As used in this chapter:
(A) As used in this
rule:
(1) "Asset quality" means the
component within the SCALE model that evaluates risk, controllability, adequacy
of loan loss reserves, acceptable earnings, and the effect of off-balance sheet
earnings and loss.
(2)(A) "Bank monitoring"
means the SCALE model identifying
process used to identify an emerging individual
financial concern or a deposit business concern for a
financial institution
FI approved for a reduced collateral floor.
(3)(B) "Bank monitoring
collateral requirement" means an additional collateral requirement that may be
imposed on a FI approved for a reduced collateral floor if an emerging
individual financial concern or a deposit business concern is
identified.
(C)
"Basis point" means a simplified unit of measure used
in finance. One basis point equals one one-hundredth of one per cent.
(4) "Capital adequacy" means the
component within the SCALE model that measures a financial institution to
determine if solvency can be maintained due to risks that have been incurred as
a course of business.
(5)(D) "Collateral
requirement calculation" means the mandatory amount of collateral for a
financial institution
FI participating in OPCP, as determined in OPCS
based upon the following factors: account balances; federal deposit insurance
corporation coverage as determined pursuant to paragraph (C)(1) of rule
113-40-02 of the Administrative
Code, which may deviate from actual federal deposit insurance corporation
limits; statutory collateral requirement; reduced collateral floor; any bank
monitoring collateral requirement(s); any economic monitoring collateral
requirement(s); any
public unit
PU negotiated collateral requirement(s); and any
cushion collateral requirement(s).
(6)(E) "Collateral
sufficiency" means the determination made by the treasurer of state on whether
a financial institution
FI is adequately collateralized based upon the
collateral requirement calculation and the collateral valuation.
(7)(F)
"Collateral valuation" means the market value of eligible collateral pledged by
a financial institution
FI.
(8)(G) "Cushion collateral
requirement" means an additional collateral requirement that may be imposed by
the treasurer of state on a
financial
institution
FI that is not in compliance
with collateral sufficiency requirements, file submission requirements, or the
OPCS operating policies.
(9) "Earnings" means the component
within the SCALE model that determines the ability of a financial institution
to increase capital through retained earnings, absorb loan losses, support the
future growth of assets, and provide a return to investors.
(10)(H) "Economic
monitoring" means macroeconomic monitoring and regional economic monitoring
under paragraph (B) of rule
113-40-04 of the Administrative
Code.
(11)(I) "Economic
monitoring collateral requirement" means an additional collateral requirement
that may be imposed on a financial institution
using
FI approved for a reduced
collateral floor if economic monitoring identifies a potential concerning
economic trend.
(12)(J) "Financial
institution"
(FI) means
any institution
a
state-chartered or national bank designated as a public depository
pursuant to section
135.01 of the Revised Code, and
any institution which receives or holds any
public deposits as defined in section
135.31 of the Revised Code, or
which receives or holds any funds from a public depositor as defined in
division (A)(2) of section
135.182 in the Revised Code.
(13) "Influencing variable" means a
specific financial indicator used in the SCALE model, which has a benchmark
within OPCS that does not need to be met by a financial institution in order to
be initially approved for a reduced collateral floor, but a financial
institution may be ineligible for a reduced collateral floor if it does not
meet a certain number of influencing variables.
(14) "Liquidity" means the component
within the SCALE model that measures what a financial institution requires if
funding is interrupted and the financial institution must still be able to meet
certain obligations, including its ability to repay depositors and other
creditors without incurring excessive costs.
(15)(K)
"Ohio pooled collateral program" (OPCP) means the program, created by the
treasurer of state pursuant to division (B)(1) of section
135.182 of the Revised Code, in
which each financial institution
FI that selects the pledging method prescribed in
division (A)(2) of section
135.18 of the Revised Code or
division (A)(2) of section
135.37 of the Revised Code,
shall pledge to the treasurer of state a pool of eligible securities for the
benefit of all public depositors at the public depository to secure the
repayment of uninsured public deposits at the public depository, and, if
applicable, collateral dedicated to a specific public depositor, provided that
the total market value of the securities so pledged is at least equal to the
amounts required by section
135.182 of the Revised
Code.
(16)(L) "Ohio pooled
collateral system" (OPCS) means the system created and maintained by the
treasurer of state to facilitate financial
institution
FI and
public unit
PU participation in OPCP via a publicly-available website and private portal
access.
(17)(M) "Operating
policies" means the set of operational procedures, policies, and requirements
for the use of
OPCS, to be made available by the
treasurer of state
OPCS. All
participation in OPCP and use of OPCS shall be subject to the operating
policies,
which are maintained at the sole
discretion of the treasurer of state. The operating policies
will be
are
available at
www.tos.ohio.gov.
(18) "Pooling method" means the
method of pledging a security or securities using OPCS, as prescribed in
division (A)(2) of section 135.18 or division (A)(2) of 135.37 of the Revised
Code.
(19)(N) "Public deposits"
means moneys of a public depositor as defined in division (A)(3) of section
135.182 of the Revised Code, but
for the purposes of this chapter herein, does not include the moneys of
metropolitan housing authorities, public or Indian housing agencies, or United
States federal agencies.
(20)(O) "Public unit"
(PU) means the state or a subdivision thereof, as
applicable, that deposits public deposits with a financial institution
FI.
(21)(P) "Public unit
negotiated collateral requirement" means a collateral requirement negotiated by
a public unit
PU with its financial
institution
FI, which may differ from
the statutory collateral requirement.
(Q)
"Qualified
trustee" means a bank or institution that meets the requirements set forth in
division (J) of section
135.18 of the Revised
Code.
(22)(R) "Reduced
collateral floor" means a collateral requirement available to eligible
financial institutions
FI pursuant to division (B)(1)(b) of section
135.182 of the Revised Code. A
financial institution's
FI reduced collateral floor will be determined in
accordance with rules
113-40-03 to
113-40-05 of the Administrative
Code.
(23) "Required variable" means a
specific financial indicator, used in the SCALE model, with a defined benchmark
within OPCS that must be met by a financial institution in order to be
initially approved for a reduced collateral floor.
(24) "SCALE model" means the model
used to determine a financial institution's reduced collateral floor using the
following components, as further defined herein: sensitivity to risk, capital
adequacy, asset quality, liquidity, and earnings.
(25) "SCALE component" means an
individual component within the SCALE model.
(26) "SCALE component variable"
means an influencing or required variable for an individual SCALE
component.
(27) "SCALE component score" means
the calculation of a financial institution's individual and peer group based
performance against required variables and influencing variables in a single
SCALE component score.
(28) "SCALE composite score" means
the calculation of a total score for a financial institution using a weighted
average of the SCALE components, with weights assigned based on the reflective
strength value the SCALE model has determined for each
component.
(29) "Sensitivity to risk" means the
component within the SCALE model that reflects the degree to which changes in
interest rates, foreign exchange rates, commodity prices, equity prices, or
other factors can adversely affect a financial institution's earnings or
economic capital.
(30)(S) "Specific pledge
method" means the method of separately securing uninsured public deposits of
each public depositor, as prescribed in division (A)(1) of section
135.18 of the Revised
Code.
(31)(T) "Specific pledge
account" (SPA) means an account containing a
security or securities pledged for the benefit of one specific
public unit
PU by a financial
institution
FI participating in the
pooling method. A financial institution
FI may be permitted to use a
specific pledge account
SPA if: the charter for the
public unit
PU requires use of the specific pledge method; United
States federal law designates the specific pledge method for the
public unit
PU; or it is permitted at the discretion of the
treasurer of state. Under this method, the financial
institution
FI will secure all uninsured
deposits in the SPA at least equal to the
requirement for the specific pledge method.
(32)(U)
"Statutory collateral requirement" means the amount
of collateral required for financial institutions in OPCP pursuant to section
135.182 of the Revised Code
"Standard" means a
specific financial indicator with a defined benchmark that must be met by a FI
in order to be approved for a reduced collateral floor.
(B) The treasurer of state will
release public records pursuant to public records law.
