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



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



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



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



(3)  To the government of any state or foreign
country, or any territory or possession thereof, or any of its political
subdivisions, instrumentalities or municipalities, in which the pledging
financial institution has a branch office, if credited to such government or to
the official credit of the treasurer or similar fiscal officer thereof;



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



Once the financial institution has complied with all
conditions necessary for the return of any assets it has pledged to secure the
deposit or borrowing of the public funds, the government official in possession
of such assets shall promptly return the same to the financial institution.  If
such assets are not so returned, the financial institution shall have its
appropriate remedies at law and in equity, including, in the case of the State
or any county of the State, the remedies under chapter 38; provided, that
nothing in this subsection shall permit the avoidance of any requirements or
liabilities imposed on the State or any county under chapter 38. [L 1993, c
350, pt of §1]