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|Governmental Unit Deposit Protection Act|
|The Governmental Unit Deposit Protection Act ("GUDPA") is a supplemental insurance program set forth by the New Jersey Legislature to protect the deposits of municipalities and local government agencies. The program is administered by the Commissioner of the New Jersey Department of Banking and Insurance.|
|Fact Sheet on GUDPA|
Following are answers to some commonly asked questions concerning GUDPA.
GUDPA does not apply to funds of the State or State agencies. Further, it does not apply to private non-profit corporations, even those which perform public services.
What deposits are covered by GUDPA?
Protected public funds include those which are beneficially owned by the governmental unit and collected by it for its use or the use of the public. Typically, these funds are raised through taxation or the sale of public assets. GUDPA should not be relied on to protect intermingled trust funds, bail funds, withholdings from an employee's salary or funds which may pass to the local government upon the happening of a future condition.
Which banks and credit unions participate in GUDPA?
How the funds are protected?
No collateral is required for amounts covered by FDIC or NCUSIF insurance. The collateral which may be pledged to support these deposits includes obligations of the State and federal governments, insured securities and other collateral approved by the Department. When the capital position of the depository deteriorates or the depository takes an unusually large amount of public deposits, the Department of Banking and Insurance requires additional collateral to be pledged.
If a governmental depository fails and the FDIC or NCUSIF does not insure or pay out the full amount of public deposits, the collateral pledged to protect these funds would first be liquidated and paid out. If this amount is insufficient, other institutions holding public funds would be assessed pro rata up to 4% of their uninsured public funds. Although these protections do not constitute a 100% guarantee of the safety of all funds, no governmental unit under GUDPA has ever lost protected deposits.
What is "eligible collateral"?
What laws implement GUDPA?
|OPRA is a state law that was enacted to give the public greater access to government records maintained by public agencies in New Jersey.||You will need to download the latest version of Adobe Acrobat Reader in order to correctly view and print PDF (Portable Document Format) files from this web site.|
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State of New Jersey
New Jersey Department of Banking and Insurance