Before I tell the senior lender he is wrong, the FDIC does not offer any coverage enhancements for municipalities, correct?

For a local gov't unit to have more than the current limits in invested funds, they either need to participate in CDARS, correct?

Local money needs to be fully collateralized i thought, hence why municipalities genenerally only deposit within the fdic insurance limits with a bank, and the rest of their funds within state run collateral pools?

Yes, no?

bump

We have deposit accounts for local municipalities in excess of FDIC insurance limits. We have investments securities pledged against those deposits for the excess balances. Hope this helps.

Your own investment securties, or the municipality puts them up?

Securities in our own investment portfolio. Specific securities are pledged to specific municipal deposit customers that carry higher balances.

The FDIC examiners used to check to see if pledged securities covered municipal deposits that were in excess of deposit insurance. They may have done that as it may have been required by state law.