2 CSR 60-5.070 - Certificates of Deposit
(1) A
certificate of deposit (CD) issued by a bank or savings and loan association
that is a member in good standing with the Federal Deposit Insurance
Corporation or Federal Savings and Loan Insurance Corporation respectively, may
be submitted to the Missouri Department of Agriculture in lieu of a Missouri
grain dealer bond as required by sections 276.401-276.582, RSMo. The CD must be
in an amount equal to the otherwise required bond.
(2) A CD shall have a term of no longer than
one (1) year and shall be automatically renewable. However, the term of the CD
may be for a period longer than one (1) year if the issuing bank states, in
writing, that in the event the Missouri Department of Agriculture liquidates
the CD, the bank will honor the request for liquidation and will not assess a
penalty for early withdrawal (see 2 CSR 604.140 for certificate of deposit
waiver of penalty).
(3) A CD
submitted in lieu of a Missouri grain dealer bond shall be held in a
safe-deposit box of a local bank or savings and loan association by the
director of the Missouri Department of Agriculture who shall act as trustee for
the benefit of all persons selling grain to the grain dealer as set forth in
the Missouri Grain Dealer Law, sections 276.401-276.582, RSMo.
(4) All CDs shall be made payable or properly
assigned to the Missouri Department of Agriculture as follows: Pay to the order
of the director of the Missouri Department of Agriculture (see
2 CSR
60-4.140 for Certificate of Deposit Assignment Form).
If a CD is assigned to the Department of Agriculture, written consent of the
assignment must be received from the financial institution issuing the
certificate. The director may make the necessary inquiries to determine that
the certificate is negotiable and, if applicable, to confirm that the
assignment of the CD to the Missouri Department of Agriculture has been
approved by the financial institution issuing the CD.
(5) A CD assigned or purchased by a
principal, shareholder, officer, employee or any other individual for or on
behalf of a licensee shall disclose on its face the name of the licensee in
whose favor the CD is deposited. The balance of any proceeds remaining after
liquidation and disbursement shall be paid to the assignor or
purchaser.
(6) In the event that a
plurality of CDs from any number of sources are deposited in satisfaction of a
licensee's bonding obligation, the director may satisfy claims arising under
the Missouri Grain Dealers Law by liquidating any one (1) or more of these CDs
without regard to proration.
(7) In
the event that a licensee desires to substitute a bond for a CD then on deposit
with the director of agriculture, the CD shall be retained by the Department of
Agriculture for a period of ninety (90) days following the later of the
effective date of the bond or the date the bond is received by the director. A
substitute bond shall be considered as received or when a binding verbal
commitment for a substitute bond has been accepted by the director. The
director may retain the CD beyond ninety (90) days for such time as may be
required to fully ascertain the existence of any claims. After that, the CD
shall be returned to the purchaser. Should the maturity date be interposed
during this transition period, the director, at the option of the licensee and
upon its timely request, shall cause the CD to be liquidated and the proceeds
be deposited in a passbook savings account for the duration of the transition
period, when the funds shall be forwarded to the purchaser or assignor of the
CD.
(8) A licensee shall be
required to augment CD deposits in any situation where it would be required to
increase its coverage under a bond; this augmentation shall be commensurate to
the increased bond value required.
(9) All CDs liquidated by the Department of
Agriculture pursuant to these rules may be redeemed by collection proceedings
through a local bank or savings and loan association selected by the
director.
(10) A CD may only be
liquidated for disbursement upon the same reasons that bond proceeds may be
demanded for disbursement and shall apply to all claims whenever
arising.
(11) All interest earned
on the CD is to be credited or paid directly to the purchaser of the CD, except
in the event of liquidation for the purpose of paying claims, in which event
interest attributed to the claim amounts shall be payable to
claimants.
(12) If a licensee
desires to surrender its license and requests the return of a CD to the
purchaser, the licensee must return its grain dealer license and make written
request by registered or certified mail with return receipt for return of the
CD. Upon receipt of the written request and submission of the grain dealer
license, the director shall hold the CD until the director is satisfied that no
claims exist, which may include a minimum ninety (90)-day holding period,
before the CD is returned to the purchaser.
(13) If a grain dealer license is revoked,
the CD shall be held by the director for a period of one hundred twenty (120)
days or until the director is satisfied that no claims against the licensee
exist.
(14) In the event that a
licensee desires to substitute a letter of credit for a CD, the director shall
return the CD to the purchaser upon receipt and authentication of the letter of
credit.
(15) In the event that the
amount of the bond required under sections 276.401-276.582, RSMo decreases, a
licensee may substitute a CD for the lesser amount; however, this substitution
shall be made only at maturity of the CD in possession of the Department of
Agriculture or at such time as approved by the director.
(16) If the decrease in bond requirement is
due to an increase in net worth, a minimum ninety (90)-day holding period may
be required from the date the improved net worth is accepted by the
director.
Notes
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