Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1955 No. 61 -
Attorney General Don Eastvold


A municipal corporation is insured only up to an aggregate amount not in excess of $10,000.00 on all non-statutory [[nonstatutory]]funds deposited in one savings and loan association, unless more than one officer of the corporation is authorized to have custody of and deposit its funds.

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                                                                   April 20, 1955

Honorable Cliff Yelle
State Auditor
Olympia, Washington                                                                                                                Cite as:  AGO 55-57 No. 61

Attention:  !ttMr. A. E. Hankins, Chief Examiner

            Division of Municipal Corporations

Dear Sir:

            You have requested the opinion of this office upon a question which may be paraphrased as follows:

            Is the deposit by a municipal corporation of a total of more than $10,000 from more than one municipal fund in a single savings and loan association completely covered by federal savings and loan insurance?

            In our opinion, unless different officers of the municipal corporation are by law given custody of and authority to deposit different municipal funds, such municipal funds are not federally insured beyond a maximum of $10,000.


            Section 1728 (a), Title 12, U.S.C.A., provides in relevant part that:

            "Each institution whose application for insurance under this subchapter is approved by the [Federal Savings and Loan Insurance] Corporation  [[Orig. Op. Page 2]] shall be entitled to insurance up to the full withdrawal or repurchasable value of the accounts of each of its members and investors * * * except that no member or investor of any such institution shall be insured for an aggregate amount in excess of $10,000.00."  (Emphasis supplied)

            Section 1724 (b), Title 12, U.S.C.A., provides in part that:

            "The term'insured member' means an individual, partnership, association, or corporation which holds an insured account.  Each officer, employee, or agent of * * * any county, of any municipality, or of any political subdivision thereof, herein called a 'public unit', having official custody of public funds and lawfully investing the same in insured institutions shall, for the purpose of determining the amount of the insured account, be deemed an insured member in such custodial capacity separate and distinct from any other officer, employee or agent of the same or anypublic unit having official custody of public funds and lawfully investing the same in the same insured institution in such custodial capacity.  * * *" (Emphasis supplied)

            A municipal corporation investing in a savings and loan association can be insured up to a maximum of $10,000 for each "member".  If only one of its officers is lawful custodian of its funds, and authorized to deposit them, it has only one "member".  Ordinarily, this will be the case; and the corporation's deposit in any one savings and loan association will be insured for no more than $10,000.

            The fact that the public moneys in custody of the "member" officer of the municipal corporation may be carried on its books as different funds or accounts is not material in determining the maximum insurance coverage under the federal statute.

             [[Orig. Op. Page 3]]

            Under RCW 33.04.100, a municipal corporation cannot lawfully deposit or invest in a savings and loan association more of its funds than the Federal Savings and Loan Insurance Corporation will protect.

            We conclude that unless a municipal corporation has more than one "member" as defined above, its deposit in a savings and loan association will not be insured beyond $10,000.

            We hope the foregoing analysis will prove to be of assistance to you.

Very truly yours,

Attorney General

Assistant Attorney General