§412:9-401  Required reserve for adepository financial services loan company.  (a)  Every depositoryfinancial services loan company shall maintain and have on hand at all times areserve composed of cash and other securities in an amount equal to seven percent of the depository financial services loan company's liabilities onoutstanding deposits with an original term not exceeding one year, and five percent of the depository financial services loan company's liabilities onoutstanding deposits with an original term of one year or more.  The reserveshall not be pledged.  The reserve requirement shall be determined as of thesame calendar day in each calendar week and shall be based on the daily averageof all outstanding deposits of the immediate preceding seven calendar days. During the succeeding seven calendar day period beginning with eachdetermination date, the average daily balance of the reserve shall equal orexceed the reserve amount so determined.  Determination of the reserverequirement shall be computed within two working days after the determinationdate.

(b)  Cash reserves shall be limited to cash onhand, cash in federal reserve banks, federal home loan banks, and federallyinsured financial institutions, and direct obligations of the United States,this State or its counties.  Cash reserves may be deposited in United Statesbranches of non-United States banks, with the written approval of thecommissioner.  The cash reserve shall at all times be at least fifty per centof the reserve required by this section.

(c)  Other securities used as reserves shall belimited to obligations of the United States and its agencies and of this Stateand its counties that qualify as permitted investments under sections412:9-409(a)(1) and (2) and 412:9-409(b), reverse repurchase agreements wherebythe depository financial services loan company has purchased obligations of theUnited States under terms which require the seller to repurchase theobligations of the United States for cash on demand or in not less than thirtydays, bankers acceptances, irrevocable lines of credit of one year or moreapproved by the commissioner, and securities listed on the New York or theAmerican stock exchanges or the National Market System of the NASDAQ StockMarket.  Not more than twenty-five per cent of the total reserve shall be heldin securities listed on the New York or American stock exchanges, or theNational Market System of the NASDAQ Stock Market.

(d)  If the reserve or cash reserve portion ofthe reserve of any depository financial services loan company falls below theamount required by this section, the depository financial services loan companyshall promptly take action to correct the deficiency.  Upon discovery of anydeficiency, the depository financial services loan company shall notify thecommissioner of the deficiency and inform the commissioner of any action beingtaken to correct the deficiency.  If the deficiency has not been corrected, thecommissioner may in writing direct the depository financial services loancompany to take action necessary to cure the deficiency. [L 1993, c 350, pt of§1; am L 1999, c 264, §1; am L 2001, c 170, §11]