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Senate File 320

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 524.103, Code 1995, is amended by
  1  2 adding the following new subsections:
  1  3    NEW SUBSECTION.  2A.  "Aggregate capital" means the sum of
  1  4 capital, surplus, undivided profits, and reserves as of the
  1  5 most recent calculation date.
  1  6    NEW SUBSECTION.  8A.  "Borrower" means a person named as a
  1  7 borrower or debtor in a loan or extension of credit, or any
  1  8 other person, including a drawer, endorser, or guarantor,
  1  9 deemed to be a borrower under section 524.904, subsection 3.
  1 10    NEW SUBSECTION.  9A.  "Calculation date" means the most
  1 11 recent of the following:
  1 12    a.  The date the bank's statement of condition is required
  1 13 to be filed pursuant to section 524.220, subsection 2.
  1 14    b.  The date an event occurs that reduces or increases the
  1 15 bank's aggregate capital by ten percent or more.
  1 16    c.  As the superintendent may direct.
  1 17    NEW SUBSECTION.  11A.  "Chief executive officer" means the
  1 18 person designated by the board of directors to be responsible
  1 19 for the implementation of and adherence to board policies and
  1 20 resolutions by all officers and employees of the bank.
  1 21    NEW SUBSECTION.  11B.  "Contractual commitment to advance
  1 22 funds" means a bank's obligation to do either of the
  1 23 following:
  1 24    a.  Advance funds under a standby letter of credit or other
  1 25 similar arrangement.
  1 26    b.  Make payment, directly or indirectly, to a third person
  1 27 contingent upon default by a customer of the bank in
  1 28 performing an obligation and to make such payment in keeping
  1 29 with the agreed upon terms of the customer's contract with a
  1 30 third person, or to make payments upon some other stated
  1 31 condition.
  1 32    The term does not include commercial letters of credit and
  1 33 similar instruments where the issuing bank expects the
  1 34 beneficiary to draw on the issuer, that do not guarantee
  1 35 payment, and that do not provide for payment in the event of a
  2  1 default by a third person.
  2  2    NEW SUBSECTION.  11C.  "Control" means when a person,
  2  3 directly or indirectly or acting through or together with one
  2  4 or more persons, satisfies any of the following:
  2  5    a.  Owns, controls, or has the power to vote fifty percent
  2  6 or more of any class of voting securities of another person.
  2  7    b.  Controls, in any manner, the election of a majority of
  2  8 the directors, trustees, or other persons exercising similar
  2  9 functions of another person.
  2 10    c.  Has the power to exercise a controlling influence over
  2 11 the management or policies of another person.
  2 12    NEW SUBSECTION.  13A.  "Executive officer" means a person
  2 13 who participates or has authority to participate, other than
  2 14 in the capacity of a director, in major policymaking functions
  2 15 of a state bank, whether or not the officer has an official
  2 16 title, whether or not such a title designates the officer as
  2 17 an assistant, or whether or not the officer is serving without
  2 18 salary or other compensation.  The chief executive officer,
  2 19 chairperson of the board, the president, every vice president,
  2 20 and the cashier of a state bank are deemed to be executive
  2 21 officers, unless such an officer is excluded, by resolution of
  2 22 the board of directors of a state bank or by the bylaws of the
  2 23 state bank, from participation, other than in the capacity of
  2 24 a director, in major policymaking functions of the state bank,
  2 25 and the officer does not actually participate in the major
  2 26 policymaking functions.  All officers who serve on a board of
  2 27 directors are deemed to be executive officers, except as
  2 28 provided for in section 524.701, subsection 3.
  2 29    NEW SUBSECTION.  17A.  "Officer" means chief executive
  2 30 officer, executive officer, or any other administrative
  2 31 official of a bank elected by the bank's board of directors to
  2 32 carry out any of the bank's operating rules and policies.
  2 33    NEW SUBSECTION.  17B.  "Operations subsidiary" means a
  2 34 wholly owned corporation incorporated and controlled by a bank
  2 35 that performs functions which the bank is authorized to
  3  1 perform.
  3  2    NEW SUBSECTION.  19A.  "Reserves" means the amount of the
  3  3 allowance for loan and lease losses of a state bank.
  3  4    NEW SUBSECTION.  19B.  "Sale of federal funds" means any
  3  5 transaction between depository institutions involving the
  3  6 transfer of immediately available funds resulting from credits
  3  7 to deposit balances at federal reserve banks, or from credits
  3  8 to new or existing deposit balances due from a correspondent
  3  9 depository institution.
  3 10    NEW SUBSECTION.  21A.  "Standby letter of credit" means a
  3 11 letter of credit, or similar arrangement, that represents an
  3 12 obligation to the beneficiary on the part of the issuer to do
  3 13 any of the following:
  3 14    a.  Repay money borrowed by or advanced to or for the
  3 15 account of the account holder.
  3 16    b.  Make payment on account of any indebtedness undertaken
  3 17 by the account holder.
  3 18    c.  Make payment on account of any default by the account
  3 19 holder in the performance of an obligation.
  3 20    Sec. 2.  Section 524.103, subsections 7, 12, 15, 18, 22,
  3 21 25, 26, and 27, Code 1995, are amended to read as follows:
  3 22    7.  "Bank" means a corporation engaged in the business of
  3 23 banking, authorized by law to receive deposits and whose
  3 24 deposits are insured by the bank insurance fund of the federal
  3 25 deposit insurance corporation organized under this chapter or
  3 26 U.S.C. title 12.
  3 27    12.  "Customer" means any a person having with an account
  3 28 or other contractual arrangement with a state bank.  For the
  3 29 purpose of this chapter, a government or governmental body or
  3 30 entity may be a customer.
  3 31    15.  "Insolvent" means the inability of a state bank to pay
  3 32 its debts and obligations as they become due in the ordinary
  3 33 course of its business.  A state bank is also considered to be
  3 34 insolvent if the ratio of its capital, surplus, and undivided
  3 35 profits to assets is at or close to zero or if its assets are
  4  1 of such poor quality that its continued existence is
  4  2 uncertain.
  4  3    18.  "Person" means an individual, a corporation (domestic
  4  4 or foreign), a partnership, an association, a trust or a
  4  5 fiduciary as defined in section 4.1.
  4  6    22.  "State bank" means any bank incorporated pursuant to
  4  7 the provisions of this chapter after January 1, 1970, and any
  4  8 "state bank" or "savings bank" incorporated pursuant to the
  4  9 laws of this state and doing business as such upon on January
  4 10 1, 1970.
  4 11    25.  "Surplus" means the aggregate of the amount originally
  4 12 paid in as required by section 524.402 524.401, subsection 1
  4 13 3, any amounts transferred to surplus pursuant to section
  4 14 524.402, subsection 2, 524.405 and any amounts subsequently
  4 15 designated as such by action of the board of directors of the
  4 16 state bank.
  4 17    26.  "Trust company" means a business organization which is
  4 18 authorized to engage in trust business pursuant to section
  4 19 524.1005.  A bank lawfully granted exercising trust powers
  4 20 under the laws of this state or of the United States is not a
  4 21 trust company by reason of having authority to engage in trust
  4 22 business in addition to its general business.
  4 23    27.  "Undivided profits" means the accumulated
  4 24 undistributed net profits of a state bank, including any
  4 25 residue from the fund established pursuant to section 524.403
  4 26 524.401, subsection 3, after:
  4 27    a.  Payment or provision for payment of taxes and expenses
  4 28 of operations.
  4 29    b.  Transfers to reserves allocated to a particular asset
  4 30 or class of assets.
  4 31    c.  Losses estimated or sustained on a particular asset or
  4 32 class of assets in excess of the amount of reserves allocated
  4 33 therefor.
  4 34    d.  Transfers to surplus and capital.
  4 35    e.  Amounts declared as dividends to shareholders.
  5  1    Sec. 3.  Section 524.103, subsection 19, Code 1995, is
  5  2 amended by striking the subsection.
  5  3    Sec. 4.  Section 524.104, Code 1995, is amended to read as
  5  4 follows:
  5  5    524.104  RULES OF CONSTRUCTION.
  5  6    In the interpretation and construction of this chapter:
  5  7    1.  Transactions or acts validly entered into or performed
  5  8 before January 1, 1970 July 1, 1995, and the rights, duties
  5  9 and interests flowing from them remain valid thereafter on and
  5 10 after July 1, 1995, and may be completed or terminated
  5 11 according to their terms and as permitted by any statute
  5 12 repealed or amended by this chapter, as though such repeal or
  5 13 amendment had not occurred.
  5 14    2.  All individuals who, upon January 1, 1970 on July 1,
  5 15 1995, hold any office under a provision of law repealed by
  5 16 this chapter, and which offices are continued by this chapter
  5 17 shall continue to hold such offices according to their former
  5 18 tenure.
  5 19    Sec. 5.  Section 524.105, Code 1995, is amended to read as
  5 20 follows:
  5 21    524.105  EFFECT ON EXISTING BANKS.
  5 22    1.  The corporate existence of a state bank existing and
  5 23 operating on January 1, 1970 July 1, 1995, shall is not be
  5 24 affected by the enactment amendment of this chapter.
  5 25    2.  All state banks shall be are subject to the provisions
  5 26 and requirements of this chapter in every particular, and all
  5 27 national banks, now or hereafter doing business in this state,
  5 28 shall be are subject to the provisions of this chapter, to the
  5 29 extent applicable, from January 1, 1970 July 1, 1995.
  5 30    Sec. 6.  Section 524.107, subsection 1, Code 1995, is
  5 31 amended to read as follows:
  5 32    1.  No A person may lawfully engage in this state in the
  5 33 business of receiving money for deposit, transact the business
  5 34 of banking, or may lawfully establish in this state a place of
  5 35 business for such purpose, except other than a state bank
  6  1 which is subject to the provisions of this chapter, a private
  6  2 bank to the extent provided for and limited by sections
  6  3 524.1701 and 524.1702, and a national bank authorized by the
  6  4 laws of the United States to engage in the business of
  6  5 receiving money for deposit, shall not engage in this state in
  6  6 the business of receiving money for deposit, transact the
  6  7 business of banking, or establish in this state a place of
  6  8 business for such purpose.
  6  9    Sec. 7.  Section 524.109, Code 1995, is amended to read as
  6 10 follows:
  6 11    524.109  BANKERS' BANK AUTHORIZED.
  6 12    1.  A state bank may be organized under this chapter as a
  6 13 bankers' bank.  The bankers' bank is subject to all rights,
  6 14 privileges, duties, restrictions, penalties, liabilities,
  6 15 conditions and limitations applicable to a state banks bank
  6 16 generally, except as limited in the definition of bankers'
  6 17 bank contained in section 524.103, subsection 8.  However, a
  6 18 bankers' bank shall have the same powers as those granted by
  6 19 federal law and regulation to a national bank organized as a
  6 20 bankers' bank under 12 U.S.C. } 27.
  6 21    2.  A state bank shall have the power to acquire and hold
  6 22 the shares in one or more bankers' banks or bank holding
  6 23 companies which own a bankers' bank in a total amount not to
  6 24 exceed five percent of the state bank's aggregate capital.  A
  6 25 state bank shall not own, directly or indirectly, more than
  6 26 five percent of any class of voting shares of a bankers' bank.
  6 27    Sec. 8.  Section 524.201, subsection 1, Code 1995, is
  6 28 amended to read as follows:
  6 29    1.  The governor shall appoint, subject to confirmation by
  6 30 the senate, a superintendent of banking.  The appointee shall
  6 31 be selected solely with regard to qualification and fitness to
  6 32 discharge the duties of office, and no a person shall not be
  6 33 appointed who has not had at least five years experience as an
  6 34 executive officer in a bank or in the regulation or
  6 35 examination of banks.
  7  1    Sec. 9.  Section 524.202, Code 1995, is amended to read as
  7  2 follows:
  7  3    524.202  SUPERINTENDENT &endash; SALARY.
  7  4    The superintendent shall receive a salary to be fixed by
  7  5 the state banking board governor.  The superintendent shall be
  7  6 entitled to receive reimbursement for expenses incurred in the
  7  7 performance of the superintendent's duties, subject to the
  7  8 provisions of section 524.209.
  7  9    Sec. 10.  Section 524.204, Code 1995, is amended to read as
  7 10 follows:
  7 11    524.204  DEPUTY SUPERINTENDENT OF BANKING.
  7 12    1.  The superintendent shall appoint a deputy
  7 13 superintendent of banking, who shall assist the superintendent
  7 14 in the performance of the superintendent's office duties and
  7 15 who shall perform the duties of the superintendent during the
  7 16 absence or the inability of the superintendent, and as
  7 17 directed by the superintendent.
  7 18    2.  The deputy superintendent shall be removable at the
  7 19 pleasure of the superintendent.  If the office of the
  7 20 superintendent becomes vacant, the deputy superintendent shall
  7 21 have all the powers and duties of the superintendent until a
  7 22 new superintendent is appointed by the governor in accordance
  7 23 with the provisions of this chapter.
  7 24    3.  The deputy superintendent shall receive a salary to be
  7 25 fixed by the state banking board as provided in section
  7 26 524.208.  The deputy superintendent shall be entitled to
  7 27 receive reimbursement for expenses incurred in the performance
  7 28 of the deputy superintendent's duties, subject to the
  7 29 provisions of section 524.209.
  7 30    Sec. 11.  Section 524.211, subsections 1 and 2, Code 1995,
  7 31 are amended by striking the subsections and inserting in lieu
  7 32 thereof the following:
  7 33    1.  The superintendent, deputy superintendent, an assistant
  7 34 to the superintendent, a bank examination analyst, general
  7 35 counsel, or an examiner assigned to the bank bureau of the
  8  1 banking division is prohibited from obtaining a loan of money
  8  2 or property from a state-chartered bank or any person or
  8  3 entity affiliated with a state-chartered bank.
  8  4    2.  The superintendent, deputy superintendent, finance
  8  5 company bureau chief, and all examiners assigned to the
  8  6 finance company bureau are prohibited from obtaining a loan of
  8  7 money or property from a finance company licensed by the
  8  8 banking division.
  8  9    Sec. 12.  Section 524.211, Code 1995, is amended by adding
  8 10 the following new subsections:
  8 11    NEW SUBSECTION.  2A.  The superintendent, deputy
  8 12 superintendent, an assistant to the superintendent, a bank
  8 13 examination analyst, finance company bureau chief, general
  8 14 counsel, or an examiner of the banking division who has credit
  8 15 relations with a mortgage banking company or credit card
  8 16 company licensed by the banking division is prohibited from
  8 17 participating in decisions, oversight, and official review of
  8 18 matters concerning the regulation of the mortgage banking
  8 19 company or credit card company with which such person has
  8 20 credit relations.
  8 21    NEW SUBSECTION.  2B.  An assistant to the superintendent, a
  8 22 bank examination analyst, general counsel, or an examiner
  8 23 assigned to the bank bureau of the banking division who has
  8 24 credit relations with a finance company licensed by the
  8 25 banking division is prohibited from participating in
  8 26 decisions, oversight, and official review of matters
  8 27 concerning the regulation of the finance company with which
  8 28 such person has credit relations.
  8 29    NEW SUBSECTION.  2C.  An employee of the banking division,
  8 30 other than the superintendent or a member of the state banking
  8 31 board, shall not perform any services for, and shall not be a
  8 32 shareholder, member, partner, owner, director, officer, or
  8 33 employee of, any enterprise, person, or affiliate subject to
  8 34 the regulatory purview of the banking division.
  8 35    Sec. 13.  Section 524.211, subsection 4, Code 1995, is
  9  1 amended to read as follows:
  9  2    4.  The superintendent, deputy superintendent, or any
  9  3 assistant or examiner who is convicted of theft, burglary,
  9  4 robbery, larceny or embezzlement as a result of a violation of
  9  5 the laws of this state or of the United States a felony while
  9  6 holding such position shall be immediately discharged from
  9  7 employment and shall be forever disqualified from holding any
  9  8 position in the banking division.
  9  9    Sec. 14.  Section 524.212, Code 1995, is amended by
  9 10 striking the section and inserting in lieu thereof the
  9 11 following:
  9 12    524.212  PROHIBITION AGAINST DISCLOSURE.
  9 13    The superintendent, deputy superintendent, assistant to the
  9 14 superintendent, examiner, or other employee of the banking
  9 15 division shall not disclose, in any manner, to any person
  9 16 other than the person examined and those regulatory agencies
  9 17 referred to in section 524.217, subsection 2, any information
  9 18 relating specifically to the supervision and regulation of any
  9 19 state bank, persons subject to the provisions of chapter 533A,
  9 20 533B, 536, or 536A, any affiliate of any state bank, or an
  9 21 affiliate of a person subject to the provisions of chapter
  9 22 533A, 533B, 536, or 536A, except when ordered to do so by a
  9 23 court of competent jurisdiction and then only in those
  9 24 instances referred to in section 524.215, subsections 1, 2, 3,
  9 25 and 5.
  9 26    Sec. 15.  Section 524.215, Code 1995, is amended to read as
  9 27 follows:
  9 28    524.215  RECORDS OF DEPARTMENT DIVISION OF BANKING.
  9 29    All records of the department division of banking shall be
  9 30 public records subject to the provisions of chapter 22, except
  9 31 that all papers, documents, reports, reports of examinations
  9 32 and other writings relating specifically to the supervision
  9 33 and regulation of any state bank or other person by the
  9 34 superintendent pursuant to the laws of this state shall not be
  9 35 public records and shall not be open for examination or
 10  1 copying by the public or for examination or publication by the
 10  2 news media.
 10  3    The superintendent, deputy superintendent, assistants, or
 10  4 examiners shall not be subpoenaed in any cause or proceeding
 10  5 to give testimony concerning information relating specifically
 10  6 to the supervision and regulation of any state bank or other
 10  7 person by the superintendent pursuant to the laws of this
 10  8 state, nor shall and the records of the banking division which
 10  9 relate specifically to the supervision and regulation of any
 10 10 such state bank or other such person shall not be offered in
 10 11 evidence in any court or subject to subpoena by any party
 10 12 except, where relevant:
 10 13    1.  In such actions or proceedings as are brought by the
 10 14 superintendent.
 10 15    2.  In any matter in which an interested and proper party
 10 16 seeks review of a decision of the superintendent.
 10 17    3.  In any action or proceeding which arises out of the
 10 18 criminal provisions of the laws of this state or the United
 10 19 States.
 10 20    4.  In any action brought as a shareholders derivative suit
 10 21 against a state bank.
 10 22    5.  In any action brought to recover moneys or to recover
 10 23 upon an indemnity bond for the loss of which was a result of
 10 24 embezzlement, misappropriation, or misuse of state bank funds
 10 25 by a director, officer, or employee of the state bank.
 10 26    Sec. 16.  Section 524.217, Code 1995, is amended to read as
 10 27 follows:
 10 28    524.217  EXAMINATIONS.
 10 29    1.  The superintendent shall have power to make may do all
 10 30 of the following:
 10 31    a.  Make or cause to be made an examination of every state
 10 32 bank and trust company whenever in the superintendent's
 10 33 judgment such examination is necessary or advisable, but in no
 10 34 event less frequently than once during each two-year period.
 10 35 During the course of each examination of a state bank or trust
 11  1 company, inquiry shall be made as to its financial condition,
 11  2 the security afforded to those to whom it is obligated, the
 11  3 policies of its management, whether the requirements of law
 11  4 have been complied with in the administration of its affairs,
 11  5 and such other matters as the superintendent may prescribe.
 11  6 The superintendent shall also have power to make
 11  7    b.  Make or cause to be made such limited examinations at
 11  8 such times and with such frequency as the superintendent may
 11  9 deem deems necessary and advisable to determine the condition
 11 10 of any state bank or trust company and whether any person has
 11 11 violated any of the provisions of this chapter.
 11 12    2. c.  The superintendent shall have power to make Make or
 11 13 cause to be made an examination of any corporation in which
 11 14 the state bank or trust company owns shares except
 11 15 corporations described in paragraphs "a" and "b" of subsection
 11 16 3 of section 524.901.  The superintendent shall also have
 11 17 power, upon
 11 18    d.  Upon application to and order of the district court of
 11 19 Polk county, to make or cause to be made an examination of any
 11 20 person having business transactions or a relationship with any
 11 21 state bank or trust company when such an examination is deemed
 11 22 necessary and advisable in order to determine whether the
 11 23 capital of the state bank or trust company is impaired or
 11 24 whether the safety of its deposits has been imperiled.  The
 11 25 fee for any such examination shall be paid by the state bank
 11 26 or trust company.
 11 27    3. e.  To the extent necessary for the purpose of any
 11 28 examination provided for by this section and section 524.1105,
 11 29 the superintendent shall have the power to examine all
 11 30 relevant books, records, accounts, and documents and to compel
 11 31 the production of the same in the manner prescribed by section
 11 32 524.214.
 11 33    4. 2.  The superintendent may furnish to the federal
 11 34 deposit insurance corporation, the federal reserve system, the
 11 35 office of the comptroller of the currency, the office of
 12  1 thrift supervision, national credit union administration, the
 12  2 federal home loan bank, and financial institution regulatory
 12  3 authorities of other states, or to any official or supervising
 12  4 examiner thereof of such regulatory authorities, a copy of the
 12  5 report of any or all examinations made of any state bank and
 12  6 of any affiliate of a state bank.
 12  7    5. 3.  A copy of the report of each examination of a state
 12  8 bank or trust company shall be transmitted by the
 12  9 superintendent to the board of directors of the state bank or
 12 10 trust company except to the extent that the report of any such
 12 11 examination may be confidential to the superintendent, and
 12 12 each member of the board of directors shall furnish to the
 12 13 superintendent, on forms to be supplied by the superintendent,
 12 14 a statement that the member has read the report of
 12 15 examination.
 12 16    6. 4.  All reports of examinations, including any copies
 12 17 thereof of such reports, in the possession of any person other
 12 18 than the superintendent or employee of the banking division,
 12 19 including any state bank or any agency to which any report of
 12 20 such examination may be furnished under subsection 4 of this
 12 21 section 2, shall be confidential communications, shall not be
 12 22 subject to subpoena from such persons, and shall not be
 12 23 published or made public by such persons.
 12 24    7. 5.  The report of examination of any affiliate or of any
 12 25 person examined as provided for in subsection 2 1, paragraph
 12 26 "c" or "d", shall not be transmitted by the superintendent to
 12 27 any such affiliate or person or to any state bank or trust
 12 28 company or to the board of directors of any state bank or
 12 29 trust company unless authorized or requested by such affiliate
 12 30 or person.
 12 31    Sec. 17.  Section 524.219, Code 1995, is amended to read as
 12 32 follows:
 12 33    524.219  FEES FOR EXAMINATIONS.
 12 34    A state bank subject to examination, supervision, and
 12 35 regulation by the superintendent, shall pay to the
 13  1 superintendent a fee fees, established by the state banking
 13  2 board, based on the time required for the examination and the
 13  3 administrative costs and expenses incurred in the discharge of
 13  4 the duties imposed upon the superintendent by this chapter.
 13  5 The fee fees shall include, but are not be limited to costs
 13  6 and expenses for salaries, expenses and travel for employees,
 13  7 office facilities, supplies, and equipment.  Such fee shall
 13  8 apply equally to all state banks.
 13  9    The fee fees for examination of any affiliate of a state
 13 10 bank as provided for in section 524.1105, and the examinations
 13 11 provided for in section 524.217, subsection 2 1, paragraphs
 13 12 "c" and "d", shall be established by the state banking board,
 13 13 based on the time required for the examination and the
 13 14 administrative costs and expenses incurred in the discharge of
 13 15 the duties imposed upon the superintendent by this chapter.
 13 16 The fee fees shall include, but not be limited to costs and
 13 17 expenses for salaries, expenses and travel for employees,
 13 18 office facilities, supplies, and equipment.
 13 19    Upon completion of each examination required or allowed by
 13 20 this chapter, the examiner in charge of such the examination
 13 21 shall render a bill for such fee the fees, in duplicate, and
 13 22 shall deliver one copy thereof of the bill to the state bank
 13 23 or private bank and one copy to the superintendent.
 13 24    PARAGRAPH DIVIDED.  Failure to pay the amount of such fee
 13 25 the fees to the superintendent within ten days after the date
 13 26 of the close of each such examination billing shall subject
 13 27 the state bank or private bank to an additional fee charge
 13 28 equal to five percent of the amount of such fee the fees for
 13 29 each day the payment is delinquent.
 13 30    Sec. 18.  Section 524.220, subsections 2 and 3, Code 1995,
 13 31 are amended to read as follows:
 13 32    2.  The statement shall be transmitted to the
 13 33 superintendent within thirty days after the receipt of a
 13 34 request for the statement from the superintendent end of each
 13 35 calendar quarter.  A statement shall be called for by the
 14  1 superintendent at least three times each year.
 14  2    3.  Within forty days after the date of the receipt of the
 14  3 request for a statement of condition, the The state bank shall
 14  4 cause the statement of condition filed for a calendar quarter
 14  5 which ends on June 30 to be published no later than the
 14  6 following August 15 and the statement of condition filed for a
 14  7 calendar quarter which ends on December 31 to be published
 14  8 once no later than February 15 of the following year in a
 14  9 newspaper of general circulation in the municipal corporation
 14 10 or unincorporated area in which the state bank has its
 14 11 principal place of business, or if there is none, in a
 14 12 newspaper of general circulation published in the county, or
 14 13 in a county adjoining the county, in which the state bank has
 14 14 its principal place of business.  Proof of such publication by
 14 15 affidavit of the publisher of the newspaper in which it was
 14 16 made, shall be delivered to the superintendent and shall be is
 14 17 conclusive evidence of the fact.
 14 18    Sec. 19.  Section 524.224, subsection 9, Code 1995, is
 14 19 amended to read as follows:
 14 20    9.  The state bank has failed to renew its corporate
 14 21 existence in the manner provided for in section 524.106
 14 22 524.314 within one hundred eighty days prior to the expiration
 14 23 thereof.
 14 24    Sec. 20.  Section 524.301, Code 1995, is amended to read as
 14 25 follows:
 14 26    524.301  INCORPORATORS.
 14 27    A state bank may be incorporated under this chapter by not
 14 28 less than five one or more individuals eighteen years of age
 14 29 or older, a majority of whom shall be citizens residents of
 14 30 this state and all of whom shall be citizens of the United
 14 31 States.
 14 32    Sec. 21.  Section 524.302, Code 1995, is amended to read as
 14 33 follows:
 14 34    524.302  ARTICLES OF INCORPORATION.
 14 35    1.  The articles of incorporation of a state bank, in the
 15  1 form prescribed by the superintendent, shall set forth the
 15  2 following:
 15  3    1. a.  The name of the state bank, that it is incorporated
 15  4 for the purpose of conducting the business of banking, and
 15  5 that it is incorporated under the provisions of this chapter.
 15  6    2. b.  The location of its proposed or existing principal
 15  7 place of business including the name of the county, municipal
 15  8 corporation or unincorporated area and county.
 15  9    3. c.  The duration of the state bank which shall be
 15 10 perpetual.
 15 11    4. d.  The aggregate number of common and preferred shares
 15 12 which the state bank shall have authority to issue, and the
 15 13 par value of such shares; if.  If such shares are to be
 15 14 divided into classes or series, the number of shares of each
 15 15 class or series and a statement of the par value of the shares
 15 16 of each class or series.
 15 17    5.  If there is to be a preferred class, a statement of the
 15 18 preferences, voting rights, if any, limitations and relative
 15 19 rights in respect of the shares of such class.
 15 20    6.  Any provision, permissible under section 524.506,
 15 21 limiting or denying the shareholders the pre-emptive right to
 15 22 acquire additional shares of the state bank.
 15 23    7.  Any provision, not inconsistent with law, which the
 15 24 incorporators elect to set forth in the articles of
 15 25 incorporation for the regulation of the internal affairs of
 15 26 the corporation, including any provision restricting the
 15 27 transfer of shares and any provision which under this chapter
 15 28 is required or permitted to be set forth in the bylaws.
 15 29    8. e.  The number of directors constituting the initial
 15 30 board of directors and the names and addresses of the
 15 31 individuals who are to serve as directors until the first
 15 32 annual meeting of shareholders or until their successors be
 15 33 elected and qualify.
 15 34    9. f.  The name and address of each incorporator.
 15 35    g.  The specific month in which the annual meeting of
 16  1 shareholders is to be held.
 16  2    2.  The articles of incorporation may set forth any or all
 16  3 of the following:
 16  4    a.  Provisions not inconsistent with law regarding:
 16  5    (1)  Managing the business and regulating the affairs of
 16  6 the corporation.
 16  7    (2)  Defining, limiting, and regulating the affairs of the
 16  8 corporation.
 16  9    b.  Any provision required or permitted by this chapter to
 16 10 be set forth in the bylaws.
 16 11    10. c.  At the election of the incorporators or
 16 12 shareholders, a A provision eliminating or limiting the
 16 13 personal liability of a director to the corporation or its
 16 14 shareholders for monetary damages for breach of fiduciary duty
 16 15 as a director, provided that the provision does not eliminate
 16 16 or limit the liability of a director for any breach of the
 16 17 director's duty of loyalty to the corporation or its
 16 18 shareholders, for acts or omissions not in good faith or which
 16 19 involve intentional misconduct or a knowing violation of law,
 16 20 for any transaction from which the director derives an
 16 21 improper personal benefit, or under section 524.605,
 16 22 subsection 1 and or 2.  A provision shall not eliminate or
 16 23 limit the liability of a director for any act or omission
 16 24 occurring prior to the date when the provision in the articles
 16 25 of incorporation becomes effective.
 16 26    11.  The specific month in which the annual meeting of
 16 27 shareholders shall be held.
 16 28    12.  Any provision not inconsistent with law or the
 16 29 purposes for which the state bank is organized, which the
 16 30 incorporators elect to set forth; or any provision limiting
 16 31 any of the powers enumerated in this chapter.
 16 32    3.  It shall not be necessary to set forth in the The
 16 33 articles of incorporation need not set forth any of the
 16 34 corporate powers enumerated in this chapter.  The articles of
 16 35 incorporation shall be signed by all of the incorporators and
 17  1 acknowledged before an officer authorized to take
 17  2 acknowledgments of deeds.
 17  3    Sec. 22.  Section 524.303, unnumbered paragraph 2, Code
 17  4 1995, is amended by striking the unnumbered paragraph.
 17  5    Sec. 23.  Section 524.304, Code 1995, is amended to read as
 17  6 follows:
 17  7    524.304  PUBLICATION OF NOTICE.
 17  8    1.  The incorporators of a state bank shall, within thirty
 17  9 days of the acceptance of the application for processing,
 17 10 publish notice of their intention to deliver, or the delivery
 17 11 of, the articles of the proposed incorporation to the
 17 12 superintendent, once each week for two successive weeks in a
 17 13 newspaper of general circulation published in the municipal
 17 14 corporation which is proposed as the principal place of
 17 15 business of the state bank, or if there is none, a newspaper
 17 16 of general circulation published in the county, or in a county
 17 17 adjoining the county, in which the proposed state bank is to
 17 18 have its principal place of business.  The first publication
 17 19 of the notice shall appear prior to, or within ten days after,
 17 20 the date of delivery of the articles of incorporation to the
 17 21 superintendent and shall set forth all of the following:
 17 22    1. a.  The name of the proposed state bank.
 17 23    2. b.  A statement that it is to be incorporated under this
 17 24 chapter.
 17 25    3. c.  The purpose or purposes of the state bank.
 17 26    4. d.  The names and addresses of the incorporators and of
 17 27 the members of the initial board of directors as they appear,
 17 28 or will appear, in the articles of incorporation.
 17 29    5. e.  The date of the delivery of the articles of
 17 30 incorporation to the superintendent the application was
 17 31 accepted for processing.
 17 32    6. f.  If the incorporation of the state bank has been
 17 33 approved by the superintendent under section 524.305,
 17 34 subsection 6, the name and address of the bank with which the
 17 35 state bank will have merged or consolidated, or the assets of
 18  1 which the state bank will have acquired or the condition of
 18  2 which in some other way provided a purpose for the
 18  3 incorporation.
 18  4    2.  Proof of publication of the notice by affidavit of the
 18  5 publisher of the newspaper in which the notice appears shall
 18  6 be filed with the superintendent and is conclusive evidence of
 18  7 the publication.
 18  8    Sec. 24.  Section 524.305, Code 1995, is amended to read as
 18  9 follows:
 18 10    524.305  APPROVAL BY SUPERINTENDENT.
 18 11    1.  Upon receipt of an application for approval of a state
 18 12 bank, the superintendent shall conduct such an investigation
 18 13 as the superintendent deems necessary to ascertain whether:
 18 14    a.  The articles of incorporation and supporting items
 18 15 satisfy the requirements of this chapter.
 18 16    b.  The convenience and needs of the public will be served
 18 17 by the proposed state bank.
 18 18    c.  The population density or other economic
 18 19 characteristics of the area primarily to be served by the
 18 20 proposed state bank afford reasonable promise of adequate
 18 21 support for the state bank.
 18 22    d.  The character and fitness of the incorporators and of
 18 23 the members of the initial board of directors are such as to
 18 24 command the confidence of the community and to warrant the
 18 25 belief that the business of the proposed state bank will be
 18 26 honestly and efficiently conducted.
 18 27    e.  The capital structure of the proposed state bank is
 18 28 adequate in relation to the amount of the anticipated business
 18 29 of the state bank and the safety of prospective depositors.
 18 30    f.  The proposed state bank will have sufficient personnel
 18 31 with adequate knowledge and experience to conduct the business
 18 32 of the state bank, and to administer fiduciary accounts, if
 18 33 the state bank is to be authorized to act in a fiduciary
 18 34 capacity.
 18 35    2.  Within one hundred eighty days after receipt of the
 19  1 application for approval together with the items referred to
 19  2 in section 524.303, subsections 1 and 2 is accepted for
 19  3 processing, the superintendent shall make a determination
 19  4 whether to approve or disapprove the pending application on
 19  5 the basis of the investigation.
 19  6    3.  Within ninety thirty days after the date of the second
 19  7 publication of the notice referred to in required under
 19  8 section 524.304, any interested person opposing the pending
 19  9 application shall file written objections with the
 19 10 superintendent may submit written comments and information to
 19 11 the superintendent concerning the application.  Following the
 19 12 expiration of the ninety-day period and prior to making a
 19 13 determination on the pending application, the superintendent
 19 14 shall give adequate notice of the pending application, and may
 19 15 afford all interested persons, including the incorporators, an
 19 16 opportunity for a stenographically reported hearing during
 19 17 which such persons shall be allowed to present evidence in
 19 18 support of, or in opposition to, the pending application.
 19 19 Comments challenging the legality of an application must be
 19 20 submitted separately in writing.  The superintendent may
 19 21 extend the thirty-day comment period, if, in the judgment of
 19 22 the superintendent, extenuating circumstances which justify
 19 23 the extension exist.
 19 24    The superintendent shall conduct such hearing if any
 19 25 interested person files an objection to the pending
 19 26 application and requests a hearing.
 19 27    3A.  Within thirty days after the date of the second
 19 28 publication of the notice required by section 524.304, any
 19 29 interested person may submit a written request of the
 19 30 superintendent for a hearing on the application.  The request
 19 31 shall state the nature of the issues or facts to be presented
 19 32 and the reasons why written submissions would be insufficient
 19 33 to make an adequate presentation to the superintendent.  If
 19 34 the reasons are related to factual disputes, the disputes
 19 35 shall be described.  A written request for a hearing shall be
 20  1 evaluated by the superintendent, who may grant or deny the
 20  2 request in whole or in part.  A hearing request shall
 20  3 generally be granted only it if is determined that written
 20  4 submissions would be inadequate or that a hearing would
 20  5 otherwise be beneficial to the decision-making process.  A
 20  6 hearing may be limited to issues considered material by the
 20  7 superintendent.
 20  8    3B.  If a request for a hearing is denied, the
 20  9 superintendent shall notify the applicant and all interested
 20 10 persons and shall state the reasons for the denial.  An
 20 11 interested person may submit additional written comments or
 20 12 information on the application to the superintendent, with
 20 13 copies to the applicant at the time of submission to the
 20 14 superintendent, within fourteen days after the date of the
 20 15 notice of denial.  The applicant shall be provided an
 20 16 additional seven days, after the fourteen-day deadline has
 20 17 expired, within which to respond to any comments submitted
 20 18 within the fourteen-day period after the notice of denial.
 20 19 The superintendent may waive this seven-day period if
 20 20 requested by the applicant.  A copy of any response submitted
 20 21 by the applicant shall also be mailed by the applicant to the
 20 22 interested persons at the time the response is submitted to
 20 23 the superintendent.
 20 24    4.  If the superintendent approves the pending application,
 20 25 the superintendent shall deliver the articles of
 20 26 incorporation, with the superintendent's approval indicated
 20 27 thereon, to the secretary of state and notify the
 20 28 incorporators, and such other persons who requested in writing
 20 29 that they be notified, of such the approval.  If the
 20 30 superintendent disapproves the pending application, the
 20 31 superintendent shall notify the incorporators of the action
 20 32 and the reason for the decision.
 20 33    5.  The actions of the superintendent shall be subject to
 20 34 judicial review in accordance with the terms of the Iowa
 20 35 administrative procedure Act chapter 17A.  The court may award
 21  1 damages to the incorporators if it finds that review is sought
 21  2 frivolously and or in bad faith.
 21  3    6.  Subsection 3 of this section Subsections 3, 3A, and 3B
 21  4 shall not apply if the superintendent finds that one of the
 21  5 purposes of the proposed state bank is the merger or
 21  6 consolidation with, or the purchase of some or all of the
 21  7 assets of and assumption of some or all of the liabilities of,
 21  8 a bank for which a receiver has been appointed or which has
 21  9 been ordered, by authorities of this state or the United
 21 10 States, to cease to carry on its business, or if the
 21 11 superintendent finds for any other reason that immediate
 21 12 action on the pending application is advisable in order to
 21 13 protect the interests of depositors or the assets of any other
 21 14 bank.
 21 15    7.  Before As a condition of receiving the decision of the
 21 16 superintendent with respect to the pending application the
 21 17 incorporators shall, upon notice, reimburse the superintendent
 21 18 to the extent of the for all expenses incurred by the
 21 19 superintendent in connection with the application.
 21 20    Sec. 25.  Section 524.306, Code 1995, is amended by
 21 21 striking the section and inserting in lieu thereof the
 21 22 following:
 21 23    524.306  INCORPORATION OF STATE BANK.
 21 24    1.  Unless a delayed effective date or time is specified,
 21 25 the corporate existence of a state bank begins when the
 21 26 articles of incorporation, with the superintendent's approval
 21 27 indicated on the articles of incorporation, are filed with the
 21 28 secretary of state.  The secretary of state shall record the
 21 29 articles of incorporation and forward a copy of them to the
 21 30 county recorder of the county in which the state bank is to
 21 31 have its principal place of business.
 21 32    2.  The secretary of state's filing of the articles of
 21 33 incorporation is conclusive proof that the incorporators
 21 34 satisfied all conditions precedent to incorporation, except in
 21 35 a proceeding instituted by the superintendent to cancel or
 22  1 revoke the incorporation or involuntarily dissolve the
 22  2 corporation.
 22  3    Sec. 26.  Section 524.307, Code 1995, is amended by
 22  4 striking the section and inserting in lieu thereof the
 22  5 following:
 22  6    524.307  ORGANIZATION OF STATE BANK.
 22  7    Upon incorporation of the state bank, the initial board of
 22  8 directors shall hold an organizational meeting within this
 22  9 state, at the call of a majority of the directors, to complete
 22 10 the organization of the state bank by electing officers,
 22 11 adopting bylaws, if any are to be adopted, and conducting any
 22 12 other business properly brought before the board at the
 22 13 meeting.
 22 14    Sec. 27.  Section 524.308, subsection 1, Code 1995, is
 22 15 amended by striking the subsection.
 22 16    Sec. 28.  Section 524.308, subsection 3, Code 1995, is
 22 17 amended to read as follows:
 22 18    3.  If a state bank transacts any business before receipt
 22 19 of an authorization to do business in violation of subsection
 22 20 2, the directors and officers who willfully authorized or
 22 21 participated in such the action shall be are severally liable
 22 22 for the debts and liabilities of the state bank incurred prior
 22 23 to the receipt of the authorization to do business.
 22 24    Sec. 29.  Section 524.309, Code 1995, is amended to read as
 22 25 follows:
 22 26    524.309  PUBLICATION OF AUTHORIZATION TO DO BUSINESS.
 22 27    1.  A state bank shall cause to be published once within
 22 28 two weeks after the issuance by the superintendent of the
 22 29 authorization to do business, in a newspaper of general
 22 30 circulation published in the municipal corporation which is
 22 31 the principal place of business of the state bank, or if there
 22 32 is none, a newspaper of general circulation published in the
 22 33 county, or in a county adjoining the county, in which the
 22 34 state bank has its principal place of business, a notice which
 22 35 shall state all of the following:
 23  1    1. a.  The name of the state bank, the address of its
 23  2 principal place of business, and the date of the issuance of
 23  3 the authorization to do business.
 23  4    2. b.  The names and addresses of the members of the
 23  5 initial board of directors as designated in the articles of
 23  6 incorporation.
 23  7    3. c.  That the shareholders shall not be personally liable
 23  8 for the debts and obligations of the state bank.
 23  9    2.  Proof of such publication, by affidavit of the
 23 10 publisher of the newspaper in which it was made, shall be
 23 11 filed with the secretary of state and with the superintendent,
 23 12 and shall be is conclusive evidence of the fact.
 23 13    Sec. 30.  Section 524.310, subsections 1 and 2, Code 1995,
 23 14 are amended to read as follows:
 23 15    1.  The name of a state bank originally incorporated after
 23 16 the effective date of this chapter shall include the word
 23 17 "bank" and may include the word "state" or "trust" in its
 23 18 name.  If a A state bank uses using the word "trust" in its
 23 19 name, it must be authorized under this chapter to act in a
 23 20 fiduciary capacity.
 23 21    2.  The provisions of this section shall not require any
 23 22 state bank, existing and operating on January 1, 1970, to add
 23 23 to, modify or otherwise change its corporate name, either on
 23 24 January 1, 1970, or upon renewal of its corporate existence
 23 25 pursuant to section 524.106 524.314.
 23 26    Sec. 31.  Section 524.312, subsections 1 and 2, Code 1995,
 23 27 are amended to read as follows:
 23 28    1.  A state bank originally incorporated pursuant to this
 23 29 chapter shall have its principal place of business within the
 23 30 confines city limits of a municipal corporation.  The
 23 31 existence of a state bank shall not, however, be affected by
 23 32 the subsequent discontinuance of the municipal corporation.  A
 23 33 state bank existing and operating on January 1, 1970, which
 23 34 does not have its principal place of business within the
 23 35 confines city limits of a municipal corporation, may renew its
 24  1 corporate existence pursuant to section 524.106 524.314
 24  2 without regard to this section and may also operate as a bank
 24  3 or convert to and operate as a bank office when acquired by or
 24  4 merged into another state bank and approved by the
 24  5 superintendent.
 24  6    2.  A state bank may, with the prior written approval of
 24  7 the superintendent, change the location of its principal place
 24  8 of business to a new location.  A change of location shall be
 24  9 limited to another location in the same municipal corporation,
 24 10 to a location in a municipal corporation in the same county,
 24 11 or to a location in a municipal corporation in counties
 24 12 surrounding and a county that is contiguous to or touching or
 24 13 cornering on the county in which the state bank is located.
 24 14 If a state bank has its principal place of business in an
 24 15 unincorporated area, the superintendent may authorize a change
 24 16 of location of its principal place of business to a new
 24 17 location within the same unincorporated area as well as to any
 24 18 location referred to in the preceding sentence this
 24 19 subsection.
 24 20    Sec. 32.  Section 524.312, Code 1995, is amended by adding
 24 21 the following new subsections:
 24 22    NEW SUBSECTION.  2A.  If a change in the location of the
 24 23 principal place of business of a state bank is proposed,
 24 24 application for approval of the superintendent shall be made
 24 25 as required by the superintendent pursuant to this section.  A
 24 26 change in location of the principal place of business of a
 24 27 state bank, including a change from one municipal corporation
 24 28 to another municipal corporation within an urban complex,
 24 29 requires an amendment to the articles of incorporation
 24 30 pursuant to sections 524.1502, 524.1504, and 524.1506.  A
 24 31 state bank seeking approval of a change of location pursuant
 24 32 to this subsection shall publish once each week for two
 24 33 consecutive weeks a notice of the proposed change of location
 24 34 in a newspaper of general circulation in the municipal
 24 35 corporation or unincorporated area in which the state bank has
 25  1 its principal place of business, or if there is none, in a
 25  2 newspaper of general circulation in the county, or in a county
 25  3 adjoining the county, in which the state bank has its
 25  4 principal place of business, and in the municipal corporation
 25  5 in which it seeks to establish its principal place of
 25  6 business, or if there is none, in a newspaper of general
 25  7 circulation in the county, or in a county adjoining the
 25  8 county, in which the municipal corporation is located.  The
 25  9 notices shall be published within thirty days after the
 25 10 application to the superintendent for approval of the change
 25 11 in location is accepted for processing.  The notice shall set
 25 12 forth the name of the state bank, the present location of its
 25 13 principal place of business, the location to which it proposes
 25 14 to move its principal place of business, and the date upon
 25 15 which the application was accepted for processing by the
 25 16 superintendent.
 25 17    NEW SUBSECTION.  2B.  Within thirty days after acceptance
 25 18 of an application for approval of a change of location of the
 25 19 principal place of business of a state bank pursuant to
 25 20 subsection 2A, the superintendent shall commence an
 25 21 investigation into the circumstances of the application as
 25 22 deemed necessary by the superintendent, giving due
 25 23 consideration to factors substantially similar to those set
 25 24 forth in section 524.305, subsection 1, paragraphs "c" through
 25 25 "f".  Within one hundred eighty days after the application has
 25 26 been accepted for processing, the superintendent shall approve
 25 27 or disapprove the application on the basis of the
 25 28 investigation.  The superintendent shall give written notice
 25 29 of the decision to the state bank, and in the event of
 25 30 disapproval a statement of the reasons for the disapproval.
 25 31 If the superintendent approves the change in location the
 25 32 superintendent shall deliver the articles of amendment to the
 25 33 secretary of state.  As a condition of receiving the decision
 25 34 of the superintendent with respect to the application, the
 25 35 state bank shall reimburse the superintendent for all expenses
 26  1 incurred by the superintendent in connection with the
 26  2 application.
 26  3    Sec. 33.  Section 524.313, Code 1995, is amended to read as
 26  4 follows:
 26  5    524.313  BYLAWS.
 26  6    The initial bylaws, if any, of a A state bank shall be
 26  7 adopted by its board of directors may adopt bylaws.  The power
 26  8 to alter, adopt, amend, or repeal bylaws or adopt new bylaws
 26  9 shall be is vested in the board of directors unless reserved
 26 10 to the shareholders by the articles of incorporation.  The
 26 11 bylaws may contain any provisions for the regulation and
 26 12 management of the affairs of the state bank not inconsistent
 26 13 with law or the articles of incorporation.
 26 14    Sec. 34.  NEW SECTION.  524.314  RENEWAL OF CORPORATE
 26 15 EXISTENCE OF EXISTING STATE BANK.
 26 16    1.  The corporate existence of a state bank existing and
 26 17 operating on January 1, 1970, which expires subsequent to that
 26 18 date, may be renewed prior to the expiration date of the
 26 19 corporate existence, following the affirmative vote of the
 26 20 holders of at least a majority of the shares entitled to vote
 26 21 on the renewal, at a meeting held for that purpose and called
 26 22 as provided by section 524.509, and delivery to the
 26 23 superintendent of the articles of incorporation together with
 26 24 the applicable filing and recording fees for the filing and
 26 25 recording.  If the superintendent finds that the articles of
 26 26 incorporation satisfy the requirements of this section, the
 26 27 superintendent shall deliver them to the secretary of state
 26 28 for filing and recording in the secretary of state's office.
 26 29 Following the receipt of the articles of incorporation, the
 26 30 secretary of state shall proceed as provided in section
 26 31 524.306.
 26 32    2.  Sections 524.303, 524.304, 524.305, 524.307, 524.308,
 26 33 and 524.309 are not applicable to a state bank existing and
 26 34 operating on January 1, 1970, which renews its corporate
 26 35 existence as provided in subsection 1.
 27  1    3.  The renewal of the corporate existence of a state bank
 27  2 pursuant to this section shall not affect any right accrued or
 27  3 established, or any liability or penalty incurred, under the
 27  4 laws of this state or of the United States, prior to the
 27  5 issuance of a certificate of incorporation by the secretary of
 27  6 state.
 27  7    Sec. 35.  Section 524.401, Code 1995, is amended to read as
 27  8 follows:
 27  9    524.401  MINIMUM CAPITAL.
 27 10    1.  The minimum capital of a state bank existing and
 27 11 operating on January July 1, 1970 1995, shall be as follows:
 27 12    a.  The amount required by subsection 2 of this section;
 27 13 or.
 27 14    b.  Such lesser An amount as less than that provided for
 27 15 under paragraph "a" which the state bank had on January July
 27 16 1, 1970 1995, but not less than the minimum amount required by
 27 17 law prior to such that date.
 27 18    2.  The minimum capital of a state bank originally
 27 19 incorporated pursuant to the provisions of this chapter shall
 27 20 not be less than one hundred thousand dollars the amount
 27 21 required by the federal deposit insurance corporation, or its
 27 22 successor, or such higher a greater amount which the
 27 23 superintendent may deem necessary in view of the deposit
 27 24 potential of the state bank and current banking standards
 27 25 relating to total capital requirements.
 27 26    3.  A state bank originally incorporated pursuant to this
 27 27 chapter shall establish, prior to receiving authorization to
 27 28 do business from the superintendent, paid in surplus and
 27 29 undivided profits as required by the superintendent.
 27 30    Sec. 36.  Section 524.404, subsections 1 and 3, Code 1995,
 27 31 are amended to read as follows:
 27 32    1.  A state bank may, with the prior approval of the
 27 33 superintendent and the affirmative vote of the holders of at
 27 34 least three-fourths a majority of the shares entitled to vote
 27 35 thereon, may issue capital notes or debentures.  The amounts,
 28  1 maturities, rate of interest, relative rights with other
 28  2 creditors, and other terms and conditions shall be set forth
 28  3 on the face of the capital notes or debentures or in an
 28  4 attendant agreement, and all such terms and conditions shall
 28  5 be are subject to the prior approval of the superintendent
 28  6 provided that all such capital notes and debentures shall be
 28  7 subordinated to the rights of other persons to the extent
 28  8 provided for in section 524.1312.  The aggregate amount of all
 28  9 capital notes and debentures issued and outstanding pursuant
 28 10 to this section shall not exceed, at any one time, twenty-five
 28 11 percent of the aggregate capital and surplus of the state
 28 12 bank.
 28 13    3.  No A state bank may shall not issue capital notes or
 28 14 debentures within five years after it is originally authorized
 28 15 to do business.
 28 16    Sec. 37.  Section 524.405, Code 1995, is amended to read as
 28 17 follows:
 28 18    524.405  INCREASE OR DECREASE OF CAPITAL STRUCTURE.
 28 19    1.  A state bank may, with the approval of the
 28 20 superintendent, may increase its capital structure or effect
 28 21 an allocation of amounts within its capital structure, by the
 28 22 use of any of the following methods:
 28 23    a.  Sale of authorized but unissued shares.
 28 24    b.  Transfer of surplus or undivided profits to capital for
 28 25 authorized but unissued shares.
 28 26    c.  Transfer of undivided profits to surplus.
 28 27    d.  Authorization and issuance of common shares, preferred
 28 28 shares, or capital notes or debentures as provided in section
 28 29 524.404.
 28 30    2.  Whenever The superintendent, whenever it shall appear
 28 31 appears necessary to do so in the interest of the safety of
 28 32 the deposits of a state bank, the superintendent may require
 28 33 that the capital structure of the state bank be increased by
 28 34 either of the methods provided for in subsection 1, paragraphs
 28 35 "a" and "d" of subsection 1.
 29  1    3.  Neither capital nor Capital or surplus shall not be
 29  2 decreased except with the approval of the superintendent.
 29  3    Sec. 38.  Section 524.501, Code 1995, is amended by
 29  4 striking the section and inserting in lieu thereof the
 29  5 following:
 29  6    524.501  AUTHORIZED SHARES.
 29  7    1.  The articles of incorporation must prescribe the
 29  8 classes of shares and the number of shares of each class that
 29  9 the state bank is authorized to issue.  If more than one class
 29 10 of shares is authorized, the articles of incorporation must
 29 11 prescribe a distinguishing designation for each class.  Prior
 29 12 to the issuance of shares of a class, the preferences,
 29 13 limitations, and relative rights of that class must be
 29 14 described in the articles of incorporation.  All shares of a
 29 15 class must have preferences, limitations, and relative rights
 29 16 identical with those of other shares of the same class except
 29 17 to the extent otherwise permitted by section 524.502.
 29 18    2.  The articles of incorporation must authorize both of
 29 19 the following:
 29 20    a.  One or more classes of shares that together have
 29 21 unlimited voting rights.
 29 22    b.  One or more classes of shares, which may be the same
 29 23 class or classes as those with voting rights, that together
 29 24 are entitled to receive the net assets of the state bank upon
 29 25 dissolution.
 29 26    3.  The articles of incorporation may authorize one or more
 29 27 classes of shares that have any of the following qualities:
 29 28    a.  Have special, conditional, or limited voting rights, or
 29 29 no right to vote, unless prohibited by this chapter.
 29 30    b.  Are redeemable or convertible as specified in the
 29 31 articles of incorporation in any of the following ways:
 29 32    (1)  At the option of the state bank, the shareholders, or
 29 33 another person or upon the occurrence of a designated event.
 29 34    (2)  For cash, indebtedness, securities, or other property.
 29 35    (3)  In a designated amount or in an amount determined in
 30  1 accordance with a designated formula or by reference to
 30  2 extrinsic data or events.
 30  3    c.  Preferred shares are redeemable only by resolution of
 30  4 the board of directors with the prior approval of the
 30  5 superintendent.  Preferred shares which are redeemable
 30  6 according to the terms of their issuance shall be redeemed
 30  7 only in accordance with such terms.  Preferred shares which
 30  8 are redeemed shall be canceled and shall not be reissued.
 30  9 Preferred shares which are not redeemable according to the
 30 10 terms of their issuance are redeemable only pro rata, by lot,
 30 11 or by such other equitable method as determined by the board
 30 12 of directors.
 30 13    d.  (1)  If preferred shares are redeemed by a state bank,
 30 14 the redemption effects a cancellation of the shares, and a
 30 15 statement of cancellation shall be filed as provided in this
 30 16 paragraph.  The filing of the statement of cancellation
 30 17 constitutes an amendment to the articles of incorporation and
 30 18 reduces the number of preferred shares of the class which the
 30 19 state bank is authorized to issue by the number which are
 30 20 canceled.
 30 21    (2)  The statement of cancellation shall be executed by the
 30 22 state bank by its president or a vice president and by its
 30 23 cashier or an assistant cashier, and acknowledged by one of
 30 24 the officers signing such statement, and shall set forth all
 30 25 of the following:
 30 26    (a)  The name of the state bank and the effective date of
 30 27 its articles of incorporation.
 30 28    (b)  The number of preferred shares canceled through
 30 29 redemption, itemized by classes.
 30 30    (c)  The aggregate number of issued shares, itemized by
 30 31 classes, after giving effect to the cancellation.
 30 32    (d)  The amount, expressed in dollars, of the stated
 30 33 capital of the state bank after giving effect to the
 30 34 cancellation.
 30 35    (e)  The number of shares which the state bank has
 31  1 authority to issue, itemized by classes, after giving effect
 31  2 to the cancellation.
 31  3    (3)  The statement of cancellation, together with the
 31  4 applicable filing and recording fees, shall be delivered to
 31  5 the superintendent who shall, if the superintendent finds the
 31  6 statement of cancellation satisfies the requirements of this
 31  7 section, deliver it to the secretary of state for filing and
 31  8 recording in the secretary of state's office and the statement
 31  9 of cancellation shall also be filed and recorded in the office
 31 10 of the county recorder.  The capital of the state bank is
 31 11 deemed to be reduced by the par value of the shares canceled
 31 12 upon the effective date of the redemption.
 31 13    e.  Entitle the holders to distributions calculated in any
 31 14 manner, including dividends that may be cumulative,
 31 15 noncumulative, or partially cumulative.
 31 16    f.  Have preference over any other class of shares with
 31 17 respect to distributions, including dividends and
 31 18 distributions upon the dissolution of the state bank.
 31 19    4.  The description of the designations, preferences,
 31 20 limitations, and relative rights of share classes in
 31 21 subsection 3 is not all-inclusive.
 31 22    5.  Unless the articles of incorporation or bylaws
 31 23 otherwise provide, the board of directors, by resolution duly
 31 24 adopted and with the approval of the superintendent as
 31 25 provided in section 524.405, may issue from time to time, in
 31 26 whole or in part, the shares authorized by the articles of
 31 27 incorporation.
 31 28    Sec. 39.  NEW SECTION.  524.501A  TERMS OF CLASS OR SERIES
 31 29 DETERMINED BY BOARD OF DIRECTORS.
 31 30    1.  If the articles of incorporation provide for such, the
 31 31 board of directors may determine, in whole or in part, the
 31 32 preferences, limitations, and relative rights, within the
 31 33 limits set forth in section 524.501, of either of the
 31 34 following:
 31 35    a.  A class of shares before the issuance of any shares of
 32  1 that class.
 32  2    b.  One or more series within a class before the issuance
 32  3 of any shares of that series.
 32  4    2.  Each series of a class must be given a distinguishing
 32  5 designation.
 32  6    3.  All shares of a series must have preferences,
 32  7 limitations, and relative rights identical with those of other
 32  8 shares of the same series and, except to the extent otherwise
 32  9 provided in the description of the series, with those of other
 32 10 series of the same class.
 32 11    4.  Before issuing any shares of a class or series created
 32 12 under this section, the state bank shall deliver to the
 32 13 superintendent for filing with the secretary of state articles
 32 14 of amendment on forms prescribed by the superintendent, which
 32 15 are effective without shareholder action, that set forth all
 32 16 of the following:
 32 17    a.  The name of the state bank and the effective date of
 32 18 its articles of incorporation.
 32 19    b.  The text of the amendment determining the terms of the
 32 20 class or series of shares.
 32 21    c.  The date it was adopted.
 32 22    d.  A statement that the amendment was duly adopted by the
 32 23 board of directors.
 32 24    Sec. 40.  Section 524.502, Code 1995, is amended to read as
 32 25 follows:
 32 26    524.502  CERTIFICATES REPRESENTING SHARES.
 32 27    1.  The shares of a state bank shall be represented by
 32 28 certificates signed by such officers, employees, or agents as
 32 29 are authorized by the articles of incorporation or bylaws to
 32 30 sign.  If no contrary provisions are made in the articles of
 32 31 incorporation or bylaws, such the certificates shall be signed
 32 32 by the president or a vice president and the cashier or an
 32 33 assistant cashier of the state bank, and may be sealed with
 32 34 the seal of the state bank or a facsimile thereof.  The
 32 35 signatures of the president or vice president and the cashier
 33  1 or an assistant cashier or other persons signing for the state
 33  2 bank upon a certificate may be facsimiles if the certificate
 33  3 is countersigned by a transfer agent, or registered by a
 33  4 registrar, other than the state bank itself or an employee of
 33  5 the state bank.  In case any officer or other authorized
 33  6 person who has signed or whose facsimile signature has been
 33  7 placed upon such certificate for the state bank shall have
 33  8 ceased to be such officer or employee or agent before such
 33  9 certificate is issued, it may be issued by the state bank with
 33 10 the same effect as if the person were such officer or employee
 33 11 or agent at the date of its issue.  If a state bank is
 33 12 authorized to issue preferred shares, every certificate issued
 33 13 by the state bank shall set forth upon the face or back of the
 33 14 certificate, or shall state that the state bank will furnish
 33 15 to any shareholder upon request and without charge, a full
 33 16 statement of the designations, preferences, limitations, and
 33 17 relative rights of such preferred shares.
 33 18    Each certificate representing shares shall state upon the
 33 19 face thereof:
 33 20    2.  Each share certificate must state on its face, at a
 33 21 minimum, all of the following:
 33 22    1. a.  That the The name of the issuing state bank and that
 33 23 it is organized under the laws of this state.
 33 24    2. b.  The name of the person to whom issued.
 33 25    3. c.  The number and class of shares and the designation
 33 26 of the series, if any, which such the certificate represents.
 33 27    4. d.  The par value of each share represented by such the
 33 28 certificate.
 33 29    3.  A state bank which is authorized to issue different
 33 30 classes of shares or different series within a class must do
 33 31 one of the following:
 33 32    a.  Summarize on the front or back of each certificate the
 33 33 designations, relative rights, preferences, and limitations
 33 34 applicable to each class; the variations in rights,
 33 35 preferences, and limitations determined for each series; and
 34  1 the authority of the board of directors to determine
 34  2 variations for future series.
 34  3    b.  State conspicuously on the front or back of each
 34  4 certificate that the state bank will furnish the shareholder
 34  5 this information on request in writing and without charge.
 34  6    4.  Each share certificate must be signed either manually
 34  7 or in facsimile by two officers as set forth in subsection 1,
 34  8 and may bear the corporate seal or its facsimile.
 34  9    5.  If the person who signed a share certificate no longer
 34 10 holds office when the certificate is issued, the certificate
 34 11 is nevertheless valid.
 34 12    6.  No A certificate shall not be issued for any share
 34 13 until such share is fully paid.
 34 14    Sec. 41.  Section 524.503, Code 1995, is amended to read as
 34 15 follows:
 34 16    524.503  CONSIDERATION FOR SHARES.
 34 17    1.  Except in the case of a distribution of shares
 34 18 authorized by section 524.517 or shares issued upon exchanges
 34 19 or conversion, common or preferred shares of a state bank may
 34 20 be issued only for cash in an amount which shall be at least:
 34 21    a.  In the case of the issuance of additional common shares
 34 22 of an existing state bank, equal to the sum of the capital
 34 23 represented by the common shares and the surplus of the state
 34 24 bank divided by the number of common shares previously issued
 34 25 not less than that determined by the superintendent.
 34 26    b.  In the case of the issuance of common shares of a
 34 27 proposed state bank, the amount required to equal the sum of
 34 28 the capital, to be represented by the common shares, the
 34 29 surplus and the undivided profits, required by the
 34 30 superintendent as a condition precedent to the issuance of an
 34 31 authorization to do business, divided by the number of shares
 34 32 to be issued.
 34 33    2.  Preferred shares of a state bank may be issued only for
 34 34 cash and for an amount not less than that determined by the
 34 35 superintendent.
 35  1    Sec. 42.  Section 524.504, Code 1995, is amended by
 35  2 striking the section and inserting in lieu thereof the
 35  3 following:
 35  4    524.504  SUBSCRIPTION FOR SHARES BEFORE INCORPORATION.
 35  5    1.  A subscription for shares entered into before
 35  6 incorporation of the state bank is irrevocable for six months
 35  7 unless the subscription agreement provides a longer or shorter
 35  8 period, or all subscribers agree to revocation.
 35  9    2.  The board of directors may determine the payment terms
 35 10 of subscriptions for shares that were entered into before
 35 11 incorporation of the state bank unless the subscription
 35 12 agreement specifies the terms.  A call for payment by the
 35 13 board of directors must be uniform so far as practicable as to
 35 14 all shares of the same class or series, unless the
 35 15 subscription agreement specifies otherwise.
 35 16    3.  Shares issued pursuant to subscriptions entered into
 35 17 before incorporation of the state bank are fully paid and
 35 18 nonassessable when the state bank receives the consideration
 35 19 specified in the subscription agreement.
 35 20    4.  If a subscriber defaults in payment of money or
 35 21 property under a subscription agreement entered into before
 35 22 incorporation of the state bank, the state bank may do either
 35 23 of the following:
 35 24    a.  Collect the amount owed as any other debt.
 35 25    b.  Unless the subscription agreement provides otherwise,
 35 26 the state bank may rescind the agreement and may sell the
 35 27 shares if the debt remains unpaid more than twenty days after
 35 28 the state bank sends written demand for payment to the
 35 29 subscriber.
 35 30    Sec. 43.  NEW SECTION.  524.504A  FRACTIONAL SHARES.
 35 31    1.  A state bank may do any of the following:
 35 32    a.  Issue fractions of a share or pay in money the value of
 35 33 fractions of a share.
 35 34    b.  Arrange for disposition of fractional shares by the
 35 35 shareholders of the state bank.
 36  1    c.  Issue scrip in registered or bearer form entitling the
 36  2 holder to receive a full share upon surrendering enough scrip
 36  3 to equal a full share.
 36  4    2.  Each certificate representing scrip must be
 36  5 conspicuously labeled "scrip" and must contain the information
 36  6 required by section 524.502, subsection 2.
 36  7    3.  The holder of a fractional share is entitled to
 36  8 exercise the rights of a shareholder, including the right to
 36  9 vote, to receive dividends, and to participate in the assets
 36 10 of the state bank upon liquidation, but only if the scrip
 36 11 provides for such rights.
 36 12    4.  The board of directors may authorize the issuance of
 36 13 scrip subject to any condition considered desirable, including
 36 14 either of the following:
 36 15    a.  That the scrip will become void if not exchanged for
 36 16 full shares before a specified date.
 36 17    b.  That the shares for which the scrip is exchangeable may
 36 18 be sold and the proceeds paid to the scrip holders.
 36 19    Sec. 44.  Section 524.505, Code 1995, is amended by
 36 20 striking the section and inserting in lieu thereof the
 36 21 following:
 36 22    524.505  LIABILITY OF SHAREHOLDERS.
 36 23    1.  A purchaser of the shares of a state bank is not liable
 36 24 to the bank, its creditors, or depositors with respect to the
 36 25 shares except to pay the consideration for which the shares
 36 26 were authorized to be issued under section 524.501, or the
 36 27 consideration specified in the subscription agreement
 36 28 authorized under section 524.504.
 36 29    2.  Unless otherwise provided in the articles of
 36 30 incorporation, a shareholder of a state bank is not personally
 36 31 liable for the acts or debts of the state bank.
 36 32    Sec. 45.  Section 524.506, Code 1995, is amended by
 36 33 striking the section and inserting in lieu thereof the
 36 34 following:
 36 35    524.506  SHAREHOLDERS' PREEMPTIVE RIGHTS.
 37  1    1.  Unless otherwise provided in section 524.506A, the
 37  2 shareholders of a state bank do not have a preemptive right to
 37  3 acquire the state bank's unissued shares except to the extent
 37  4 provided in the articles of incorporation.
 37  5    2.  A statement included in the articles of incorporation
 37  6 that "the state bank elects to have preemptive rights", or
 37  7 words of similar import, means that, except to the extent
 37  8 otherwise expressly provided in the articles of incorporation,
 37  9 the following principles apply:
 37 10    a.  A shareholder of a state bank has a preemptive right,
 37 11 granted on uniform terms and conditions prescribed by the
 37 12 board of directors to provide a fair and reasonable
 37 13 opportunity to exercise the right, to acquire a proportional
 37 14 amount of the state bank's unissued shares upon the decision
 37 15 of the board of directors to issue such shares.
 37 16    b.  A shareholder may waive the shareholder's preemptive
 37 17 right.  A waiver evidenced in writing is irrevocable even
 37 18 though it is not supported by consideration.
 37 19    c.  There is no preemptive right with respect to any of the
 37 20 following:
 37 21    (1)  Shares issued as compensation to directors, officers,
 37 22 agents, or employees of the state bank, its subsidiaries, or
 37 23 its affiliates.
 37 24    (2)  Shares issued to satisfy conversion or option rights
 37 25 created to provide compensation to directors, officers,
 37 26 agents, or employees of the state bank, its subsidiaries, or
 37 27 its affiliates.
 37 28    (3)  Shares authorized in articles of incorporation that
 37 29 are issued within six months from the effective date of
 37 30 incorporation.
 37 31    d.  A holder of shares of any class without general voting
 37 32 rights but with preferential rights to distributions or assets
 37 33 has no preemptive rights with respect to shares of any class.
 37 34    e.  A holder of shares of any class with general voting
 37 35 rights but without preferential rights to distributions or
 38  1 assets has no preemptive rights with respect to shares of any
 38  2 class with preferential rights to distributions or assets
 38  3 unless the shares with preferential rights are convertible
 38  4 into or carry a right to subscribe for or acquire shares
 38  5 without preferential rights.
 38  6    f.  Shares subject to preemptive rights that are not
 38  7 acquired by shareholders may be issued to any person for a
 38  8 period of one year after being offered to shareholders at a
 38  9 consideration set by the board of directors that is not lower
 38 10 than the consideration set for the exercise of preemptive
 38 11 rights.  An offer at a lower consideration or after the
 38 12 expiration of one year is subject to the shareholders'
 38 13 preemptive rights.
 38 14    3.  For purposes of this section, "shares" includes a
 38 15 security convertible into or carrying a right to subscribe for
 38 16 or acquire shares.
 38 17    Sec. 46.  NEW SECTION.  524.506A  PREEMPTIVE RIGHTS FOR
 38 18 EXISTING STATE BANKS.
 38 19    Notwithstanding contrary provisions of this chapter, a
 38 20 state bank which was incorporated under this chapter prior to
 38 21 July 1, 1995, shall be governed by the following until July 1,
 38 22 1998:
 38 23    1.  Except to the extent limited or denied by this section
 38 24 or by the articles of incorporation, shareholders have a
 38 25 preemptive right to acquire unissued shares or securities
 38 26 convertible into such shares or carrying a right to subscribe
 38 27 to or acquire shares.
 38 28    2.  Unless otherwise provided in the articles of
 38 29 incorporation:
 38 30    a.  No preemptive right exists with respect to either of
 38 31 the following:
 38 32    (1)  Acquiring any shares issued to directors, officers, or
 38 33 employees pursuant to approval by the affirmative vote of the
 38 34 holders of a majority of the shares entitled to vote or when
 38 35 authorized by and consistent with a plan approved by such vote
 39  1 of the shareholders.
 39  2    (2)  Acquiring treasury shares of the state bank pursuant
 39  3 to section 524.506B.
 39  4    b.  A holder of shares of any class that is preferred or
 39  5 limited as to dividends or assets is not entitled to any
 39  6 preemptive right.
 39  7    c.  A holder of shares of common stock is not entitled to
 39  8 any preemptive right to shares of any class that is preferred
 39  9 or limited as to dividends or assets or to any obligations,
 39 10 unless convertible into shares of common stock or carrying a
 39 11 right to subscribe to or acquire shares of common stock.
 39 12    d.  A holder of common stock without voting power has no
 39 13 preemptive right to shares of common stock with voting power.
 39 14    e.  A preemptive right is only an opportunity to acquire
 39 15 shares or other securities under the terms and conditions as
 39 16 fixed by the board of directors for the purpose of providing a
 39 17 fair and reasonable opportunity for the exercise of the
 39 18 preemptive right.
 39 19    Sec. 47.  NEW SECTION.  524.506B  STATE BANK'S ACQUISITION
 39 20 OF ITS OWN SHARES.
 39 21    1.  With the prior approval of the superintendent, a state
 39 22 bank may acquire its own shares.  Shares acquired pursuant to
 39 23 this section constitute authorized but unissued shares except
 39 24 as provided in subsection 2.
 39 25    2.  If the articles of incorporation prohibit the reissue
 39 26 of acquired shares, the number of authorized shares is reduced
 39 27 by the number of shares acquired, effective upon amendment of
 39 28 the articles of incorporation.
 39 29    Sec. 48.  Section 524.507, Code 1995, is amended to read as
 39 30 follows:
 39 31    524.507  OWNING OR LOANING ON ITS OWN SHARES.
 39 32    No A state bank shall not make any loan or extension of
 39 33 credit on the security of the shares of its own capital, or,
 39 34 except as provided in sections 524.1406 and 524.1417, be the
 39 35 purchaser or holder of any such shares, unless such security
 40  1 or purchase shall be is necessary to prevent loss upon a debt
 40  2 previously contracted in good faith, and shares so purchased
 40  3 or acquired shall be sold at public or private sale within one
 40  4 year from the time of their purchase or acquisition, unless
 40  5 the time is extended by the superintendent.  Any common shares
 40  6 of a state bank purchased or acquired by the state bank
 40  7 pursuant to this chapter, and sold as directed by this
 40  8 chapter, shall be subject to the minimum consideration
 40  9 requirements of subsection 1 of section 524.503 unless a
 40 10 lesser consideration is approved by the superintendent.  Any
 40 11 preferred shares of a state bank purchased or acquired by the
 40 12 state bank pursuant to this chapter, and sold as directed by
 40 13 this chapter, shall be subject to the consideration
 40 14 requirements of subsection 2 of section 524.503.
 40 15    Sec. 49.  Section 524.509, Code 1995, is amended to read as
 40 16 follows:
 40 17    524.509  NOTICE OF SHAREHOLDER MEETINGS &endash; WAIVER OF NOTICE
 40 18 GENERALLY.
 40 19    1.  Written or printed notice stating the place, day and
 40 20 hour of a meeting of the shareholders and, in case of a
 40 21 special meeting, the purpose or purposes for which the meeting
 40 22 is called, shall be delivered not less than ten nor more than
 40 23 fifty sixty days before the date of the meeting, either
 40 24 personally or by mail, by or at the direction of the
 40 25 president, the cashier, or the officer or persons calling the
 40 26 meeting, to each shareholder of record entitled to vote at
 40 27 such the meeting.  If mailed, such the notice shall be is
 40 28 deemed to be delivered when deposited in the United States
 40 29 mail addressed to the shareholder at the shareholder's address
 40 30 as it appears on the stock transfer books of the state bank
 40 31 with postage thereon prepaid.
 40 32    2.  Whenever any notice is required to be given to any
 40 33 shareholder under the provisions of this chapter or under the
 40 34 provisions of the articles of incorporation or bylaws of the
 40 35 state bank, a waiver thereof in writing signed by the person
 41  1 or persons entitled to such notice, whether before or after
 41  2 the time stated therein, shall be equivalent to the giving of
 41  3 such notice.  A shareholder may waive any notice required by
 41  4 this chapter, the articles of incorporation, or bylaws before
 41  5 or after the date and time stated in the notice.  The waiver
 41  6 must be in writing, be signed by the shareholder entitled to
 41  7 the notice, and be delivered to the state bank for inclusion
 41  8 in the minutes or filing with the corporate records.
 41  9    3.  A shareholder's attendance at a meeting results in both
 41 10 of the following:
 41 11    a.  Waives the shareholder's objection to lack of notice or
 41 12 defective notice of the meeting, unless the shareholder at the
 41 13 beginning of the meeting or promptly upon the shareholder's
 41 14 arrival objects to holding the meeting or transacting business
 41 15 at the meeting.
 41 16    b.  Waives the shareholder's objection to consideration of
 41 17 a particular matter at the meeting that is not within the
 41 18 purpose or purposes described in the meeting notice, unless
 41 19 the shareholder objects to considering the matter when it is
 41 20 presented.
 41 21    4.  Unless the articles of incorporation or bylaws provide
 41 22 otherwise, the shareholders may permit any or all shareholders
 41 23 to participate in a regular or special meeting by, or conduct
 41 24 the meeting through the use of, any means of communication by
 41 25 which all shareholders participating may simultaneously hear
 41 26 each other during the meeting.  A shareholder participating in
 41 27 a meeting as provided in this subsection is deemed to be
 41 28 present in person at the meeting.
 41 29    Sec. 50.  NEW SECTION.  524.509A  ACTION WITHOUT MEETING.
 41 30    1.  Unless the articles of incorporation or bylaws provide
 41 31 otherwise, action required or permitted to be taken under this
 41 32 chapter at a special shareholders' meeting may be taken
 41 33 without a meeting if the action is consented to by all
 41 34 shareholders.  The action must be evidenced by one or more
 41 35 written consents describing the action taken, signed by each
 42  1 shareholder, and included in the minutes or filed with the
 42  2 corporate records reflecting the action taken.
 42  3    2.  Action taken under this section is effective when the
 42  4 last shareholder signs the consent, unless the consent
 42  5 specifies a different effective date.
 42  6    3.  A written consent signed under this section has the
 42  7 effect of a meeting vote and may be described as such in any
 42  8 document.
 42  9    Sec. 51.  Section 524.510, Code 1995, is amended to read as
 42 10 follows:
 42 11    524.510  CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE.
 42 12    The board of directors of a state bank shall cause adequate
 42 13 stock transfer books to be maintained.  For the purpose of
 42 14 determining shareholders entitled to notice of or to vote at
 42 15 any meeting of shareholders or any adjournment thereof, or
 42 16 entitled to receive payment of any dividend, or in order to
 42 17 make a determination of shareholders for any other proper
 42 18 purpose, the board of directors of a state bank may provide
 42 19 that the stock transfer books shall be closed for a stated
 42 20 period but not to exceed, in any case, fifty days.  If the
 42 21 stock transfer books shall be closed for the purpose of
 42 22 determining shareholders entitled to notice of or to vote at a
 42 23 meeting of shareholders, such books shall be closed for at
 42 24 least ten days immediately preceding such meeting.  In lieu of
 42 25 closing the stock transfer books, the The bylaws, or in the
 42 26 absence of an applicable bylaw, the board of directors may
 42 27 fix, in advance, a date as the record date for any such
 42 28 determination of shareholders entitled to notice of or to vote
 42 29 at a meeting of shareholders, such the date in any case to be
 42 30 not more than fifty seventy days and, in case of a meeting of
 42 31 shareholders, not less than ten days prior to the date on
 42 32 which the particular action, requiring such the determination
 42 33 of shareholders, is to be taken.  If the stock transfer books
 42 34 are not closed and no a record date is not fixed for the
 42 35 determination of shareholders entitled to notice of or to vote
 43  1 at a meeting of shareholders, or shareholders entitled to
 43  2 receive payment of a dividend, the date on which notice of the
 43  3 meeting is mailed or the date on which the resolution of the
 43  4 board of directors declaring such dividend is adopted, as the
 43  5 case may be, shall be the record date for such the
 43  6 determination of shareholders.  When If a determination of
 43  7 shareholders entitled to vote at any meeting of shareholders
 43  8 has been made as provided in this section, such the
 43  9 determination shall apply applies to any adjournment thereof
 43 10 of the meeting.
 43 11    Sec. 52.  Section 524.511, Code 1995, is amended to read as
 43 12 follows:
 43 13    524.511  VOTING LIST.
 43 14    The officer or agent having charge of the stock transfer
 43 15 books for shares of a state bank shall make, at least ten days
 43 16 before each meeting of shareholders, make a complete list of
 43 17 the shareholders entitled to vote at such the meeting or any
 43 18 adjournment thereof of the meeting, arranged in alphabetical
 43 19 order, with the address of and the number of shares held by
 43 20 each, which list, for a period of ten days prior to such the
 43 21 meeting, shall be kept on file at the principal place of
 43 22 business of the state bank and shall be is subject to
 43 23 inspection by any a shareholder, or a shareholder's agent or
 43 24 attorney, at any time during usual business hours.  Such The
 43 25 list of shareholders shall also be produced and kept open at
 43 26 the time and place of the meeting and shall be is subject to
 43 27 the inspection of any a shareholder, or a shareholder's agent
 43 28 or attorney, during the whole time of the meeting.  The
 43 29 original stock transfer books shall be are prima facie
 43 30 evidence as to who are the shareholders entitled to examine
 43 31 such the list or transfer books or to vote at any a meeting of
 43 32 shareholders.  Failure to comply with the requirements of this
 43 33 section shall not affect the validity of action taken at such
 43 34 a meeting of shareholders.
 43 35    Sec. 53.  Section 524.512, Code 1995, is amended to read as
 44  1 follows:
 44  2    524.512  QUORUM OF SHAREHOLDERS.
 44  3    1.  Unless otherwise provided in the articles of
 44  4 incorporation, a majority of the shares entitled to vote,
 44  5 represented in person or by proxy, shall constitute
 44  6 constitutes a quorum at a meeting of shareholders.  If a
 44  7 quorum is present, the affirmative vote of the majority of the
 44  8 shares represented at the meeting and entitled to vote on the
 44  9 subject matter shall be the act of the shareholders, unless
 44 10 the vote of a greater number or voting by classes is required
 44 11 by the laws of this state or of the United States or by the
 44 12 articles of incorporation or bylaws.
 44 13    2.  Once a share is represented for any purpose at a
 44 14 meeting, it is deemed present for the purpose of determining a
 44 15 quorum for the remainder of the meeting and for any
 44 16 adjournment of that meeting unless a new record date is or
 44 17 must be set for that adjourned meeting.
 44 18    Sec. 54.  Section 524.513, Code 1995, is amended to read as
 44 19 follows:
 44 20    524.513  VOTING OF SHARES.
 44 21    1.  Each outstanding share shall be entitled to one vote on
 44 22 each matter submitted to a vote at a meeting of shareholders,
 44 23 except to the extent that the voting rights of the shares of
 44 24 any preferred class, a class or series may be limited or
 44 25 denied by the articles of incorporation.
 44 26    2.  Shares of a state bank purchased or acquired by such
 44 27 state bank pursuant to this chapter shall not be voted at any
 44 28 meeting and shall be excluded in determining whether matters
 44 29 voted upon by the shareholders were adopted by the requisite
 44 30 number of shares.
 44 31    3.  A shareholder may vote either in person or by proxy
 44 32 executed in writing by the shareholder or by the shareholder's
 44 33 duly authorized attorney-in-fact.  No A proxy shall not be
 44 34 valid after eleven months from the date of its execution.
 44 35    4.  At each election for directors every shareholder
 45  1 entitled to vote at such election shall have the right to
 45  2 vote, in person or by proxy, the number of shares owned by the
 45  3 shareholder for as many individuals as there are directors to
 45  4 be elected and for whose election the shareholder has a right
 45  5 to vote.
 45  6    Shares standing in the name of another corporation,
 45  7 domestic or foreign, may be voted by such officer, agent or
 45  8 proxy as the bylaws of such corporation may prescribe, or, in
 45  9 the absence of such provision, as the board of directors of
 45 10 such corporation may determine.
 45 11    Shares held by an administrator, executor, guardian or
 45 12 conservator may be voted by such person, either in person or
 45 13 by proxy, without a transfer of such shares into the person's
 45 14 name.  Except as provided in the following sentence, shares
 45 15 standing in the name of a trustee may be voted by the trustee,
 45 16 either in person or by proxy, but no trustee shall be entitled
 45 17 to vote shares held by the trustee without a transfer of such
 45 18 shares into the trustee's name.
 45 19    5.  In an election of directors, a state bank may shall not
 45 20 vote its own shares held by it as sole trustee unless under
 45 21 the terms of the trust the manner in which such shares shall
 45 22 be voted may be determined by a donor or beneficiary of the
 45 23 trust and unless such donor or beneficiary actually directs
 45 24 how such the shares shall be voted, provided, however, that.
 45 25 However, shares held in trust by a state bank pursuant to an
 45 26 instrument in effect prior to January 1, 1970, under the terms
 45 27 of which the manner in which such shares shall be voted could
 45 28 not be determined by a donor or beneficiary of the trust, may
 45 29 be voted in an election of directors of a state bank upon
 45 30 petition filed by the state bank, to a court of competent
 45 31 jurisdiction, and the appointment by such court of an
 45 32 individual to determine the manner in which such the shares
 45 33 shall be voted.  When the shares of a state bank are held by
 45 34 such state bank and one or more persons as trustees, such the
 45 35 shares may be voted by such other person or persons as
 46  1 trustees, in the same manner as if the person or persons were
 46  2 the sole trustee.  Whenever shares cannot be voted by reason
 46  3 of being held by a state bank as sole trustee, such the shares
 46  4 shall be excluded in determining whether matters voted upon by
 46  5 the shareholders were adopted by the requisite number of
 46  6 shares.
 46  7    Unless otherwise provided by the governing instrument,
 46  8 shares which are held jointly by any number of fiduciaries
 46  9 shall be voted in the manner determined by the majority of
 46 10 such fiduciaries (excluding a trustee ineligible by reason of
 46 11 the preceding paragraph) or if the fiduciaries are equally
 46 12 divided on the manner of voting, any court of competent
 46 13 jurisdiction may, upon petition filed by any such fiduciaries
 46 14 or any beneficiary, appoint an additional person to act with
 46 15 such fiduciaries in determining the manner in which such
 46 16 shares shall be voted.
 46 17    Unless otherwise provided by agreement, if persons holding
 46 18 shares jointly or as tenants in common are unable to agree
 46 19 upon the manner in which such shares shall be voted, the vote
 46 20 of such shares shall be divided among such persons in
 46 21 proportion to their interest.
 46 22    Shares standing in the name of a receiver may be voted by
 46 23 such receiver, and shares held by or under the control of a
 46 24 receiver may be voted by such receiver without the transfer
 46 25 thereof into the receiver's name if authority so to do be
 46 26 contained in an appropriate order of the court by which such
 46 27 receiver was appointed.
 46 28    A shareholder whose shares are pledged shall be entitled to
 46 29 vote such shares until the shares have been transferred into
 46 30 the name of the pledgee, and thereafter the pledgee shall be
 46 31 entitled to vote the shares so transferred.
 46 32    On and after the date on which written notice of redemption
 46 33 of preferred shares has been mailed to the holders thereof and
 46 34 a sum sufficient to redeem such shares has been deposited in
 46 35 escrow with irrevocable instruction and authority to pay the
 47  1 redemption price to the holders thereof upon surrender of
 47  2 certificates therefor, such shares shall not be entitled to
 47  3 vote on any matter and shall not be deemed to be outstanding
 47  4 shares.
 47  5    Sec. 55.  Section 524.514, Code 1995, is amended to read as
 47  6 follows:
 47  7    524.514  VOTING TRUST.
 47  8    Any number of shareholders of a state bank may create a
 47  9 voting trust for the purpose of conferring upon a trustee or
 47 10 trustees the right to vote or otherwise represent their
 47 11 shares, for a period of not to exceed twenty ten years, by
 47 12 entering into a written voting trust agreement specifying the
 47 13 terms and conditions of the voting trust, by depositing a
 47 14 counterpart of the agreement with the state bank at its
 47 15 principal place of business, by delivery of a copy thereof of
 47 16 the voting trust agreement to the superintendent and by
 47 17 transferring their shares to such trustee or trustees for the
 47 18 purposes of the agreement.  The counterpart of the voting
 47 19 trust agreement so deposited with the state bank shall be is
 47 20 subject to examination for any proper purpose during usual
 47 21 business hours by a shareholder of the state bank, in person
 47 22 or by agent or attorney, or by any holder of a beneficial
 47 23 interest in the voting trust, in person or by agent or
 47 24 attorney.
 47 25    This section shall not affect the validity of any
 47 26 agreement, relative to the voting of shares, in effect on
 47 27 January prior to July 1, 1970 1995.
 47 28    Sec. 56.  NEW SECTION.  524.514A  VOTING AGREEMENTS.
 47 29    1.  Two or more shareholders may provide for the manner in
 47 30 which they will vote their shares by signing an agreement for
 47 31 that purpose.  A voting agreement created under this section
 47 32 is not subject to section 524.514.
 47 33    2.  A voting agreement created under this section is
 47 34 subject to a judicial order for specific enforcement.
 47 35    Sec. 57.  Section 524.516, subsection 2, Code 1995, is
 48  1 amended to read as follows:
 48  2    2.  A dividend may shall not be declared or paid unless the
 48  3 transfer of net profits to surplus required by section 524.402
 48  4 has been made prior to the declaration of the dividend if
 48  5 restricted by the superintendent.
 48  6    Sec. 58.  Section 524.517, subsection 2, Code 1995, is
 48  7 amended to read as follows:
 48  8    2.  No A distribution may shall not be made in authorized
 48  9 but unissued shares of the state bank unless:
 48 10    a.  There shall be transferred to capital an amount equal
 48 11 to the total par value of the shares distributed, and
 48 12    b.  Immediately after the distribution, the surplus of the
 48 13 state bank would be at least equal to fifty percent of its is
 48 14 transferred to capital.
 48 15    Sec. 59.  Section 524.520, Code 1995, is amended to read as
 48 16 follows:
 48 17    524.520  OPTIONS FOR SHARES.
 48 18    A state bank may authorize the granting of options to
 48 19 officers and employees to purchase unissued, common shares of
 48 20 the state bank in accordance with a plan approved by the
 48 21 superintendent provided the following steps are taken:.
 48 22    1.  The plan is submitted to a vote of the shareholders at
 48 23 an annual meeting or special meeting called for the purpose,
 48 24 the notice of the meeting contains a complete description of
 48 25 the plan, and the plan receives the affirmative vote of the
 48 26 holders of at least two-thirds of the shares entitled to vote
 48 27 thereon.
 48 28    2.  The consideration per share shall be determined as of
 48 29 the date the options are granted and shall not be less than
 48 30 the sum of the capital represented by common shares and the
 48 31 surplus of the state bank divided by the number of common
 48 32 shares issued and outstanding on such date, but in no case
 48 33 less than an amount approved by the superintendent.
 48 34    3.  Options to purchase shares shall have a termination
 48 35 date and shall not be transferable by the holder of the option
 49  1 during the holder's lifetime.  In the event that the option is
 49  2 to survive the death of the holder of the option, the option
 49  3 shall terminate one year after the date of the holder's death
 49  4 but may be exercised by the holder's estate during that one-
 49  5 year period.
 49  6    4.  Notice of the meeting shall describe the extent to
 49  7 which pre-emptive rights of shareholders are inapplicable to
 49  8 the issuance of shares under this section.
 49  9    Upon approval by the shareholders the cashier shall reserve
 49 10 authorized but unissued shares for purposes of this section
 49 11 until the options are exercised or expire.
 49 12    Upon approval by the shareholders as provided in subsection
 49 13 1 of this section, the provisions of section 524.506
 49 14 inconsistent with this section shall be inapplicable.
 49 15    Sec. 60.  Section 524.601, subsection 1, Code 1995, is
 49 16 amended to read as follows:
 49 17    1.  The business and affairs of a state bank shall be
 49 18 managed by a board of five or more directors eighteen years of
 49 19 age or older, a majority of whom shall be citizens residents
 49 20 of this the state of Iowa and all of whom shall be citizens of
 49 21 the United States.
 49 22    Sec. 61.  Section 524.602, Code 1995, is amended to read as
 49 23 follows:
 49 24    524.602  BOARD OF DIRECTORS &endash; ELECTION.
 49 25    At the first annual meeting of shareholders and at each
 49 26 annual meeting thereafter the shareholders shall elect
 49 27 directors to hold office until the next succeeding annual
 49 28 meeting.  Directors shall hold office for one year and or
 49 29 until their successors have been elected and qualified, unless
 49 30 removed in accordance with provisions of section 524.606.
 49 31 When the shareholders increase determine the number of
 49 32 directors at an annual meeting or at a special meeting, they
 49 33 shall, at the same meeting or at a subsequent meeting, elect a
 49 34 director to fill each new directorship created.
 49 35    Sec. 62.  Section 524.604, subsections 1 and 4, Code 1995,
 50  1 are amended to read as follows:
 50  2    1.  Reasonably regular attendance at meetings of the board
 50  3 Attendance at no less than seventy-five percent of the regular
 50  4 board meetings held during the calendar year.
 50  5    4.  Utilization of a method to insure the safety of the
 50  6 funds of depositors as provided for in Review of the adequacy
 50  7 of the bank's internal controls and determination of the most
 50  8 appropriate method to satisfy the bank's audit needs pursuant
 50  9 to section 524.608.
 50 10    Sec. 63.  Section 524.605, subsection 3, Code 1995, is
 50 11 amended to read as follows:
 50 12    3.  The directors of a state bank who, willfully or
 50 13 negligently, vote for or assent to any loan loans or extension
 50 14 extensions of credit resulting in an obligation, as defined in
 50 15 subsection 1 of section 524.904, to such state bank in
 50 16 violation of the provisions of this chapter, shall be jointly
 50 17 and severally liable to the state bank for the total amount of
 50 18 any loss sustained as a result of such obligation.
 50 19    Sec. 64.  Section 524.606, subsection 1, Code 1995, is
 50 20 amended to read as follows:
 50 21    1.  At a meeting of shareholders expressly called for that
 50 22 purpose, individual directors or the entire board of directors
 50 23 may be removed, with or without cause, by the affirmative vote
 50 24 of the holders of at least two-thirds a majority of the shares
 50 25 entitled to vote at an election of directors.  The vacancies
 50 26 created may be filled at the same meeting at which the removal
 50 27 proceedings take place.
 50 28    Sec. 65.  Section 524.607, unnumbered paragraph 1, Code
 50 29 1995, is amended to read as follows:
 50 30    The board of directors shall hold at least one meeting nine
 50 31 regular meetings each calendar month year.  No more than one
 50 32 regular meeting shall be held in any one calendar month.
 50 33 Unless the articles of incorporation or bylaws provide
 50 34 otherwise, the board of directors may permit directors to
 50 35 participate in meetings through the use of any means of
 51  1 communication by which all directors participating may
 51  2 simultaneously hear each other during the meeting.  A director
 51  3 participating in a meeting by this means is deemed to be
 51  4 present at the meeting.
 51  5    PARAGRAPH DIVIDED.  A special meeting may be called by the
 51  6 president, a vice president, cashier any executive officer or
 51  7 a director.  Notice of a meeting shall be given to each
 51  8 director, either personally or by mail, at least two days in
 51  9 advance of the meeting.  Notice of a regular meeting shall not
 51 10 be required if the articles of incorporation, bylaws, or a
 51 11 resolution of the board of directors provide for a regular
 51 12 monthly meeting date.
 51 13    Sec. 66.  Section 524.608, Code 1995, is amended by
 51 14 striking the section and inserting in lieu thereof the
 51 15 following:
 51 16    524.608  AUDITING PROCEDURES.
 51 17    In addition to any examination made by the banking division
 51 18 or other supervisory agency, the board of directors shall
 51 19 review the adequacy of the bank's internal controls and cause
 51 20 to be made no less frequently than annually additional
 51 21 auditing procedures that the board deems to be appropriate.
 51 22 The board shall determine the bank's audit needs and record in
 51 23 the board's minutes the extent to which audit procedures are
 51 24 to be employed.  A report which summarizes significant audit
 51 25 findings shall be delivered to the superintendent as soon as
 51 26 practical upon completion.
 51 27    The superintendent may require that more comprehensive
 51 28 auditing procedures be applied to a bank's account records
 51 29 when deemed necessary.  These auditing procedures may range
 51 30 from limited scope agreed-upon procedures to an unqualified
 51 31 audit opinion.
 51 32    Sec. 67.  Section 524.610, Code 1995, is amended to read as
 51 33 follows:
 51 34    524.610  COMPENSATION OF DIRECTORS.
 51 35    The shareholders of a state bank shall fix the reasonable
 52  1 compensation of directors for their services as members of the
 52  2 board of directors.  Subject to the approval of the
 52  3 superintendent and approval by the shareholders at an annual
 52  4 or special meeting called for that purpose, the shareholders
 52  5 of a state bank may adopt a pension or profit sharing plan, or
 52  6 both, or other plan of deferred compensation for directors, to
 52  7 which a state bank may contribute.
 52  8    A director who is also a salaried officer or employee of
 52  9 the state bank of which the person is a director shall receive
 52 10 no additional compensation as director.  Directors may be
 52 11 reimbursed for reasonable expenses incurred in the performance
 52 12 of their duties.
 52 13    Sec. 68.  Section 524.612, Code 1995, is amended to read as
 52 14 follows:
 52 15    524.612  DIRECTOR DEALING WITH STATE BANK.
 52 16    1.  The total obligations, as defined in subsection 1 of
 52 17 section 524.904, of a director to a state bank of which the
 52 18 person is a director shall not exceed twenty percent of the
 52 19 capital and surplus of the state bank except that the total
 52 20 obligations of a director to a state bank of which the person
 52 21 is a director shall not exceed forty percent of the capital
 52 22 and surplus of the state bank if the amount by which such
 52 23 obligations exceed twenty percent of the capital and surplus
 52 24 of the state bank shall consist of obligations described in
 52 25 paragraph "a" of subsection 2 of section 524.904.  Subject to
 52 26 the provisions of section 524.904, a director of a state bank
 52 27 may receive loans and extensions of credit from a state bank
 52 28 of which the person is a director.  A majority of the board of
 52 29 directors, voting in the absence of the applying director,
 52 30 shall give its prior approval to any obligation, as defined in
 52 31 subsection 1 of section 524.904, of a director to the state
 52 32 bank of which the person is a director such loans and
 52 33 extensions of credit.  The form of such approval shall be
 52 34 specified by the superintendent, and a copy recorded in the
 52 35 minutes of the board of directors.  Approval shall be recorded
 53  1 in the minutes.
 53  2    2.  A director shall not be permitted to receive any loan
 53  3 or extension of credit or use any property of a state bank of
 53  4 which the person is a director at a lower rate of interest or
 53  5 charge than the rate charged or on terms which are more
 53  6 favorable than the terms offered to other customers under
 53  7 similar circumstances.
 53  8    3.  A director shall not receive terms or be paid a higher
 53  9 rate of interest on deposits, by a state bank of which the
 53 10 person is a director, which are more favorable than the rate
 53 11 paid that provided to any other customer under similar
 53 12 circumstances.
 53 13    4.  A director shall not purchase or lease any assets from
 53 14 or sell or lease any assets to a state bank of which the
 53 15 person is a director except upon terms not less favorable to
 53 16 the state bank than those offered to or by other persons.  All
 53 17 purchases or leases from and sales or leases to a director
 53 18 shall receive the prior approval of a majority of the board of
 53 19 directors voting in the absence of the interested director.
 53 20    5.  For the purpose of this section and section 524.706,
 53 21 any obligation loans and extensions of credit, as defined in
 53 22 section 524.904, subsection 1, of to the spouse of a director
 53 23 or officer, other than a spouse who is legally separated from
 53 24 the director or officer under a decree of divorce or separate
 53 25 maintenance, or to minor children of a director or officer to
 53 26 the state bank in which the person is a director or officer
 53 27 is, are considered an obligation loans and extensions of
 53 28 credit of such director or officer.  However, an obligation
 53 29 loans and extensions of credit of a spouse is are not
 53 30 considered an obligation loans and extensions of credit of the
 53 31 director or officer if the officer or director and the spouse
 53 32 of the director or officer maintain separate deposit accounts,
 53 33 for either personal or business purposes, and the funds
 53 34 obtained pursuant to the obligation of the spouse are not
 53 35 commingled with funds of, or used to directly benefit, the
 54  1 officer or director, and the obligation is not guaranteed by
 54  2 the director or officer. if all of the following apply:
 54  3    a.  Assets and liabilities of a director or officer are not
 54  4 included in the financial statement of the spouse and are not
 54  5 otherwise relied upon as a basis for loans or extensions of
 54  6 credit to the spouse.
 54  7    b.  The guarantee of a director or officer is not relied
 54  8 upon as a basis for loans or extensions of credit to the
 54  9 spouse.
 54 10    c.  The proceeds of the loans and extensions of credit to
 54 11 the spouse are not intermingled with or used for a common
 54 12 purpose with the proceeds of loans and extensions of credit to
 54 13 the director or officer.
 54 14    Sec. 69.  Section 524.613, Code 1995, is amended to read as
 54 15 follows:
 54 16    524.613  PROHIBITIONS APPLICABLE TO CERTAIN FINANCIAL
 54 17 TRANSACTIONS INVOLVING DIRECTORS.
 54 18    1.  No A director of a state bank shall:
 54 19    1.  Receive not receive anything of value, other than
 54 20 compensation and expense reimbursement authorized by section
 54 21 524.610, for procuring, or attempting to procure, any loan or
 54 22 extension of credit resulting, or which would result, in an
 54 23 obligation, as defined in subsection 1 of section 524.904, to
 54 24 the state bank or for procuring, or attempting to procure, an
 54 25 investment by the state bank, of which the person is a
 54 26 director.
 54 27    2.  Overdraw the director's deposit account in the state
 54 28 bank.  A state bank shall not pay an overdraft of a director
 54 29 of the state bank on an account at the state bank, unless the
 54 30 payment of funds is made in accordance with either of the
 54 31 following:
 54 32    a.  A written, preauthorized, interest-bearing extension of
 54 33 credit plan that specifies a method of repayment.
 54 34    b.  A written, preauthorized transfer of collected funds
 54 35 from another account of the account holder at the state bank.
 55  1    Sec. 70.  Section 524.614, Code 1995, is amended to read as
 55  2 follows:
 55  3    524.614  HONORARY AND ADVISORY DIRECTORS.
 55  4    The board of directors of a state bank may appoint an
 55  5 individual as an honorary director, director emeritus, or
 55  6 member of an advisory board.  An individual so appointed may
 55  7 shall not vote at any meeting of the board of directors nor,
 55  8 shall not be counted in determining a quorum, and shall not be
 55  9 charged with any responsibilities or be subject to any
 55 10 liabilities imposed upon directors by this chapter.
 55 11    Sec. 71.  Section 524.701, Code 1995, is amended by
 55 12 striking the section and inserting in lieu thereof the
 55 13 following:
 55 14    524.701  OFFICERS AND EMPLOYEES.
 55 15    1.  A state bank shall have as officers a president, one
 55 16 vice president, and a cashier.  No more than two of these
 55 17 positions may be held by the same individual.  A state bank
 55 18 may have other officers as prescribed by the articles of
 55 19 incorporation or bylaws.
 55 20    2.  The board of directors shall elect one officer as the
 55 21 chief executive officer, who shall be a member of the board of
 55 22 directors.
 55 23    3.  Upon written notice by the superintendent, an
 55 24 individual who performs active executive or official duties
 55 25 for a state bank may be treated as an executive officer.  A
 55 26 state bank may have a chairperson of the board of directors
 55 27 who, if the person does not perform executive or official
 55 28 duties or receive a salary, need not be considered an
 55 29 executive officer of the state bank.
 55 30    4.  An individual employed by a state bank, other than a
 55 31 director or an officer, is considered an employee for the
 55 32 purposes of this chapter.
 55 33    Sec. 72.  Section 524.703, Code 1995, is amended to read as
 55 34 follows:
 55 35    524.703  OFFICERS AND EMPLOYEES &endash; EMPLOYMENT AND
 56  1 COMPENSATION.
 56  2    The board of directors may fix the tenure and provide for
 56  3 the reasonable compensation of officers.  Upon approval by the
 56  4 board of directors, officers The chief executive officer or
 56  5 the chief executive officer's designee shall determine the
 56  6 employee's compensation and tenure.  Officers and employees
 56  7 may be reimbursed for reasonable expenses incurred by them in
 56  8 on behalf of the state bank.
 56  9    Subject to the approval of the superintendent, and approval
 56 10 by the shareholders at an annual or special meeting called for
 56 11 the purpose, the board of directors of a state bank may adopt
 56 12 a pension or profit-sharing plan, or both, or other plan of
 56 13 deferred compensation, for both officers and employees, to
 56 14 which the state bank may contribute.
 56 15    Sec. 73.  Section 524.705, Code 1995, is amended to read as
 56 16 follows:
 56 17    524.705  BONDS OF OFFICERS AND EMPLOYEES.
 56 18    The officers and employees of a state bank having the care,
 56 19 custody, or control of any funds or securities for any state
 56 20 bank shall give a good and sufficient bond in a company
 56 21 authorized to do business in this state indemnifying the state
 56 22 bank against losses, which may be incurred by reason of any
 56 23 act or acts of fraud, dishonesty, forgery, theft, larceny,
 56 24 embezzlement, wrongful abstraction, misapplication,
 56 25 misappropriation, or other unlawful act committed by such
 56 26 officer or employee directly or through connivance with
 56 27 others, until all of the officer's or employee's accounts with
 56 28 the state bank shall have been are fully settled and
 56 29 satisfied.  The amounts and sureties shall be are subject to
 56 30 the approval of the board of directors.  The superintendent
 56 31 may require higher amounts as deemed necessary.  If the agent
 56 32 of a bonding company issuing a bond under this section is an
 56 33 officer or employee of the state bank upon which the bond was
 56 34 issued, the bond so issued shall contain a provision that the
 56 35 bonding company shall not use, either as a grounds for
 57  1 rescission or as a defense to liability under the terms and
 57  2 conditions of the bond, the knowledge that the agent was so
 57  3 employed, whether or not the agent received any part of the
 57  4 premium for such the bond as a commission.
 57  5    Sec. 74.  Section 524.706, Code 1995, is amended to read as
 57  6 follows:
 57  7    524.706  OFFICER DEALING WITH STATE BANK.
 57  8    1.  a.  An executive officer of a state bank may receive
 57  9 loans or extensions of credit from a state bank of which the
 57 10 person is an executive officer, resulting in obligations as
 57 11 defined in section 524.904, subsection 1, not exceeding, in
 57 12 the aggregate, the following:
 57 13    (1)  An amount secured by a lien on a dwelling which is
 57 14 expected, after the obligation is incurred, to be owned by the
 57 15 executive officer and used as the officer's principal
 57 16 residence, provided that after the loan is made there is no
 57 17 other loan by the bank to the executive officer, under
 57 18 authority of this subparagraph, outstanding.
 57 19    (2)  An amount to finance the education of a child or
 57 20 children of the executive officer.
 57 21    (3)  Any other loans or extensions of credit which in the
 57 22 aggregate do not at any one time exceed the higher of twenty-
 57 23 five thousand dollars or two point five and one-half percent
 57 24 of the bank's aggregate capital and surplus, but in no event
 57 25 more than one hundred thousand dollars.
 57 26    (4)  Other amounts which do not, in the aggregate, exceed
 57 27 the principal amounts of time certificates of deposit in the
 57 28 bank which are held in the name of the executive officer, if
 57 29 repayment of the loan or credit amounts is at all times
 57 30 secured by pledge of the certificates segregated deposit
 57 31 accounts which the bank may lawfully set off.  An interest in
 57 32 or portion of a time certificate of segregated deposit account
 57 33 does not satisfy the requirements of this subparagraph if that
 57 34 interest or portion is also pledged to secure the payment of a
 57 35 debt or obligation of any person other than the executive
 58  1 officer.  If the deposit is eligible for withdrawal before the
 58  2 secured loan matures, the bank shall establish internal
 58  3 procedures to prevent the release of the security without the
 58  4 bank's prior consent.
 58  5    b.  A state bank shall not loan money or extend credit to
 58  6 an executive officer of such the state bank, nor shall and an
 58  7 executive officer of a state bank shall not receive a loan or
 58  8 extension of credit from such the state bank, exceeding the
 58  9 limitations imposed by this section or for a purpose other
 58 10 than that authorized by this section.  Such loans or
 58 11 extensions of credit shall not exceed an amount totaling more
 58 12 than twenty percent of the capital and surplus fifteen percent
 58 13 of the aggregate capital of the state bank and any such loan
 58 14 on real property shall comply with section 524.905.  A
 58 15 majority of the board of directors, voting in the absence of
 58 16 the applying executive officer, whether or not the executive
 58 17 officer is also a director, shall give its prior approval to
 58 18 any obligation of an executive officer to the state bank of
 58 19 which the person is an executive officer.  The form of
 58 20 approval shall be specified by the superintendent, and a copy
 58 21 recorded in the minutes of the board of directors.  Approval
 58 22 shall be recorded in the minutes.
 58 23    c.  For the purposes of this subsection "executive officer"
 58 24 means an officer of a state bank who participates or has
 58 25 authority to participate, otherwise than in the capacity of a
 58 26 director, in major policymaking functions of the bank,
 58 27 regardless of whether the officer has an official title or
 58 28 whether the officer's title contains a designation of
 58 29 assistant and regardless of whether the officer is serving
 58 30 without salary or other compensation.  The chairperson of the
 58 31 board, every president, every vice president, the cashier,
 58 32 secretary, and treasurer of a state bank are assumed to be
 58 33 executive officers, unless, by resolution of the board of
 58 34 directors or by the bank's bylaws, but subject to contrary
 58 35 notice by the superintendent as provided for in section
 59  1 524.701, any such officer is excluded from participation in
 59  2 major policymaking functions, otherwise than in the capacity
 59  3 of a director of the bank, and the officer does not actually
 59  4 participate.
 59  5    2.  The provisions of section Section 524.612, subsections
 59  6 subsection 2, 3 and 4, shall apply applies to executive
 59  7 officers, and section 524.612, subsections 3 and 4, apply to
 59  8 all officers and employees.
 59  9    3.  If an individual is a director and an officer, the
 59 10 individual shall be subject to the limitations of subsection 1
 59 11 of this section.  Upon the request of the board of directors,
 59 12 an officer or employee of a state bank shall submit to the
 59 13 board of directors a personal financial statement which shall
 59 14 include the names of all persons to whom the officer or
 59 15 employee is obligated, the dates, terms, and amounts of each
 59 16 loan or other obligation, the security for the loan or
 59 17 obligation, and the purpose for which the proceeds of the loan
 59 18 or other obligation has been or is to be used.
 59 19    4.  Whenever an officer of a state bank borrows from or
 59 20 otherwise becomes obligated to any person or persons other
 59 21 than the state bank of which the person is an officer, in a
 59 22 total amount equal to or exceeding twenty-five thousand
 59 23 dollars excluding such amounts as may be owing by the officer
 59 24 secured by a first lien on a dwelling which is used by the
 59 25 officer as the officer's residence, the officer shall report
 59 26 in writing to the superintendent that the officer is so
 59 27 obligated.  Upon the request of the superintendent, a director
 59 28 or an officer of a state bank shall submit to the
 59 29 superintendent, a personal financial statement which shall
 59 30 show the names of all persons to whom the director or officer
 59 31 is obligated, the dates, terms, and amounts of each loan or
 59 32 other obligation, the security therefor for the loan or
 59 33 obligation, and the purpose for which the proceeds of such
 59 34 loans or other obligations have the loan or other obligation
 59 35 has been or are is to be used.
 60  1    Sec. 75.  Section 524.707, Code 1995, is amended to read as
 60  2 follows:
 60  3    524.707  REMOVAL OF OFFICERS OR EMPLOYEES.
 60  4    1.  Any An officer or employee may be removed by the board
 60  5 of directors whenever in its judgment the best interests of
 60  6 the state bank shall be served thereby by such removal, but
 60  7 such the removal shall be without prejudice to the contract
 60  8 rights, if any, of the officer or employee so removed.
 60  9 Election of an officer shall not of itself create contract
 60 10 rights.
 60 11    2.  Subsection 2 of section Section 524.606, providing
 60 12 subsection 2, which provides for the removal of directors by
 60 13 the superintendent, shall have equal application to officers
 60 14 and employees.
 60 15    Sec. 76.  Section 524.708, Code 1995, is amended to read as
 60 16 follows:
 60 17    524.708  REPORT OF CHANGE IN OFFICER PERSONNEL.
 60 18    A state bank shall promptly notify the superintendent of
 60 19 any change in the names of individuals holding the offices of
 60 20 chairperson, chief executive officer or president, vice
 60 21 president, and cashier.
 60 22    Sec. 77.  Section 524.710, Code 1995, is amended to read as
 60 23 follows:
 60 24    524.710  PROHIBITIONS APPLICABLE TO CERTAIN FINANCIAL
 60 25 TRANSACTIONS INVOLVING OFFICERS AND EMPLOYEES.
 60 26    1.  No An officer or employee of a state bank shall not do
 60 27 any of the following:
 60 28    1. a.  Receive anything of value, other than compensation
 60 29 as authorized by section 524.703, for procuring, or attempting
 60 30 to procure, any loan or extension of credit resulting, or
 60 31 which would result, in an obligation, as defined in subsection
 60 32 1 of section 524.904, to for the state bank or for procuring,
 60 33 or attempting to procure, an investment by the state bank, of
 60 34 which the person is an officer or employee.
 60 35    2.  Overdraw the officer's or employee's deposit account in
 61  1 the state bank.
 61  2    3. b.  Engage, directly or indirectly, in the sale of any
 61  3 kind of insurance, shares of stock, bonds or other securities,
 61  4 or real property, or procure or attempt to procure for a fee
 61  5 or other compensation, a loan or extension of credit for any
 61  6 person from a person other than the state bank of which the
 61  7 person is an officer or employee, or act in any fiduciary
 61  8 capacity, unless authorized to do so by the board of directors
 61  9 of the state bank which shall also determine the manner in
 61 10 which the profits, fees, or other compensation derived
 61 11 therefrom shall be distributed.
 61 12    2.  A state bank shall not pay an overdraft of an officer
 61 13 or employee of the state bank on an account at the state bank,
 61 14 unless the payment of funds is made in accordance with either
 61 15 of the following:
 61 16    a.  A written, preauthorized, interest-bearing extension of
 61 17 credit plan that specifies a method of repayment.
 61 18    b.  A written, preauthorized transfer of collected funds
 61 19 from another account of the account holder at the state bank.
 61 20    Sec. 78.  Section 524.801, subsection 1, Code 1995, is
 61 21 amended by striking the subsection.
 61 22    Sec. 79.  Section 524.801, Code 1995, is amended by adding
 61 23 the following new subsection:
 61 24    NEW SUBSECTION.  13.  To set off a customer's account
 61 25 against any of the customer's debts or liabilities owed the
 61 26 state bank pursuant to an agreement entered into between the
 61 27 customer and the state bank.
 61 28    Sec. 80.  Section 524.802, Code 1995, is amended to read as
 61 29 follows:
 61 30    524.802  ADDITIONAL POWERS RELATED TO CONDUCT OF BUSINESS
 61 31 OF A STATE BANK.
 61 32    A state bank shall have in addition to other powers granted
 61 33 by this chapter, and subject to the limitations and
 61 34 restrictions contained in this chapter, the power to do all of
 61 35 the following:
 62  1    1.  The power to become a member of a clearing house
 62  2 association Become an insured bank pursuant to the Federal
 62  3 Deposit Insurance Act and to take action as necessary to
 62  4 maintain the state bank's insured status.
 62  5    2.  The power to become Become a member of the federal
 62  6 reserve system, to acquire and hold shares of stock in a the
 62  7 appropriate federal reserve bank, to take all actions incident
 62  8 to maintenance of such membership and to exercise all powers
 62  9 conferred on member banks by the federal reserve system that
 62 10 are not inconsistent with the provisions of this chapter
 62 11 conferred on member banks by the federal reserve system.
 62 12    3.  The power to become an insured bank pursuant to the
 62 13 federal deposit insurance Act and to take all actions incident
 62 14 to maintenance of an insured status thereunder.  Become a
 62 15 member of a clearinghouse association.
 62 16    4.  The power to act Act as agent of the United States or
 62 17 of any instrumentality or agency thereof for the sale or issue
 62 18 of bonds, notes or other obligations of the United States.
 62 19    4A.  Act as agent for a depository institution affiliate to
 62 20 the same extent that a national bank can act as an agent for a
 62 21 depository institution under the provisions of section 18 of
 62 22 the Federal Deposit Insurance Act, 12 U.S.C. } 1828.
 62 23    5.  The power to buy Buy and sell coin, currency, and
 62 24 bullion.
 62 25    6.  All other powers incidental to the conduct of the
 62 26 business of banking.  Organize, acquire, and hold shares of
 62 27 stock in an operations subsidiary, with the prior approval of
 62 28 the superintendent.
 62 29    7.  Engage in the brokerage of insurance and real estate
 62 30 subject to the prior approval of the superintendent.  These
 62 31 activities are subject to regulation, including but not
 62 32 limited to regulation under Title XIII, subtitle 1 and
 62 33 subtitle 4.
 62 34    8.  Acquire and hold shares of stock in the appropriate
 62 35 federal home loan bank and to exercise all powers conferred on
 63  1 member banks of the federal home loan bank system that are not
 63  2 inconsistent with this chapter.  A purchase of federal home
 63  3 loan bank shares which causes the state bank's holdings to
 63  4 exceed fifteen percent of aggregate capital requires the prior
 63  5 approval of the superintendent.
 63  6    9.  Acquire and hold shares of stock in the federal
 63  7 agricultural mortgage corporation or corporations engaged
 63  8 solely in the pooling of agricultural loans for the federal
 63  9 agricultural mortgage corporation guarantees.
 63 10    10.  Become a member of a bankers' bank.
 63 11    11.  Subject to the prior approval of the superintendent,
 63 12 organize, acquire, or invest in a subsidiary for the purpose
 63 13 of engaging in any of the following:
 63 14    a.  Nondepository activities that a state bank is
 63 15 authorized to engage in directly under this chapter.
 63 16    b.  Activities that a bank service corporation is
 63 17 authorized to engage in under state or federal law or
 63 18 regulation.
 63 19    c.  Activities authorized pursuant to section 524.825.
 63 20    12.  Acquire, hold, and improve real estate for the sole
 63 21 purpose of economic or community development, provided that
 63 22 the state bank's aggregate investment in all acquisitions and
 63 23 improvements of real estate under this subsection shall not
 63 24 exceed fifteen percent of a state bank's aggregate capital and
 63 25 shall be subject to the prior approval of the superintendent.
 63 26    13.  All other powers determined by the superintendent to
 63 27 be appropriate for a state bank.
 63 28    Sec. 81.  Section 524.803, Code 1995, is amended to read as
 63 29 follows:
 63 30    524.803  BUSINESS PROPERTY OF STATE BANK.
 63 31    1.  A state bank shall have power to do all of the
 63 32 following:
 63 33    a.  Acquire and hold, or lease as lessee, such personal
 63 34 property as is used, or is to be used, in its operations.
 63 35    b.  Subject to the prior approval of the superintendent,
 64  1 acquire and hold, or lease as lessee, only such real property
 64  2 as is used, or is to be used, wholly or substantially, in its
 64  3 operations or acquired for future use.
 64  4    c.  Subject to the prior approval of the superintendent,
 64  5 acquire and hold shares in a corporation engaged solely in
 64  6 holding or operating real property used wholly or
 64  7 substantially by a state bank in its operations or acquired
 64  8 for its future use and in a corporation organized solely for
 64  9 the purpose of providing data processing services, as such
 64 10 services are defined in the first sentence of section 524.804.
 64 11    d.  Subject to the prior approval of the superintendent,
 64 12 invest in a bank service corporation as defined by, and in
 64 13 accordance with, the laws of the United States acquire and
 64 14 hold shares in a corporation organized solely for the purpose
 64 15 of providing data processing services, as such services are
 64 16 defined in section 524.804.
 64 17    e.  Subject to the prior approval of the superintendent,
 64 18 acquire and hold shares in a corporation engaged in providing
 64 19 and operating facilities through which banks and customers may
 64 20 engage, by means of either the direct transmission of
 64 21 electronic impulses to and from a bank or the recording of
 64 22 electronic impulses or other indicia of a transaction for
 64 23 delayed transmission to a bank, in transactions in which such
 64 24 banks are otherwise permitted to engage pursuant to applicable
 64 25 law.
 64 26    f.  Organize, acquire, or invest in a subsidiary for the
 64 27 purpose of engaging in any one or more of the following,
 64 28 subject to the prior approval of the superintendent:
 64 29    (1)  Nondepository activities that a state bank is
 64 30 authorized to engage in directly under this chapter.
 64 31    (2)  Any activity that a bank service corporation is
 64 32 authorized to engage in under state or federal law or
 64 33 regulation.
 64 34    (3)  Any activity authorized pursuant to section 524.825.
 64 35    2.  The book value of all real and personal property
 65  1 acquired and held pursuant to this section, of all alterations
 65  2 to buildings on real property owned or leased by a state bank,
 65  3 of all shares in corporations acquired pursuant to paragraphs
 65  4 "c", and "d", and "e" of subsection 1 of this section, and of
 65  5 any and all obligations of such corporations to the state
 65  6 bank, shall not exceed twenty-five forty percent of the
 65  7 aggregate capital, surplus and undivided profits of the state
 65  8 bank or such larger amount as may be approved by the
 65  9 superintendent.
 65 10    3.  Any real property which is held by a state bank
 65 11 pursuant to this section and which it ceases to use for
 65 12 banking purposes, or is acquired for future use but not used
 65 13 within a reasonable period of time, shall be sold or disposed
 65 14 of by the state bank as directed by the superintendent.
 65 15    Sec. 82.  Section 524.804, Code 1995, is amended to read as
 65 16 follows:
 65 17    524.804  DATA PROCESSING SERVICES.
 65 18    A state bank which owns or leases equipment to perform such
 65 19 bank services as check and deposit sorting and posting,
 65 20 computation and posting of interest and other credits and
 65 21 charges, preparation and mailing of checks, statements,
 65 22 notices, and similar items, or other clerical, bookkeeping,
 65 23 accounting, statistical, or other similar functions, may
 65 24 provide similarly related data processing services for others
 65 25 whether or not engaged in the business of banking.  If a state
 65 26 bank holds shares in a corporation organized solely for the
 65 27 purpose of providing data processing services, pursuant to the
 65 28 authority granted by paragraph "c" of subsection 1 of section
 65 29 524.803, subsection 1, paragraph "d", other than a bank
 65 30 service corporation as defined by the laws of the United
 65 31 States, such corporation shall be authorized to perform
 65 32 services for the state bank owning such interest and for
 65 33 others, whether or not engaged in the business of banking.
 65 34    Sec. 83.  Section 524.805, subsections 1 and 4, Code 1995,
 65 35 are amended to read as follows:
 66  1    1.  A state bank may receive money for deposit and may
 66  2 provide, by resolution of the board of directors, for the
 66  3 payment of interest thereon in an amount not inconsistent with
 66  4 the provisions of subsection 2 of this section on such deposit
 66  5 and shall repay such the deposit in accordance with the terms
 66  6 and conditions of its acceptance.
 66  7    4.  A state bank may make such charges for the handling or
 66  8 custody of deposits as may be fixed by its board of directors
 66  9 provided that a schedule of such the charges shall be
 66 10 furnished to the customer at the time of acceptance by the
 66 11 state bank of the initial deposit.  Any change in such the
 66 12 charges shall be furnished to the customer within a reasonable
 66 13 amount period of time before the effective date of such the
 66 14 change.
 66 15    Sec. 84.  Section 524.805, subsection 2, Code 1995, is
 66 16 amended by striking the subsection.
 66 17    Sec. 85.  Section 524.809, subsection 1, Code 1995, is
 66 18 amended to read as follows:
 66 19    1.  A state bank may lease safe deposit boxes for the
 66 20 storage of property on terms and conditions prescribed by it
 66 21 the state bank.  Such The terms and conditions shall not bind
 66 22 any a customer or the customer's successors or legal
 66 23 representatives to whom the state bank does not give notice
 66 24 thereof of such terms and conditions by delivery of a lease
 66 25 and agreement in writing containing such the terms and
 66 26 conditions.  A state bank may limit its liability provided
 66 27 such limitations are set forth in the lease and agreement in
 66 28 at least the same size and type as the other substantive
 66 29 provisions of the contract lease and agreement.
 66 30    Sec. 86.  Section 524.812, subsection 2, Code 1995, is
 66 31 amended to read as follows:
 66 32    2.  If the rental for the safe deposit box has not been
 66 33 paid after prior to the expiration of the period specified in
 66 34 a notice mailed pursuant to subsection 1 of this section, the
 66 35 state bank may, in the presence of two of its officers, cause
 67  1 the box to be opened and the contents removed.  An inventory
 67  2 of the contents of the safe deposit box shall be made by the
 67  3 two officers present and the contents held by the state bank
 67  4 for the account of the customer.
 67  5    Sec. 87.  Section 524.825, Code 1995, is amended to read as
 67  6 follows:
 67  7    524.825  SECURITIES ACTIVITIES.
 67  8    Subject to the prior approval of the superintendent and as
 67  9 authorized by rules adopted by the superintendent pursuant to
 67 10 chapter 17A, a state bank or a subsidiary of a state bank
 67 11 organized or acquired pursuant to section 524.803 524.802,
 67 12 subsection 1 11, paragraph "f" may engage in directly, or may
 67 13 organize, acquire, or invest in a subsidiary for the purpose
 67 14 of engaging in securities activities and any aspect of the
 67 15 securities industry, including, but not limited to, any of the
 67 16 following:
 67 17    1.  Issuing, underwriting, selling, or distributing stocks,
 67 18 bonds, debentures, notes, interest in mutual funds or money-
 67 19 market-type mutual funds, or other securities.
 67 20    2.  Organizing, sponsoring, and operating one or more
 67 21 mutual funds.
 67 22    3.  Acting as a securities broker-dealer licensed under
 67 23 chapter 502.  The business relating to securities shall be
 67 24 conducted through, and in the name of, the broker-dealer.  The
 67 25 requirements of chapter 502 apply to any business of the
 67 26 broker-dealer transacted in this state.
 67 27    A subsidiary engaging in activities authorized by this
 67 28 section may also engage in any other authorized activities
 67 29 under section 524.803 524.802, subsection 1, paragraph "f" 11.
 67 30    Sec. 88.  Section 524.901, Code 1995, is amended by
 67 31 striking the section and inserting in lieu thereof the
 67 32 following:
 67 33    524.901  INVESTMENTS.
 67 34    1.  For purposes of this section, unless the context
 67 35 otherwise requires:
 68  1    a.  "Investment securities" means marketable obligations in
 68  2 the form of bonds, notes, or debentures which have been
 68  3 publicly offered, are of sound value, or are secured so as to
 68  4 be readily marketable at a fair value, and are within the four
 68  5 highest grades according to a reputable rating service or
 68  6 represent unrated issues of equivalent value.  "Investment
 68  7 securities" does not include investments which are
 68  8 predominately speculative in nature.
 68  9    b.  "Shares" means proprietary units of ownership of a
 68 10 corporation.
 68 11    2.  A state bank shall not invest for its own account more
 68 12 than fifteen percent of its aggregate capital in investment
 68 13 securities of any one obligor.  Any premium paid by a state
 68 14 bank for any investment securities shall not be included in
 68 15 determining the amount that may be invested under this
 68 16 subsection.
 68 17    3.  Subject only to the exercise of prudent banking
 68 18 judgment, a state bank may invest for its own account without
 68 19 regard to the limitation provided in subsection 2 in any of
 68 20 the following:
 68 21    a.  Investment securities of the United States of which the
 68 22 payment of principal and interest is fully and unconditionally
 68 23 guaranteed by the United States.
 68 24    b.  Investment securities issued, insured, or guaranteed by
 68 25 a department or an agency of the United States government,
 68 26 provided that the securities, insurance, or guarantee commits
 68 27 the full faith and credit of the United States for the
 68 28 repayment of the securities.
 68 29    c.  Investment securities of the federal national mortgage
 68 30 association or the association's successor.
 68 31    d.  Investment securities of the federal home loan mortgage
 68 32 corporation or the corporation's successor.
 68 33    e.  Investment securities of the student loan marketing
 68 34 association or the association's successor.
 68 35    f.  Investment securities of a federal home loan bank.
 69  1    g.  Investment securities of a farm credit bank.
 69  2    h.  Investment securities representing general obligations
 69  3 of the state of Iowa or of political subdivisions of the
 69  4 state.
 69  5    4.  A state bank may invest without limit in the shares or
 69  6 units of investment companies or investment trusts registered
 69  7 under the federal Investment Company Act of 1940, 15 U.S.C. }
 69  8 80a, the portfolio of which is limited to United States
 69  9 investment securities described in subsection 3 or repurchase
 69 10 agreements fully collateralized by United States investment
 69 11 securities described in subsection 3, if delivery of the
 69 12 collateral is taken either directly or through an authorized
 69 13 custodian and the dollar-weighted average maturity of the
 69 14 portfolio is not more than five years.  All other investments
 69 15 by a state bank in the shares or units of investment companies
 69 16 or investment trusts registered under the federal Investment
 69 17 Company Act of 1940, 15 U.S.C. } 80a, whose portfolios
 69 18 exclusively contain investment securities permissible pursuant
 69 19 to subsections 2 and 3, shall not exceed fifteen percent of
 69 20 the state bank's aggregate capital.
 69 21    5.  To the extent necessary to meet minimum membership or
 69 22 participation criteria, a state bank may invest for its own
 69 23 account in the shares of the appropriate federal reserve bank,
 69 24 the appropriate federal home loan bank, the federal national
 69 25 agricultural mortgage corporation or corporations engaged
 69 26 solely in the pooling of agricultural loans for federal
 69 27 agricultural mortgage corporation guarantees, and other
 69 28 similar investments acceptable to the superintendent and
 69 29 approved in writing by the superintendent.  The bank's
 69 30 investment in the shares of each of the organizations is
 69 31 limited to fifteen percent of its aggregate capital or a
 69 32 higher amount as approved by the superintendent.  Not-
 69 33 withstanding the specific requirements of this section, any
 69 34 shares of government-sponsored entities held by a state bank
 69 35 on or before July 1, 1995, shall be authorized.
 70  1    6.  A state bank, upon the approval of the superintendent,
 70  2 may acquire and hold the shares of any corporation which a
 70  3 state bank is authorized to acquire and hold pursuant to this
 70  4 chapter.
 70  5    7.  A state bank, upon the approval of the superintendent,
 70  6 may invest up to five percent of its aggregate capital in the
 70  7 shares or equity interests of any of the following:
 70  8    a.  Economic development corporations organized under
 70  9 chapter 496B to the extent authorized by and subject to the
 70 10 limitations of that chapter.
 70 11    b.  Community development corporations or community
 70 12 development projects to the same extent a national bank may
 70 13 invest in such corporations or projects pursuant to 12 U.S.C.
 70 14 } 24.
 70 15    c.  Small business investment companies as defined by the
 70 16 laws of the United States.
 70 17    d.  Venture capital funds which invest an amount equal to
 70 18 at least fifty percent of a state bank's investment in small
 70 19 businesses having their principal offices within this state
 70 20 and having either more than one-half of their assets within
 70 21 this state or more than one-half of their employees employed
 70 22 within this state.
 70 23    e.  Small businesses having a principal office within this
 70 24 state and having either more than one-half of their assets
 70 25 within this state or more than one-half of their employees
 70 26 employed within this state.  An investment by a state bank in
 70 27 a small business under this paragraph shall be included with
 70 28 the obligations of the small business to the state bank that
 70 29 are incurred as a result of the exercise by the state bank of
 70 30 the powers conferred in section 524.902 for the purpose of
 70 31 determining the total obligations of the small business
 70 32 pursuant to section 524.904.  A state bank's equity interest
 70 33 investment in a small business, pursuant to this paragraph,
 70 34 shall not exceed a twenty percent ownership interest in the
 70 35 small business.
 71  1    f.  Other entities, acceptable to the superintendent, whose
 71  2 sole purpose is to promote economic or civic developments
 71  3 within a community or this state.
 71  4    A state bank's total investment in any combination of the
 71  5 shares or equity interests of the entities identified in
 71  6 paragraphs "a" through "f" shall be limited to fifteen percent
 71  7 of its aggregate capital.
 71  8    For purposes of this subsection, the term "venture capital
 71  9 fund" means a corporation, partnership, proprietorship, or
 71 10 other entity whose principal business is or will be the making
 71 11 of investments in, and the providing of significant managerial
 71 12 assistance to, small businesses.  The term "small business"
 71 13 means a corporation, partnership, proprietorship, or other
 71 14 entity which meets the appropriate United States small
 71 15 business administration definition of small business and which
 71 16 is principally engaged in the development or exploitation of
 71 17 inventions, technological improvements, new processes, or
 71 18 other products not previously generally available in this
 71 19 state, or other investments which provide an economic benefit
 71 20 to the state.  The term "equity interests" means limited
 71 21 partnership interests and other equity interests in which
 71 22 liability is limited to the amount of the investment, but does
 71 23 not mean general partnership interests or other interests
 71 24 involving general liability.
 71 25    8.  A state bank, in the exercise of the powers granted in
 71 26 this chapter, may purchase cash value life insurance contracts
 71 27 which may include provisions for the lump sum payment of
 71 28 premiums and which may include insurance against the loss of
 71 29 the lump sum payment.  The cash value life insurance contracts
 71 30 purchased from any one company shall not exceed fifteen
 71 31 percent of aggregate capital of the state bank, and in the
 71 32 aggregate from all companies, shall not exceed twenty-five
 71 33 percent of aggregate capital of the state bank unless the
 71 34 state bank has obtained the approval of the superintendent
 71 35 prior to the purchase of any cash value life insurance
 72  1 contract in excess of this limitation.
 72  2    9.  A state bank may invest without limitation for its own
 72  3 account in futures, forward, and standby contracts to purchase
 72  4 and sell any of the instruments a state bank is authorized to
 72  5 purchase and sell, subject to the prior approval of the
 72  6 superintendent and pursuant to applicable federal laws and
 72  7 regulations governing such contracts.  Purchase and sale of
 72  8 such contracts shall be conducted in accordance with safe and
 72  9 sound banking practices and with the level of the activity
 72 10 being reasonably related to the state bank's business needs
 72 11 and capacity to fulfill its obligations under the contracts.
 72 12    Sec. 89.  Section 524.903, subsections 2 and 3, Code 1995,
 72 13 are amended to read as follows:
 72 14    2.  A state bank shall not accept such drafts in an amount
 72 15 which exceeds at any time in the aggregate for all drawers
 72 16 fifty thirty percent of its the state bank's aggregate capital
 72 17 and surplus.  The superintendent may authorize a state bank to
 72 18 accept drafts in an amount not exceeding at any time in the
 72 19 aggregate for all drawers one hundred sixty percent of its the
 72 20 state bank's aggregate capital, and surplus but the aggregate
 72 21 of acceptance growing out of domestic transactions shall in no
 72 22 event exceed fifty thirty percent of such aggregate capital
 72 23 and surplus.
 72 24    3.  A state bank may, with the prior approval of the
 72 25 superintendent, may accept drafts, having not more than three
 72 26 months after sight to run, drawn upon it by banks or bankers
 72 27 in foreign countries, or in dependencies or insular
 72 28 possessions of the United States, for the purpose of
 72 29 furnishing dollar exchange as required by the usages of trade
 72 30 where the drafts are drawn in an aggregate amount which shall
 72 31 not at any time exceed for all such acceptance on behalf of a
 72 32 single bank or banker ten seven and one-half percent of the
 72 33 state bank's aggregate capital and surplus, and for all such
 72 34 acceptances, fifty thirty percent of the state bank's
 72 35 aggregate capital and surplus.
 73  1    Sec. 90.  Section 524.904, Code 1995, is amended by
 73  2 striking the subsection and inserting in lieu thereof the
 73  3 following:
 73  4    524.904  LOANS AND EXTENSIONS OF CREDIT TO ONE BORROWER.
 73  5    1.  For purposes of this section, "loans and extensions of
 73  6 credit" means a state bank's direct or indirect advance of
 73  7 funds to a borrower based on an obligation of that borrower to
 73  8 repay the funds or repayable from specific property pledged by
 73  9 the borrower and shall include:
 73 10    a.  A contractual commitment to advance funds, as defined
 73 11 in section 524.103.
 73 12    b.  A maker or endorser's obligation arising from a state
 73 13 bank's discount of commercial paper.
 73 14    c.  A state bank's purchase of securities subject to an
 73 15 agreement that the seller will repurchase the securities at
 73 16 the end of a stated period.
 73 17    d.  A state bank's purchase of third-party paper subject to
 73 18 an agreement that the seller will repurchase the paper upon
 73 19 default or at the end of a stated period.  The amount of the
 73 20 state bank's loan is the total unpaid balance of the paper
 73 21 owned by the state bank less any applicable dealer reserves
 73 22 retained by the state bank and held by the state bank as
 73 23 collateral security.  Where the seller's obligation to
 73 24 repurchase is limited, the state bank's loan is measured by
 73 25 the total amount of the paper the seller may ultimately be
 73 26 obligated to repurchase.  A state bank's purchase of third-
 73 27 party paper without direct or indirect recourse to the seller
 73 28 is not a loan or extension of credit to the seller.
 73 29    e.  An overdraft.
 73 30    f.  Amounts paid against uncollected funds.
 73 31    g.  Loans or extensions of credit that have been charged
 73 32 off the books of the state bank in whole or in part, unless
 73 33 the loan or extension of credit has become unenforceable by
 73 34 reason of discharge in bankruptcy; or is no longer legally
 73 35 enforceable because of expiration of the statute of
 74  1 limitations or a judicial decision; or forgiven under an
 74  2 executed written agreement by the state bank and the borrower.
 74  3    h.  The aggregate rentals payable by the borrower under
 74  4 leases of personal property by the state bank as lessor.
 74  5    i.  Loans and extensions of credit to one borrower
 74  6 consisting of investments in which the state bank has invested
 74  7 pursuant to section 524.901.
 74  8    j.  Amounts invested by a state bank for its own account in
 74  9 the shares and obligations of a corporation which is a
 74 10 customer of the state bank.
 74 11    k.  All other loans and extensions of credit to one
 74 12 borrower of the state bank not otherwise excluded by
 74 13 subsection 7, whether directly or indirectly, primarily or
 74 14 secondarily.
 74 15    2.  A state bank's total outstanding loans and extensions
 74 16 of credit to one borrower shall not exceed fifteen percent of
 74 17 the state bank's aggregate capital as defined in section
 74 18 524.103, unless the additional lending provisions described in
 74 19 subsections 3, 4, and 5 apply.
 74 20    3.  A state bank may grant loans or extensions of credit to
 74 21 one borrower up to twenty-five percent of the state bank's
 74 22 aggregate capital if the amount that exceeds fifteen percent
 74 23 of the state bank's aggregate capital is fully secured by one
 74 24 or any combination of the following:
 74 25    a.  Nonnegotiable bills of lading, warehouse receipts, or
 74 26 other documents transferring or securing title covering
 74 27 readily marketable nonperishable staples when such goods are
 74 28 covered by insurance to the extent that insuring the goods is
 74 29 customary, and when the market value of the goods is not at
 74 30 any time less than one hundred twenty percent of the amount of
 74 31 the loans and extensions of credit.
 74 32    b.  Nonnegotiable bills of lading, warehouse receipts, or
 74 33 other documents transferring or securing title covering
 74 34 readily marketable refrigerated or frozen staples when such
 74 35 goods are fully covered by insurance and when the market value
 75  1 of the goods is not at any time less than one hundred twenty
 75  2 percent of the amount of the loans and extensions of credit.
 75  3    c.  Shipping documents or instruments that secure title to
 75  4 or give a first lien on livestock.  At inception, the current
 75  5 value of the livestock securing the loans must equal at least
 75  6 one hundred percent of the amount of the outstanding loans and
 75  7 extensions of credit.  For purposes of this section,
 75  8 "livestock" includes dairy and beef cattle, hogs, sheep, and
 75  9 poultry, whether or not held for resale.  For livestock held
 75 10 for resale, current value means the price listed for livestock
 75 11 in a regularly published listing or actual purchase price
 75 12 established by invoice.  For livestock not held for resale,
 75 13 the value shall be determined by the local slaughter price.
 75 14 The bank must maintain in its files evidence of purchase or an
 75 15 inspection and valuation for the livestock pledged that is
 75 16 reasonably current, taking into account the nature and
 75 17 frequency of turnover of the livestock to which the documents
 75 18 relate.
 75 19    d.  Mortgages, deeds of trust, or similar instruments
 75 20 granting a first lien on farm land or on single-family or two-
 75 21 family residences, subject to the provisions of section
 75 22 524.905, provided the amount loaned shall not exceed fifty
 75 23 percent of the appraised value of such real property.
 75 24    e.  With the prior approval of the superintendent, other
 75 25 readily marketable collateral.  The market value of the
 75 26 collateral securing the loans must at all times equal at least
 75 27 one hundred percent of the outstanding loans and extensions of
 75 28 credit.
 75 29    4.  A state bank may grant loans and extensions of credit
 75 30 to a corporate group, including the lending provisions of
 75 31 subsection 3, in an amount not to exceed twenty-five percent
 75 32 of the state bank's aggregate capital.  A corporate group
 75 33 includes a person and all corporations in which the person
 75 34 owns or controls fifty percent or more of the shares entitled
 75 35 to vote.
 76  1    5.  A state bank may grant loans or extensions of credit to
 76  2 one borrower not to exceed thirty-five percent of the state
 76  3 bank's aggregate capital if the amount that exceeds the
 76  4 lending provisions provided in subsections 2, 3, and 4
 76  5 consists of obligations as endorser of negotiable chattel
 76  6 paper negotiated by endorsement with recourse, or as
 76  7 unconditional guarantor of nonnegotiable chattel paper, or as
 76  8 transferor of chattel paper endorsed without recourse subject
 76  9 to a repurchase agreement.
 76 10    6.  For purposes of this section:
 76 11    a.  Loans and extensions of credit to one person will be
 76 12 attributed to another person and will be considered one
 76 13 borrower if either of the following apply:
 76 14    (1)  The proceeds, or assets purchased with the proceeds,
 76 15 benefit another person, other than a bona fide arm's length
 76 16 transaction where the proceeds are used to acquire property,
 76 17 goods, or services.
 76 18    (2)  The expected source of repayment for each loan or
 76 19 extension of credit is the same for each borrower and no
 76 20 borrower has another source of income from which the loan may
 76 21 be fully repaid.
 76 22    b.  Loans and extensions of credit to a partnership, joint
 76 23 venture, or association are deemed to be loans and extensions
 76 24 of credit to each member of the partnership, joint venture, or
 76 25 association.  This provision does not apply to limited
 76 26 partners in limited partnerships or to members of joint
 76 27 ventures or associations if the partners or members, by the
 76 28 terms of the partnership or membership agreement or other
 76 29 written agreement, are not to be held generally liable for the
 76 30 debts or actions of the partnership, joint venture, or
 76 31 association, and those provisions are valid under applicable
 76 32 law.
 76 33    c.  Loans and extensions of credit to members of a
 76 34 partnership, joint venture, or association are not attributed
 76 35 to the partnership, joint venture, or association unless loans
 77  1 and extensions of credit are made to the member to purchase an
 77  2 interest in the partnership, joint venture, or association, or
 77  3 the proceeds are used for a common purpose with the proceeds
 77  4 of loans and extensions of credit to the partnership, joint
 77  5 venture, or association.
 77  6    d.  Loans and extensions of credit to one borrower which
 77  7 are endorsed or guaranteed by another borrower will not be
 77  8 combined with loans and extensions of credit to the endorser
 77  9 or guarantor unless the endorsement or guaranty is relied upon
 77 10 as a basis for the loans and extensions of credit.  A state
 77 11 bank shall not be deemed to have violated this section if the
 77 12 endorsement or guaranty is relied upon after inception of
 77 13 loans and extensions of credit, but the state bank shall, if
 77 14 required by the superintendent, dispose of loans and
 77 15 extensions of credit to one borrower in the amount in excess
 77 16 of the limitations of this section within a reasonable time as
 77 17 fixed by the superintendent.
 77 18    e.  When the superintendent determines the interests of a
 77 19 group of more than one borrower, or any combination of the
 77 20 members of the group, are so interrelated that they should be
 77 21 considered a unit for the purpose of applying the limitations
 77 22 of this section, some or all loans and extensions of credit to
 77 23 that group of borrowers existing at any time shall be combined
 77 24 and deemed loans and extensions of credit to one borrower.  A
 77 25 state bank shall not be deemed to have violated this section
 77 26 solely by reason of the fact that loans and extensions of
 77 27 credit to a group of borrowers exceed the limitations of this
 77 28 section at the time of a determination by the superintendent
 77 29 that the indebtedness of that group must be combined, but the
 77 30 state bank shall, if required by the superintendent, dispose
 77 31 of loans and extensions of credit to the group in the amount
 77 32 in excess of the limitations of this section within a
 77 33 reasonable time as fixed by the superintendent.
 77 34    7.  Total loans and extensions of credit to one borrower
 77 35 for the purpose of applying the limitations of this section
 78  1 shall not include any of the following:
 78  2    a.  Additional funds advanced for taxes or for insurance if
 78  3 the advance is for the protection of the state bank, and
 78  4 provided that such amounts receive the prior approval of the
 78  5 superintendent.
 78  6    b.  Accrued and discounted interest on existing loans or
 78  7 extensions of credit.
 78  8    c.  Any portion of a loan or extension of credit sold as a
 78  9 participation by a state bank on a nonrecourse basis, provided
 78 10 that the participation results in a pro rata sharing of credit
 78 11 risk proportionate to the respective interests of the
 78 12 originating and participating lenders.  Where a participation
 78 13 agreement provides that repayment must be applied first to the
 78 14 portions sold, a pro rata sharing will be deemed to exist only
 78 15 if the agreement also provides that in the event of a default
 78 16 or comparable event defined in the agreement, participants
 78 17 must share in all subsequent repayments and collections in
 78 18 proportion to their percentage participation at the time of
 78 19 the occurrence of the event.  If an originating state bank
 78 20 funds the entire loan, it must receive funding from the
 78 21 participants on the same day or the portions funded will be
 78 22 treated as loans by the originating state bank to the
 78 23 borrower.
 78 24    d.  Loans and extensions of credit to one borrower to the
 78 25 extent secured by a segregated deposit account which the state
 78 26 bank may lawfully set off.  An amount held in a segregated
 78 27 deposit account in the name of more than one customer shall be
 78 28 counted only once with respect to all borrowers.  Where the
 78 29 deposit is eligible for withdrawal before the secured loan
 78 30 matures, the state bank must establish internal procedures to
 78 31 prevent release of the security without the state bank's prior
 78 32 consent.
 78 33    e.  Loans and extensions of credit to one borrower which is
 78 34 a bank.
 78 35    f.  Loans and extensions of credit to one borrower which
 79  1 are fully secured by bonds and securities of the kind in which
 79  2 a state bank is authorized to invest for its own account
 79  3 without limitation under section 524.901, subsection 3.
 79  4    g.  Loans and extensions of credit to a federal reserve
 79  5 bank or to the United States, or of any department, bureau,
 79  6 board, commission, agency, or establishment of the United
 79  7 States, or to any corporation owned directly or indirectly by
 79  8 the United States, or loans and extensions of credit to one
 79  9 borrower to the extent that such loans and extensions of
 79 10 credit are fully secured or guaranteed or covered by
 79 11 unconditional commitments or agreements to purchase by a
 79 12 federal reserve bank or by the United States, or any
 79 13 department, bureau, board, commission, agency, or
 79 14 establishment of the United States, or any corporation owned
 79 15 directly or indirectly by the United States.  Loans and
 79 16 extensions of credit to one borrower secured by a lease on
 79 17 property under the terms of which the United States, or any
 79 18 department, bureau, board, commission, agency, or
 79 19 establishment of the United States, or any corporation owned
 79 20 directly or indirectly by the United States, or the state of
 79 21 Iowa, or any political subdivision of the state, is lessee and
 79 22 under the terms of which the aggregate rentals payable to the
 79 23 borrower will be sufficient to satisfy the amount loaned is
 79 24 considered to be loans and extensions of credit secured or
 79 25 guaranteed as provided for in this paragraph.
 79 26    h.  Loans and extensions of credit to one borrower as the
 79 27 drawer of drafts drawn in good faith against actually existing
 79 28 values in connection with a sale of goods which have been
 79 29 endorsed by the borrower with recourse or which have been
 79 30 accepted.
 79 31    i.  Loans and extensions of credit arising out of the
 79 32 discount of commercial paper actually owned by a borrower
 79 33 negotiating the same and endorsed by a borrower without
 79 34 recourse and which is not subject to repurchase by a borrower.
 79 35    j.  Loans and extensions of credit drawn by a borrower in
 80  1 good faith against actually existing values and secured by
 80  2 nonnegotiable bills of lading for goods in process of
 80  3 shipment.
 80  4    k.  Loans and extensions of credit in the form of
 80  5 acceptances of other banks of the kind described in section
 80  6 524.903, subsection 3.
 80  7    l.  Loans and extensions of credit of the borrower by
 80  8 reason of acceptances by the state bank for the account of the
 80  9 borrower pursuant to section 524.903, subsection 1.
 80 10    Sec. 91.  Section 524.908, Code 1995, is amended by
 80 11 striking the section and inserting in lieu thereof the
 80 12 following:
 80 13    524.908  LEASING OF PERSONAL PROPERTY.
 80 14    A state bank may make leases as authorized by rules adopted
 80 15 by the superintendent under chapter 17A.
 80 16    Sec. 92.  NEW SECTION.  524.1009  SUCCESSION TO FIDUCIARY
 80 17 ACCOUNTS AND APPOINTMENTS &endash; APPLICATION FOR APPOINTMENT OF
 80 18 NEW FIDUCIARY.
 80 19    1.  If a party to a plan of merger was authorized to act in
 80 20 a fiduciary capacity and if the resulting state or national
 80 21 bank is similarly authorized, the resulting state or national
 80 22 bank shall be automatically substituted by reason of the
 80 23 merger as fiduciary of all accounts held in that capacity by
 80 24 such party to the plan, without further action and without any
 80 25 order or decree of any court or public officer, and shall have
 80 26 all the rights and be subject to all the obligations of such
 80 27 party as fiduciary.
 80 28    2.  No designation, nomination, or appointment as fiduciary
 80 29 of a party to a plan of merger shall lapse by reason of the
 80 30 merger.  The resulting state or national bank, if authorized
 80 31 to act in a fiduciary capacity, shall be entitled to act as
 80 32 fiduciary pursuant to each designation, nomination, or
 80 33 appointment to the same extent as the party to the plan so
 80 34 named could have acted in the absence of the merger.
 80 35    3.  Any person with an interest in an account held in a
 81  1 fiduciary capacity by a party to a plan of merger may, within
 81  2 sixty days after the effective date of the merger, apply to
 81  3 the district court in the county in which the resulting state
 81  4 or national bank has its principal place of business, for the
 81  5 appointment of a new fiduciary to replace the resulting state
 81  6 or national bank on the ground that the merger will adversely
 81  7 affect the administration of the fiduciary account.  The court
 81  8 shall have the discretion to appoint a new fiduciary to
 81  9 replace the resulting state or national bank if it should
 81 10 find, upon hearing after notice to all interested parties,
 81 11 that the merger will adversely affect the administration of
 81 12 the fiduciary account and that the appointment of a new
 81 13 fiduciary will be in the best interests of the beneficiaries
 81 14 of the fiduciary account.  This provision is in addition to
 81 15 any other provision of law governing the removal of
 81 16 fiduciaries and is subject to the terms upon which the party
 81 17 to the plan which held the fiduciary account was designated as
 81 18 fiduciary.
 81 19    Sec. 93.  Section 524.1102, Code 1995, is amended to read
 81 20 as follows:
 81 21    524.1102  LOANS AND OTHER TRANSACTIONS WITH AFFILIATES.
 81 22    No A state bank shall not make any loan or any extension of
 81 23 credit to, or purchase securities under repurchase agreement
 81 24 from, any of its affiliates, or invest any of its funds in the
 81 25 shares, bonds, capital securities, or other obligations of any
 81 26 such an affiliate, or accept the shares, bonds, capital
 81 27 securities, or other obligations of any such an affiliate as
 81 28 collateral security for advances made to any customer, if the
 81 29 aggregate amount of such the loans, extensions of credit,
 81 30 repurchase agreements, investments and advances against such
 81 31 collateral security will exceed:
 81 32    1.  In the case of any one such affiliate, ten percent of
 81 33 the aggregate capital and surplus of the state bank.  However,
 81 34 a state bank may invest its funds in shares of a bank service
 81 35 corporation pursuant to section 524.803, subsection 1,
 82  1 paragraph f, in an amount up to twenty percent of the capital
 82  2 and surplus of the state bank.
 82  3    2.  In the case of all such affiliates, twenty percent of
 82  4 the aggregate capital and surplus of such the state bank.
 82  5    Within the foregoing limitations, each loan or extension of
 82  6 credit of any kind or character to an affiliate shall be
 82  7 secured by collateral in the form of shares of stock, bonds,
 82  8 capital securities or other such obligations having a market
 82  9 value at the time of making the loan or extension of credit of
 82 10 at least twenty percent more than the amount of the loan or
 82 11 extension of credit, or of at least ten percent more than the
 82 12 amount of the loan or extension of credit if it is secured by
 82 13 obligations of any state, or of any political subdivision or
 82 14 agency of the state, or of at least one hundred percent of the
 82 15 amount of the loan or extension of credit if it is secured by
 82 16 a segregated, earmarked deposit account with which the state
 82 17 bank may set off.
 82 18    A loan or extension of credit to a director, officer,
 82 19 clerk, or other employee or any representative of any such
 82 20 affiliate shall be is deemed to be a loan to the affiliate to
 82 21 the extent that the proceeds of such loan are used for the
 82 22 benefit of, or transferred to, the affiliate.
 82 23    The provisions of this section shall not apply to loans or
 82 24 extensions of credit fully secured by obligations of the
 82 25 United States, or the farm credit banks, or the federal home
 82 26 loan banks, or obligations fully guaranteed by the United
 82 27 States as to principal and interest.  The provisions of this
 82 28 section shall likewise not apply to indebtedness of any
 82 29 affiliate for unpaid balances due a state bank on assets
 82 30 purchased from such the state bank.
 82 31    For the purposes of this section, the terms "extension of
 82 32 credit" and "extensions of credit" shall be are deemed to
 82 33 include any purchase of securities under a repurchase
 82 34 agreement, other assets or obligations under a repurchase
 82 35 agreement, and the discount of promissory notes, bills of
 83  1 exchange, conditional sales contracts, or similar paper,
 83  2 whether with or without recourse.
 83  3    Sec. 94.  Section 524.1103, Code 1995, is amended by adding
 83  4 the following new subsection:
 83  5    NEW SUBSECTION.  7.  Which is an operations subsidiary or
 83  6 other subsidiary in which the state bank owns or controls
 83  7 eighty percent or more of the voting shares.  However, an
 83  8 operations subsidiary shall not conduct any activity at any
 83  9 location where the state bank itself would not be permitted to
 83 10 conduct that activity without the prior approval of the
 83 11 superintendent.
 83 12    Sec. 95.  Section 524.1202, subsection 2, paragraph d, Code
 83 13 1995, is amended to read as follows:
 83 14    d.  One such facility that is located on the same property,
 83 15 or that is adjacent to or cornering upon the property on which
 83 16 an office of a bank is located, or that is separated from
 83 17 being adjacent to or cornering upon the property only by a
 83 18 street, alley, or other publicly owned right of way, may be
 83 19 found by the superintendent to be an integral part of that
 83 20 office location and not a separate bank office in the
 83 21 proximity of a state bank's office may be found by the
 83 22 superintendent to be an integral part of the bank office and
 83 23 not a bank office within the meaning of this section.  This
 83 24 paragraph does not authorize more than one facility to be
 83 25 found to be an integral part of a bank office.
 83 26    Sec. 96.  Section 524.1301, Code 1995, is amended by
 83 27 striking the section and inserting in lieu thereof the
 83 28 following:
 83 29    524.1301  DISSOLUTION BY INCORPORATORS OR INITIAL
 83 30 DIRECTORS.
 83 31    A majority of the incorporators or initial directors of a
 83 32 state bank that has not issued shares or has not commenced
 83 33 business may dissolve the state bank by delivering articles of
 83 34 dissolution to the superintendent, together with the
 83 35 applicable filing and recording fees, for filing with the
 84  1 secretary of state that set forth all of the following:
 84  2    1.  The name of the state bank.
 84  3    2.  The date of its incorporation.
 84  4    3.  Either of the following:
 84  5    a.  That the state bank has not issued any shares.
 84  6    b.  That the state bank has not commenced business.
 84  7    4.  That no debt of the state bank remains unpaid.
 84  8    5.  If shares were issued, that the net assets of the state
 84  9 bank remaining after the payment of all necessary expenses
 84 10 have been distributed to the shareholders.
 84 11    6.  That a majority of the incorporators or initial
 84 12 directors authorized the dissolution.
 84 13    Sec. 97.  Section 524.1303, Code 1995, is amended to read
 84 14 as follows:
 84 15    524.1303  VOLUNTARY DISSOLUTION AFTER COMMENCEMENT OF
 84 16 BUSINESS.
 84 17    1.  A state bank which has commenced business may propose
 84 18 to voluntarily dissolve upon the affirmative vote of the
 84 19 holders of at least three-fourths a majority of the shares
 84 20 entitled to vote thereon on the voluntary dissolution,
 84 21 adopting a plan of dissolution involving both a provision for
 84 22 acquisition of its assets and assumption of its liabilities by
 84 23 another state bank, or national bank, or other financial
 84 24 institution insured by the federal deposit insurance
 84 25 corporation and a provision for continuance of its business if
 84 26 acquisition of its assets and assumption of its liabilities is
 84 27 not effected, or any other plan of dissolution providing for
 84 28 full payment of its liabilities.
 84 29    2.  Upon receipt acceptance for processing of an
 84 30 application for approval of a plan of dissolution on forms
 84 31 prescribed by the superintendent, the superintendent shall
 84 32 conduct such investigation as the superintendent may deem
 84 33 necessary to determine whether the plan adequately protects
 84 34 the interests of depositors, other creditors and shareholders
 84 35 and, if the plan involves an acquisition of assets and
 85  1 assumption of liabilities by another state bank, whether such
 85  2 acquisition and assumption would be consistent with adequate
 85  3 and sound banking and in the public interest, on the basis of
 85  4 factors substantially similar to those set forth in section
 85  5 524.1403, subsection 1, paragraph "d".  Within ninety days
 85  6 after receipt of the application, the superintendent shall
 85  7 approve or disapprove the application on the basis of the
 85  8 superintendent's investigation.  Before receiving the decision
 85  9 of the superintendent with respect to the pending application,
 85 10 the applying state bank shall, upon notice, reimburse the
 85 11 superintendent to the extent of the expenses incurred by the
 85 12 superintendent in connection with the application.  Thereafter
 85 13 the superintendent shall give to the applying state bank
 85 14 written notice of the superintendent's decision, and in the
 85 15 event of disapproval, a statement of the reasons for the
 85 16 decision.  The decision of the superintendent shall be subject
 85 17 to judicial review in accordance with the terms of the Iowa
 85 18 administrative procedure Act.
 85 19    3.  When a state bank has proposed to dissolve by adopting
 85 20 a plan of dissolution involving a provision for acquisition of
 85 21 its assets and assumption of its liabilities by another state
 85 22 bank, the dissolving bank shall publish Within thirty days
 85 23 after the application for dissolution involving a provision of
 85 24 acquisition of the state bank's assets and assumption of its
 85 25 liabilities by another state bank is accepted for processing,
 85 26 the dissolving bank shall publish once each week for two
 85 27 consecutive weeks a notice of the proposed transaction.  The
 85 28 notice shall be published once each week for two successive
 85 29 weeks in a newspaper of general circulation published in the
 85 30 municipal corporation or unincorporated area in which the
 85 31 dissolving bank has its principal place of business, and in
 85 32 the municipal corporation or unincorporated area in which the
 85 33 acquiring state bank has its principal place of business, or
 85 34 if there is none, a newspaper of general circulation published
 85 35 in the county or counties, or in a county adjoining the county
 86  1 or counties, in which the dissolving bank and the acquiring
 86  2 bank have their principal place of business.  The publication
 86  3 of notice shall be made within thirty days after making
 86  4 application to the superintendent for approval of the plan of
 86  5 dissolution, and proof of publication of the notice shall be
 86  6 delivered to the superintendent.  The notice shall set forth
 86  7 the name of the dissolving state bank and of the acquiring
 86  8 state bank, the location and post office address of the
 86  9 principal place of business of the dissolving state bank and
 86 10 of the acquiring state bank and of each office to be
 86 11 maintained by the acquiring state bank and a brief statement
 86 12 of the nature of the proposed transaction.  Prior to making a
 86 13 determination on the pending application, the superintendent
 86 14 shall give adequate notice of the pending application, and may
 86 15 afford all interested parties an opportunity for a
 86 16 stenographically reported hearing during which such parties
 86 17 shall be allowed to present evidence in support of, or in
 86 18 opposition to, the pending application.  The notice shall be
 86 19 on forms provided by the superintendent, and proof of
 86 20 publication of the notice shall be delivered to the
 86 21 superintendent.
 86 22    The superintendent shall conduct such hearing if any
 86 23 interested person files an objection to the pending
 86 24 application and requests a hearing.  If the superintendent
 86 25 finds that the superintendent must act immediately on the
 86 26 pending application in order to protect the interests of
 86 27 depositors or the assets of the dissolving bank, the
 86 28 superintendent may proceed without requiring publication of
 86 29 the notice referred to in this subsection.
 86 30    4.  Within thirty days after the date of the second
 86 31 publication of the notice, any interested person may submit to
 86 32 the superintendent written comments and data on the
 86 33 application.  The superintendent may extend the thirty-day
 86 34 comment period if, in the superintendent's judgment,
 86 35 extenuating circumstances exist.
 87  1    5.  Within thirty days after the date of the second
 87  2 publication of the notice, any interested person may submit to
 87  3 the superintendent a written request for a hearing on the
 87  4 application.  The request shall state the nature of the issues
 87  5 or facts to be presented and the reasons why written
 87  6 submissions would be insufficient to make an adequate
 87  7 presentation to the superintendent.  If the reasons are
 87  8 related to factual disputes, the disputes shall be described.
 87  9 Comments challenging the legality of an application shall be
 87 10 submitted separately in writing and shall not be considered at
 87 11 a hearing conducted pursuant to this section.  Written
 87 12 requests for hearings shall be evaluated by the
 87 13 superintendent, who may grant or deny such requests in whole
 87 14 or in part.  A hearing request shall generally be granted only
 87 15 if it is determined that written submissions would be
 87 16 inadequate or that a hearing would otherwise be beneficial to
 87 17 the decision-making process.  A hearing may be limited to
 87 18 issues considered material by the superintendent.
 87 19    6.  If a request for a hearing has been made and denied,
 87 20 the superintendent shall notify the applicant and all
 87 21 interested persons and shall state the reasons for the denial.
 87 22 Interested persons may submit to the superintendent, with
 87 23 simultaneous copies to the applicant, additional written
 87 24 comments or information on the application within fourteen
 87 25 days after the date of the notice of denial.  The applicant
 87 26 shall be provided an additional seven days, after the
 87 27 fourteen-day deadline has expired, within which to respond to
 87 28 any comments submitted within the fourteen-day period.  The
 87 29 superintendent may waive this seven-day period upon request by
 87 30 the applicant.  A copy of any response submitted by the
 87 31 applicant shall also be mailed simultaneously by the applicant
 87 32 to the interested persons.
 87 33    Sec. 98.  Section 524.1304, Code 1995, is amended by
 87 34 striking the section and inserting in lieu thereof the
 87 35 following:
 88  1    524.1304  VOLUNTARY DISSOLUTION &endash; APPROVAL.
 88  2    1.  Within ninety days after acceptance of the application
 88  3 for processing, the superintendent shall approve or disapprove
 88  4 the application for voluntary dissolution on the basis of the
 88  5 superintendent's investigation.  As a condition of receiving
 88  6 the decision of the superintendent with respect to the
 88  7 application, the applying state bank shall reimburse the
 88  8 superintendent for all expenses incurred by the superintendent
 88  9 in connection with the application.  The superintendent shall
 88 10 give to the applying state bank written notice of the
 88 11 superintendent's decision.  The decision of the superintendent
 88 12 shall be subject to judicial review pursuant to chapter 17A.
 88 13    2.  Upon approval of the plan of voluntary dissolution by
 88 14 the superintendent, the superintendent shall file with the
 88 15 secretary of state articles of dissolution prepared by the
 88 16 applicant in conformance with section 524.1304A.  Upon filing
 88 17 of the articles of dissolution with the secretary of state,
 88 18 the state bank shall cease to accept deposits or carry on its
 88 19 business, except insofar as may be necessary for the proper
 88 20 winding up of the business of the state bank in accordance
 88 21 with the approved plan of dissolution.
 88 22    3.  If applicable state or federal laws require approval by
 88 23 an appropriate state or federal agency, the superintendent may
 88 24 withhold delivery of the approved articles of dissolution
 88 25 until the superintendent receives notice of the decision of
 88 26 such agency.  If the final approval of the agency is not given
 88 27 within six months of the superintendent's approval, then the
 88 28 superintendent shall notify the applying state bank that the
 88 29 approval of the superintendent has been rescinded for that
 88 30 reason.
 88 31    Sec. 99.  NEW SECTION.  524.1304A  ARTICLES OF DISSOLUTION.
 88 32    1.  At any time after the dissolution of a state bank is
 88 33 authorized, the state bank may dissolve by delivering to the
 88 34 superintendent for filing with the secretary of state articles
 88 35 of dissolution setting forth all of the following:
 89  1    a.  The name of the state bank.
 89  2    b.  The date dissolution was authorized.
 89  3    c.  The number of votes entitled to be cast by the
 89  4 shareholders on the proposal to dissolve.
 89  5    d.  The total number of shareholder votes cast for and
 89  6 against dissolution, or the total number of undisputed votes
 89  7 cast for dissolution and a statement that the number cast for
 89  8 dissolution was sufficient for approval.
 89  9    e.  If voting by voting groups was required, the
 89 10 information required by paragraphs "c" and "d" must be
 89 11 separately provided for each voting group entitled to vote
 89 12 separately on the plan to dissolve.
 89 13    f.  That all debts, obligations, and liabilities of the
 89 14 state bank will be paid or otherwise discharged or that
 89 15 adequate provision will be made for such discharge.
 89 16    g.  That all the remaining property and assets of the state
 89 17 bank will be distributed among its shareholders in accordance
 89 18 with their respective rights and interests.
 89 19    h.  That there are no legal actions pending against the
 89 20 state bank in any court or that adequate provision has been
 89 21 made for the satisfaction of any judgment, order, or decree
 89 22 which may be entered against it in any pending legal action.
 89 23    2.  A state bank is dissolved upon the effective date of
 89 24 its articles of dissolution.
 89 25    Sec. 100.  Section 524.1305, subsections 1, 2, and 3, Code
 89 26 1995, are amended to read as follows:
 89 27    1.  The board of directors shall have full power to wind up
 89 28 and settle the affairs of a state bank in voluntary
 89 29 dissolution proceedings, including the power to do all of the
 89 30 following:
 89 31    a.  Collecting the assets of the state bank.
 89 32    b.  Disposing of its properties that will not be
 89 33 distributed in kind to its shareholders.
 89 34    c.  Discharging or making provision for discharging its
 89 35 liabilities.
 90  1    d.  Distributing its remaining property among its
 90  2 shareholders according to their interests.
 90  3    e.  Doing every other act necessary to wind up and
 90  4 liquidate its business and affairs.
 90  5    1A.  Dissolution of a state bank does not result in any of
 90  6 the following:
 90  7    a.  Transferring title to the state bank's property.
 90  8    b.  Preventing transfer of its shares or securities,
 90  9 although the authorization to dissolve may provide for closing
 90 10 the state bank's share transfer records.
 90 11    c.  Subjecting its directors or officers to standards of
 90 12 conduct different from those prescribed by this chapter prior
 90 13 to dissolution.
 90 14    d.  Changing quorum or voting requirements for its board of
 90 15 directors or shareholders; changing provisions for selection,
 90 16 resignation, or removal of its directors or officers or both;
 90 17 or changing provisions for amending its bylaws.
 90 18    e.  Preventing commencement of a proceeding by or against
 90 19 the state bank in its name.
 90 20    f.  Abating or suspending a proceeding pending by or
 90 21 against the state bank on the effective date of dissolution.
 90 22    2.  Within thirty days after the issuance by filing of the
 90 23 articles of dissolution with the secretary of state of an
 90 24 approved copy of the statement of intent to dissolve, the
 90 25 state bank shall give notice of its dissolution:
 90 26    a.  By mail to each depositor and creditor, (except those
 90 27 as to whom the liability of the state bank has been assumed by
 90 28 another state bank or national bank financial institution
 90 29 insured by the federal deposit insurance corporation pursuant
 90 30 to the plan), at their last address of record as shown upon
 90 31 the books of the bank, including a statement of the amount
 90 32 shown by the books of the state bank to be due to such
 90 33 depositor or creditor and a demand that any claim for a
 90 34 greater amount be filed with the state bank any time before a
 90 35 specified date at least ninety days after the date of the
 91  1 notice.
 91  2    b.  By mail to each lessee of a safe-deposit box and each
 91  3 customer for whom property is held in safekeeping, (except
 91  4 those as to whom the liability of the state bank has been
 91  5 assumed by another state bank or national bank financial
 91  6 institution insured by the federal deposit insurance
 91  7 corporation pursuant to the plan), at their last known address
 91  8 of record as shown upon the books of the state bank, including
 91  9 a demand that all property held in a safe-deposit box or held
 91 10 in safekeeping by the state bank be withdrawn by the person
 91 11 entitled thereto to the property before a specified date which
 91 12 is at least ninety days after the date of the notice.
 91 13    c.  By mail to each person, at the person's last known
 91 14 address as shown upon the books of the state bank, interested
 91 15 in funds held in a fiduciary account or other representative
 91 16 capacity.
 91 17    d.  By a conspicuous posting at each office of the state
 91 18 bank.
 91 19    e.  By such publication as the superintendent may
 91 20 prescribe.
 91 21    3.  As soon after the issuance of an approved statement of
 91 22 intent to dissolve approval of the plan of dissolution and the
 91 23 filing of the articles of dissolution as feasible, the state
 91 24 bank shall resign all fiduciary appointments and take such
 91 25 action as may be necessary to settle its fiduciary accounts.
 91 26    Sec. 101.  Section 524.1306, subsection 1, Code 1995, is
 91 27 amended to read as follows:
 91 28    1.  A state bank may, at any time prior to the issuance of
 91 29 the approved copy of the statement of intent to dissolve by
 91 30 filing of the articles of dissolution with the secretary of
 91 31 state, revoke voluntary dissolution proceedings as provided
 91 32 for in section 490.1404.
 91 33    Sec. 102.  NEW SECTION.  524.1308A  KNOWN CLAIMS AGAINST
 91 34 DISSOLVED STATE BANK.
 91 35    1.  A dissolved state bank may dispose of the known claims
 92  1 against it pursuant to this section.
 92  2    2.  The dissolved state bank shall notify its known
 92  3 claimants in writing of the dissolution at any time after the
 92  4 effective date of the dissolution.  The written notice must
 92  5 include all of the following:
 92  6    a.  A description of information that must be included in a
 92  7 claim.
 92  8    b.  The mailing address where a claim may be sent.
 92  9    c.  The deadline for submitting a claim, which may not be
 92 10 fewer than one hundred twenty days from the effective date of
 92 11 the written notice, by which the dissolved state bank must
 92 12 receive the claim.
 92 13    d.  A statement that the claim will be barred if not
 92 14 received by the deadline.
 92 15    3.  A claim against the dissolved state bank is barred if
 92 16 either of the following occur:
 92 17    a.  A claimant who was given written notice under
 92 18 subsection 2 does not deliver the claim to the dissolved state
 92 19 bank by the deadline.
 92 20    b.  A claimant whose claim was rejected by the dissolved
 92 21 state bank does not commence a proceeding to enforce the claim
 92 22 within ninety days from the effective date of the rejection
 92 23 notice.
 92 24    4.  For purposes of this section, "claim" does not include
 92 25 a contingent liability or a claim based upon an event
 92 26 occurring after the effective date of dissolution.
 92 27    Sec. 103.  NEW SECTION.  524.1308B  UNKNOWN CLAIMS AGAINST
 92 28 DISSOLVED STATE BANK.
 92 29    1.  A dissolved state bank may publish notice of its
 92 30 dissolution and request that persons with claims against the
 92 31 state bank present them in accordance with the notice.
 92 32    2.  A notice made pursuant to this section must satisfy all
 92 33 of the following requirements:
 92 34    a.  Be published at least once in a newspaper of general
 92 35 circulation in the county where the dissolved state bank's
 93  1 principal office is located.
 93  2    b.  Include a description of the information that must be
 93  3 included in a claim and provide a mailing address where the
 93  4 claim may be sent.
 93  5    c.  Include a statement that a claim against the state bank
 93  6 will be barred unless a proceeding to enforce the claim is
 93  7 commenced within two years after the publication of the
 93  8 notice.
 93  9    3.  If the dissolved state bank publishes a newspaper
 93 10 notice pursuant to subsection 2, the claim of each of the
 93 11 following claimants is barred unless the claimant commences a
 93 12 proceeding to enforce the claim against the dissolved state
 93 13 bank within two years after the publication date of the
 93 14 newspaper notice:
 93 15    a.  A claimant who did not receive written notice under
 93 16 section 524.1308A.
 93 17    b.  A claimant whose claim was timely sent to the dissolved
 93 18 state bank but not acted on.
 93 19    c.  A claimant whose claim is contingent or based on an
 93 20 event occurring after the effective date of dissolution.
 93 21    4.  A claim may be enforced under this section as follows:
 93 22    a.  Against the dissolved state bank, to the extent of its
 93 23 undistributed assets.
 93 24    b.  If the assets have been distributed in liquidation,
 93 25 against a shareholder of the dissolved state bank to the
 93 26 extent of the shareholder's pro rata share of the claim or the
 93 27 state bank's assets distributed to the shareholder in
 93 28 liquidation, whichever is less, but a shareholder's total
 93 29 liability for all claims under this section shall not exceed
 93 30 the total amount of assets distributed to the shareholder in
 93 31 liquidation.
 93 32    Sec. 104.  Section 524.1309, unnumbered paragraph 1, Code
 93 33 1995, is amended to read as follows:
 93 34    In lieu of the dissolution procedure prescribed in sections
 93 35 524.1303 to 524.1308 524.1306, a state bank may cease to carry
 94  1 on the business of banking and, after compliance with this
 94  2 section, continue as a corporation subject to chapter 490.
 94  3    Sec. 105.  Section 524.1309, subsections 1, 3, 4, 5, and
 94  4 10, Code 1995, are amended to read as follows:
 94  5    1.  A state bank which has commenced business may propose
 94  6 to voluntarily cease to carry on the business of banking and
 94  7 become a corporation subject to chapter 490 upon the
 94  8 affirmative vote of the holders of at least three-fourths a
 94  9 majority of the shares entitled to vote thereon on such
 94 10 proposal, adopting a plan involving both a provision for
 94 11 acquisition of its assets and assumption of its liabilities by
 94 12 another state bank, or national bank, or other financial
 94 13 institution insured by the federal deposit insurance
 94 14 corporation, and a provision for continuance of its business
 94 15 if acquisition of its assets and assumption of its liabilities
 94 16 is not effected, or any other plan providing for the cessation
 94 17 of banking business and the payment of its liabilities.
 94 18    3.  Immediately upon adoption and approval of a plan to
 94 19 voluntarily cease to carry on the business of banking and
 94 20 become a corporation subject to chapter 490, the state bank
 94 21 shall deliver to the superintendent a statement of its intent
 94 22 plan to cease to carry on the business of banking and become a
 94 23 corporation subject to chapter 490, which shall be signed by
 94 24 two of its duly authorized officers and shall contain the name
 94 25 of the state bank, the post office address of its principal
 94 26 place of business, the name and address of its officers and
 94 27 directors, the number of shares entitled to vote on the plan
 94 28 and the number of shares voted for or against the plan,
 94 29 respectively, the nature of the business to be conducted by
 94 30 the corporation under chapter 490, and the general nature of
 94 31 the assets to be held by the corporation.
 94 32    4.  If the statement of intent to cease to carry on the
 94 33 business of banking and become a corporation subject to
 94 34 chapter 490 satisfies the requirements of this section, the
 94 35 superintendent shall deliver the statement with written
 95  1 approval to the secretary of state who shall issue to the
 95  2 state bank an approved copy of the statement.  Upon the
 95  3 issuance of an approved copy of the statement of intent
 95  4 approval of the plan by the superintendent, the state bank
 95  5 shall immediately surrender to the superintendent its
 95  6 authorization to do business as a bank and shall cease to
 95  7 accept deposits or and carry on the banking business except
 95  8 insofar as may be necessary for it to complete the settlement
 95  9 of its affairs as a state bank in accordance with subsection
 95 10 5.
 95 11    5.  The board of directors has full power to complete the
 95 12 settlement of the affairs of the state bank.  Within thirty
 95 13 days after the issuance of an approved copy of the statement
 95 14 of intent to cease to carry on approval by the superintendent
 95 15 of the plan to cease the business of banking and become a
 95 16 corporation subject to chapter 490, the state bank shall give
 95 17 notice of its intent to persons described in subsection 2 of
 95 18 identified in section 524.1305 and, subsection 3, in the
 95 19 manner provided for in that subsection.  In completing the
 95 20 settlement of its affairs as a state bank the state bank shall
 95 21 also follow the procedure prescribed in subsections 3, 4 and 5
 95 22 of section 524.1305, subsections 3, 4, and 5.
 95 23    10.  A state bank may, at any time prior to the issuance of
 95 24 the approved copy of the statement of intent to cease to carry
 95 25 on the business of banking and become a corporation approval
 95 26 of the articles of intent to become subject to chapter 490,
 95 27 may revoke the proceedings in the manner prescribed by section
 95 28 524.1306.
 95 29    Sec. 106.  Section 524.1309, subsection 6, Code 1995, is
 95 30 amended by striking the subsection.
 95 31    Sec. 107.  Section 524.1314, subsection 2, Code 1995, is
 95 32 amended to read as follows:
 95 33    2.  Subsequent to the dissolution of a state bank, other
 95 34 than through the adoption of a plan involving a provision for
 95 35 acquisition of its assets and assumption of its liabilities by
 96  1 another state or bank, national bank, or other financial
 96  2 institution insured by the federal deposit insurance
 96  3 corporation, the superintendent shall may assume custody of
 96  4 the records of the state bank and, if so, shall retain them in
 96  5 accordance with the provisions of section 524.221.  The
 96  6 superintendent may make copies of such records in accordance
 96  7 with the provisions of subsection 1 of section 524.221,
 96  8 subsection 1.
 96  9    Sec. 108.  Section 524.1401, Code 1995, is amended to read
 96 10 as follows:
 96 11    524.1401  AUTHORITY TO MERGE OR CONSOLIDATE.
 96 12    1.  Upon compliance with the requirements of this chapter,
 96 13 one or more state banks, or one or more national banks, one or
 96 14 more state associations, one or more federal associations, one
 96 15 or more corporations, or any combination of state and national
 96 16 banks, may merge or consolidate into a national bank or these
 96 17 entities, with the approval of the superintendent, may merge
 96 18 into a state bank or consolidate into a new state bank.
 96 19    2.  Upon compliance with the requirements of this chapter,
 96 20 one or more state banks may merge into a national bank.  The
 96 21 authority of a state bank to merge or consolidate into a
 96 22 national bank shall be is subject to the condition that at the
 96 23 time of the transaction the laws of the United States shall
 96 24 authorize a national bank located in this state, without
 96 25 approval by the comptroller of the currency of the United
 96 26 States, to merge or consolidate into a state bank under
 96 27 limitations no more restrictive than those contained in this
 96 28 chapter with respect to the merger or consolidation of a state
 96 29 bank into a national bank.
 96 30    3.  Upon compliance with the requirements of this chapter
 96 31 and chapter 534, one or more state banks may merge with one or
 96 32 more state associations or federal associations.  The
 96 33 authority of a state bank to merge into a state or federal
 96 34 association is subject to the conditions the laws of the
 96 35 United States authorize at the time of the transaction.
 97  1    4.  As used in this section, the term "merger" or "merge"
 97  2 means any plan by which the assets and liabilities of an
 97  3 entity are combined with those of one or more other entities,
 97  4 including transactions in which one of the corporate entities
 97  5 survives and transactions in which a new corporate entity is
 97  6 created.
 97  7    Sec. 109.  Section 524.1402, Code 1995, is amended to read
 97  8 as follows:
 97  9    524.1402  REQUIREMENTS FOR A MERGER OR CONSOLIDATION.
 97 10    The requirements for a merger or consolidation which must
 97 11 be satisfied by the parties thereto to the merger are as
 97 12 follows:
 97 13    1.  The parties shall adopt a plan stating all of the
 97 14 following:
 97 15    a.  The names of the banks parties proposing to merge or
 97 16 consolidate and the name of the bank into which they propose
 97 17 to merge, which is the "resulting bank".
 97 18    b.  The terms and conditions of the proposed merger or con-
 97 19 solidation.
 97 20    c.  The manner and basis of the converting of the shares of
 97 21 each bank party into shares, obligations, or other securities
 97 22 of the resulting bank or of any other corporation, or, in
 97 23 whole or in part, into cash or other property.
 97 24    d.  The rights of the shareholders of each of the parties.
 97 25    e.  An agreement concerning the merger or consolidation.
 97 26    f.  Such other provisions with respect to the proposed
 97 27 merger or consolidation which are deemed necessary or desir-
 97 28 able.
 97 29    2.  In the case of a state bank which is a party to the
 97 30 plan, if the proposed merger or consolidation will result in a
 97 31 state bank subject to this chapter, adoption of the plan by
 97 32 such state bank shall require requires the affirmative vote of
 97 33 at least a majority of the directors and approval by the
 97 34 shareholders, in the manner and according to the procedures
 97 35 prescribed in section 490.1103, at a meeting called in
 98  1 accordance with the terms of that section.  In the case of a
 98  2 national bank, or if the proposed merger or consolidation will
 98  3 result in a national bank, adoption of the plan by each party
 98  4 thereto to the merger shall require the affirmative vote of at
 98  5 least such directors and shareholders whose affirmative vote
 98  6 thereon on the plan is required under the laws of the United
 98  7 States.  Subject to applicable requirements of the laws of the
 98  8 United States in a case in which a national bank is a party to
 98  9 a plan, any modification of a plan which has been adopted
 98 10 shall be made by any method provided therein in the plan, or
 98 11 in the absence of such provision, by the same vote as required
 98 12 for adoption.
 98 13    3.  If a proposed merger or consolidation will result in a
 98 14 state bank, application for the required approval by the
 98 15 superintendent shall be made in the manner prescribed by the
 98 16 superintendent.  There shall also be delivered to the
 98 17 superintendent, when available, the following:
 98 18    a.  Articles of merger or consolidation.
 98 19    b.  Applicable fees payable to the secretary of state, as
 98 20 specified in section 490.122, for the filing and recording of
 98 21 the articles of merger or consolidation.
 98 22    c.  If there is any modification of the plan at any time
 98 23 prior to the approval by the superintendent under section
 98 24 524.1403, an amendment of the application and, if necessary,
 98 25 of the articles of merger or consolidation, signed in the same
 98 26 manner as the originals, setting forth the modification of the
 98 27 plan, the method by which such the modification was adopted
 98 28 and any related change in the provisions of the articles of
 98 29 merger or consolidation.
 98 30    d.  Proof of publication of the notice required by
 98 31 subsection 4 of this section.
 98 32    4.  If a proposed merger or consolidation will result in a
 98 33 state bank, within thirty days after the application for
 98 34 merger is accepted for processing, the parties to the plan
 98 35 shall publish, once each week for two consecutive weeks, a
 99  1 notice of the proposed transaction.  The notices shall be
 99  2 published in a newspaper of general circulation published in a
 99  3 the municipal corporation or unincorporated area in which each
 99  4 party to the plan has its principal place of business, and in
 99  5 the case of a consolidation, in which the resulting state bank
 99  6 is to have its principal place of business, or if there is
 99  7 none, in a newspaper of general circulation published in the
 99  8 county, or in a county adjoining the county, in which each
 99  9 party to the plan has its principal place of business and, in
 99 10 the case of a consolidation, in which the resulting state bank
 99 11 is to have its principal place of business.  The notice shall
 99 12 be published once each week for two successive weeks, within
 99 13 thirty days after making application to the superintendent for
 99 14 approval of the plan.  The notice shall be on forms prescribed
 99 15 by the superintendent and shall set forth the names of the
 99 16 parties to the plan and the resulting state bank, the location
 99 17 and post office address of the principal place of business of
 99 18 the resulting state bank and of each office to be maintained
 99 19 by the resulting state bank, and the purpose or purposes of
 99 20 the resulting state bank, and the date of delivery of the
 99 21 articles of merger and consolidation to the superintendent.
 99 22    4A.  Within thirty days after the date of the second
 99 23 publication of the notice required under subsection 4, any
 99 24 interested person may submit to the superintendent written
 99 25 comments and data on the application.  Comments challenging
 99 26 the legality of an application shall be submitted separately
 99 27 in writing.  The superintendent may extend the thirty-day
 99 28 comment period if, in the superintendent's judgment,
 99 29 extenuating circumstances exist.
 99 30    4B.  Within thirty days after the date of the second
 99 31 publication of the notice required under subsection 4, any
 99 32 interested person may submit to the superintendent a written
 99 33 request for a hearing on the application.  The request shall
 99 34 state the nature of the issues or facts to be presented and
 99 35 the reasons why written submissions would be insufficient to
100  1 make an adequate presentation to the superintendent.  If the
100  2 reasons are related to factual disputes, the disputes shall be
100  3 described.  Written requests for hearings shall be evaluated
100  4 by the superintendent, who may grant or deny such requests in
100  5 whole or in part.  A hearing request shall generally be
100  6 granted only if it is determined that written submissions
100  7 would be inadequate or that a hearing would otherwise be
100  8 beneficial to the decision-making process.  A hearing may be
100  9 limited to issues considered material by the superintendent.
100 10    4C.  If a request for a hearing is denied, the
100 11 superintendent shall notify the applicant and all interested
100 12 persons and shall state the reasons for the denial.
100 13 Interested persons may submit to the superintendent, with
100 14 simultaneous copies to the applicant, additional written
100 15 comments or data on the application within fourteen days after
100 16 the date of the notice of denial.  The applicant shall be
100 17 provided an additional seven days, after the fourteen-day
100 18 deadline has expired, within which to respond to any comments
100 19 submitted within the fourteen-day period.  The superintendent
100 20 may waive this seven-day period upon request by the applicant.
100 21 A copy of any response submitted by the applicant shall also
100 22 be mailed simultaneously by the applicant to the interested
100 23 persons.
100 24    5.  The articles of merger or consolidation shall be signed
100 25 by two duly authorized officers of each party to the plan and
100 26 shall contain all of the following:
100 27    a.  The names of the parties to the plan, and of the
100 28 resulting state bank.
100 29    b.  The location and the post office address of the
100 30 principal place of business of each party to the plan, and of
100 31 each additional office maintained by the parties to the plan,
100 32 and the location and post office address of the principal
100 33 place of business of the resulting state bank, and of each
100 34 additional office to be maintained by the resulting state
100 35 bank.
101  1    c.  The votes by which the plan was adopted, and the time
101  2 date and place of each meeting in connection with such
101  3 adoption.
101  4    d.  The number of directors constituting the board of
101  5 directors, and the names and addresses of the individuals who
101  6 are to serve as directors until the next annual meeting of the
101  7 shareholders or until their successors be elected and qualify.
101  8    e.  In the case of a merger, any Any amendment of the
101  9 articles of incorporation of the resulting state bank.
101 10    f.  In the case of a consolidation, the provisions required
101 11 in the articles of incorporation of a state bank by section
101 12 524.302, subsections 3 to 7.
101 13    g. f.  The plan of merger or consolidation.
101 14    6.  If a proposed merger or consolidation will result in a
101 15 national bank, a state bank which is a party to the plan shall
101 16 do all of the following:
101 17    a.  Notify the superintendent of the proposed merger or
101 18 consolidation.
101 19    b.  Provide such evidence of the adoption of the plan as
101 20 the superintendent may request.
101 21    c.  Notify the superintendent of any abandonment or
101 22 disapproval of the plan.
101 23    d.  File with the superintendent and with the secretary of
101 24 state a certificate evidence of approval of the merger or
101 25 consolidation by the comptroller of the currency of the United
101 26 States.
101 27    e.  Notify the superintendent of the date upon which such
101 28 the merger or consolidation is to become effective.
101 29    Sec. 110.  Section 524.1403, Code 1995, is amended to read
101 30 as follows:
101 31    524.1403  APPROVAL OF MERGER OR CONSOLIDATION BY
101 32 SUPERINTENDENT.
101 33    1.  Upon receipt of an application for approval of a merger
101 34 or consolidation and of the supporting items required by
101 35 section 524.1402, subsection 3, the superintendent shall
102  1 conduct such investigation as the superintendent deems
102  2 necessary to ascertain whether the following:
102  3    a.  The articles of merger or consolidation and supporting
102  4 items satisfy the requirements of this chapter.
102  5    b.  The plan and any modification thereof of the plan
102  6 adequately protects the interests of depositors, other
102  7 creditors and shareholders.
102  8    c.  The requirements for a merger or consolidation under
102  9 all applicable laws have been satisfied and the resulting
102 10 state bank would satisfy the requirements of this chapter with
102 11 respect to it.
102 12    d.  The merger or consolidation would be consistent with
102 13 adequate and sound banking and in the public interest on the
102 14 basis of the financial history and condition of the parties to
102 15 the plan, including the adequacy of the capital structure of
102 16 the resulting state bank, the character of the management of
102 17 the resulting state bank, the potential effect of the merger
102 18 or consolidation on competition, and the convenience and needs
102 19 of the area primarily to be served by the resulting state
102 20 bank.
102 21    2.  Within one hundred eighty days after receipt acceptance
102 22 of the application for processing, or within an additional
102 23 period of not more than sixty days after receipt of an
102 24 amendment of the application, the superintendent shall
102 25 determine whether to approve or disapprove the application on
102 26 the basis of the investigation.  The plan shall not be
102 27 modified at any time after approval of the application by the
102 28 superintendent.  Prior to making a determination on the
102 29 pending application the superintendent shall give adequate
102 30 notice of the pending application, and may afford all
102 31 interested persons an opportunity for a stenographically
102 32 reported hearing during which such persons shall be allowed to
102 33 present evidence in support of, or in opposition to, the
102 34 pending application.
102 35    The superintendent shall conduct such hearing if any
103  1 interested person files an objection to the pending
103  2 application and requests a hearing.  If the superintendent
103  3 finds that the superintendent must act immediately on the
103  4 pending application in order to protect the interests of
103  5 depositors or the assets of any party to the plan, the
103  6 superintendent may proceed without requiring publication of
103  7 the notice referred to in this subsection required under
103  8 section 524.1402, subsection 4.  Before As a condition of
103  9 receiving the decision of the superintendent with respect to
103 10 the pending application, the parties to the plan shall, upon
103 11 notice, reimburse the superintendent to the extent of for all
103 12 the expenses incurred in connection with the application.
103 13 Thereafter the The superintendent shall give to the parties to
103 14 the plan written notice of the decision and, in the event of
103 15 disapproval, a statement of the reasons for the decision.  The
103 16 decision of the superintendent shall be subject to judicial
103 17 review in accordance with pursuant to chapter 17A.
103 18    Sec. 111.  Section 524.1404, Code 1995, is amended to read
103 19 as follows:
103 20    524.1404  PROCEDURE AFTER APPROVAL BY THE SUPERINTENDENT &endash;
103 21 ISSUANCE OF CERTIFICATE OF MERGER OR CONSOLIDATION.
103 22    If the applicable state or federal laws of the United
103 23 States require the approval of the merger or consolidation by
103 24 any a federal or state agency, the superintendent shall, after
103 25 the superintendent's approval, retain the may withhold
103 26 delivery of the approved articles of merger or consolidation
103 27 until the superintendent receives notice of the decision of
103 28 such agency.  If the final approval of the agency is not given
103 29 within six months of the superintendent's approval, the
103 30 superintendent shall notify the parties to the plan that the
103 31 approval of the superintendent has been rescinded for that
103 32 reason.  If such agency gives its approval, the superintendent
103 33 shall deliver the articles of merger or consolidation, with
103 34 the superintendent's approval indicated thereon on the
103 35 articles, to the secretary of state, and shall notify the
104  1 parties to the plan.  The receipt of the approved articles of
104  2 merger or consolidation by the secretary of state shall
104  3 constitute constitutes filing thereof of the articles of
104  4 merger with that office.  The secretary of state shall record
104  5 the articles of merger or consolidation in the secretary of
104  6 state's office, and the same articles shall be filed and
104  7 recorded in the office of the county recorder in each county
104  8 in which the parties to the plan had previously maintained a
104  9 principal place of business and, in the case of a
104 10 consolidation, in the county in which the new state bank is to
104 11 maintain its principal place of business.  On the date upon
104 12 which the merger or consolidation is effective the secretary
104 13 of state shall issue a certificate of merger or consolidation
104 14 and send the same to the resulting state bank and a copy
104 15 thereof of the certificate of merger to the superintendent.
104 16    Sec. 112.  Section 524.1405, subsection 1, Code 1995, is
104 17 amended to read as follows:
104 18    1.  The merger or consolidation shall be is effective upon
104 19 the filing of the articles of merger or consolidation with the
104 20 secretary of state, or at any later date and time as specified
104 21 by the superintendent in writing on the articles of merger or
104 22 consolidation.  The certificate of merger or consolidation
104 23 shall be is conclusive evidence of the performance of all
104 24 conditions precedent to the merger or consolidation, and of
104 25 the existence or creation of the resulting state bank, except
104 26 as against the state.
104 27    Sec. 113.  Section 524.1405, subsections 2 and 3, Code
104 28 1995, are amended by striking the subsections and inserting in
104 29 lieu thereof the following:
104 30    2.  When a merger takes effect all of the following apply:
104 31    a.  Every other financial institution to the merger merges
104 32 into the surviving financial institution and the separate
104 33 existence of every party except the surviving financial
104 34 institution ceases.
104 35    b.  The title to all real estate and other property owned
105  1 by each party to the merger is vested in the surviving party
105  2 without reversion or impairment.
105  3    c.  The surviving party has all liabilities of each party
105  4 to the merger.
105  5    d.  A proceeding pending against any party to the merger
105  6 may be continued as if the merger did not occur or the
105  7 surviving party may be substituted in the proceeding for the
105  8 party whose existence ceased.
105  9    e.  The articles of incorporation of the surviving party
105 10 are amended to the extent provided in the articles of merger.
105 11    f.  The shares of each party to the merger that are to be
105 12 converted into shares, obligations, or other securities of the
105 13 surviving party or any other corporation or into cash or other
105 14 property are converted, and the former holders of the shares
105 15 are entitled only to the rights provided in the articles of
105 16 merger or to their rights under division XIII of this chapter.
105 17    Sec. 114.  Section 524.1406, Code 1995, is amended to read
105 18 as follows:
105 19    524.1406  RIGHTS OF DISSENTING SHAREHOLDERS.
105 20    1.  A shareholder of a state bank, which is a party to a
105 21 proposed merger or consolidation plan which will result in a
105 22 state bank subject to this chapter, who objects to the plan is
105 23 entitled to the rights and remedies of a dissenting
105 24 shareholder as provided in chapter 490, division XIII.  Shares
105 25 acquired by a state bank pursuant to payment of their agreed
105 26 value or to payment of the judgment entered therefor, pursuant
105 27 to chapter 490, division XIII, shall be sold at public or
105 28 private sale, within one year from the time of their purchase
105 29 or acquisition, unless the time is extended by the
105 30 superintendent.
105 31    2.  If a shareholder of a national bank which is a party to
105 32 a proposed merger or consolidation plan which will result in a
105 33 state bank, or a shareholder of a state bank which is a party
105 34 to a plan which will result in a national bank, shall object
105 35 objects to the plan and shall comply complies with the
106  1 requirements of the applicable laws of the United States, the
106  2 resulting state bank or national bank, as the case may be,
106  3 shall be is liable for the value of the shareholder's shares
106  4 as determined in accordance with such laws of the United
106  5 States.  Shares acquired by a state bank pursuant to this
106  6 subsection shall be sold at public or private sale within one
106  7 year from the time of their purchase or acquisition, unless
106  8 the time is extended by the superintendent.
106  9    Sec. 115.  Section 524.1408, Code 1995, is amended to read
106 10 as follows:
106 11    524.1408  MERGER OF CORPORATION SUBSTANTIALLY OWNED BY A
106 12 STATE BANK.
106 13    A state bank owning at least ninety-five ninety percent of
106 14 the outstanding shares, of each class, of another corporation
106 15 which it is authorized to own under this chapter, may merge
106 16 the other corporation into itself without approval by a vote
106 17 of the shareholders of either the state bank or the subsidiary
106 18 corporation.  The board of directors of the state bank shall
106 19 approve a plan of merger, mail to shareholders of record of
106 20 the subsidiary corporation, and prepare and execute articles
106 21 of merger in the manner provided for in section 490.1104.  The
106 22 articles of merger, together with the applicable filing and
106 23 recording fees, shall be delivered to the superintendent who
106 24 shall, if the superintendent approves of the proposed merger
106 25 and if the superintendent finds the articles of merger satisfy
106 26 the requirements of this section, deliver them to the
106 27 secretary of state for filing and recording in the secretary
106 28 of state's office, and they shall be filed in the office of
106 29 the county recorder.  The secretary of state upon filing the
106 30 articles of merger shall issue a certificate of merger and
106 31 send the certificate to the state bank and a copy of it to the
106 32 superintendent.
106 33    Sec. 116.  Section 524.1411, subsections 3 and 5, Code
106 34 1995, are amended to read as follows:
106 35    3.  The votes by which the plan of conversion was adopted
107  1 and the time date and place of each meeting in connection with
107  2 the adoption.
107  3    5.  The provisions required in the articles of
107  4 incorporation by subsections 3, 4, 5, 6, and 7 of section
107  5 524.302, subsection 1, paragraphs "c" and "d", and subsection
107  6 2, paragraph "b".
107  7    Sec. 117.  Section 524.1412, Code 1995, is amended to read
107  8 as follows:
107  9    524.1412  PUBLICATION OF NOTICE.
107 10    The Within thirty days after the application for conversion
107 11 has been accepted for processing, the national bank shall
107 12 publish a notice of its intention to deliver, or the delivery
107 13 of, the articles of conversion to the superintendent, once
107 14 each week for two successive weeks in a newspaper of general
107 15 circulation published in the municipal corporation or
107 16 unincorporated area in which the national bank has its
107 17 principal place of business, or if there is none, a newspaper
107 18 of general circulation published in the county, or in a county
107 19 adjoining the county, in which the national bank has its
107 20 principal place of business.  The notice shall appear prior
107 21 to, or within seven days after, the date of delivery of the
107 22 articles of conversion to the superintendent and shall set
107 23 forth all of the following:
107 24    1.  The name of the national bank and the name of the
107 25 resulting state bank.
107 26    2.  The location and post office address of its principal
107 27 place of business.
107 28    3.  A statement that articles of conversion are to be, or
107 29 have been delivered to the superintendent.
107 30    4.  The purpose or purposes of the resulting state bank.
107 31    5.  The date of delivery of the articles of conversion to
107 32 the superintendent.
107 33    Sec. 118.  Section 524.1413, Code 1995, is amended to read
107 34 as follows:
107 35    524.1413  APPROVAL OF CONVERSION BY SUPERINTENDENT.
108  1    Upon receipt acceptance for processing of an application
108  2 for approval of a conversion, the superintendent shall conduct
108  3 such investigation as the superintendent may deem deems
108  4 necessary to ascertain whether the following:
108  5    1.  The articles of conversion and supporting items satisfy
108  6 the requirements of this chapter.
108  7    2.  The plan adequately protects the interests of
108  8 depositors.
108  9    3.  The requirements for a conversion under all applicable
108 10 laws have been satisfied and the resulting state bank would
108 11 satisfy the requirements of this chapter applicable to it.
108 12    4.  The resulting state bank will possess an adequate
108 13 capital structure.
108 14    Within ninety days after receipt of the application has
108 15 been accepted for processing, the superintendent shall make a
108 16 determination whether to approve or disapprove the pending
108 17 application on the basis of the investigation.  Before As a
108 18 condition of receiving the decision of the superintendent with
108 19 respect to the pending application, the national bank shall,
108 20 upon notice, reimburse the superintendent to the extent of the
108 21 for all expenses incurred in connection with the application.
108 22 Thereafter, the The superintendent shall give the national
108 23 bank written notice of the decision and, in the event of
108 24 disapproval, a statement of the reasons for the decision.  If
108 25 the superintendent approves the pending application, the
108 26 superintendent shall deliver the articles of conversion, with
108 27 the superintendent's approval indicated thereon on the
108 28 articles of conversion, to the secretary of state.  The
108 29 decision of the superintendent shall be subject to judicial
108 30 review in accordance with the terms of the Iowa administrative
108 31 procedure Act pursuant to chapter 17A.  Notwithstanding the
108 32 terms of said the Iowa administrative procedure Act, such
108 33 chapter 17A, a petition for judicial review must be filed
108 34 within thirty days after the superintendent notifies the
108 35 national bank of the superintendent's decision.
109  1    Sec. 119.  Section 524.1414, Code 1995, is amended to read
109  2 as follows:
109  3    524.1414  ISSUANCE OF CERTIFICATE OF CONVERSION.
109  4    The receipt of the approved articles of conversion by the
109  5 secretary of state shall constitute constitutes filing thereof
109  6 of the articles of conversion with that office.  The secretary
109  7 of state shall record the articles of conversion in the
109  8 secretary's office, and the same articles shall be filed and
109  9 recorded in the office of the county recorder in the county in
109 10 which the resulting state bank has its principal place of
109 11 business.  On the date upon which the conversion is effective,
109 12 the secretary of state shall issue a certificate of conversion
109 13 and send the same to the resulting state bank and a copy
109 14 thereof to the superintendent and the superintendent shall
109 15 issue to the resulting state bank an authorization to do
109 16 business.
109 17    Sec. 120.  Section 524.1415, subsection 1, Code 1995, is
109 18 amended to read as follows:
109 19    1.  The conversion shall be is effective upon the filing of
109 20 the articles of conversion with the secretary of state, or at
109 21 any later date and time as specified by the superintendent in
109 22 writing on the articles of conversion.  The certificate of
109 23 conversion shall be is conclusive evidence of the performance
109 24 of all conditions required by this chapter for conversion of a
109 25 national bank into a state bank, except as against the state.
109 26    Sec. 121.  Section 524.1415, Code 1995, is amended by
109 27 adding the following new subsection:
109 28    NEW SUBSECTION.  4.  The title to all real estate and other
109 29 property owned by the converting national bank is vested in
109 30 the resulting state bank without reversion or impairment.
109 31    Sec. 122.  Section 524.1417, subsection 1, Code 1995, is
109 32 amended by striking the subsection and inserting in lieu
109 33 thereof the following:
109 34    1.  A shareholder of a state bank which converts into a
109 35 national bank who objects to the plan of conversion is
110  1 entitled to the rights and remedies of a dissenting
110  2 shareholder as provided in chapter 490, division XIII.
110  3    Sec. 123.  Section 524.1417, subsection 2, Code 1995, is
110  4 amended to read as follows:
110  5    2.  If a shareholder of a national bank, which converts
110  6 into a state bank, shall object objects to the plan of
110  7 conversion and shall comply complies with the requirements of
110  8 applicable laws of the United States, the resulting state bank
110  9 shall be is liable for the value of the shareholder's shares
110 10 as determined in accordance with such laws of the United
110 11 States.  Shares acquired by a state bank pursuant to this
110 12 subsection shall be sold at public or private sale, within one
110 13 year from the time of purchase or acquisition, unless the time
110 14 is extended by the superintendent.
110 15    Sec. 124.  Section 524.1418, Code 1995, is amended to read
110 16 as follows:
110 17    524.1418  SUCCESSION TO FIDUCIARY ACCOUNTS AND APPOINTMENTS
110 18 &endash; APPLICATION FOR APPOINTMENT OF NEW FIDUCIARY.
110 19    The provisions of section 524.1407 shall 524.1009 apply to
110 20 a resulting state or national bank after a conversion with the
110 21 same effect as though such the state or national bank were a
110 22 party to a plan of merger or consolidation, and the conversion
110 23 were a merger or consolidation, within the provisions of that
110 24 section.
110 25    Sec. 125.  Section 524.1419, Code 1995, is amended to read
110 26 as follows:
110 27    524.1419  OFFICES OF A RESULTING STATE BANK.
110 28    If a merger, consolidation or conversion results in a state
110 29 bank subject to the provisions of this chapter, the resulting
110 30 state bank shall, after the effective date of the merger,
110 31 consolidation or conversion, shall be subject to all the
110 32 provisions of sections 524.1201, 524.1202, and 524.1203
110 33 relating to the bank offices.
110 34    Sec. 126.  Section 524.1420, Code 1995, is amended to read
110 35 as follows:
111  1    524.1420  NONCONFORMING ASSETS OF RESULTING STATE BANK.
111  2    If a merger, consolidation or conversion results in a state
111  3 bank subject to the provisions of this chapter, and the
111  4 resulting state bank has assets which do not conform with the
111  5 provisions of this chapter, the superintendent may allow the
111  6 resulting state bank a reasonable time to conform with state
111  7 law.
111  8    Sec. 127.  Section 524.1501, Code 1995, is amended to read
111  9 as follows:
111 10    524.1501  RIGHT AUTHORITY TO AMEND.
111 11    A state bank may, with the approval of the superintendent
111 12 and in the manner provided in this chapter, may amend its
111 13 articles of incorporation in order to make any change therein
111 14 in the articles of incorporation so long as its the articles
111 15 of incorporation as amended contain only such provisions as
111 16 might be lawfully contained in the original articles of
111 17 incorporation at the time of making such the amendment.
111 18    Sec. 128.  Section 524.1503, Code 1995, is amended by
111 19 striking the section and inserting in lieu thereof the
111 20 following:
111 21    524.1503  VOTING ON AMENDMENTS BY VOTING GROUPS.
111 22    1.  The holders of the outstanding shares of a class are
111 23 entitled to vote as a separate voting group on a proposed
111 24 amendment if the amendment does any of the following:
111 25    a.  Increases or decreases the aggregate number of
111 26 authorized shares of the class.
111 27    b.  Increases or decreases the par value of the shares of
111 28 the class.
111 29    c.  Effects an exchange or reclassification of all or part
111 30 of the shares of the class into shares of another class or
111 31 effects a cancellation of all or part of the shares of the
111 32 class.
111 33    d.  Effects an exchange or reclassification, or creates the
111 34 right of exchange, of all or part of the shares of another
111 35 class into shares of that class.
112  1    e.  Changes the designation, rights, preferences, or
112  2 limitations of all or part of the shares of the class.
112  3    f.  Changes the shares of all or part of the class into a
112  4 different number of shares of the same class.
112  5    g.  Creates a new class of shares having rights or
112  6 preferences with respect to distributions or to dissolution
112  7 that are prior, superior, or substantially equal to the shares
112  8 of the class.
112  9    h.  Increases the rights, preferences, or number of
112 10 authorized shares of any class that, after giving effect to
112 11 the amendment, have rights or preferences with respect to
112 12 distributions or to dissolution that are prior, superior, or
112 13 substantially equal to the shares of the class.
112 14    i.  Limits or denies an existing preemptive right of all or
112 15 part of the shares of the class.
112 16    j.  Cancels or otherwise affects rights to distributions or
112 17 dividends that have accumulated but not yet been declared on
112 18 all or part of the shares of the class.
112 19    2.  If a proposed amendment would affect a series of a
112 20 class of shares in one or more of the ways described in
112 21 subsection 1, the shares of that series are entitled to vote
112 22 as a separate voting group on the proposed amendment.
112 23    3.  If a proposed amendment that entitles two or more
112 24 series of shares to vote as separate voting groups under this
112 25 section would affect those two or more series in the same or a
112 26 substantially similar way, the shares of all the series so
112 27 affected must vote together as a single voting group on the
112 28 proposed amendment.
112 29    4.  A class or series of shares is entitled to the voting
112 30 rights granted by this section although the articles of
112 31 incorporation provide that the shares are nonvoting shares.
112 32    Sec. 129.  Section 524.1504, subsection 1, paragraph d,
112 33 Code 1995, is amended to read as follows:
112 34    d.  The place, and date and hour of the meeting of
112 35 shareholders at which the amendment was adopted, and the kind
113  1 and period of notice given to the shareholders.
113  2    Sec. 130.  Section 524.1506, Code 1995, is amended to read
113  3 as follows:
113  4    524.1506  CERTIFICATE OF AMENDMENT &endash; EFFECT.
113  5    1.  The secretary of state shall record the articles of
113  6 amendment in the secretary's office, and the same articles of
113  7 amendment shall be filed and recorded in the office of the
113  8 county recorder in the county in which the state bank has its
113  9 principal place of business.  The secretary of state upon the
113 10 filing of the articles of amendment shall issue a certificate
113 11 of amendment and send the same to the state bank.
113 12    2.  Upon the issuance of the certificate of amendment by
113 13 the secretary of state, the amendment shall become becomes
113 14 effective and the articles of incorporation shall be are
113 15 deemed to be amended accordingly.  No amendment shall affect
113 16 the existing rights of persons other than shareholders, or any
113 17 existing cause of action in favor of or against such state
113 18 bank, or any pending suit to which such state bank shall be a
113 19 party, and, in the event the name of the state bank shall be
113 20 changed by amendment, no suit brought by or against such state
113 21 bank under its former name shall abate for that reason.
113 22    Sec. 131.  Section 524.1508, Code 1995, is amended to read
113 23 as follows:
113 24    524.1508  RESTATEMENT OF RESTATED ARTICLES OF
113 25 INCORPORATION.
113 26    A state bank may at any time restate its articles of
113 27 incorporation, which may be amended by such the restatement,
113 28 so long as its articles of incorporation as so restated
113 29 contain only such provisions as might be lawfully contained in
113 30 original articles of incorporation at the time of making such
113 31 the restatement, by the adoption of restated.  Restated
113 32 articles of incorporation, including any amendments to its
113 33 articles of incorporation to be made thereby, shall be adopted
113 34 in the following manner:
113 35    1.  The board of directors shall adopt a resolution setting
114  1 forth the proposed restated articles of incorporation, which
114  2 may include an amendment or amendments to the articles of
114  3 incorporation of the state bank to be made thereby, and
114  4 directing that such the restated articles, including such
114  5 amendment or amendments, be submitted to a vote at a meeting
114  6 of shareholders, which may be either an annual meeting or a
114  7 special meeting.
114  8    2.  Written or printed notice setting forth the proposed
114  9 restated articles or a summary of the provisions thereof of
114 10 the proposed restated articles shall be given to each
114 11 shareholder of record entitled to vote thereon on the proposed
114 12 restated articles within the time and in the manner provided
114 13 in section 524.509.  If the meeting be an annual meeting, the
114 14 proposed restated articles may be included in the notice of
114 15 such annual meeting.  If the restated articles include an
114 16 amendment or amendments to the articles of incorporation to be
114 17 made thereby, the notice shall separately set forth such
114 18 amendment or amendments or a summary of the changes to be
114 19 effected thereby by the amendment or amendments.
114 20    3.  At such the meeting a vote of the shareholders entitled
114 21 to vote thereon on the proposed restated articles shall be
114 22 taken on the proposed restated articles.  The proposed
114 23 restated articles shall be adopted upon receiving the
114 24 affirmative vote of the holders of a majority of the shares
114 25 entitled to vote thereon, unless such restated articles
114 26 include an amendment to the articles of incorporation to be
114 27 made thereby which, if contained in a proposed amendment to
114 28 articles of incorporation to be made without restatement of
114 29 the articles of incorporation, would entitle a class of shares
114 30 to vote as a class thereon on the proposed restated articles,
114 31 in which event the proposed restated articles shall be adopted
114 32 upon receiving the affirmative vote of the holders of a
114 33 majority of the shares of each class of shares entitled to
114 34 vote thereon on the proposed restated articles as a class, and
114 35 of the total shares entitled to vote thereon on the proposed
115  1 restated articles.
115  2    Upon such approval, restated articles of incorporation
115  3 shall be executed by the state bank by its president or vice
115  4 president and by its cashier or an assistant cashier, and
115  5 verified by one of the officers signing the same restated
115  6 articles, and shall set forth, as then stated in the articles
115  7 of incorporation of the state bank and, if the restated
115  8 articles of incorporation included an amendment or amendments
115  9 to the articles of incorporation to be made thereby, as so
115 10 amended, the material and contents described in section
115 11 524.302.
115 12    The restated articles of incorporation shall set forth also
115 13 a statement that they correctly set forth the provisions of
115 14 the articles of incorporation as theretofore or thereby
115 15 amended, that they have been duly adopted as required by law
115 16 and that they supersede the original articles of incorporation
115 17 and all amendments thereto to the original articles of
115 18 incorporation.
115 19    The restated articles of incorporation shall be delivered
115 20 to the superintendent together with the applicable fees for
115 21 the filing and recording of the restated articles of
115 22 incorporation.  The superintendent shall conduct such
115 23 investigation and give approval or disapproval, all as in the
115 24 manner provided for in section 524.1505.  If the
115 25 superintendent shall approve approves the restated articles of
115 26 incorporation, the superintendent shall deliver them with the
115 27 written approval on the restated articles of incorporation to
115 28 the secretary of state for filing, and recording in the
115 29 secretary's office and the same restated articles of
115 30 incorporation shall be filed and recorded in the office of the
115 31 county recorder.  The secretary of state upon filing the
115 32 restated articles of incorporation shall issue a restated
115 33 certificate of incorporation and send the same certificate to
115 34 the state bank or its representative.
115 35    Upon the issuance of the restated certificate of
116  1 incorporation by the secretary of state, the restated articles
116  2 of incorporation including any amendment or amendments to the
116  3 articles of incorporation made thereby, shall become are
116  4 effective and shall supersede the original articles of
116  5 incorporation and all amendments thereto to the original
116  6 articles of incorporation.
116  7    No amendment shall affect the existing rights of persons
116  8 other than shareholders, or any existing cause of action in
116  9 favor of or against such state bank, or any pending suit to
116 10 which such state bank shall be a party; and, in the event the
116 11 corporate name shall be changed by amendment, no suit brought
116 12 by or against such state bank under its former name shall
116 13 abate for that reason.
116 14    Sec. 132.  NEW SECTION.  524.1509  REVERSE STOCK SPLIT.
116 15    A state bank may effect a reverse stock split or similar
116 16 change in capital structure by renewal, amendment, or
116 17 restatement of existing articles of incorporation, provided
116 18 the requirements of the superintendent are satisfied.
116 19    Sec. 133.  NEW SECTION.  524.1510  EFFECT OF AMENDMENT.
116 20    An amendment to the articles of incorporation does not
116 21 affect a cause of action existing against or in favor of the
116 22 state bank, a proceeding to which the state bank is a party,
116 23 or the existing rights of persons other than shareholders of
116 24 the state bank.  An amendment changing the state bank's name
116 25 does not abate a proceeding brought by or against the state
116 26 bank in its former name.
116 27    Sec. 134.  Section 524.1806, Code 1995, is amended to read
116 28 as follows:
116 29    524.1806  BANKS OWNED OR CONTROLLED &endash; OFFICERS AND
116 30 DIRECTORS.
116 31    If any An individual who is a director or an officer, or
116 32 both, of a bank holding company, or of a bank which is owned
116 33 or controlled by a bank holding company in any manner, and to
116 34 the extent, as specified by section 524.1801, such individual
116 35 shall also be is deemed to be a director or an officer, or
117  1 both, as the case may be, of each bank so owned or controlled
117  2 by that bank holding company, for the purposes of sections
117  3 524.612, 524.613 and 524.706.
117  4    Sec. 135.  Sections 524.106, 524.402, 524.403, 524.518,
117  5 524.704, 524.1307, 524.1308, 524.1407, 524.1507, 524.1701,
117  6 524.1702, and 524.1703, Code 1995, are repealed.  
117  7 SF 320
117  8 mj/cc/26
     
Text: SF00319                           Text: SF00321
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