FAQs – West Virginia Security for Public Deposits Act

Frequently Asked Questions (FAQs)

Where can I find the State of West Virginia code regarding the West Virginia Security for Public Deposits Act?

The West Virginia Security for Public Deposits Act is codified at W. Va. Code §12-1B-1, et. seq. which establishes the acceptable methods of collateralizing funds:the Dedicated Single Bank Method and the Multibank Pooled Method.The Act is available at West Virginia Code (wvlegislature.gov).

What is the Multibank Pooled Method of collateralization?

The Multibank Pooled Method of collateralizing public fund deposits allows for contingent liability of proportionate share of losses of uninsured and uncollateralized public fund deposits held by a Designated State Depository in default. Entities in the Multibank Pooled Method may be required to post collateral at different percentage levels as determined by a financial rating service. Collateral pledging levels of 50%, 75% or 100% are being considered for all public funds over the FDIC, IntraFi/CDARS/ICS coverage.

What is the Dedicated Single Bank Method of collateralization?

The Dedicated Single Bank Method of collateralizing public fund deposits collateralizes public deposits at 102% over the FDIC, IntraFi/CDARS/ICS coverage. There is no contingent liability in the Dedicated Single Bank Method of collateralizing; therefore, depositories will not be liable for losses of public deposits held by other Designated State Depositories.

When will the West Virginia Security for Public Deposits Act be effective?

House Bill 4801 was passed by the West Virginia Legislature and signed by the Governor on February 23, 2024. The bill removed the original implementation date of March 2024 and allows the State Treasurer to announce the commencement of the West Virginia Security for Public Deposits Program by publishing a notice in the State Register at least 30 days prior to commencement of the program. An announcement will also be made on the State Treasurer’s Office website.

Does the West Virginia Security for Public Deposits Act change the way my public funds are collateralized per other state and local laws?

Yes. All public fund deposits will be collateralized by a Designated State Depository approved by the State Treasurer’s Office and held in the name of the State Treasurer’s Office.If provisions of the Act are inconsistent with the provisions of any other state or local law relating to the pledge of collateral by the state or any county, municipality, or other political subdivision for purposes of securing public deposits in financial institutions, the provisions of the West Virginia Security for Public Deposits Act shall control.

Rules will be established to return funds due in the event the depository becomes insolvent.

Will there be any exceptions or exemptions to the West Virginia Security for Public Deposits Act?

No. There will be no exemptions or exceptions to the West Virginia Security for Public Deposits Act.All public funds will be collateralized through the State Treasurer’s Office in accordance with West Virginia Security for Public Deposits Act.

How do I know if my public funds are covered by the West Virginia Security for Public Deposits Act?

The West Virginia Security for Public Deposits Act covers all public fund deposits of a public depositor held at a Designated State Depository. This includes, but may not be limited to, time deposits, demand deposits, savings deposits, or any other transaction account.

How do I know if my bank is an approved Designated State Depository?

A published list of approved Designated State Depositories is on the State Treasurer’s Office website at the bottom of the Banking Services tab.The State Treasurer’s Office will work with financial institutions on becoming approved as a Designated State Depository.Please contact the State Treasurer’s Office at 304-558-3599 if you do not see your current financial institution bank on the list.Please also take note of the restricted financial institution list also published on the State Treasurer’s Office website.

How do I know if I am a public depositor?

A Public Depositor is defined as the state or any county, municipality, spending unit, or other political subdivision of the state.The Public Depositor needs to determine if funds are public fund deposits and is responsible for informing the Designated State Depository of such funds.Some questions to ask to help determine if your funds are public:

  • Are you audited by the State Auditor’s Office
  • Are your funds provided by the Federal, State, or Local Government?

The State Treasurer’s Office will be the final authority for the determination as to whether funds are classified as public funds.

What are public fund deposits?

Public fund deposits are moneys held by a Public Depositor by entity of the state or any county, municipality, spending unit, or other political subdivision of the state.Deposits include, but may not be limited to, time deposits, demand deposits, savings deposits, or any other transaction account.

What is a Designated State Depository?

A Designated State Depository is any state or national bank or any state or federal savings and loan association in this state meeting the requirements of this Act.A depository must be approved by the State Treasurer’s Office to accept public fund deposits.

What types of collateral are acceptable?

The following eligible securities are acceptable forms of collateral to be pledged by banks for deposits held for the State of West Virginia. Securities, such as bonds and notes shall be rated as an AA+ by S&P or equivalent by any other national rating service. Bonds of this state or any other state of the United States shall be rated as an A+ by S&P or equivalent by any other national rating service. A full listing of acceptable collateral will be provided on our website when the program is implemented.

Please see the complete list of acceptable collateral on the Collateralization of Public Deposits home tab on our website

Where can I find the required forms to become a designated state depository?

Forms will be located on the State Treasurer’s Office website under the Collateral & Securities tab.

Does the West Virginia Security for Public Deposits Act allow funds to be kept in a deposit placement program such as CDARS or ICS for public fund deposits?

Public deposits of funds due the State of West Virginia or held in an approved outside bank account approved by the State Treasurer’s Office are NOT allowed to be held in a deposit placement program such as CDARS or ICS.Public funds for other entities under the West Virginia Security for Public Deposits Act may be held in a deposit placement program.

How safe are my public fund deposits with either of the collateralization methods?

Public fund deposits are safe under both methods allowed under the Act because the funds are collateralized.For the funds collateralized below 100%, the Designated State Depositories in the Multibank Pooled Method have assumed the contingent liability to cover for potential losses.

Is the State Treasurer’s Office Online Collateral System ready for viewing and or testing?

The State Treasurer’s Office is currently developing and testing the Treasurer’s Online Collateral System. The State Treasurer’s Office will let potential users know when it is available for use.

When will onboarding begin for depositors and depositories?

The State Treasurer’s Office staff continue to work toward building the new online system and will be onboarding participants when the system is available. We will communicate to all participants as new information becomes available.

Who can I contact to help me with questions about the Act or the program?

You may contact the West Virginia State Treasurer’s Office at CollateralGroup@wvsto.com, call 304-340-5020.

What tools will be available on the Treasurer’s Office website related to this program?

Can I change the collateral method I’m currently using if I am not satisfied with my original selection?

Yes. The Designated State Depository may change from one method to another each quarter if desired.

Are there fees associated with the West Virginia Security for Public Deposits Act and the program?

Yes. The State Treasurer’s Office will assess an annual fee calculated on a calendar year (January 1 to December 31) to Designated State Depositories required to pledge collateral.The fees related to this program are still in the planning phase and will be published in the rules.

Are there penalties imposed on depositories for non-compliance of the Act?

Yes. The Treasurer may rescind the authority of a Designated State Depository to receive further receive public fund deposits and may be assessed penalties for failure to comply with the West Virginia Security for Public Deposits Act. Information regarding penalties may be found in W. Va. Code §12-1B-7.

Where do I find information about restricted financial institutions and if my depository is on the restricted financial institution list?

Information about restricted financial institutions can be found on our website at https://wvtreasury.com/Restricted-Financial-Institutions.

What rating service will the WVSTO utilize to obtain bank ratings which will determine the level of collateralization?

The WVSTO will be using the FedFis Rating service. Rating requirements for collateral pledging levels are being developed and will be shared when available.

The Treasury does not collect state taxes. Visit the The West Virginia State Tax Department for assistance.

West Virginia State Treasurer's Office
1900 Kanawha Boulevard
Capitol Complex Building #1, Room E-145
Charleston, West Virginia 25305
304-558-5000 Toll Free: 800-422-7498
Hours: 8:30am-4:30pm (ET)

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