We are wrestling with the concept of public funds. We're aware of 12 CFR 330.15 and the definition of political subdivision that lies therein. We're trying to get a better feel for the limits to practical interpretation of those concepts.

We're a community bank and we have people trying to solicit business. Many public entities (libraries, airports, hospitals...) that aren't really cut and dry want to have their funds collateralized. There is an opportunity cost to collateralizing these funds, so we can't really say "yes" to every request (nor is that appropriate). Ultimately we end up with one group that feels an entity does not qualify as a public unit and another that does.

My research hasn't yielded anything really substantial as far as "x qualifies but y does not". Does anyone know of any good resources or procedures to use to get a good answer to these questions as they arise?

TIA

I know it's not an exact science, but I generally start with whether or not that entity has taxing authority. If you look at your tax bill, you'll see the county, city, schools; those constitute the bulk of our public funds. In one case we had a request from the local Water and Conservation District, and, surprising to many of us, they were a line item on our tax bills and the state office of the US Department of Agriculture confirmed that they used public funds.

In the absence of such a taxing authority I'd ask them to get some documentation from the overall entity that governs them(e.g., if this is a public airport, which legal entity is responsible for it?).