Court Opinion

ID: 6382673
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:02:38.917405+00
Date Added: 2024-06-11T15:50:24.953438
License: Public Domain

Umsted, Special Deputy Attorney General,
You inquire whether a Pennsylvania bank or bank and trust company may pledge its assets to secure funds deposited by a housing authority. It may.
Section 1004 of the Banking Code, the Act of May 15, 1933, P. L. 624, as amended by the Act of June 21, 1935, P. L. 369, 7 PS §819-1004, provides, in part, as follows:
“A bank or a bank and trust company shall not have the power to pledge or hypothecate any of its assets as security for deposits made with it, except for the following:
“(1) Federal, State, municipal, school district, or other public funds.”
The Housing Authorities Law, the Act of May 28, 1937, P. L. 955, as amended by the Act of'May 26, 1943, P. L. 658, 35 PS §1543, defines “authority”, or “housing authority” in the following terms:
“A public body and a body corporate and politic created and organized, in accordance with the provisions of this act, for the purposes, with the powers, and subject to the restrictions hereinafter set forth.”
Section 10 of the above act, 35 PS §1550, reads, in part, as follows :
“An Authority shall constitute a public body, corporate and politic, exercising public powers of the Commonwealth as an agency thereof . . .”
From the foregoing it is obvious that funds of a housing authority are public funds within the meaning of section 1004 of the Banking Code, supra.
We are of the opinion and you are, therefore, advised that a Pennsylvania bank or bank and trust company has the power to pledge or hypothecate assets as security for deposits made with it by any Pennsylvania housing authority.