(2) In lieu of the requirements of subsection (1) of this section, a licensee may deposit with the director, or with insured institutions as defined in ORS 706.008 located in this state and designated by the licensee and approved by the director, securities in an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the security device applicable under subsection (1) of this section or portion thereof. The securities shall be held to secure the same obligations as would the security device. The depositor shall be entitled to receive all interest and dividends on the securities and may, with the approval of the director, substitute other securities for those deposited. The director, in writing, for good cause shown, may require the depositor to substitute other securities for those deposited. As used in this subsection, "securities" includes interest-bearing stocks and bonds, notes, debentures or other obligations of the United States Government or any agency or instrumentality of the United States Government, or guaranteed by the United States Government, or of this state, or of a city, county, district or instrumentality of this state, or guaranteed by this state.
(3) The security device shall remain in effect until cancellation, which may occur only after 30 days’ written notice to the director. Cancellation shall not affect any liability incurred or accrued during the 30-day period.
(4) The security device shall remain in place for no longer than five years after the licensee ceases money transmission operations in this state. However, notwithstanding this provision, the director may permit the security device to be reduced or eliminated prior to that time to the extent that the amount of the licensee’s payment instruments outstanding in this state are reduced. The director may also permit a licensee to substitute a letter of credit or such other form of security device acceptable to the director for the security device in place at the time the licensee ceases money transmission operations in this state.
(5) In the event of bankruptcy of the licensee, the security device shall be considered by operation of law to be held in trust for the benefit of purchasers and holders of the licensee’s outstanding payment instruments. [1999 c.571 §7]