Financial Code section 1408

A bank may act as a depositary, paying agent, trustee, or fiscal agent for the holding or handling of public funds or securities notwithstanding the fact that a member of the legislative body or an officer or employee of the depositor is an officer, employee, or stockholder of such bank, or of a holding company that owns any of the stock of such bank. Such member of a legislative body, or such officer or employee thereof, shall not be deemed “interested in any contract” as that phrase is used in Section 1090 of the Government Code, if his sole interest is the fact that he is an officer, employee, or stockholder of the bank selected to act as such depositary, paying agent or fiscal agent.
An officer or employee of a local public agency shall be deemed to have only a “remote interest” in a contract, as that phrase is used in Section 1091 of the Government Code, where such contract is entered into without competitive bidding under a procedure established by law, if his sole interest is that of an officer, director, or employee, of a bank, bank holding company, or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor, and if the conditions of subdivision (a) of Section 1091 of the Government Code are met.

Source: Section 1408, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=FIN§ionNum=1408.­ (updated Jan. 1, 2012; accessed Jul. 21, 2025).

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Verified:
Jul. 21, 2025

§ 1408's source at ca​.gov