§412:4-112  Pledging of assets. (a)  No financial institution shall give a preference to any depositor bypledging the assets of the financial institution, except as otherwiseauthorized by this chapter; provided that any financial institution may for anypurpose borrow money and pledge or hypothecate its assets as collateralsecurity therefor.

(b)  A financial institution may pledge itsassets to secure deposits or borrowing of public funds.  For purposes of thissection, "public funds" means funds belonging:

(1)  To the State, if credited to the State or to theofficial credit of the director of finance;

(2)  To any county within the State, if credited tosuch county or to the official credit of the treasurer or similar fiscalofficer of the county;

(3)  To the government of any state or foreigncountry, or any territory or possession thereof, or any of its politicalsubdivisions, instrumentalities or municipalities, in which the pledgingfinancial institution has a branch office, if credited to such government or tothe official credit of the treasurer or similar fiscal officer thereof;

(4)  To the United States, if credited in such mannerand under such rules and regulations as may be prescribed by the United Statesgovernment.

Once the financial institution has complied with allconditions necessary for the return of any assets it has pledged to secure thedeposit or borrowing of the public funds, the government official in possessionof such assets shall promptly return the same to the financial institution.  Ifsuch assets are not so returned, the financial institution shall have itsappropriate remedies at law and in equity, including, in the case of the Stateor any county of the State, the remedies under chapter 38; provided, thatnothing in this subsection shall permit the avoidance of any requirements orliabilities imposed on the State or any county under chapter 38. [L 1993, c350, pt of §1]