pc
nid 92011
Apr 09, 2026
ggallwey@vixio.com
New Hampshire
Banking Department
financial services
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1895 charsNew Hampshire Readopts and Amends Public Deposit Collateralization Rule
On March 26, 2026, New Hampshire readopted with amendments Part Ban 1450, effective June 1, 2016, establishing rules for the collateralization of public deposits. The rule identifies and classifies by risk those securities appropriate for securing public funds belonging to New Hampshire state entities, counties, cities, towns, districts, school districts, and other political subdivisions.
Under Ban 1450.03, the value of securities pledged as collateral must equal or exceed the amount of public funds on deposit, less any portion covered by federal deposit insurance. Securities are valued at market value. Ban 1450.04 establishes acceptable collateral, including all public obligations under RSA 383-B:3-303(c), federal agency obligations (Export-Import Bank, General Services Administration, Maritime Administration, Small Business Administration, Tennessee Valley Authority), and Department of Housing and Urban Development obligations including Federal Housing Administration, Government National Mortgage Association, community development, and public housing notes and bonds.
Federal government-sponsored enterprises (GSEs) qualify as acceptable collateral if assigned investment-grade ratings of at least AA+ with S&P Global Ratings and Fitch Ratings, and Aa1 with Moody's Investors Service, or rated commensurate with the United States government's sovereign rating. Qualifying GSEs include Federal Farm Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (Freddie Mac), and Federal National Mortgage Association (Fannie Mae).
Ban 1450.05 permits bonds and notes authorized as legal investments for banks under RSA 383-B:3-303(d)(1), excluding convertible bonds not rated among the three highest ratings of any Nationally Recognized Statistical Rating Organization (NRSRO). All enumerated collateral is classified as low-risk for public funds on deposit.
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1617 charsNew Hampshire Banking Department Issues Rulemaking Notice to Amend Public Deposit Collateralization Rule
On April 9, 2026, the New Hampshire Banking Department issued a rulemaking notice proposing the readoption with amendments of Rule Ban 1450, which governs the collateralization of public deposits held by financial institutions.
The rule sets out the types of securities that may be used to secure public funds and requires that pledged collateral be maintained at market value equal to or exceeding uninsured public deposits. It also classifies eligible collateral by risk and establishes criteria for acceptable instruments.
The proposed amendments update the framework to reflect current market practices and introduce more specific eligibility criteria. In particular, the amendments establish minimum credit rating requirements for obligations issued by government-sponsored enterprises (GSEs), requiring high investment-grade ratings or alignment with the U.S. sovereign rating. The amendments also clarify the categorization of certain federal entities, including the Tennessee Valley Authority, and introduce an explicit requirement that institutions exercise reasonable care when selecting collateral.
The rules apply to financial institutions that accept public deposits from New Hampshire public entities. The current rule, originally adopted in 2016, was due to expire in June 2026 and has been extended pending completion of the rulemaking process. The proposal does not introduce additional costs and is intended to maintain alignment with existing practices while improving clarity and risk specification.
A public hearing is scheduled for May 14, 2026, and written comments are due by May 22, 2026.