Pledge of Assets by Banking Institutions

Saylor, Deputy Attorney General,

You have asked to be advised whether banking institutions under your supervision may pledge their assets to secure the deposit of postal savings funds and custodial funds of the Commonwealth.

Section 1004 of the Banking Code, approved May 15, 1933, P. L. 624, and effective July 3,1933, provides as follows:

*444“Pledge of Assets for Deposits. — 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…