§ 3-211.1. Receivership -- Nondepository trust company.

   (a) "Receivership" defined. -- In this section, "receivership" means a proceeding in which:

   (1) The Commissioner takes possession of a nondepository trust company in accordance with § 5-601, § 5-602, or § 5-602.1 of this article; and

   (2) A receiver is appointed in accordance with § 5-605 of this article.

(b) Pledge of securities or surety bond to defray costs of receivership. --

   (1) A nondepository trust company shall pledge securities or deliver a surety bond to the Commissioner, for the benefit of the Commissioner, to defray the costs of a receivership.

   (2) The amount of the securities or surety bond shall be determined by the Commissioner in an amount that the Commissioner deems appropriate to defray such costs, but in no event shall the amount exceed:

      (i) $ 1,000,000 for a nondepository trust company with a composite rating, using the Uniform Interagency Trust Rating System, of 1 or 2; or

      (ii) $ 3,000,000 for a nondepository trust company with a composite rating, using the Uniform Interagency Trust Rating System, of 3, 4, or 5.

(c) Use of securities or surety bond proceeds. -- Subject to the provisions of Title 5, Subtitle 6 of this article, in the event of a receivership, the Commissioner or a receiver appointed under § 5-605 of this article may, without regard to any priorities, preferences, or adverse claims, reduce the pledged securities or the surety bond to cash and use the cash to defray the costs associated with the receivership.

(d) Securities -- Holding; use; income. --

   (1) If a nondepository trust company chooses to pledge securities to satisfy the requirement of subsection (b) of this section, the securities shall be held at a depository institution or a federal reserve bank approved by the Commissioner.

   (2) The Commissioner may specify the types of securities that may be pledged.

   (3) Any fees associated with holding pledged securities shall be the responsibility of the nondepository trust company.

   (4) Securities pledged by a nondepository trust company may not be assets relied on by the nondepository trust company to meet the minimum capital requirements of § 3-209 of this subtitle.

   (5) Any income earned on securities pledged by a nondepository trust company:

      (i) Shall be paid to the nondepository trust company; and

      (ii) May not be held by the Commissioner.

(e) Surety bond -- Issuance; use. --

   (1) If a nondepository trust company chooses to purchase a surety bond to satisfy the requirement of subsection (b) of this section, the surety bond shall be issued by a bonding company that:

      (i) Is authorized to do business in this State; and

      (ii) Has a rating in one of the three highest grades as determined by a national rating service.

   (2) The surety bond shall be in a form approved by the Commissioner.

   (3) A nondepository trust company may not obtain a surety bond from any affiliate, as defined in § 5-401 of this article.

HISTORY: 2010, ch. 457.