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PAG LIN 1 1 Section 1. Section 536A.12, Code 1995, is amended to read 1 2 as follows: 1 3 536A.12 CONTINUING LICENSE – ANNUAL FEE – CHANGE OF 1 4 LOCATION – CHANGE OF CONTROL. 1 5 1. Each such license remains in full force and effect 1 6 until surrendered, revoked, or suspended, or until there is a 1 7 change of control on or after January 1, 1996. A licensee 1 8shall, on or before the second day of January, shall pay to 1 9 the superintendent the sum of fifty dollars as an annual 1 10 license fee for the succeeding calendar year. When a licensee 1 11 changes its place of business from one location to another in 1 12 the same city, it shall at once give written notice to the 1 13 superintendent who shall attach to the license in writing the 1 14 superintendent's record of the change and the date of the 1 15 change, which is authority for the operation of the business 1 16 under that license at the new place of business. 1 17 2. A person who proposes to purchase or otherwise acquire, 1 18 directly or indirectly, any of the outstanding shares of an 1 19 industrial loan company which would result in a change of 1 20 control of the industrial loan company, shall first apply in 1 21 writing to the superintendent for a certificate of approval 1 22 for the proposed change of control. The superintendent shall 1 23 grant the certificate if the superintendent is satisfied that 1 24 the person who proposes to obtain control of the industrial 1 25 loan company is qualified by character, experience, and 1 26 financial responsibility to control and operate the industrial 1 27 loan company in a sound and legal manner, and that the 1 28 interests of the thrift certificate holders, creditors, and 1 29 shareholders of the industrial loan company, and of the public 1 30 generally, shall not be jeopardized by the proposed change of 1 31 control. If a board member of the industrial loan company has 1 32 reason to believe any of the requirements of this subsection 1 33 have not been complied with, the board member shall promptly 1 34 report in writing such facts to the superintendent. If there 1 35 is any doubt as to whether a change in the ownership of the 2 1 outstanding shares is sufficient to result in control of the 2 2 industrial loan company, or to effect a change in the control 2 3 of the industrial loan company, such doubt shall be resolved 2 4 in favor of reporting the facts to the superintendent. 2 5 3. a. For purposes of this section, "control" means 2 6 control as defined in section 524.103. However, a change of 2 7 control does not occur when a majority shareholder of an 2 8 industrial loan company transfers the shareholder's shares of 2 9 the industrial loan company to a revocable trust, so long as 2 10 the transferor retains the power to revoke the trust and take 2 11 possession of such shares. 2 12 b. Notwithstanding the provisions of paragraph "a", a 2 13 change of control is deemed to occur two years after the death 2 14 of the majority shareholder, whether the shareholder's shares 2 15 of the industrial loan company are held in a revocable trust 2 16 or otherwise. 2 17 Sec. 2. Section 536A.19, Code 1995, is amended to read as 2 18 follows: 2 19 536A.19 RECEIVERSHIP – LIQUIDATION. 2 20 1. If the superintendentshall revokerevokes the license 2 21 of any industrial loan company the superintendent shall 2 22 promptly report the revocation to the attorney generalof Iowa2 23 who may apply to the district court of the county in which the 2 24 licensee had conducted its business for the appointment of a 2 25 receiver to take possession of the assets of the corporation 2 26 for the purpose of liquidating its affairs. The court shall 2 27 appoint the superintendent as receiver unless the 2 28 superintendent has tendered the appointment to the federal 2 29 deposit insurance corporation, in which case the court shall 2 30 appoint the federal deposit insurance corporation as receiver. 2 31 The affairs of the industrial loan company, after such 2 32 appointment, shall be under the direction of the court. The 2 33 attorney general shall represent the superintendent in all 2 34 proceedings connected with the receivership. 2 35 2. When an insured industrial loan company has ceased to 3 1 carry on its business, the superintendent may tender the 3 2 appointment as receiver of the insured industrial loan company 3 3 to the federal deposit insurance corporation. If the federal 3 4 deposit insurance corporation accepts the appointment as 3 5 receiver, the rights of depositors and other creditors of the 3 6 insured industrial loan company shall be determined in 3 7 accordance with the laws of this state. 3 8 3. The federal deposit insurance corporation as receiver 3 9 shall possess all of the powers, rights, and privileges of the 3 10 superintendent in connection with the liquidation. 3 11 4. If the federal deposit insurance corporation pays or 3 12 makes available for payment the insured deposit liabilities of 3 13 an insured industrial loan company, the federal deposit 3 14 insurance corporation, whether or not it has become receiver, 3 15 shall be subrogated to all rights of the owners of such 3 16 deposits against the insured industrial loan company in the 3 17 same manner and to the same extent as subrogation of the 3 18 federal deposit insurance corporation is provided for in 3 19 applicable federal law with respect to a national bank. 3 20 Sec. 3. Section 536A.22, Code 1995, is amended to read as 3 21 follows: 3 22 536A.22 THRIFT CERTIFICATES. 3 23 Licensed industrial loan companies may sell senior debt to 3 24 the general public in the form of thrift certificates, 3 25 installment thrift certificates, certificates of indebtedness, 3 26 promissory notes, or similar evidences of indebtedness if such 3 27 debt instruments are insured by a federal deposit insurance 3 28 agency. Licensees selling debt instruments on January 1, 3 29 1996, may continue to do so without obtaining federal deposit 3 30 insurance until there is a change of control of the licensee 3 31 which occurs on or after January 1, 1996. If there is a 3 32 change of control of a licensee on or after January 1, 1996, 3 33 and the licensee has sold senior debt instruments that are not 3 34 insured by a federal deposit insurance agency, such 3 35 outstanding senior debt instruments that do not have a stated 4 1 maturity date shall be redeemed within six months of the date 4 2 of the change of control. Such outstanding senior debt 4 3 instruments with stated maturity dates shall be redeemed on 4 4 their stated maturity dates. 4 5 PARAGRAPH DIVIDED. The total amount of such thrift 4 6 certificates, installment thrift certificates, certificates of 4 7 indebtedness, promissory notes, or similar evidences of 4 8 indebtedness outstanding and in the hands of the general 4 9 public shall not at any time exceed ten times the total amount 4 10 of capital, surplus, undivided profits, and subordinated debt 4 11 that gives priority to such securities of the issuing 4 12 industrial loan company. The sale of such securities is 4 13 subject to the provisions of chapter 502 and rules adopted by 4 14 the superintendent of banking pursuant to chapter 17A, and 4 15 shall not be construed to be exempt by reason of the 4 16 provisions of section 502.202, subsection 10, except that the 4 17 sale of thrift certificates or installment thrift certificates 4 18 which are redeemable by the holder either upon demand or 4 19 within a period not in excess of five years are exempt from 4 20 sections 502.201 and 502.602. 4 21 For purposes of this section, "control" means control as 4 22 defined in section 524.103. 4 23 EXPLANATION 4 24 This bill amends provisions relating to industrial loan 4 25 companies. The bill provides that a person who proposes to 4 26 purchase or otherwise acquire, directly or indirectly, any of 4 27 the outstanding shares of an industrial loan company which 4 28 would result in a change of control, must first apply to the 4 29 superintendent of banking for a certificate of approval. 4 30 The bill provides for the appointment of the superintendent 4 31 or the federal deposit insurance corporation as receiver of an 4 32 industrial loan company for purposes of liquidating the assets 4 33 of the industrial loan company. If the federal deposit 4 34 insurance corporation pays or makes available for payment the 4 35 insured deposit liabilities of such company, the federal 5 1 deposit insurance corporation is subrogated to the rights of 5 2 the owners of such deposits. 5 3 The bill also requires that an industrial loan company 5 4 which sells senior debt to the general public in the form of 5 5 thrift certificates, installment thrift certificates, 5 6 certificates of indebtedness, promissory notes, or similar 5 7 evidences of indebtedness shall insure the debt instruments by 5 8 a federal deposit insurance agency. An industrial loan 5 9 company selling such debt instruments on January 1, 1996, may 5 10 continue to do so without obtaining such insurance until there 5 11 is a change in control of the industrial loan company which 5 12 occurs on or after that date. The bill provides that if there 5 13 is a change in control after January 1, 1996, and the 5 14 industrial loan company has sold senior debt instruments which 5 15 are not insured by a federal deposit insurance agency, the 5 16 instruments which do not have a stated maturity date must be 5 17 redeemed within six months of the date of the change of 5 18 control and the instruments with stated maturity dates must be 5 19 redeemed on their stated maturity dates. 5 20 A person who violates a provision of this bill would also 5 21 be guilty of a serious misdemeanor as provided in section 5 22 536A.27. 5 23 LSB 4323SV 76 5 24 mj/jj/8.1
Text: SF02406 Text: SF02408 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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