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Can you summarize 7 GACO Chapter 1, Article 2, Part 7?
Banks and Trust Companies > Banking Depositories, Reserves, and Remissions
Short Summary
This legal document governs the deposits made by financial institutions. Financial institutions are allowed to deposit their funds in any depository that is selected or authorized by their directors and is authorized by law to receive deposits. In the case of a depository located in the United States, it must also have deposit insurance issued by a federal public body. However, if a director of the financial institution has a relationship with a depository as an officer, director, or owner of 5 percent or more of the shares, the depository must be approved by a majority of the other directors. The document also references historical opinions of the Attorney General and research references related to banks and financial institutions. This legal document also governs the reserve requirements for financial institutions in Georgia. Financial institutions are required to maintain a reserve fund, which is a certain percentage of their demand deposits and other deposits. The amount of the required reserve is fixed by regulation of the department, and it must be computed on a daily basis. The reserve fund must consist of United States coin and currency on hand or on deposit, as well as obligations of the United States, the State of Georgia, or other approved issuers. Financial institutions must not pledge, assign, or hypothecate the assets in the reserve fund. If a financial institution has a deficiency in its reserve fund, it must give written notice to the department and take immediate action to restore the deficiency. Failure to restore the reserve within 30 days may result in the department taking over the institution’s business and assets. According to the Georgia Code, commercial banks have the authority to deduct a reasonable collection charge from the remittance for any check forwarded to them for collection and remittance as a special collection item. They can also impose a service charge as authorized by Code Section 44-12-196, which relates to when an instrument on which a banking or financial organization is directly liable is presumed abandoned. The history of this provision dates back to various legislative acts. It is important to note that this provision has been preempted by federal law in certain cases. Additionally, there have been judicial decisions and opinions of the Attorney General that provide further interpretation and guidance on the application of this provision. However, no specific penalties are mentioned in this document.
Whom does it apply to?
Financial institutions, directors of financial institutions, commercial banks
What does it govern?
Deposits made by financial institutions, reserve requirements for financial institutions, collection charges and service charges for commercial banks
What are exemptions?
No specific exemptions are mentioned in this document.
What are the Penalties?
No specific penalties are mentioned in this document.
Jurisdiction
Georgia