Senate Study Bill 3239
SENATE FILE
BY (PROPOSED COMMITTEE ON
COMMERCE BILL BY
CO=CHAIRPERSONS BEHN AND
WARNSTADT)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the regulation of state banks and bank holding
2 companies including attestation and publication requirements,
3 the removal and service of officers, directors, and employees,
4 and offers to purchase stock, and increasing civil penalties.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 5323SC 81
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PAG LIN
1 1 Section 1. Section 524.217, subsection 2, Code 2005, is
1 2 amended to read as follows:
1 3 2. The superintendent may furnish to the federal deposit
1 4 insurance corporation, the federal reserve system, the office
1 5 of the comptroller of the currency, the office of thrift
1 6 supervision, national credit union administration, the federal
1 7 home loan bank, the financial crimes enforcement network of
1 8 the federal department of the treasury, the United States
1 9 internal revenue service, and financial institution regulatory
1 10 authorities of other states, or to any official or supervising
1 11 examiner of such regulatory authorities, a copy of the report
1 12 of any or all examinations made of any state bank and of any
1 13 affiliate of a state bank.
1 14 Sec. 2. Section 524.220, subsection 1, Code 2005, is
1 15 amended to read as follows:
1 16 1. A state bank shall render a full, clear, and accurate
1 17 statement of its condition to the superintendent, in a format
1 18 prescribed by the superintendent, verified by the oath of an
1 19 officer and attested by the signatures of at least three of
1 20 the directors, or verified by the oath of two of its officers,
1 21 and attested by at least two of the directors. The
1 22 superintendent may, in the superintendent's discretion, use
1 23 any form of statement of condition that is used by the federal
1 24 deposit insurance corporation or the federal reserve system.
1 25 Sec. 3. Section 524.220, subsection 3, Code 2005, is
1 26 amended by striking the subsection.
1 27 Sec. 4. Section 524.312, subsection 3, Code 2005, is
1 28 amended to read as follows:
1 29 3. If a change in the location of the principal place of
1 30 business of a state bank is proposed, application for approval
1 31 of the superintendent shall be made as required by the
1 32 superintendent pursuant to this section. A change in location
1 33 of the principal place of business of a state bank, including
1 34 a change from one municipal corporation to another municipal
1 35 corporation within an urban complex, requires an amendment to
2 1 the articles of incorporation pursuant to sections 524.1502,
2 2 524.1504, and 524.1506. A state bank seeking approval of a
2 3 change of location pursuant to this subsection shall publish
2 4 once each week for two consecutive weeks a notice of the
2 5 proposed change of location in a newspaper of general
2 6 circulation in the municipal corporation or unincorporated
2 7 area in which the state bank has its principal place of
2 8 business, or if there is none, in a newspaper of general
2 9 circulation in the county, or in a county adjoining the
2 10 county, in which the state bank has its principal place of
2 11 business, and in the municipal corporation in which it seeks
2 12 to establish its principal place of business, or if there is
2 13 none, in a newspaper of general circulation in the county, or
2 14 in a county adjoining the county, in which the municipal
2 15 corporation is located. The notices notice shall be published
2 16 within thirty days after the application to the superintendent
2 17 for approval of the change in location is accepted for
2 18 processing. The notice shall set forth the name of the state
2 19 bank, the present location of its principal place of business,
2 20 the location to which it proposes to move its principal place
2 21 of business, and the date upon which the application was
2 22 accepted for processing by the superintendent.
2 23 Sec. 5. Section 524.606, subsection 2, unnumbered
2 24 paragraph 1, Code 2005, is amended to read as follows:
2 25 If, in the opinion of the superintendent, any director of a
2 26 state bank or bank holding company has violated any law
2 27 relating to such state bank or bank holding company or has
2 28 engaged in unsafe or unsound practices in conducting the
2 29 business of such state bank or bank holding company, the
2 30 superintendent may cause notice to be served upon such
2 31 director, to appear before the superintendent to show cause
2 32 why the director should not be removed from office. A copy of
2 33 such notice shall be sent to each director of the state bank
2 34 or bank holding company affected, by registered or certified
2 35 mail. If, after granting the accused director a reasonable
3 1 opportunity to be heard, the superintendent finds that the
3 2 director violated any law relating to such state bank or bank
3 3 holding company or engaged in unsafe or unsound practices in
3 4 conducting the business of such state bank or bank holding
3 5 company, the superintendent, in the superintendent's
3 6 discretion, may order that such director be removed from
3 7 office, and that such director be prohibited from serving in
3 8 any capacity in any other bank, bank holding company, bank
3 9 affiliate, trust company, or an entity licensed under chapter
3 10 533A, 533C, 533D, 535B, 536, or 536A. A copy of the order
3 11 shall be served upon such director and upon the state bank or
3 12 bank holding company of which the person is a director at
3 13 which time the person shall cease to be a director of the
3 14 state bank or bank holding company. The resignation,
3 15 termination of employment, or separation of such director,
3 16 including a separation caused by the closing of the state bank
3 17 or bank holding company at which the person serves as a
3 18 director, does not affect the jurisdiction and authority of
3 19 the superintendent to cause notice to be served and proceed
3 20 under this subsection against the director, if the notice is
3 21 served before the end of the six=year period beginning on the
3 22 date the director ceases to be a director with the bank.
3 23 Sec. 6. Section 524.707, subsection 2, Code 2005, is
3 24 amended to read as follows:
3 25 2. Section 524.606, subsection 2, which provides for the
3 26 removal of directors by the superintendent, shall have equal
3 27 application to officers and employees of a bank, bank holding
3 28 company, bank affiliate, or trust company.
3 29 Sec. 7. Section 524.1601, Code 2005, is amended to read as
3 30 follows:
3 31 524.1601 PENALTIES AND CRIMINAL PROVISIONS APPLICABLE TO
3 32 DIRECTORS, OFFICERS, AND EMPLOYEES OF STATE BANKS AND BANK
3 33 HOLDING COMPANIES.
3 34 1. A director, officer, or employee of a state bank or
3 35 bank holding company who willfully violates any of the
4 1 provisions of subsection 4 of section 524.612, section
4 2 524.613, subsection 2 of section 524.706, insofar as such
4 3 subsection incorporates subsection 4 of section 524.612, or
4 4 section 524.710, shall be guilty of a serious misdemeanor,
4 5 plus, in the following circumstances, an additional fine or
4 6 fines equal to:
4 7 a. The amount of money or the value of the property which
4 8 the director, officer, or employee received for procuring, or
4 9 attempting to procure, a loan, extension of credit, or
4 10 investment by the state bank or bank holding company, upon
4 11 conviction of a violation of subsection 1 of section 524.613,
4 12 or of subsection 1 of section 524.710.
4 13 b. The amount by which the director's, officer's, or
4 14 employee's deposit account in the state bank or bank holding
4 15 company is overdrawn, upon conviction of a violation of
4 16 subsection 2 of section 524.613, or of subsection 2 of section
4 17 524.710.
4 18 c. The amount of any profit which the director, officer,
4 19 or employee receives on the transaction, upon conviction of a
4 20 violation of subsection 4 of section 524.612, or of subsection
4 21 2 of section 524.706, insofar as each applies to purchases
4 22 from and sales to a state bank or bank holding company upon
4 23 terms more favorable to such director, or officer, or employee
4 24 than those offered to other persons.
4 25 d. The amount of profit, fees or other compensation
4 26 received, upon conviction of a violation of section 524.710,
4 27 subsection 1, paragraph "b".
4 28 2. A director or officer who willfully makes or receives a
4 29 loan in violation of subsection 1 of section 524.612, or
4 30 subsection 1 of section 524.706, shall be guilty of a serious
4 31 misdemeanor and shall be subject to an additional fine equal
4 32 to that amount of the loan in excess of the limitation imposed
4 33 by such subsections, and shall be forever disqualified from
4 34 acting as a director or officer of any state bank or bank
4 35 holding company. For the purpose of this subsection, amounts
5 1 which are treated as obligations of an officer or director
5 2 pursuant to subsection 5 of section 524.612, shall be
5 3 considered in determining whether the loan or extension of
5 4 credit is in violation of subsection 1 of section 524.612 and
5 5 subsection 1 of section 524.706.
5 6 3. A director, officer, or employee of a state bank or
5 7 bank holding company who willfully makes or receives a loan or
5 8 extension of credit of funds held by the state bank or bank
5 9 holding company as fiduciary, in violation of subsection 4 of
5 10 section 524.1002, shall be guilty of a serious misdemeanor and
5 11 shall be subject to a further fine equal to the amount of the
5 12 loan or extension of credit made in violation of subsection 4
5 13 of section 524.1002, and shall be forever disqualified from
5 14 acting as a director, officer, or employee of any state bank
5 15 or bank holding company.
5 16 4. A director, officer, or employee of a state bank or
5 17 bank holding company who willfully violates, or participates
5 18 in the violation of, section 524.814, or section 524.819,
5 19 shall be guilty of a serious misdemeanor.
5 20 Sec. 8. Section 524.1602, unnumbered paragraph 1, Code
5 21 2005, is amended to read as follows:
5 22 The superintendent may impose a penalty on a state bank of
5 23 up to one hundred thousand dollars for each day:
5 24 Sec. 9. Section 524.1603, subsection 2, Code 2005, is
5 25 amended to read as follows:
5 26 2. The superintendent may impose a penalty on a state bank
5 27 of up to one hundred thousand dollars for each day that it
5 28 violates the provisions of section 524.1201.
5 29 Sec. 10. Section 524.1803, Code 2005, is repealed.
5 30 EXPLANATION
5 31 This bill relates to the regulation of state banks. The
5 32 bill permits the superintendent to provide copies of
5 33 examinations or reports to the financial crimes enforcement
5 34 network of the U.S. department of the treasury and the
5 35 internal revenue service. The bill changes the verification
6 1 and attestation requirements for reports to the superintendent
6 2 by requiring two officers to verify and at least two directors
6 3 to attest to the report rather than allowing an alternative
6 4 verification by one officer and attestation by at least three
6 5 directors. The bill repeals the requirement that a state bank
6 6 publish the bank's statement of condition in a local
6 7 newspaper. The bill reduces the number of times a state bank
6 8 must publish a notice of a proposed change of location of its
6 9 principal place of business in a local newspaper.
6 10 The bill provides the superintendent with authority to
6 11 remove a director, officer, or employee of a bank holding
6 12 company for engaging in unsafe or unsound practices in
6 13 conducting the business of the bank holding company and
6 14 prohibit the director from serving in any capacity for another
6 15 entity regulated by the superintendent. The bill makes the
6 16 criminal provisions of Code chapter 524 applicable to a
6 17 director, officer, or employee of a bank holding company.
6 18 The bill increases the penalty the superintendent may
6 19 impose on a state bank from $100 per day to $1,000 per day.
6 20 The bill repeals the provision restricting the ability of a
6 21 bank holding company to purchase stock of a state or national
6 22 bank.
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