North Hempstead Town also had money in failed Signature Bank

                                                                               

Town of North Hempstead

North Hempstead Town had $1.2 million on deposit in Signature Bank, which was shut down by state regulators Sunday night, but Oyster Bay Town did not use the New York bank as a depository, spokesmen for both towns said separately today.

Hempstead Town did not respond to inquiries about deposits at Signature Bank.

Signature was seized by state regulators Sunday evening after the Silicone Valley Bank in California collapsed on Friday.

Both President Joe Biden and New York Gov. Kathy Hochul have tried to assure worried Americans that their deposits are secure. Biden said today, "Rest assured our banking system is safe."

But, of course, many people are waiting to see if any other banking institutions fail.

In North Hempstead, the town board unanimously approved Signature for town bank deposits in January, among with seven other banks: First National Bank of Long Island, Flushing Bank, Hanover Bank, J.P. Morgan Chase, TD Bank, Webster Bank, and Wells Fargo Bank.

A spokesman for North Hempstead Supervisor Jennifer DeSena, a Democrat elected two years ago as a Republican in the Democratic-controlled town, said that the town hasn't had a comptroller since December 2021 despite DeSena's attempts to hire one. He said the comptroller's department has no deputies or management-level employees, because the board's Demoratic majority "controls hiring and firing."

Jennifer DeSena

DeSena said in a statement:

“The Town has utilized Signature Bank as a designated depository since 2010. Although this was not a new deposit, our Comptroller’s Office, which is devoid of any management-level employees, gave no caution regarding the dangerous investments in crypto the bank was making. Since this story has broken, I have directed our Comptroller’s Office staff to perform a full review of our depositories to make sure nothing like this ever happens again."

 

"Thankfully, we have no reason to believe that the $1.2 million in taxpayer funds that was deposited at Signature Bank is in jeopardy in any way, but this is yet more proof that the Town Board is derelict in their duty to our taxpayers as they continue to block a hire for Town Comptroller. As I’ve said all along, the majority members of the Town Board have been playing a dangerous game with our taxpayers finances, and today the other shoe may have finally dropped.”

 

Awaiting comment from Democratic board members spokesman.

Nassau County also uses Signature for county deposits.    

Although Nassau County Executive Bruce Blakeman's spokesman Chris Boyle did not respond to an inquiry about the county's use of Signature Bank last night, he told Newsday and News12 today hat Nassau had $95 million in collateralized certificates of deposit at the failed New York Bank and county officials are "confident that taxpayer funds are safe."

Still, $95 million is a lot of money. The Government Finance Officers Association recommends that governments secure deposits with the collateral or assets of a bank or financial institutions.

North Hempstead in its resolution specified that all deposits be collateralized.

"RESOLVED that the foregoing designation of each Financial Institution is conditioned upon their collateralizing Town deposits by pledging eligible securities as more fully described in the Town’s Investment Policy, dated December 16, 2021, as amended, and in accordance with General Municipal Law §10;"

The Finance Officers association says, however, "The FDIC does not guarantee however that the collateral will be sufficient to cover the amount of uninsured funds."