Opinion Number

Dear Senator Heitmeier:

You requested the opinion of this office concerning the application of Act No. 27 of the First Extraordinary session of 2000, which enacted R.S. 6:318 which authorizes banks to use letters of credit issued by the Federal Home Loan Bank to collateralize the deposit of public funds. You are seeking confirmation that local political entities may now accept from their depositories letters of credit issued by the Federal Home Loan Bank as collateral for public funds in addition to the securities outlined in La. R.S. 39:1242(A). You are correct. Act No. 27 specifically states:

"In addition to other collateral for public funds deposits authorized by law, banks may also use letters of credit issued by the Federal Home Loan Bank."

Accordingly, banks may use letters of credit issued by the Federal Home Loan Bank to collateralize the deposit of public funds.

Trusting this adequately responds to your request, we remain,

Yours very truly,

RICHARD P. IEYOUB Attorney General

BY: ___________________________ MARTHA S. HESS Assistant Attorney General

RPI/MSH