(2)__The bonds, debentures, acceptances and commercial paper of a bank or bank holding company principally domiciled outside the State, as long as the bank's or holding company's bonds and debentures are rated in the 3 highest grades by a nationally recognized statistical rating organization. In the case of commercial paper, the commercial paper must be rated in the 2 highest grades. In the case of acceptances, the bank's or holding company's ratings of its other obligations so listed must be rated in the 2 highest grades. The bank must also be insured by the Federal Deposit Insurance Corporation, and the holding company must be registered under the federal Bank Holding Company Act of 1956; and

(3)__Capital notes or debentures issued by a savings bank or savings and loan association chartered under the laws of any state or of the United States or of the Commonwealth of Puerto Rico, as long as that institution is insured by the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation or issued by a thrift institution holding company registered under the United States Housing Act, Section 408. These obligations must be rated in the 3 highest grades by a nationally recognized statistical rating organization.

A payroll processor may not acquire obligations of any one bank or thrift, or bank or thrift holding company, not principally domiciled in this State in excess of 5% of the annual aggregate of funds handled by the payroll processor;

D.__Mutual funds or trusts, as long as all of the investments of those mutual funds or trusts are permissible investments under this section; and

E.__United States or State Government guaranteed loans.

§1495-F.__Audits

A payroll processor shall submit to an annual audit to be conducted by the Department of Professional and Financial Regulation.

§1495-G.__Rulemaking