Text: HSB00612                          Text: HSB00614
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House Study Bill 613

Bill Text

PAG LIN
  1  1    Section 1.  Section 533.2, Code 2003, is amended to read as
  1  2 follows:
  1  3    533.2  AMENDMENTS.
  1  4    1.  The articles Articles of incorporation or the bylaws
  1  5 may be amended by a favorable vote of a majority of the
  1  6 members present at a meeting, if that number constitutes a
  1  7 quorum and if the proposed amendment was contained in the
  1  8 notice of the meeting.
  1  9    2.  Bylaws may also be amended by a any of the following
  1 10 methods:
  1 11    a.  The favorable vote of a majority of the members of the
  1 12 board, or by present at a meeting, if that number constitutes
  1 13 a quorum and if the proposed amendment was contained in the
  1 14 notice of the meeting.
  1 15    b.  The favorable vote of a majority of the members of the
  1 16 board.
  1 17    c.  By a majority vote of members voting by mailed or
  1 18 electronic ballot, according to procedures specified by rule
  1 19 of the superintendent requiring at least twenty days' notice
  1 20 to all members, mailed ballots ensuring the confidentiality of
  1 21 voters, announcement to members of the results of the vote,
  1 22 and preservation of the ballots for a reasonable period of
  1 23 time according to procedures specified by rule of the
  1 24 superintendent, requiring at least twenty days' notice to all
  1 25 members.  All amendments must be approved by the
  1 26 superintendent before they become effective.  An announcement
  1 27 shall be made to members of the results of the vote.  Ballots
  1 28 shall be preserved for a reasonable period of time following
  1 29 the vote.
  1 30    d.  A combination of procedures as specified in paragraphs
  1 31 "a" and "c", whereby members are allowed to vote either in
  1 32 person at a meeting or by mailed or electronic ballot,
  1 33 according to procedures specified by rule of the
  1 34 superintendent.  If the proposed amendment receives a
  1 35 favorable majority of the total votes cast in person and by
  2  1 mailed ballot, the bylaws shall be amended.
  2  2    Sec. 2.  Section 533.4, subsection 25, Code 2003, is
  2  3 amended by striking the subsection and inserting in lieu
  2  4 thereof the following:
  2  5    25.  Exercise any of the powers conferred upon federal
  2  6 credit unions, other than trust powers, if not prohibited by
  2  7 state law.
  2  8    Sec. 3.  Section 533.4, Code 2003, is amended by adding the
  2  9 following new subsection:
  2 10    NEW SUBSECTION.  28.  Set off a member's accounts against
  2 11 any of the member's debts or liabilities owed the state credit
  2 12 union pursuant to an agreement entered into between the member
  2 13 and the credit union.  The credit union shall also have a lien
  2 14 on the shares and deposits of a member for any sum due the
  2 15 credit union from the member or for any loan endorsed by the
  2 16 member.
  2 17    Sec. 4.  Section 533.6, subsection 2, Code 2003, is amended
  2 18 to read as follows:
  2 19    2.  The superintendent may make or cause to be made an
  2 20 examination of each credit union whenever the superintendent
  2 21 believes such examination is necessary or advisable, but in no
  2 22 event less frequently than once during each eighteen-month
  2 23 twenty-four-month period.  A credit union designated as
  2 24 serving predominantly low-income members shall be reviewed
  2 25 during each examination to ensure that such credit union is
  2 26 continuing to meet the standards established by rule of the
  2 27 superintendent.  Each credit union and all of its officers and
  2 28 agents shall give to the representatives of the superintendent
  2 29 free access to all books, papers, securities, records, and
  2 30 other sources of information under their control.  A report of
  2 31 such examination shall be forwarded to the chairperson of each
  2 32 credit union within thirty days after the completion of the
  2 33 examination.  Within thirty days of the receipt of this
  2 34 report, a meeting of the directors shall be called to consider
  2 35 matters contained in the report and the action taken shall be
  3  1 set forth in the minutes of the board.  The superintendent may
  3  2 accept, in lieu of the examination of a credit union, an audit
  3  3 report conducted by a certified public accounting firm
  3  4 selected from a list of firms previously approved by the
  3  5 superintendent.  The cost of the audit shall be paid by the
  3  6 credit union.
  3  7    Sec. 5.  Section 533.8, Code 2003, is amended to read as
  3  8 follows:
  3  9    533.8  ELECTIONS.
  3 10    1.  At the organization meeting there shall be elected a
  3 11 board of directors of not less than nine members to hold
  3 12 office for such terms as the bylaws provide and until
  3 13 successors are elected and qualify.
  3 14    2.  At each annual meeting there shall be elected one
  3 15 member to fill each position vacated by reason of expiring
  3 16 terms or other causes.
  3 17    3.  Pursuant to rules adopted by the superintendent, state
  3 18 credit unions may allow members to vote on the election of
  3 19 directors via electronic means including, but not limited to,
  3 20 the internet or telephone.
  3 21    4.  A record of the names and addresses of the directors,
  3 22 officers and committee persons shall be filed with the
  3 23 superintendent within ten days following each election.
  3 24    5.  A state credit union wishing to maintain a board of
  3 25 directors of less than nine members may apply to the
  3 26 superintendent for permission to reduce the required number of
  3 27 directors to no fewer than seven members.  An application to
  3 28 reduce the required number of directors under this subsection
  3 29 must demonstrate both of the following:
  3 30    a.  The application is necessitated by a hardship or other
  3 31 special circumstance.
  3 32    b.  The lesser number of directors is in the best interest
  3 33 of the credit union and its members.
  3 34    Sec. 6.  Section 533.9, Code 2003, is amended to read as
  3 35 follows:
  4  1    533.9  DIRECTORS AND OFFICERS.
  4  2    1.  Within five days following the organization meeting and
  4  3 each annual meeting, the directors shall elect from their own
  4  4 number a chairperson of the board, a vice chairperson, a
  4  5 secretary, and a chief financial officer whose title shall be
  4  6 designated by the board of directors.
  4  7    2.  The board shall appoint a credit committee of not less
  4  8 than three members, and an auditing committee of not less than
  4  9 three members, and may also appoint alternate members of the
  4 10 credit committee.
  4 11    3.  Only a member of the board of directors or a member of
  4 12 the credit union may be appointed to the credit committee or
  4 13 to the auditing committee.
  4 14    4.  The board may appoint an executive committee to act on
  4 15 its behalf when designated for that purpose.
  4 16    5.  The duties and responsibilities of a director and of
  4 17 the board of directors have general shall include, but are not
  4 18 limited to, all of the following:
  4 19    a.  General management of the affairs of the state credit
  4 20 union including, but not limited to, the power to fix.
  4 21    b.  Setting the amount of the surety bond which that shall
  4 22 be required of all officers and employees handling money.
  4 23    c.  Periodic review of the original records of the state
  4 24 credit union, or comprehensive summaries prepared by the
  4 25 officers of the credit union, pertaining to loans, security
  4 26 interests, and investments.
  4 27    d.  Review of the adequacy of the state credit union's
  4 28 internal controls.
  4 29    e.  Periodic review of utilization of security measures.
  4 30    f.  Establishing education and training programs to ensure
  4 31 that the directors possess adequate knowledge to manage the
  4 32 affairs of the state credit union.
  4 33    6.  a.  Directors of a state credit union shall discharge
  4 34 the duties of their position in good faith and with that
  4 35 diligence, care, and skill which ordinarily prudent persons
  5  1 would exercise under similar circumstances in like positions.
  5  2    b.  The directors have a continuing responsibility to
  5  3 assure themselves that the state credit union is being managed
  5  4 according to law and that the practices and policies adopted
  5  5 by the board are being implemented.
  5  6    7.  Unless the bylaws provide otherwise, the board of
  5  7 directors may permit any and all directors to participate in
  5  8 all except one meeting per year of the board of directors
  5  9 through the use of any means of communication by which all
  5 10 directors participating in the meeting may simultaneously hear
  5 11 each other and communicate during the meeting.  A director
  5 12 participating in a meeting by this means is deemed to be
  5 13 present at the meeting.
  5 14    8.  a.  A director, committee member, officer, or employee
  5 15 of a state credit union shall not directly or indirectly
  5 16 participate in either the deliberation upon or the
  5 17 determination of any matter in which the director, committee
  5 18 member, officer, or employee has a direct or indirect
  5 19 interest.
  5 20    b.  For the purposes of this subsection, an interest may
  5 21 include, but is not limited to, a pecuniary or familial
  5 22 interest.
  5 23    Sec. 7.  Section 533.12, subsection 1, Code 2003, is
  5 24 amended to read as follows:
  5 25    1.  The capital of a credit union shall consist of the
  5 26 payments that have been made to it by the several members
  5 27 thereof on shares.  The credit union shall have a lien on the
  5 28 shares and deposits of a member for any sum due to the credit
  5 29 union from the member or for any loan endorsed by the member.
  5 30 A credit union may charge an entrance fee as may be provided
  5 31 by the bylaws.
  5 32    Sec. 8.  Section 533.19, Code 2003, is amended to read as
  5 33 follows:
  5 34    533.19  EXPULSION – WITHDRAWAL.
  5 35    1.  The board of directors may expel any member who has
  6  1 failed to do either of the following:
  6  2    a.  Carry out the member's obligations to the state credit
  6  3 union.
  6  4    b.  Comply with the state credit union's bylaws or
  6  5 policies.
  6  6    2.  A member may be expelled by a majority vote of the
  6  7 board of directors at a regular or special meeting of the
  6  8 board.
  6  9    a.  The An expelled member may request a hearing before the
  6 10 membership of the credit union.  A meeting of the membership
  6 11 shall be held within sixty days of the member's request.
  6 12    b.  The membership may, by majority vote at the membership
  6 13 meeting, reinstate the expelled member upon terms and
  6 14 conditions prescribed by it.
  6 15    3.  Any member may withdraw from the credit union at any
  6 16 time, but notice of withdrawal may be required as provided in
  6 17 this section.
  6 18    4.  All amounts paid on shares or as deposits of an
  6 19 expelled or withdrawing member, with any dividends or interest
  6 20 accredited thereto, to the date thereof, shall, after
  6 21 deducting all amounts due from the member to the credit union
  6 22 and an amount as necessary to honor outstanding share drafts
  6 23 drawn against accounts of the member, be paid to the member.
  6 24    5.  Upon expulsion or withdrawal of a member from a credit
  6 25 union, or at any other time, the credit union may require
  6 26 sixty days' notice of intention to withdraw shares and thirty
  6 27 days' notice of intention to withdraw deposits, except that a
  6 28 credit union shall not at any time require notice of
  6 29 withdrawal with respect to funds which are subject to
  6 30 withdrawal by share drafts.
  6 31    6.  Withdrawing or expelled members shall have no further
  6 32 rights in the credit union but are not, by such expulsion or
  6 33 withdrawal, released from any remaining liability to the
  6 34 credit union.
  6 35    Sec. 9.  NEW SECTION.  533.19A  SUSPENSION OR RESTRICTION
  7  1 OF SERVICES.
  7  2    1.  A state credit union may suspend or deny certain
  7  3 services to members who have performed any of the following
  7  4 actions:
  7  5    a.  Caused a loss to the state credit union.
  7  6    b.  Violated the membership agreement or any policy adopted
  7  7 by the board.
  7  8    c.  Been physically or verbally abusive to state credit
  7  9 union members or staff.
  7 10    2.  Members with suspended services may maintain a share
  7 11 account and continue to vote at annual and special meetings.
  7 12    Sec. 10.  Section 533.38, Code 2003, is amended by adding
  7 13 the following new subsection:
  7 14    NEW SUBSECTION.  12.  Establish one or more capital
  7 15 accounts in the same manner as if it were a federal credit
  7 16 union.  
  7 17                           EXPLANATION
  7 18    This bill makes several changes to Code chapter 533
  7 19 regarding credit unions.
  7 20    The bill modifies Code section 533.2 to provide for
  7 21 amendment of the bylaws via mailed or electronic ballot,
  7 22 ensuring confidentiality of voters.  The changes also allow
  7 23 the superintendent of credit unions to enact, by rule, a
  7 24 procedure that combines elements of the in-person, by mail,
  7 25 and electronic voting procedures specified in the bylaw
  7 26 amendment section.
  7 27    Similar additions are also made to Code section 533.8 to
  7 28 allow electronic voting by the board of directors of a credit
  7 29 union, including on the election of the directors.  An
  7 30 additional change to Code section 533.8 allows a board of
  7 31 directors to request the superintendent for permission to
  7 32 maintain a board of directors of less than nine, but at least
  7 33 seven, directors.
  7 34    Changes to Code section 533.9 also permit a board of
  7 35 directors to approve participation in most meetings via
  8  1 electronic means.  In addition, the modifications to Code
  8  2 section 533.9 list specific duties of directors, individually
  8  3 and for the board as a whole.  The Code section also adds a
  8  4 prohibition against conflicts of interest.
  8  5    The bill amends Code section 533.4, which relates to the
  8  6 powers of a state credit union.  A new subsection allows a
  8  7 credit union to perform setoffs on a member's account, if a
  8  8 member has agreed, and also gives the credit union a lien on
  8  9 member shares and deposits for sums due or for loans.  An
  8 10 amended subsection allows state credit unions to exercise
  8 11 powers conferred upon federal credit unions, other than trust
  8 12 powers, if not prohibited by state law.
  8 13    A change to Code section 533.6 requires examination of
  8 14 credit unions no less than once every 24 months, rather than
  8 15 every 18.
  8 16    Code section 533.19 adds specific reasons for expulsion of
  8 17 a credit union member, relating specifically to obligations to
  8 18 the credit union and to credit union bylaws and policies.
  8 19 Code section 533.19 is also divided into subsections and
  8 20 paragraphs.
  8 21    New Code section 533.19A is added to permit a state credit
  8 22 union to suspend or deny service when a member has caused a
  8 23 loss to the credit union, violated the membership agreement or
  8 24 other policy, or been physically or verbally abusive to other
  8 25 members or staff.  Such suspension of service does not take
  8 26 away the right to vote at meetings or the right to maintain a
  8 27 share account.
  8 28    Code section 533.38 is amended to allow a corporate central
  8 29 credit union to establish capital accounts like federal credit
  8 30 unions.  
  8 31 LSB 5090HC 80
  8 32 kk/pj/5.2
     

Text: HSB00612                          Text: HSB00614
Text: HSB00600 - HSB00699               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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