Depositories of public moneys and pledge of assets.

(1) Banks shall be depositories of public moneys; they may also be employed as financial agents of the state and its political subdivisions, and they shall perform such reasonable duties as such depositories and financial agents as may be required of them. Banks so designated shall give satisfactory security for the safekeeping and prompt payment of the public moneys deposited with them and for the faithful performance of their duties as financial agents of the state and its political subdivisions as provided in chapter 280. A bank or trust company may also pledge its assets to:

(a) Enable it to act as agent for the sale of obligations of the United States.

(b) Secure borrowed funds.

(c) Secure deposits when the depositor is required by law to obtain such security.

(d) Comply with the requirements of any other law.

(2) Notwithstanding any other provision of this section or the provisions of any other law requiring security for deposits of funds in the form of surety bond, in the form of the deposit or pledge of securities, or in any other form, security for such deposits shall not be required to the extent that such deposits are insured under the provisions of the Federal Deposit Insurance Act, as now or hereafter amended. Recognition is accorded to the custom and usage, and its practicality, of the deposit or pledge of securities by banks, as security for deposits, in an aggregate amount which, because of the fluctuation from time to time of the aggregate amount of the deposits secured thereby, may at times be in an amount in excess of the required amount of such security without withdrawing and redepositing securities with each decrease and increase of the aggregate amount of deposits secured thereby. In order to effectuate the provisions of the first sentence of this subsection, whenever the amount of securities deposited or pledged exceeds the amount required for the deposits secured thereby, securities in an amount equal to such excess shall, for all purposes and laws, while such excess exists be, and be treated as, freed and discharged from such deposit and pledge even though not physically withdrawn or removed from such deposit or pledge. However, such excess securities which are not physically withdrawn or removed from deposit or from the pledge thereof shall immediately and automatically, for all purposes and laws, be, and be treated as, redeposited and repledged at such time or times as, and to the extent that, there is an increase in the amount of security required for funds deposited with the bank.

(3) Any notes, bonds, or other securities, other than shares of stock, in which a state bank is authorized by law to invest any of its funds shall be accepted as satisfactory security for the deposit of funds, for the safekeeping and prompt payment of moneys deposited, for the faithful performance of duties as fiscal or financial agent, and for any other purpose for which security is required, whether such moneys so deposited be funds of or under the control of, or the security is required by, the state or any political subdivision thereof or any officer of the state or any political subdivisions thereof or whether the security is required by any other law. The provisions of this subsection shall be cumulative and shall not be subject to the restrictions or the provisions of any other law relating to the type, characteristics, or form of securities acceptable or required in connection with deposits of any public or other funds or the qualification of depositories therefor, or acceptable or required by any law.