Section 487.14108 - Pledging bank assets as collateral security(1) Except as otherwise provided in this section, a bank or bank officer shall not give preference to a depositor or creditor by pledging the assets of the bank as collateral security or otherwise.(2) A bank may pledge its assets in an aggregate amount that does not exceed 10% of its total assets for the purpose of securing the following:(a) Funds belonging to the United States or belonging to or being administered by an officer, instrumentality, or agent of the United States, funds of estates being administered by a federal court under a federal bankruptcy law, and other funds when required or permitted to do so under the laws of the United States or an order of a federal court.(b) Surplus funds of the state held by the state treasurer.(c) Funds of the Mackinac Bridge Authority, which is declared to be a political subdivision of this state, under 1950 (Ex Sess) PA 21, MCL 254.301 to 254.302.(d) Funds of the international bridge authority, which is declared to be a political subdivision of this state, under 1954 PA 99, MCL 254.221 to 254.240.(e) Funds on deposit under 1941 PA 205, MCL 252.51 to 252.64, providing for limited access highways.(f) Funds on deposit to the credit of the Michigan employment security commission.(g) Funds of the Michigan state housing development authority constituting proceeds of the sale of the authority's notes and bonds and repayments of those notes and bonds, under the state housing development authority act of 1966, 1966 PA 346, MCL 125.1401 to 125.1499c.(h) Funds belonging to any political subdivision of this state.(i) Funds belonging to any federally recognized Indian tribe.(j) Funds representing the proceeds of a grant or loan from a department or agency of the United States, the award of which is conditioned upon the recipient depositing the proceeds in an account secured by a pledge of assets of the depository institution.(3) The requirements, restrictions, and limitations imposed under this section shall not apply to the pledging of an obligation of the United States, direct or fully guaranteed, or both, for the purpose of securing a deposit of the United States when the deposit is established coincidentally with the purchase of an obligation of the United States by or through an institution.(4) A bank may pledge its assets to secure liabilities of any of the following types:(a) In the case of member banks, liabilities incurred under the federal reserve act. In the case of nonmember banks, liabilities incurred through borrowing under the same conditions as are imposed upon members of the federal reserve system by the federal reserve act.(b) In the case of federal home loan bank members, liabilities incurred under the federal home loan bank act.(c) Liabilities incurred under former section 202 of title II of the federal farm loan act, chapter 245, 39 Stat. 360.(d) Liabilities incurred on account of a loan made with the express approval of the director under section 4202(3)(c).(e) Liabilities incurred on account of borrowings from 1 business day to the next from a bank or national banking association of excess reserve balances from time to time maintained by the bank or national banking association under section 19 of the federal reserve act, 12 USC 461.(f) Liabilities incurred on account of securities sold under a repurchase agreement.(g) Liabilities incurred in connection with administration of treasury tax and loan accounts.(5) A bank may pledge its assets to counterparties to secure the counterparties' exposure in interest rate swap transactions.Amended by 2016, Act 175,s 6, eff. 9/12/2016.1999, Act 276, Eff. 3/1/2000.