There is an IDFPR Interpretive Letter, 98-12, explaining that state banks may collateralize a customer’s deposits. The letter states that the Illinois Banking Act does allow the bank to pledge assets to secure deposit accounts, but you should contact the FDIC to see if you need the FDIC’s written consent before pledging any assets.
One of our customers has an account with more than $250,000 in it, and the customer is not interested in repurchase agreements or CEDARS. Are there any other options?
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