• Fact sheet
• Statute (NJSA 17:9-41 et seq) (Regulation may be found at NJAC 3:1-4.1 through 3:1-4.12)
• Reporting Form (PDF)

• As of December 31, 2007* (PDF)
• As of June 30, 2007* (PDF)

Following are answers to some commonly asked questions concerning GUDPA.

What local entities are covered by GUDPA?
GUDPA protects deposits of counties, municipalities and local school districts. In addition, it covered deposits of public bodies formed by one or more counties or municipalities, or any board, commission, or agency of a county or municipality having custody of public funds. For example, public funds or a county college and a municipal public library would be protected.

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?
The first $100,000 of governmental deposits in each insured depository are protected by the Federal Deposit Insurance (FDIC) regardless of their source. Public funds in excess of $100,000 are protected 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 participate in GUDPA?
Local government units are required by law to deposit their funds in a depository which is protecting such funds pursuant to GUDPA. State and federally chartered banks, savings banks and savings and loan associations having their offices in New Jersey must be certified by the Department of Banking and Insurance for participation in the GUDPA system. A governmental unit should ask their depository for a coy of the "Notification of Eligibility" issued by the Department. Credit unions may not act as a governmental depositories for these public funds. A governmental unit which is unsure whether a depository is certified to receive its funds may contact the Department.

How the funds are protected?
Each depository participating in the GUDPA system must pledge plus collateral equal to 5% of the average amount of its public deposits and 100% of the average amount of its public funds in excess of 75% of its capital funds. No collateral is required for amounts covered by FDIC 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 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 rate up to 5% of their 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 laws implement GUDPA?
GUDPA is codified in the New Jersey Statutes as N.J.S.A 17:9-41 et seq. In addition, the Department of Banking and Insurance has promulgated regulations in the New Jersey Administrative Code at N.J.A.C. 3:1-4.l et seq.