Text: HSB00222 Text: HSB00224 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 12C.1, subsection 2, Code 2001, is 1 2 amended by adding the following new paragraphs: 1 3 NEW PARAGRAPH. g. "Public officer" means the person 1 4 authorized by and acting for a public body to deposit public 1 5 funds of the public body. 1 6 NEW PARAGRAPH. h. "Uninsured public funds" means any 1 7 amount of public funds of a public funds depositor on deposit 1 8 in an account at a financial institution that exceeds the 1 9 amount of public funds in that account that are insured by the 1 10 federal deposit insurance corporation or the national credit 1 11 union administration. 1 12 Sec. 2. Section 12C.2, Code 2001, is amended to read as 1 13 follows: 1 14 12C.2 APPROVAL – REQUIREMENTS. 1 15 The approval of a financial institution as a depository of 1 16 public funds for a public body shall be by written resolution 1 17 or orderwhichthat shall be entered of record in the minutes 1 18 of the approving board, andwhichthat shall distinctly name 1 19 each depository approved, and specify the maximum amountwhich1 20 that may be kept on deposit in each depository. 1 21 Sec. 3. Section 12C.6A, subsection 3, paragraph b, Code 1 22 2001, is amended to read as follows: 1 23 b. To receive challenges from any person to a financial 1 24 institution's continued eligibility to receivestatepublic 1 25 funds. 1 26 Sec. 4. Section 12C.19, subsection 1, Code 2001, is 1 27 amended to read as follows: 1 28 1. Securities pledged pursuant to this chapter may be 1 29 withdrawn on application of the pledging depository 1 30 institution, and as to securities pledged by a credit union, 1 31 upon approval of the public officer to whom the securities are 1 32 pledged, if the deposit of securities is no longer necessary 1 33 to comply with this chapter, or is required for collection by 1 34 virtue of its maturity or for exchange. The depository 1 35 institution shall replace securities so withdrawn for 2 1 collection or exchange. 2 2 Sec. 5. NEW SECTION. 12C.20 PUBLIC FUND REPORTS. 2 3 1. On or before the tenth day of November, February, May, 2 4 and August of each year, each bank shall calculate and certify 2 5 to the superintendent of banking in the form prescribed by the 2 6 superintendent the minimum amount of its uninsured public 2 7 funds that must at all times during the next calendar quarter 2 8 be secured by collateral pledged to the treasurer of state 2 9 under section 12C.22. 2 10 2. The superintendent may at any time make such 2 11 investigation as the superintendent deems necessary and 2 12 appropriate to verify the information provided to the 2 13 superintendent pursuant to subsection 1. 2 14 3. On or before the twentieth day of December, March, 2 15 June, and September of each year, the superintendent shall 2 16 notify the treasurer of state of the minimum amount of 2 17 collateral that must at all times be pledged by each bank to 2 18 the treasurer of state during the next calendar quarter. 2 19 Sec. 6. NEW SECTION. 12C.22 REQUIRED COLLATERAL – 2 20 BANKS. 2 21 1. A financial institution that is a bank shall pledge to 2 22 the treasurer of state the amount of collateral required under 2 23 subsection 2 by depositing the collateral before the first day 2 24 of each calendar quarter in restricted accounts at a financial 2 25 institution that has been designated by the treasurer of state 2 26 and that is not owned or controlled directly or indirectly by 2 27 the same depository or holding company. Each bank shall 2 28 execute as debtor and deliver to the treasurer of state a 2 29 security agreement and such other documents, instruments, and 2 30 agreements in form approved by the treasurer of state as are 2 31 required to grant to the treasurer of state, as secured party 2 32 in its capacity as agent for the depositors of all public 2 33 funds from time to time deposited in the bank, a perfected 2 34 security interest in the collateral described in the security 2 35 agreement. The security agreement shall among other 3 1 provisions contain all of the following provisions: 3 2 a. A security interest in the collateral is granted as 3 3 collateral for the obligation of the bank to repay all 3 4 uninsured public funds deposited in the bank. 3 5 b. The security interest in the collateral is also granted 3 6 as collateral security for the obligation of the bank to repay 3 7 the uninsured public funds deposited in a closed bank to the 3 8 extent required under section 12C.23A, subsection 3. 3 9 c. In the event that the collateral is liquidated and to 3 10 the extent that the proceeds are used to pay the claim of a 3 11 public funds depositor in the receivership of a closed bank, 3 12 the bank whose collateral is liquidated is subrogated to the 3 13 claim of the public funds depositor. 3 14 d. The treasurer of state is appointed as agent to assert 3 15 the claim on behalf of the bank as subrogee. Any amount 3 16 recovered by the treasurer by reason of the claim shall be 3 17 deposited in the state sinking fund for public deposits in 3 18 banks. 3 19 2. The amount of the required collateral shall not be less 3 20 than the total of the amount of uninsured public funds 3 21 deposits in the bank at the end of each of the preceding four 3 22 calendar quarters divided by four, times the following 3 23 amounts: 3 24 a. During the period beginning July 1, 2002, and ending 3 25 June 30, 2003, twenty percent. 3 26 b. During the period beginning July 1, 2003, and ending 3 27 June 30, 2004, thirty-five percent. 3 28 c. On and after July 1, 2004, fifty percent. 3 29 3. The amount of collateral pledged by a bank shall be 3 30 increased as required in order that the amount of collateral 3 31 pledged by the bank is at all times not less than the 3 32 applicable percent of uninsured public funds set forth in 3 33 subsection 2. The value of the collateral shall be its market 3 34 value. 3 35 4. The treasurer of state shall adopt rules pursuant to 4 1 chapter 17A to administer this section, including rules to do 4 2 the following: 4 3 a. Establish requirements for reporting by the 4 4 superintendent to the treasurer of state as to the minimum 4 5 collateral requirements for each bank. 4 6 b. Designate not less than four financial institutions 4 7 that may be custodians of collateral pledged under this 4 8 chapter. 4 9 c. Establish requirements for reporting to the treasurer 4 10 of state by a financial institution of the amount and value of 4 11 collateral held by the financial institution as custodian of 4 12 collateral for the uninsured public funds on deposit in a 4 13 bank. 4 14 d. Establish procedures for the valuation of collateral 4 15 that does not have a readily ascertainable market value. 4 16 e. Establish procedures for substituting different 4 17 collateral for collateral pledged under this section. 4 18 f. Establish administrative procedures necessary to 4 19 administer this chapter and other rules as may be necessary to 4 20 accomplish the purposes of this chapter. 4 21 g. Establish amounts and procedures for payment of fees to 4 22 cover the costs of administration of this chapter. 4 23 5. The collateral used to secure public deposits shall be 4 24 in one or more of the following forms acceptable to the 4 25 treasurer of state: 4 26 a. Direct obligations of, or obligations that are insured 4 27 or fully guaranteed as to principal and interest by, the 4 28 United States of America or an agency or instrumentality of 4 29 the United States of America, including obligations of 4 30 government-sponsored enterprises. 4 31 b. Public bonds or obligations of this state or a 4 32 political subdivision of this state, including obligations the 4 33 payment of which is dependent upon revenue from the specific 4 34 project or fund. 4 35 c. Public bonds or obligations of another state or a 5 1 political subdivision of another state whose bonds are rated 5 2 within the two highest classifications of prime as established 5 3 by at least one of the standard rating services approved by 5 4 the superintendent of banking by rule adopted pursuant to 5 5 chapter 17A. 5 6 d. Guarantees, loans, obligations, or nontransferable 5 7 letters of credit upon which the payment of principal and 5 8 interest is fully secured or guaranteed by the United States 5 9 of America or an agency or instrumentality including 5 10 government-sponsored enterprises of the United States of 5 11 America. 5 12 e. Letters of credit issued by a federal reserve bank or a 5 13 federal home loan bank. 5 14 f. Corporate bonds rated within the two highest 5 15 classifications of prime as established by at least one of the 5 16 standard rating services approved by the superintendent by 5 17 rule adopted pursuant to chapter 17A. 5 18 g. A bond of a surety company rated within the two highest 5 19 classifications established by at least one of the standard 5 20 rating services and approved by the superintendent by rule 5 21 adopted pursuant to chapter 17A. 5 22 h. Investments in an open-end management investment 5 23 company registered with the federal securities and exchange 5 24 commission under the federal Investment Company Act of 1940, 5 25 15 U.S.C. } 80(a), which is operated in accordance with 17 5 26 C.F.R. } 270.2a-7. Direct obligations of, or obligations that 5 27 are insured or fully guaranteed as to principal and interest 5 28 by the United States of America, which may be used to secure 5 29 public deposits under paragraph "a", include investments in an 5 30 investment company or investment trust registered under the 5 31 federal Investment Company Act of 1940, 15 U.S.C. } 80(a), the 5 32 portfolio of which is limited to the United States government 5 33 obligations described in paragraph "a", if the investment 5 34 company or investment trust takes delivery of the collateral 5 35 either directly or through an authorized custodian. 6 1 6. A bank may borrow collateral used for a pledge if the 6 2 collateral is free of any liens, security interests, claims, 6 3 or encumbrances. 6 4 Sec. 7. Section 12C.23A, Code 2001, is amended to read as 6 5 follows: 6 6 12C.23A PAYMENT OF LOSSES IN A BANK. 6 7 1. The acceptance of public funds and the pledging of 6 8 securities by a bank pursuant to this chapter constitutes 6 9consentall of the following: 6 10 a. Consent by the bank to the disposition of securities in 6 11 accordance with this section. 6 12 b. Consent by the bank to assessments by the treasurer of 6 13 state in accordance with this chapter. 6 14 c. Agreement by the bank to provide accurate information 6 15 and to otherwise comply with the requirements of this chapter. 6 16 2.TheA bank is liable for payment if the bank fails to 6 17 pay a check, draft, or warrant drawn bythe public officera 6 18 public funds depositor or to account for a check, draft, 6 19 warrant, order, or certificates of deposit, or any public 6 20 funds entrusted toitthe bank if, in failing to pay, the bank 6 21 acts contrary to the terms of an agreement between the bank 6 22 and the publicbody treasurerfunds depositor. The bank is 6 23 also liable to the treasurer of state for payment if the bank 6 24 fails to pay an assessment by the treasurer of state when the 6 25 assessment is due. 6 26 3. If a bank is closed by its primary regulatory 6 27 officials,the public bodyeach public funds depositor with 6 28 deposits in the bank shall notify the treasurer of state of 6 29 the amount of any claim within thirty days of the closing. 6 30 The treasurer of state shall implement the following 6 31 procedures: 6 32 a. In cooperation with the responsible regulatory 6 33 officials for the closed bank, the treasurer shall validate 6 34 the amount of public funds on deposit at thedefaultingclosed 6 35 bank and the amount of deposit insurance applicable to the 7 1 deposits. 7 2 b.The recovery of anyAny loss topublicthe public funds 7 3 depositors shallbegin with applicablebe satisfied first by 7 4 any federal deposit insurance, then by the sale or other 7 5 disposition of collateral pledged by the closed bank, then 7 6 from the assets of the closed bank.TheTo the extent 7 7 permitted by federal law, the priority of claims are those 7 8 established pursuant to section 524.1312, subsection 2. To 7 9 the extent permitted by federal law, in the distribution of an 7 10 insolvent federally chartered bank's assets, the order of 7 11 payment of liabilities, if its assets are insufficient to pay 7 12 in full all its liabilities for which claims are made, shall 7 13 be in the same order as for astate-charteredstate bank as 7 14 provided in section 524.1312, subsection 2. 7 15 c. The claim of a public funds depositor for purposes of 7 16 this section shall be the amount of the depositor's public 7 17 funds deposits plus interest to the date the funds are 7 18 distributed to the public funds depositor at the rate the bank 7 19 agreed to pay on the public funds reduced by the portion of 7 20 the public fundswhichthat is insured by federal deposit 7 21 insurance. 7 22 d. If the losstoof public funds is not covered by 7 23 federal deposit insurance and the proceeds of thefailed7 24 closed bank's assetswhichthat are liquidated within thirty 7 25 days of the closing of the bank are not sufficient to cover 7 26 the loss, then any further payments to cover the loss will 7 27 come from the state sinking fund for public deposits in banks. 7 28 If the balance in that sinking fund is inadequate to pay the 7 29 entire loss, then the treasurer shall obtain the additional 7 30 amount needed by making an assessment against other banks 7 31 whose public funds deposits exceed federal deposit insurance 7 32 coverage. A bank's assessment shall be determined by 7 33 multiplying the total amount of the remaining loss to all 7 34 public depositors in the closed bank by a percentage that 7 35 representsthatthe assessed bank's proportional share of the 8 1 total of uninsured public funds deposits held by all banks, 8 2 calculated in the manner provided by section 12C.22, 8 3 subsection 2, excluding the amount of uninsured public funds 8 4 held by the closed bank at the time of closing. Each bank 8 5 shall pay its assessment to the treasurer of state within 8 6 three business days after it receives notice of assessment. 8 7 e. If a bank fails to pay its assessment when due, the 8 8 treasurer of state shallinitiate a lawsuit to collectsatisfy 8 9 the assessment by liquidating collateral pledged by the bank 8 10 upon such notice as is required by chapter 554. If the 8 11 collateral pledged by the bank is inadequate to pay the 8 12 assessment, the treasurer of state shall make additional 8 13 assessments as may be necessary against other banks that hold 8 14 uninsured public funds to satisfy any unpaid assessment. Any 8 15 additional assessments shall be determined, collected, and 8 16 satisfied in the same manner as the first assessment except 8 17 that in calculating that amount of each such additional 8 18 assessment, the amount of uninsured public funds held by the 8 19 bank that fails to pay the assessment shall not be counted. 8 20 f. If a bank fails to pay its assessment when due and the 8 21 proceeds from liquidation of the collateral pledged by the 8 22 bank are not sufficient to pay the assessment against the 8 23 bank, the treasurer of state shall notify the superintendent 8 24 or the comptroller of the currency, as applicable, of the 8 25 failure to pay the assessment and shall initiate a lawsuit to 8 26 collect the amount of the assessment. If a bank is found to 8 27 have failed to pay the assessment as required by this 8 28paragraph,subsection and is ordered to pay the assessment, 8 29 the court shall also orderit tothat the bank paythe8 30assessment,court costs,and reasonable attorney fees based on 8 31 the amount of time the attorney general's office spent 8 32 preparing and bringing the action, and reasonable expenses 8 33 incurred by the treasurer of state.Idle balances in the fund8 34shall be invested by the treasurer with earnings credited to8 35the fund. Fees paid by banks for administration of this9 1chapter shall be credited to the fund and the treasurer may9 2deduct actual costs of administration from the fund.9 3e.g. Following collection of the assessments, thestate9 4 treasurer of state shall distribute funds to the public 9 5 depositors of thefailedclosed bank according to their 9 6 validated claims.If the assets available are less than the9 7total deposits, the treasurer shall prorate the claims. A9 8public depositorBy receiving payment under this section, a 9 9 public depositor shallassignbe deemed to have assigned to 9 10 the treasurer anyinterestrights the public depositor may 9 11 have in funds that subsequently become available to depositors 9 12 of thedefaultingclosed bank. 9 13 Sec. 8. Section 12C.24, Code 2001, is amended to read as 9 14 follows: 9 15 12C.24 LIABILITY. 9 16 When public deposits are made in accordance with this 9 17 chapter, a public body depositing public funds or its agents, 9 18 employees, officers, and board members are exempt from 9 19 liability for any loss resulting from the loss of a depository 9 20 in the absence of negligence, malfeasance, misfeasance, or 9 21 nonfeasance on the part of the official. If the treasurer of 9 22 statesells a depository'sliquidates collateralsecurities9 23 pledged by a bank, thedepositorybank shall within ten days 9 24 following receipt of notice from the treasurer of state 9 25 deposit additional collateral to meet required collateral 9 26 levels. 9 27 In making an assessment againstdepositoriesbanks holding 9 28 public funds as a result of afailurebank closure, the 9 29 treasurer of state is exempt from any liability for loss, 9 30 damage, or expense to adepository whichbank that has 9 31 accepted public funds. 9 32 Sec. 9. Section 12C.25, Code 2001, is amended by adding 9 33 the following new unnumbered paragraph after subsection 2: 9 34 NEW UNNUMBERED PARAGRAPH. Idle balances in the state 9 35 sinking fund for public deposits in banks shall be invested by 10 1 the treasurer of state with earnings credited to that fund. 10 2 Fees paid by banks for administration of this chapter shall be 10 3 credited to the state sinking fund for public deposits in 10 4 banks and the treasurer of state may deduct actual costs of 10 5 administration from that fund. 10 6 Sec. 10. NEW SECTION. 12C.27 FAILURE TO MAINTAIN 10 7 REQUIRED COLLATERAL. 10 8 If a bank fails to maintain the amount of collateral 10 9 subject to a perfected security interest held by the treasurer 10 10 of state required to comply with section 12C.22, subsections 2 10 11 and 3, the treasurer of state shall notify the bank of the 10 12 amount of additional collateral required. If the bank fails 10 13 to provide the additional required collateral within ten days 10 14 following the date the notice is given, the treasurer shall 10 15 notify the office of thrift supervision, the office of the 10 16 comptroller of the currency, or the superintendent as 10 17 applicable, who may take such action against the bank, its 10 18 board of directors and officers as permitted by law. 10 19 Sec. 11. NEW SECTION. 12C.28 ELECTRONIC REPORTING. 10 20 Any notice, information, report, or other communication 10 21 required by this chapter shall be deemed effective and in 10 22 compliance with this chapter if sent or given electronically 10 23 as provided in rules adopted pursuant to chapter 17A by the 10 24 superintendent or the treasurer of state. 10 25 Sec. 12. Section 524.213, Code 2001, is amended to read as 10 26 follows: 10 27 524.213 DUTIES AND POWERS OF SUPERINTENDENT. 10 28 The superintendent shall have general control, supervision 10 29 and regulation of all state banks and shall be charged with 10 30 the administration and execution of the laws of this state 10 31 relating to banks and banking and with such other duties and 10 32 responsibilities as are imposed upon the superintendent by the 10 33 laws of this state. The superintendent shall have power to 10 34 adopt and promulgate such rules and regulations as in the 10 35 superintendent's opinion will be necessary to properly and 11 1 effectively carry out and enforce the provisions of this 11 2 chapter and chapter 12C. Rules relating to the administration 11 3 of chapter 12C may include such procedures as the 11 4 superintendent deems necessary and appropriate to enable a 11 5 bank to attain compliance with the requirements of chapter 12C 11 6 and such penalties for noncompliance with chapter 12C as the 11 7 superintendent deems appropriate including, without 11 8 limitation, the sanctions provided under section 524.223. 11 9 Sec. 13. Section 524.223, Code 2001, is amended to read as 11 10 follows: 11 11 524.223 POWER OF SUPERINTENDENT TO ISSUE ORDERS. 11 12 1. Whenever it shall appear to the superintendent that a 11 13 state bank is engaging or has engaged, or the superintendent 11 14 has reasonable cause to believe that the state bank is about 11 15 to engage, in an unsafe or unsound practice in conducting the 11 16 business of such state bank, or is violating or has violated, 11 17 or the superintendent has reasonable cause to believe that the 11 18 state bank is about to violate, any provision of this chapter 11 19 or of any regulation adopted pursuant to this chapter, or any 11 20 condition imposed in writing by the superintendent in 11 21 connection with the approval of any matter required by this 11 22 chapter, or any written agreement entered into with the 11 23 superintendent, or any provision of chapter 12C or any rules 11 24 adopted pursuant to chapter 12C, the superintendent may issue 11 25 and serve upon the state bank a notice containing a statement 11 26 of the facts constituting the alleged violation or violations, 11 27 or the unsafe or unsound practice or practices, and fixing a 11 28 time and place at which a hearing will be held to determine 11 29 whether an order to cease and desisttherefromshould be 11 30 issued to the state bank. 11 31 2. If the state bank fails to appear at the hearing it 11 32 shall be deemed to have consented to the issuance of a cease 11 33 and desist order. In the event of such consent, or if upon 11 34 the record made at such hearing, the superintendent shall find 11 35 that any violation or unsafe or unsound practice specified in 12 1 the notice has been established, the superintendent may issue 12 2 and serve upon the bank an order to cease and desist from any 12 3 such violation or practice. Such order may require the state 12 4 bank and its directors, officers and employees to cease and 12 5 desist from any such violation or practice and, further, to 12 6 take affirmative action to correct the conditions resulting 12 7 from any such violation or practice. In addition, if the 12 8 violation or practice involves a failure to comply with 12 9 chapter 12C or any rules adopted pursuant to chapter 12C, the 12 10 superintendent may require that during the current calendar 12 11 quarter and the next succeeding eight calendar quarters that 12 12 the bank do one of the following: 12 13 a. Return to the depositors some or all uninsured public 12 14 funds. 12 15 b. Pledge up to an amount equal to one hundred ten percent 12 16 of the uninsured public funds held by the bank, calculated in 12 17 the same manner as provided by section 12C.20, subsection 1. 12 18 3. Any order issued pursuant to this section shall become 12 19 effective upon servicethereofof the order on the state bank 12 20 and shall remain effective except to such extent that it is 12 21 stayed, modified, terminated, or set aside by action of the 12 22 superintendent or of the district court of the county in which 12 23 the state bank has its principal place of business. 12 24 4. The superintendent may apply to the district court of 12 25 the county in which the state bank has its principal place of 12 26 business for the enforcement of any order pursuant to this 12 27 section and such court shall have jurisdiction and power to 12 28 order and require compliancetherewith. 12 29 Sec. 14. EFFECTIVE DATE AND APPLICABILITY. This Act takes 12 30 effect on July 1, 2001, with the following exceptions: 12 31 1. Certification to the superintendent under section 12 32 12C.20, subsection 1, shall not be required until February 10, 12 33 2002. 12 34 2. Notification by the superintendent to the treasurer of 12 35 state under section 12C.20, subsection 3, shall not be 13 1 required until June 20, 2002. 13 2 3. The pledging of collateral to the treasurer of state 13 3 pursuant to section 12C.22 shall not be required until July 1, 13 4 2002. 13 5 EXPLANATION 13 6 This bill primarily makes changes to Code chapter 12C, to 13 7 provide for collateral in relation to the deposit of public 13 8 funds. 13 9 The bill adds new definitions to Code section 12C.1 13 10 regarding "public officer" and "uninsured public funds". 13 11 The bill amends Code section 12C.2, to provide that 13 12 approval of a financial institution as a depository of public 13 13 funds for a public body shall be by written resolution or 13 14 order entered in the minutes of the approving board, with the 13 15 name of each depository and the maximum amount that may be 13 16 kept on deposit in each depository. 13 17 The bill amends Code section 12C.6A by deleting the word 13 18 "state", in referring to public funds. 13 19 The bill amends Code section 12C.19 by adding a reference 13 20 to securities pledged by a credit union. 13 21 The bill adds new Code section 12C.20, regarding public 13 22 fund reports to be filed periodically by banks with the 13 23 superintendent of banking regarding the amount of uninsured 13 24 public funds that must be secured by collateral pledged to the 13 25 treasurer of state during the next calendar quarter. The 13 26 superintendent may make investigation as necessary to verify 13 27 the information, and is required to notify the treasurer of 13 28 state regarding the collateral that must be pledged by each 13 29 bank during the calendar quarter. 13 30 The bill adds new Code section 12C.22, which addresses the 13 31 requirements regarding collateral that must be pledged by a 13 32 bank to the treasurer of state during each calendar quarter in 13 33 respect to the bank's uninsured public funds deposits. The 13 34 bill requires that the bank execute a security agreement, with 13 35 the treasurer of state as the secured party. The agreement 14 1 must contain at least the following provisions: (1) a 14 2 security interest in the collateral is granted as collateral 14 3 for the obligation of the bank to repay all uninsured public 14 4 funds deposited in the bank; (2) the security interest in the 14 5 collateral is also granted as collateral security for the 14 6 obligation of the bank to repay the uninsured public funds 14 7 deposited in a closed bank to the extent required under the 14 8 Code chapter 12C; (3) in the event that the collateral is 14 9 liquidated and the proceeds used to pay the claim of a public 14 10 funds depositor in the receivership of a closed bank, the bank 14 11 whose collateral is liquidated is subrogated to the claim of 14 12 the public funds depositor; (4) the treasurer of state is 14 13 appointed as agent to assert the claim on behalf of the bank 14 14 as subrogee; any amount recovered shall be deposited in the 14 15 sinking fund for public deposits in banks. 14 16 The total amount of required collateral will escalate 14 17 yearly for three years, beginning after the statute has been 14 18 in effect for one year. The minimum amount of collateral 14 19 shall be the total of the amount of uninsured public funds 14 20 deposits in the bank at the end of each of the four calendar 14 21 quarters, divided by four, times the following amounts: (1) 14 22 20 percent, from July 1, 2002, through June 30, 2003; (2) 35 14 23 percent, from July 1, 2003, through June 30, 2004; and (3) 50 14 24 percent, on and after July 1, 2004. Collateral is valued 14 25 according to market value. The treasurer of state is directed 14 26 to adopt rules related to pledging and reporting of 14 27 collateral. 14 28 New Code section 12C.22 also specifies the kinds of 14 29 collateral that may be used to secure public deposits, and 14 30 indicates that a bank may borrow collateral used for a pledge 14 31 if the collateral is free of any liens, security interest, 14 32 claims, or encumbrances. 14 33 The bill amends Code section 12C.23A, relating to the 14 34 payment of losses in a bank, to add references to the pledging 14 35 of collateral, and the disposition of collateral pledged by a 15 1 closed bank. Code section 12C.23A provides that loss to the 15 2 depositors of public funds shall be satisfied first by any 15 3 federal deposit insurance, then by the sale or other 15 4 disposition of collateral pledged by the closed bank, then 15 5 from the assets of the closed bank. If the assets are 15 6 insufficient to cover the loss, further payments come from the 15 7 state sinking fund for public deposits in banks. If that fund 15 8 is inadequate, the treasurer of state shall make an assessment 15 9 against other banks whose public funds deposits exceed federal 15 10 deposit insurance coverage. The bill changes some of the 15 11 language regarding the calculation of this assessment, and 15 12 inserts new language regarding what is done if a bank fails to 15 13 pay its assessment when due. 15 14 The bill amends Code section 12C.24, to refer to 15 15 liquidation of collateral pledged by a bank, and the deposit 15 16 of additional collateral within 10 days of notice from the 15 17 treasurer of state to meet required levels. 15 18 The bill adds a new paragraph to Code section 12C.25, to 15 19 require the treasurer of state to invest idle balances in the 15 20 state sinking fund for public deposits in banks, and to credit 15 21 earnings to that fund. Fees paid by banks for the 15 22 administration of Code chapter 12C shall be credited to the 15 23 state sinking fund, and the treasurer may deduct actual costs 15 24 of administration from the fund. This language previously was 15 25 contained in Code section 12C.23A. 15 26 The bill adds new Code section 12C.27 that addresses the 15 27 procedures when a bank fails to maintain the required 15 28 collateral levels. The treasurer of state is required to give 15 29 the bank notice and opportunity to pledge the additional 15 30 required collateral, or else the treasurer shall notify the 15 31 office of thrift supervision, the comptroller of the currency, 15 32 or the superintendent, as applicable, who may take such action 15 33 permitted by law. 15 34 The bill adds new Code section 12C.28, which allows any 15 35 notice, report, or other communication required by Code 16 1 chapter 12C to be deemed effective if sent or given 16 2 electronically, according to regulation by the superintendent 16 3 and the treasurer of state. 16 4 The bill amends Code section 524.213, regarding the powers 16 5 and duties of the superintendent, to specifically refer to 16 6 Code chapter 12C and related rules and regulations. The bill 16 7 also amends Code section 524.223, regarding the power of the 16 8 superintendent to issue orders, to specifically refer to Code 16 9 chapter 12C, and the right to require that a state bank return 16 10 some or all uninsured public funds, or pledge up to 110 16 11 percent of the uninsured public funds held by the bank. 16 12 The Act takes effect July 1, 2001, but certain portions of 16 13 the Act have special applicability provisions: (1) 16 14 certification to the superintendent under Code section 12C.20, 16 15 subsection 1, is not required until February 10, 2002; (2) 16 16 notification by the superintendent to the treasurer of state 16 17 under Code section 12C.20, subsection 3, is not required until 16 18 June 20, 2002; (3) the pledging of collateral to the treasurer 16 19 of state shall not be required until July 1, 2002. 16 20 LSB 2406HC 79 16 21 jj/gg/8
Text: HSB00222 Text: HSB00224 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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