1. A credit union may provide its members with share draft accounts. Share draft means a negotiable draft which is payable upon demand and is used to withdraw funds from a share draft account. A share draft is an item for purposes of chapter 554, article 4. The term does not include a draft issued by a credit union for the transfer of funds between the issuing credit union and another credit union, a bank, a savings and loan association, or another depository financial institution.
2. A share draft account is an account that is a demand account from which a credit union has agreed that funds may be withdrawn by means of a share draft. A share draft account may bear interest or dividends as determined by the board of directors, provided that a credit union shall not pay interest or dividends on a share draft account at a rate which exceeds the maximum interest rate which a regulated financial institution is able to pay on comparable instruments as allowed by the depository institutions deregulatory committee.
3. A credit union may guarantee payment for a share draft if both the following conditions are met:
a. A specific guarantee authorization is obtained for the share draft from the credit union.
b. The guarantee authorization is immediately noted on the share draft account to prevent the withdrawal of funds needed to pay the guaranteed share draft.
4. A credit union may charge fees and penalties on share drafts and apply fees and penalties to the credit union's income in relation to share draft services.
5. The superintendent may adopt rules relating to share draft programs as necessary to administer this chapter.
[C79, § 533.39; C81, § 533.42]
83 Acts, ch 98, § 1, 3
Previous Section 533.40
Next Section 533.43
© 2003 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Tue Jan 28 13:52:42 CST 2003
URL: /DOCS/IACODE/2003/533/42.html
jhf