Missouri Code of State Regulations › Title 2 - DEPARTMENT OF AGRICULTURE › Division 60 - Grain Inspection and Warehousing › Chapter 5 - Missouri Grain Dealer's Law › Section 2 CSR 60-5.070 - Certificates of Deposit

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule sets forth guidelines for the
				  submission, acceptance, safeguarding, possible liquidation and return of a
				  certificate of deposit that has been submitted in lieu of a Missouri grain
				  dealer bond.
(1) A
				certificate of deposit (CD) issued by a bank or savings and loan association
				that is a member in good standing with the Federal Deposit Insurance
				Corporation or Federal Savings and Loan Insurance Corporation respectively, may
				be submitted to the Missouri Department of Agriculture in lieu of a Missouri
				grain dealer bond as required by sections 276.401-276.582, RSMo. The CD must be
				in an amount equal to the otherwise required bond.
(2) A CD shall have a term of no longer than
				one (1) year and shall be automatically renewable. However, the term of the CD
				may be for a period longer than one (1) year if the issuing bank states, in
				writing, that in the event the Missouri Department of Agriculture liquidates
				the CD, the bank will honor the request for liquidation and will not assess a
				penalty for early withdrawal (see
				2 CSR
				60-4.140 for certificate of deposit waiver of
				penalty).
(3) A CD submitted in
				lieu of a Missouri grain dealer bond shall be held in a safe-deposit box of a
				local bank or savings and loan association by the director of the Missouri
				Department of Agriculture who shall act as trustee for the benefit of all
				persons selling grain to the grain dealer as set forth in the Missouri Grain
				Dealer Law, sections 276.401-276.582, RSMo.
(4) All CDs shall be made payable or properly
				assigned to the Missouri Department of Agriculture as follows: Pay to the order
				of the director of the Missouri Department of Agriculture (see
				2 CSR
				60-4.140 for Certificate of Deposit Assignment Form).
				If a CD is assigned to the Department of Agriculture, written consent of the
				assignment must be received from the financial institution issuing the
				certificate. The director may make the necessary inquiries to determine that
				the certificate is negotiable and, if applicable, to confirm that the
				assignment of the CD to the Missouri Department of Agriculture has been
				approved by the financial institution issuing the CD.
(5) A CD assigned or purchased by a
				principal, shareholder, officer, employee or any other individual for or on
				behalf of a licensee shall disclose on its face the name of the licensee in
				whose favor the CD is deposited. The balance of any proceeds remaining after
				liquidation and disbursement shall be paid to the assignor or
				purchaser.
(6) In the event that a
				plurality of CDs from any number of sources are deposited in satisfaction of a
				licensee's bonding obligation, the director may satisfy claims arising under
				the Missouri Grain Dealers Law by liquidating any one (1) or more of these CDs
				without regard to proration.
(7) In
				the event that a licensee desires to substitute a bond for a CD then on deposit
				with the director of agriculture, the CD shall be retained by the Department of
				Agriculture for a period of ninety (90) days following the later of the
				effective date of the bond or the date the bond is received by the director. A
				substitute bond shall be considered as received or when a binding verbal
				commitment for a substitute bond has been accepted by the director. The
				director may retain the CD beyond ninety (90) days for such time as may be
				required to fully ascertain the existence of any claims. After that, the CD
				shall be returned to the purchaser. Should the maturity date be interposed
				during this transition period, the director, at the option of the licensee and
				upon its timely request, shall cause the CD to be liquidated and the proceeds
				be deposited in a passbook savings account for the duration of the transition
				period, when the funds shall be forwarded to the purchaser or assignor of the
				CD.
(8) A licensee shall be
				required to augment CD deposits in any situation where it would be required to
				increase its coverage under a bond; this augmentation shall be commensurate to
				the increased bond value required.
(9) All CDs liquidated by the Department of
				Agriculture pursuant to these rules may be redeemed by collection proceedings
				through a local bank or savings and loan association selected by the
				director.
(10) A CD may only be
				liquidated for disbursement upon the same reasons that bond proceeds may be
				demanded for disbursement and shall apply to all claims whenever
				arising.
(11) All interest earned
				on the CD is to be credited or paid directly to the purchaser of the CD, except
				in the event of liquidation for the purpose of paying claims, in which event
				interest attributed to the claim amounts shall be payable to
				claimants.
(12) If a licensee
				desires to surrender its license and requests the return of a CD to the
				purchaser, the licensee must return its grain dealer license and make written
				request by registered or certified mail with return receipt for return of the
				CD. Upon receipt of the written request and submission of the grain dealer
				license, the director shall hold the CD until the director is satisfied that no
				claims exist, which may include a minimum ninety (90)-day holding period,
				before the CD is returned to the purchaser.
(13) If a grain dealer license is revoked,
				the CD shall be held by the director for a period of one hundred twenty (120)
				days or until the director is satisfied that no claims against the licensee
				exist.
(14) In the event that a
				licensee desires to substitute a letter of credit for a CD, the director shall
				return the CD to the purchaser upon receipt and authentication of the letter of
				credit.
(15) In the event that the
				amount of the bond required under sections 276.401-276.582, RSMo decreases, a
				licensee may substitute a CD for the lesser amount; however, this substitution
				shall be made only at maturity of the CD in possession of the Department of
				Agriculture or at such time as approved by the director.
(16) If the decrease in bond requirement is
				due to an increase in net worth, a minimum ninety (90)-day holding period may
				be required from the date the improved net worth is accepted by the
				director.
*Original authority: 276.406, RSMo 1980, amended 1986,
					 1993, 1995; and 276.431, RSMo 1980 amended 1986,
					 1987.