House File 405 - Introduced HOUSE FILE 405 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HF 261) A BILL FOR An Act relating to records requirements applicable to state 1 banks and state credit unions, and causes of action and 2 duties in relation thereto. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2099HV (3) 84 rn/nh

H.F. 405 Section 1. Section 524.221, subsection 1, unnumbered 1 paragraph 1, Code 2011, is amended to read as follows: 2 A state bank is not required to preserve its records for 3 a period longer than eleven seven years after the first 4 day of January of the year following the time of the making 5 or filing of such records, provided, however, that account 6 records showing unpaid balances due to depositors shall not 7 be destroyed. A copy of an original may be kept in lieu of 8 any such original record. For purposes of this subsection , a 9 copy includes any duplicate, rerecording or reproduction of 10 an original record from any photograph, photostat, microfilm, 11 microcard, miniature or microphotograph, computer printout, 12 electronically stored data or image, or other process which 13 accurately reproduces or forms a durable medium for accurately 14 and legibly reproducing an unaltered image or reproduction of 15 the original record. 16 Sec. 2. Section 524.221, subsections 2 and 3, Code 2011, are 17 amended to read as follows: 18 2. All causes of action, other than actions for relief on 19 the grounds of fraud or mistake, against a state bank based 20 upon a claim or claims founded on a written contract, or a 21 claim or claims inconsistent with an entry or entries in a 22 state bank record, made in the regular course of business, 23 shall be deemed to have accrued, and shall accrue for the 24 purpose of the statute of limitations one year after the breach 25 or failure of performance of a written contract, or one year 26 after the date of such entry or entries. No action founded 27 upon such a cause may be brought after the expiration of ten 28 six years from the date of such accrual. 29 3. The provisions of this section , insofar as applicable, 30 shall apply to the records of a national bank or a federally 31 chartered savings bank or a federally charted savings and loan 32 association . 33 Sec. 3. Section 533.322, subsection 1, Code 2011, is amended 34 to read as follows: 35 -1- LSB 2099HV (3) 84 rn/nh 1/ 3

H.F. 405 1. The superintendent may adopt rules regarding the 1 preservation of records and files of a state credit union or 2 any other person supervised or regulated by the superintendent. 3 A state credit union is not required to preserve its records 4 for a period longer than eleven seven years after the first 5 day of January of the year following the time of the making 6 or filing of such records. However, account records showing 7 unpaid balances due to depositors shall not be destroyed. 8 Sec. 4. Section 533.324, Code 2011, is amended to read as 9 follows: 10 533.324 Liability for destruction Preservation of records —— 11 statute of limitations . 12 1. With the exception of certain account records which shall 13 not be destroyed pursuant to section 533.322 , liability shall 14 not accrue against a state credit union for destroying records 15 if the records were maintained for the minimum time provided 16 for in this chapter . All causes of action, other than actions 17 for relief on the grounds of fraud or mistake, against a state 18 credit union based upon a claim or claims founded on a written 19 contract, or a claim or claims inconsistent with an entry or 20 entries in a state credit union record, made in the ordinary 21 course of business, shall be deemed to have accrued, and shall 22 accrue for the purpose of the statute of limitations one 23 year after the breach or failure of performance of a written 24 contract, or one year after the date of such entry or entries. 25 No action founded upon such a cause may be brought after the 26 expiration of six years from the date of such accrual. 27 2. In any cause or proceeding in which state credit union 28 records or files may be called in question or be demanded of 29 the state credit union, or any officer or employee of the state 30 credit union, a showing that such records or files have been 31 destroyed in accordance with the provisions of this chapter or 32 rules adopted pursuant to this chapter shall be a sufficient 33 excuse for the failure to produce them. 34 Sec. 5. Section 554.4406, subsection 2, Code 2011, is 35 -2- LSB 2099HV (3) 84 rn/nh 2/ 3

H.F. 405 amended to read as follows: 1 2. If the items are not returned to the customer, the person 2 retaining the items shall either retain the items or, if the 3 items are destroyed, maintain the capacity to furnish legible 4 copies of the items until the expiration of eleven seven years 5 after receipt of the items. A customer may request an item 6 from the bank that paid the item, and that bank must provide 7 in a reasonable time either the item or, if the item has been 8 destroyed or is not otherwise obtainable, a legible copy of the 9 item. 10 EXPLANATION 11 This bill reduces the period of time during which a state 12 bank or state credit union is required to preserve its records 13 from the currently required 11 years after the first day of 14 January of the year following the time of the making or filing 15 of the record, to seven years after the first day of January 16 of the year following the time of the making or filing of the 17 record. 18 The bill additionally adds a claim or claims founded on 19 a written contract to causes of action against a state bank 20 subject to statute of limitations provisions contained in Code 21 section 524.221, and reduces the statute of limitations period 22 from 10 to six years. The bill applies the provisions of the 23 Code section to federally chartered savings banks and federally 24 chartered savings and loan associations, and duplicates these 25 provisions in Code section 533.324, applicable to state credit 26 unions. 27 The bill also reduces from 11 to seven years the period of 28 time during which legible copies of items paid and retained 29 or destroyed with reference to a customer’s account must be 30 maintained by a bank. 31 -3- LSB 2099HV (3) 84 rn/nh 3/ 3