[§412:13-213]  Pledge of assets.  (a) Each foreign bank that is licensed to establish and maintain a Hawaii statebranch or Hawaii state agency shall keep on deposit $500,000 or any greateramount as the commissioner may prescribe by rule in unaffiliated Hawaii banksas have been selected by the foreign bank and approved in writing by thecommissioner.

(b)  The only assets that may be deposited inorder to comply with this section are:

(1)  Cash;

(2)  Any negotiable certificate of deposit which:

(A)  Has a maturity of not more than one year;

(B)  Is payable in the United States; and

(C)  Is issued by a bank organized under thelaws of a state of the United States, by a national bank, or by a branch officeof a foreign bank which is located in the United States;

(3)  Securities and obligations of the United Statesgovernment and any agency of the United States government whose debtobligations are fully and explicitly guaranteed as to the timely payment ofprincipal and interest by the full faith and credit of the United States;

(4)  Securities and obligations of United Statesgovernment-sponsored agencies which are originally established or chartered bythe United States government to serve public purposes specified by the Congressbut whose debt obligations are not explicitly guaranteed by the full faith andcredit of the United States;

(5)  Obligations of the International Bank forReconstruction and Development, the Inter-American Development Bank, the AsianDevelopment Bank, or the African Development Bank;

(6)  Securities and obligations issued by this Stateor any county of this State, through an appropriate agency or instrumentality;and

(7)  Any other assets as the commissioner shall permitby rule or order.

Any assets deposited shall be valued at the lower ofprincipal amount or market value.  The commissioner may limit the amount ofeach type of asset that may be deposited.  An asset will not satisfy therequirements of this section if it is an instrument that is issued by theforeign bank itself, or by a person who controls, is controlled by, or is incommon control with the foreign bank.

(c)  The commissioner, from time to time, mayrequire that the assets deposited pursuant to this section may be maintained bythe foreign bank in an amount, in a form, and subject to any conditions, thecommissioner deems necessary or desirable for the maintenance of a soundfinancial condition, the protection of depositors and the public interest, andto maintain public confidence in the business of the Hawaii state branch orHawaii state agency.  The commissioner may give credit to reserves required tobe maintained with a Federal Reserve Bank in or outside this State pursuant tofederal law, in accordance with rules or procedures as the commissioner mayadopt.

(d)  So long as it shall continue business inthe ordinary course, the foreign bank shall be permitted to collect interest onthe securities deposited under this section and from time to time exchange,examine and compare the securities. [L 1996, c 155, pt of §2]