AI-assisted research summary: Foreign banks with Hawaii branches or agencies must keep a required deposit in approved unaffiliated Hawaii banks, and only specified assets may be used for compliance.
(a) Each foreign bank that is licensed to establish and maintain a Hawaii state branch or Hawaii state agency shall keep on deposit $500,000 or any greater amount as the commissioner may prescribe by rule in unaffiliated Hawaii banks as have been selected by the foreign bank and approved in writing by the commissioner. (b) The only assets that may be deposited in order to comply with this section are: (1) Cash; (2) Any negotiable certificate of deposit which: (A) Has a maturity of not more than one year; (B) Is payable in the United States; and (C) Is issued by a bank organized under the laws of a state of the United States, by a national bank, or by a branch office of a foreign bank which is located in the United States; (3) Securities and obligations of the United States government and any agency of the United States government whose debt obligations are fully and explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the United States; (4) Securities and obligations of United States government-sponsored agencies which are originally established or chartered by the United States government to serve public purposes specified by the Congress but whose debt obligations are not explicitly guaranteed by the full faith and credit of the United States; (5) Obligations of the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, or the African Development Bank; (6) Securities and obligations issued by this State or any county of this State, through an appropriate agency or instrumentality; and (7) Any other assets as the commissioner shall permit by rule or order. Any assets deposited shall be valued at the lower of principal amount or market value. The commissioner may limit the amount of each type of asset that may be deposited. An asset will not satisfy the requirements of this section if it is an instrument that is issued by the foreign bank itself, or by a person who controls, is controlled by, or is in common control with the foreign bank. (c) The commissioner, from time to time, may require that the assets deposited pursuant to this section may be maintained by the foreign bank in an amount, in a form, and subject to any conditions, the commissioner deems necessary or desirable for the maintenance of a sound financial condition, the protection of depositors and the public interest, and to maintain public confidence in the business of the Hawaii state branch or Hawaii state agency. The commissioner may give credit to reserves required to be maintained with a Federal Reserve Bank in or outside this State pursuant to federal law, in accordance with rules or procedures as the commissioner may adopt. (d) So long as it shall continue business in the ordinary course, the foreign bank shall be permitted to collect interest on the securities deposited under this section and from time to time exchange, examine and compare the securities. [L 1996, c 155, pt of §2]