S.F. _____ H.F. _____ Section 1. NEW SECTION . 533.209A Prohibited relationships. 1 A director shall not be related by consanguinity or affinity 2 within the third degree to any person employed by a state 3 credit union in a senior management position. For purposes 4 of this section, “senior management position” includes a state 5 credit union’s chief executive officer, president, or manager; 6 assistant chief executive officer, assistant president, vice 7 president, or assistant manager; or chief financial officer or 8 treasurer. 9 Sec. 2. Section 533.301, subsection 5, paragraph i, Code 10 2014, is amended to read as follows: 11 i. Corporate bonds as defined by and subject to terms 12 and conditions imposed by the superintendent, provided that 13 the superintendent shall not approve investment in corporate 14 bonds unless the bonds are rated in the two highest grades 15 of corporate bonds by a nationally accepted rating agency 16 investment grade . For purposes of this paragraph, “investment 17 grade” means the issuer of a security has an adequate capacity 18 to meet the financial commitments under the security for the 19 projected life of the asset or exposure, even under adverse 20 economic conditions. An issuer has adequate capacity to 21 meet the financial commitments of a security if the risk of 22 default by the obligor is low and the full and timely repayment 23 of principal and interest on the security is expected. A 24 state credit union may consider any or all of the following 25 nonexhaustive or nonmutually exclusive factors, to the extent 26 appropriate, with respect to the credit risk of a security: 27 (1) Credit spreads. 28 (2) Securities-related research. 29 (3) Internal or external credit risk assessments. 30 (4) Default statistics. 31 (5) Inclusion on an index. 32 (6) Priorities and enhancements. 33 (7) Price, yield, or volume. 34 (8) Asset class-specific factors. 35 -1- LSB 5580DP (3) 85 rn/rj 1/ 4

S.F. _____ H.F. _____ Sec. 3. Section 533.301, subsection 28, Code 2014, is 1 amended to read as follows: 2 28. Sell, to persons in the field of membership, negotiable 3 checks, including traveler’s checks; money orders; and other 4 similar money transfer instruments including international 5 and domestic electronic fund transfers and remittance checks 6 transfers . 7 Sec. 4. NEW SECTION . 533.405A Involuntary dissolution. 8 1. If the superintendent has taken over management of the 9 property and business of a state credit union pursuant to 10 section 533.502, and determined that the state credit union 11 cannot be reorganized or merged with another credit union, the 12 superintendent may move for the involuntary dissolution of the 13 state credit union and shall apply to the district court for 14 appointment as receiver with the authority to dissolve the 15 state credit union. 16 2. If a state credit union is in the process of a 17 voluntary dissolution, and pursuant to section 533.405, 18 the superintendent finds that the state credit union is not 19 making reasonable progress toward terminating its affairs, the 20 superintendent may move for the involuntary dissolution of the 21 state credit union and shall apply to the district court for 22 appointment as receiver with the authority to dissolve the 23 state credit union. 24 3. The provisions of section 533.503 shall apply when the 25 superintendent is acting as receiver, and as receiver the 26 superintendent shall distribute the assets pursuant to the 27 provisions of section 533.404. 28 Sec. 5. Section 533.503, Code 2014, is amended by adding the 29 following new subsections: 30 NEW SUBSECTION . 2A. The superintendent as receiver may sue 31 and defend in the superintendent’s name with respect to the 32 affairs of a state credit union. 33 NEW SUBSECTION . 5. The superintendent as receiver shall 34 hold all records of the receivership for a period of two years 35 -2- LSB 5580DP (3) 85 rn/rj 2/ 4

S.F. _____ H.F. _____ after the court decree dissolving the state credit union 1 and discharging the receiver, and at the termination of the 2 two-year period, the records may then be destroyed. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill relates to matters under the purview of the credit 7 union division of the department of commerce. 8 The bill provides that a director shall not be related 9 by consanguinity or affinity within the third degree to any 10 person employed by a state credit union in a senior management 11 position. The bill defines “senior management position” to 12 include a credit union’s chief executive officer, president, 13 or manager; assistant chief executive officer, assistant 14 president, vice president, or assistant manager; or chief 15 financial officer or treasurer. 16 The bill modifies provisions relating to investments by a 17 state credit union in corporate bonds to delete a requirement 18 that the bonds are rated in the two highest grades of corporate 19 bonds by a nationally accepted rating agency and substituting 20 the requirement that the bonds be considered investment grade. 21 The bill defines “investment grade” to mean the issuer of 22 a security has an adequate capacity to meet the financial 23 commitments under the security for the projected life of the 24 asset or exposure, even under adverse economic conditions. The 25 bill provides that an issuer has adequate capacity to meet the 26 financial commitments of a security if the risk of default 27 by the obligor is low and the full and timely repayment of 28 principal and interest on the security is expected. The bill 29 specifies a list of nonexhaustive or nonmutually exclusive 30 factors which a credit union may consider, to the extent 31 appropriate, with respect to the credit risk of a security. 32 The bill changes a reference to “remittance checks” to 33 “remittance transfers” regarding the ability of a state credit 34 union to sell, to persons in the field of membership, specified 35 -3- LSB 5580DP (3) 85 rn/rj 3/ 4

S.F. _____ H.F. _____ checks, money orders, and other similar money transfer 1 instruments. 2 Additionally, the bill establishes new involuntary 3 dissolution provisions relating to state credit unions. The 4 bill provides that if the superintendent has taken over 5 management of the property and business of a state credit 6 union and determined that the state credit union cannot 7 be reorganized or merged with another credit union, the 8 superintendent may move for the involuntary dissolution of the 9 state credit union and shall apply to the district court for 10 appointment as receiver with the authority to dissolve the 11 state credit union. Further, the bill provides that if a state 12 credit union is in the process of a voluntary dissolution, and 13 the superintendent of credit unions finds that the state credit 14 union is not making reasonable progress toward terminating 15 its affairs, the superintendent may move for the involuntary 16 dissolution of the state credit union and shall apply to the 17 district court for appointment as receiver with the authority 18 to dissolve the state credit union. 19 The bill adds two new provisions applicable to the 20 superintendent acting as receiver. The bill provides that 21 the superintendent as receiver may sue and defend in the 22 superintendent’s name with respect to the affairs of a state 23 credit union, and shall hold all records of the receivership 24 for a period of two years after the court decree dissolving the 25 state credit union and discharging the receiver, which, at the 26 termination of the two-year period, may be destroyed. 27 -4- LSB 5580DP (3) 85 rn/rj 4/ 4