Florida lawmakers are mulling legislation that would let small banks and thrifts pledge Federal Home Loan Bank letters of credit — instead of more tangible assets — as collateral on public deposits.

Since the Federal Deposit Insurance Corp. only insures deposits up to $100,000, many states, including Florida, require that banks pledge bonds or other assets as collateral on government deposits that exceed the FDIC limit. Bankers say many small banks cannot meet that requirement and therefore are excluded from bidding on public deposits.

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