House Study Bill 628 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF COMMERCE/CREDIT UNION DIVISION BILL) A BILL FOR An Act relating to credit unions, including methods of 1 voting by credit union members and the board of directors, 2 electronic communications to certain credit union members, 3 the composition of the board of directors, assessment of 4 fees for examination and supervision, limited negotiated 5 disclosures of certain confidential information, treatment 6 of ownership shares, and superintendent management 7 authority, and making penalties applicable. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 5194DP (13) 84 rn/rj

S.F. _____ H.F. _____ Section 1. Section 533.108, subsection 1, Code 2011, is 1 amended to read as follows: 2 1. a. Records of the credit union division are public 3 records subject to the provisions of chapter 22 , except as 4 otherwise provided in this chapter . 5 b. Papers, documents, writings, reports, reports of 6 examinations and other information relating specifically to the 7 supervision and regulation of a specific state credit union or 8 of other persons by the superintendent pursuant to the laws of 9 this state are not public records and shall not be open for 10 examination or copying by the public or for examination or 11 publication by the news media. 12 c. The superintendent or an employee of the credit 13 union division shall not disclose such information relating 14 specifically to the supervision and regulation of a specific 15 state credit union or of other persons in any manner to any 16 person other than the person examined, except as otherwise 17 authorized by this section or section 533.113 or 533.308 . 18 d. Notwithstanding the prohibition on disclosure pursuant to 19 paragraph “c” , the superintendent or an employee of the credit 20 union division may disclose information relating specifically 21 to the supervision and regulation of a specific state credit 22 union or of other persons if the credit union or other person 23 consents in writing to the disclosure and the persons to 24 whom the disclosures are made are subject to, or agree to 25 comply with, standards of confidentiality comparable to those 26 contained in this chapter. 27 Sec. 2. Section 533.112, Code 2011, is amended to read as 28 follows: 29 533.112 Annual and individual fees —— examination fees —— 30 delinquencies. 31 1. Each state credit union shall pay an annual fee for 32 examination and supervision as determined by the superintendent 33 based on the actual cost of operating the credit union 34 division. 35 -1- LSB 5194DP (13) 84 rn/rj 1/ 18

S.F. _____ H.F. _____ a. The cost of operating the credit union division shall 1 include but not be limited to costs and expenses for salaries 2 and benefits, expenses and travel for employees, office 3 facilities, supplies, equipment, and administrative costs and 4 expenses incurred in the discharge of the duties imposed on the 5 superintendent under this chapter. 6 b. (1) The cost of operating the credit union division 7 shall also include but not be limited to the costs incurred due 8 to additional time and other division resources required for 9 any of the following: 10 (a) Performing services for the credit union that are 11 customarily performed by the credit union. 12 (b) Performing services related to a particular examination 13 that exceed estimates for an individual credit union’s 14 examination based on factors including but not limited to the 15 asset size of the credit union, the complexity of transactions 16 to be examined, and the examination history of the credit 17 union. 18 (2) An individual fee assessment for such costs incurred 19 under this paragraph “b” may be made in addition to a credit 20 union’s annual fee. 21 c. The In establishing the structure of the fee schedule, 22 the superintendent shall consider recommendations from the 23 review board and from state credit unions in determining the 24 amount of the annual fee . 25 d. The annual fee may be paid in one or more installments, 26 as provided by rule by the superintendent. 27 2. Each state credit union, corporation, credit union 28 service organization, or other person subject to an examination 29 pursuant to section 533.113 shall pay an examination fee as 30 determined by the superintendent, which shall reflect but not 31 be limited to the time required for the examination and the 32 costs of the examination . The superintendent shall establish 33 by rule an examination fee schedule. 34 a. The costs of the examination shall include but not 35 -2- LSB 5194DP (13) 84 rn/rj 2/ 18

S.F. _____ H.F. _____ be limited to costs and expenses for salaries and benefits, 1 expenses and travel for employees, office facilities, supplies, 2 equipment, and administrative costs and expenses incurred in 3 the discharge of duties imposed upon the superintendent under 4 this chapter. 5 b. The examination fee shall be due within thirty days of 6 presentation of the fee statement to the corporation, credit 7 union service organization, or other person examined by the 8 division. 9 3. In addition to the annual fee and examination fee 10 assessed pursuant to this section, the division may also assess 11 a credit union, credit union service organization, corporation, 12 or other person subject to an examination pursuant to section 13 533.133 for the expense of accountants, investigators, and 14 other experts reasonably necessary to assist in the conduct of 15 the examination, pursuant to section 533.113, subsection 1. 16 4. a. Failure of a state credit union, corporation, credit 17 union service organization, or other person to pay a fee 18 pursuant to subsection 1 , or 2 , or 3 shall result in the fee 19 being considered delinquent and a penalty equal to five percent 20 of the original fee may be assessed for each day or part of a 21 day the payment remains delinquent. 22 b. A fee delinquency under this subsection by a corporation, 23 credit union service organization, or other person may result 24 in the superintendent collecting the delinquent fee and penalty 25 from the state credit union owning shares or investments or 26 having business transactions or a relationship with such 27 corporation, credit union service organization, or other 28 person. 29 c. A fee delinquency under this subsection may also 30 constitute grounds for revocation of the certificate of 31 approval of the credit union to operate in this state. 32 Sec. 3. Section 533.113, subsection 6, paragraph e, Code 33 2011, is amended by striking the paragraph. 34 Sec. 4. Section 533.201, subsections 7 and 8, Code 2011, are 35 -3- LSB 5194DP (13) 84 rn/rj 3/ 18

S.F. _____ H.F. _____ amended to read as follows: 1 7. Articles of incorporation may be amended by a favorable 2 vote of a majority of the members present at a meeting, if that 3 number constitutes a quorum and if the proposed amendment was 4 contained in the notice of the meeting. 5 8. Bylaws Articles of incorporation or bylaws may be amended 6 by any of the following methods , upon a favorable vote of a 7 majority of the board of directors selecting the method of 8 voting : 9 a. The favorable vote of a majority of the members present 10 at a meeting, if that number constitutes a quorum and if the 11 proposed amendment was contained in the notice of the meeting. 12 b. The favorable vote of a majority of the members of the 13 board. 14 c. By a majority vote of members voting by mailed or 15 electronic ballot, ensuring the confidentiality of voters votes 16 remain confidential and secret from all interested parties, and 17 that each member is only allowed to vote once , according to 18 procedures specified by rule of the superintendent , requiring 19 at least twenty days’ notice to all members or as specified 20 in the bylaws . An announcement shall be made to members of 21 the results of the vote. Ballots shall be preserved for a 22 reasonable period of time following the vote. 23 d. A combination of procedures as specified in paragraphs 24 “a” and “c” , whereby members are allowed to vote either 25 in person at a meeting or by mailed or electronic ballot, 26 according to procedures specified by rule of the superintendent 27 or as specified in the bylaws . 28 8. If the proposed amendment receives a favorable majority 29 of the total votes cast in person and by mailed or electronic 30 ballot under the method of voting selected under subsection 7 , 31 the articles of incorporation or bylaws shall be are amended as 32 proposed . Notice shall be given to members of the results of 33 the vote. Ballots of members shall be preserved for at least 34 sixty days after the results are tallied and notice given to 35 -4- LSB 5194DP (13) 84 rn/rj 4/ 18

S.F. _____ H.F. _____ members, and until any challenge is resolved. 1 Sec. 5. Section 533.203, Code 2011, is amended to read as 2 follows: 3 533.203 Fiscal year —— membership meetings —— voting by 4 membership —— notice . 5 1. The fiscal year of all state credit unions shall end 6 December 31. 7 2. Annual meetings shall be held, and special meetings may 8 be held, in the manner indicated in the bylaws. 9 a. At all meetings, a A member shall have one vote 10 regardless of the number of or class of shares held by the 11 member. 12 b. There shall be no voting by proxy. 13 c. A member other than a natural person may cast a single 14 vote through a delegated agent. 15 3. a. The majority of members present at any meeting may 16 vote to modify, amend, or reverse any act of the board of 17 directors or instruct the board to take action not inconsistent 18 with the articles, bylaws, or this chapter . 19 b. In order to be binding upon the board of directors, any 20 action taken by the membership to modify, amend, or reverse 21 an act of the board, or to instruct the board to take action, 22 requires an affirmative vote of a majority of all eligible 23 members obtained by submitting the modification, amendment, or 24 reversal to the members by mail or electronic ballot, pursuant 25 to rules adopted by the superintendent. When a vote of the 26 membership is required under the provisions of this chapter, 27 the board of directors, by a favorable vote of the majority 28 of the board, shall select one of the following methods for 29 conducting that vote, unless a procedure for that vote is 30 otherwise specified: 31 (1) The favorable vote of a majority of the members present 32 at a meeting, if that number constitutes a quorum and if the 33 proposed vote was contained in the notice of the meeting. 34 (2) By a majority vote of members voting by mailed or 35 -5- LSB 5194DP (13) 84 rn/rj 5/ 18

S.F. _____ H.F. _____ electronic ballot according to procedures specified by rule of 1 the superintendent or as specified in the bylaws. 2 (3) A combination of procedures as specified in 3 subparagraphs (1) and (2), according to procedures specified by 4 rule of the superintendent or as specified in the bylaws. 5 b. Notice shall be given to members of the results of the 6 vote. Ballots of members shall be preserved for at least sixty 7 days after the results are tallied and notice given to members, 8 and until any challenge is resolved. 9 4. Votes of the membership conducted in accordance with 10 this chapter shall ensure that votes remain confidential and 11 secret from all interested parties, and that each member is 12 only allowed to vote once. 13 5. When notice to members is required under the provisions 14 of this chapter, the board of directors may satisfy the 15 notice requirement by sending the notice electronically to 16 those members who have exercised an option to receive notices 17 electronically. 18 6. Credit unions may send account statements and other 19 communications electronically to those members who have 20 exercised an option to receive communications electronically. 21 Sec. 6. NEW SECTION . 533.203A Vote to modify, amend, or 22 reverse act of board of directors —— instruction to take action. 23 1. The majority of members present at any meeting may vote 24 to modify, amend, or reverse any act of the board of directors 25 or instruct the board to take action not inconsistent with the 26 articles, bylaws, or this chapter. 27 2. In order to be binding upon the board of directors, any 28 action taken by the membership to modify, amend, or reverse 29 an act of the board, or to instruct the board to take action, 30 requires an affirmative vote of a majority of all eligible 31 members obtained by submitting the modification, amendment, 32 reversal, or instruction to the members for a vote, pursuant to 33 the provisions of section 533.203. 34 Sec. 7. Section 533.204, Code Supplement 2011, is amended 35 -6- LSB 5194DP (13) 84 rn/rj 6/ 18

S.F. _____ H.F. _____ to read as follows: 1 533.204 Election of board. 2 1. At the organizational meeting, and at each annual meeting 3 after initial organization, a board of directors of not less 4 than nine members shall be elected to hold office for such . 5 The board shall consist of at least seven members, but in every 6 instance shall be composed of an odd number of directors. The 7 directors shall serve staggered terms of three years, as the 8 bylaws provide and , so that an approximately equal number of 9 terms expire at each annual meeting. A director shall serve 10 until successors are a successor is elected and qualified. 11 2. At each annual meeting, one member shall be elected to 12 fill each position vacated by reason of an expiring term or 13 other cause. 14 3. Pursuant to rules adopted by the superintendent, 15 state credit unions may The board of directors shall allow 16 members to vote on the election of directors via electronic 17 means including but not limited to the internet or telephone 18 according to the provisions of section 533.203 . 19 4. A record of the names and addresses of the directors, 20 officers, and committee persons shall be filed with the 21 superintendent within ten days following each election or any 22 other change in the directors, officers, or committee persons . 23 5. a. A state credit union wishing to maintain a board 24 of directors of less than nine members may apply to the 25 superintendent for permission to reduce the required number of 26 directors. An application to reduce the required number of 27 directors under this subsection must demonstrate both of the 28 following: 29 (1) The application is necessitated by a hardship or other 30 special circumstance. 31 (2) A lesser number of directors is in the best interest of 32 the state credit union and its members. 33 b. In no event shall the superintendent allow a state credit 34 union to maintain fewer than seven directors on a state credit 35 -7- LSB 5194DP (13) 84 rn/rj 7/ 18

S.F. _____ H.F. _____ union board. 1 Sec. 8. Section 533.205, subsection 2, paragraph b, Code 2 Supplement 2011, is amended to read as follows: 3 b. The board may also appoint alternate members of the 4 credit committee or the auditing committee . 5 Sec. 9. Section 533.208, subsection 3, Code 2011, is amended 6 to read as follows: 7 3. Suspend by unanimous majority vote any officer, 8 director, or member of the auditing committee and call the 9 members together to act on the suspension , if the auditing 10 committee deems the action to be necessary to the proper 11 conduct of the state credit union. The suspension shall be 12 put to a vote of the membership, according to the provisions 13 of section 533.203. The members at the meeting may vote to 14 sustain the suspension and remove the officer, director, or 15 member permanently or may vote to reinstate the officer, 16 director, or member. 17 Sec. 10. Section 533.210, subsections 3, 4, and 6, Code 18 2011, are amended to read as follows: 19 3. Any member may withdraw from the state credit union 20 at any time, but advance notice of withdrawal of shares or 21 deposits may be required as provided in this section . 22 4. After deducting all amounts due from the member to 23 the state credit union and the amount necessary to honor 24 outstanding share drafts drawn against accounts of the member, 25 all amounts paid on shares or as deposits of an expelled or 26 withdrawing withdrawn member, along with accrued dividends and 27 interest to the date of expulsion or withdrawal, shall be paid 28 to that member. 29 6. Withdrawing or expelled Expelled or withdrawn members 30 shall have no further rights in the state credit union. 31 However, withdrawing or expelled or withdrawn members shall not 32 be released from any remaining liability to the state credit 33 union because of the expulsion or withdrawal. 34 Sec. 11. Section 533.213, subsection 3, paragraph f, Code 35 -8- LSB 5194DP (13) 84 rn/rj 8/ 18

S.F. _____ H.F. _____ 2011, is amended to read as follows: 1 f. Sell all or part of its assets to another corporate 2 central credit union and assume the liabilities of a selling 3 corporate central credit union if the action is pursuant to a 4 plan agreed upon by a majority of the board of directors and, 5 in the case of the sale of all of its assets, the affirmative 6 vote of a majority of its members either by mail or in person at 7 a meeting called for that purpose according to the provisions 8 of section 533.203 . 9 Sec. 12. Section 533.302, Code 2011, is amended to read as 10 follows: 11 533.302 Capital. 12 1. The capital of a credit union shall consist of the 13 payments that have been made to it by the several members 14 thereof on shares. A credit union may charge an entrance fee 15 as may be provided by the bylaws. 16 2. A credit union may establish an equity share having a 17 par value not to exceed one hundred dollars which shall be 18 a part of the capital of the credit union and shall not be 19 withdrawn or transferred except upon termination of expulsion 20 or withdrawal from membership in the credit union , as provided 21 in section 533.210 . 22 3. At the option of the credit union, the equity share may 23 earn a dividend and may be insured. 24 Sec. 13. Section 533.307, Code 2011, is amended to read as 25 follows: 26 533.307 Account insurance. 27 Except as provided in section 533.302, subsection 2 3 , a 28 credit union organized under this chapter , as a condition 29 of maintaining its privilege of organization, shall acquire 30 and maintain insurance to protect each shareholder and each 31 depositor against loss of funds held on account by the credit 32 union. The insurance shall be obtained from the national 33 credit union administrator or from some other share guarantor 34 or insurance plan approved by the Iowa commissioner of 35 -9- LSB 5194DP (13) 84 rn/rj 9/ 18

S.F. _____ H.F. _____ insurance and the superintendent, provided that each credit 1 union shall acquire deposit insurance from the appropriate 2 agency of the federal government. 3 Sec. 14. Section 533.308, subsection 2, Code 2011, is 4 amended to read as follows: 5 2. The superintendent may furnish to any official of an 6 insurance plan by which the accounts of a state credit union 7 are insured or by which its employees and officials are bonded, 8 any information relating to examinations, investigations, 9 and reports of the status of that state credit union or 10 its employees and officials for the purpose of facilitating 11 the availability or continuation of the insurance or bond 12 of the state credit union or resolution of a claim. The 13 superintendent and the insurance company shall, whenever 14 possible, execute a confidentiality agreement regarding 15 the information provided by the superintendent that imposes 16 standards of confidentiality comparable to those required by 17 this chapter. 18 Sec. 15. Section 533.308, Code 2011, is amended by adding 19 the following new subsection: 20 NEW SUBSECTION . 3. A state credit union may furnish to 21 any official of an insurance plan by which the accounts of the 22 state credit union are insured or by which its employees and 23 officials are bonded, any information regarding transactions 24 of the state credit union, examinations, investigations, 25 or reports of the status of the state credit union or its 26 employees and officials for the purpose of facilitating the 27 availability or continuation of the insurance or bond of the 28 state credit union or resolution of a claim. The state credit 29 union and the insurance company shall, whenever possible, 30 execute a confidentiality agreement regarding the information 31 provided by the state credit union that imposes standards of 32 confidentiality comparable to those required by this chapter. 33 Sec. 16. Section 533.309, subsection 1, Code 2011, is 34 amended to read as follows: 35 -10- LSB 5194DP (13) 84 rn/rj 10/ 18

S.F. _____ H.F. _____ 1. Ownership share account. The ownership share account 1 shall consist of an account balance held by the state credit 2 union in accordance with the state credit union’s bylaws. Each 3 member may acquire only one ownership share. In the case of a 4 joint account, the joint account owners may acquire only one 5 ownership share unless each joint account owner applies for and 6 is accepted as an individual member. The state credit union 7 shall not set off fees against a member’s ownership share. 8 Sec. 17. Section 533.325, subsection 1, Code 2011, is 9 amended to read as follows: 10 1. The directors, officers, committee members, and 11 employees of a state credit union shall hold in confidence all 12 information regarding transactions of the state credit union, 13 including information regarding transactions with its members 14 and their personal affairs, except to the extent necessary in 15 connection with making any of the following: 16 a. Making , extending, or collecting a loan or line of 17 credit , guaranteeing . 18 b. Guaranteeing of member share drafts by third parties , or 19 complying . 20 c. Communicating with an insurance company for the purpose 21 of facilitating the availability or continuation of the 22 insurance or bond of the state credit union or the resolution 23 of a claim, pursuant to section 533.308, subsection 3. 24 d. Pursuant to a confidentiality agreement that is executed 25 pursuant to section 533.108, subsection 1. 26 e. Complying with the examination of credit union records by 27 regulatory authorities or compliance . 28 f. Compliance with an order from a court having jurisdiction 29 over the state credit union. 30 Sec. 18. Section 533.401, subsection 1, Code 2011, is 31 amended to read as follows: 32 1. With the approval of the superintendent, a state credit 33 union may merge with another credit union under the existing 34 certificate of approval of the other credit union if the merger 35 -11- LSB 5194DP (13) 84 rn/rj 11/ 18

S.F. _____ H.F. _____ is pursuant to a plan agreed upon by a majority of the board 1 of directors of each credit union joining in the merger and 2 the merger is approved by the affirmative vote of a majority 3 of the members of the merging credit union either by mail or 4 in person at a meeting called for the purpose of voting on the 5 merger according to the provisions of section 533.203 . At 6 least twenty days’ notice shall be provided between the sending 7 of notice and the scheduled conclusion of the vote. 8 Sec. 19. Section 533.401, subsection 3, paragraph c, Code 9 2011, is amended to read as follows: 10 c. At the meeting called to consider the merger, a A 11 majority of the votes received, by regular mail or in person, 12 upon the question according to the method of voting selected 13 by the board of directors pursuant to section 533.203, were in 14 favor of the merger. 15 Sec. 20. Section 533.403, subsection 1, Code 2011, is 16 amended to read as follows: 17 1. A state credit union may convert into a federal credit 18 union with the approval of the administrator of the national 19 credit union administration and by the affirmative vote of 20 a majority of the credit union’s members who vote on the 21 proposal , according to the provisions of section 533.203 . This 22 vote, if taken, shall be at a meeting called for that purpose 23 and shall be in the manner prescribed by the bylaws. 24 Sec. 21. Section 533.405, subsections 1, 2, and 6, Code 25 2011, are amended to read as follows: 26 1. At a special meeting called for that purpose, a A state 27 credit union may dissolve upon the affirmative vote of a 28 majority of its members eligible to vote at the special meeting 29 according to the provisions of section 533.203 . At least 30 twenty days’ notice shall be provided between the sending of 31 notice and the scheduled conclusion of the vote. 32 a. Notice of the meeting’s purpose shall be contained in the 33 meeting’s notice. 34 b. Any member eligible to vote and not present at the 35 -12- LSB 5194DP (13) 84 rn/rj 12/ 18

S.F. _____ H.F. _____ meeting may, within twenty days after the date on which the 1 meeting was held, vote in favor of dissolution by signing a 2 statement in a form approved by the superintendent. This vote 3 shall have the same force and effect as if cast at the meeting. 4 2. a. The state credit union shall cease to do business 5 except for the purposes of liquidation immediately upon giving 6 sending notice of the special meeting called for the members’ 7 vote on dissolution. 8 b. The board of directors shall immediately notify the 9 superintendent of the intention of the state credit union to 10 dissolve within three business days of a vote by a majority of 11 the board of directors in favor of dissolution, and prior to 12 sending notice of the members’ vote . 13 c. The state credit union shall not resume its regular 14 business unless the dissolution fails to receive the required 15 vote of the members or unless the members have revoked prior 16 affirmative action to dissolve as provided for in subsection 6 . 17 6. a. At any time prior to any distribution of its assets, 18 a state credit union may revoke the voluntary dissolution 19 proceedings by the affirmative vote of a majority of its 20 members eligible to vote , according to the provisions of 21 section 533.203 . This vote, if taken, shall be at a special 22 meeting called for that purpose in the manner prescribed by the 23 bylaws. At least twenty days’ notice shall be provided between 24 the sending of notice and the scheduled conclusion of the vote. 25 b. The Upon the conclusion of the vote, the board of 26 directors shall immediately notify the superintendent of any 27 such action to revoke voluntary dissolution proceedings. 28 Sec. 22. Section 533.502, subsection 2, Code 2011, is 29 amended to read as follows: 30 2. a. The superintendent shall thereafter manage the 31 property and business of the state credit union until such time 32 as the superintendent may relinquish to the state credit union 33 the management, upon such conditions as the superintendent 34 may prescribe, or until the affairs of the state credit 35 -13- LSB 5194DP (13) 84 rn/rj 13/ 18

S.F. _____ H.F. _____ union are finally dissolved as provided in this chapter . The 1 superintendent may operate and direct the affairs of the 2 state credit union in its regular course of business. The 3 superintendent may also collect amounts due the state credit 4 union and do such other acts as are necessary or expedient to 5 conduct the affairs of the state credit union and conserve or 6 protect its assets, property, and business. 7 b. The superintendent may appoint one or more persons, with 8 powers specified in the certificate of appointment, to assist 9 the superintendent in the duty of management, conservation, or 10 dissolution and distribution of the business and property of a 11 state credit union. 12 c. During the period of the superintendent’s management of 13 the property and business of the state credit union, and prior 14 to the time that the superintendent may apply to the district 15 court for appointment as receiver, the superintendent may 16 assess the state credit union for costs and expenses incurred 17 by the division in the management of the state credit union. 18 Costs and expenses shall include but not be limited to costs 19 and expenses for salaries and benefits, expenses and travel 20 for employees, office facilities, supplies, equipment, and 21 administrative costs and expenses incurred in the management of 22 the state credit union. 23 EXPLANATION 24 This bill relates to matters under the purview of the credit 25 union division of the department of commerce. 26 The bill modifies provisions prohibiting disclosure of 27 confidential information pertaining to the supervision and 28 regulation of a specific state credit union or of other 29 persons. The bill provides that, notwithstanding the general 30 prohibition on disclosure, the superintendent of credit unions 31 or an employee of the credit union division may disclose 32 information relating specifically to the supervision and 33 regulation of a specific state credit union or of other persons 34 if the credit union or other person consents in writing to 35 -14- LSB 5194DP (13) 84 rn/rj 14/ 18

S.F. _____ H.F. _____ the disclosure and the persons to whom the disclosures are 1 made are subject to, or agree to comply with, standards of 2 confidentiality comparable to those contained in Code chapter 3 533. The bill references Code sections 533.113 and 533.308 4 as constituting exceptions to the general prohibition. In 5 connection specifically to Code section 533.308, relating to 6 the furnishing to officials of an insurance plan and specified 7 information to facilitate the availability or continuation 8 of insurance or a bond, or the resolution of a claim, the 9 bill adds that the superintendent and the insurance company 10 shall, whenever possible, execute a confidentiality agreement 11 regarding the information provided by the superintendent. 12 The bill specifies that the annual fees referenced in Code 13 section 533.112 payable by state credit unions refer to one 14 annual fee relating to examination and supervision, based on 15 the actual cost of operating the credit union division. The 16 bill provides that the cost of operating the credit union 17 division shall include but not be limited to costs and expenses 18 for salaries and benefits, expenses and travel for employees, 19 office facilities, supplies, equipment, and administrative 20 costs and expenses incurred in the discharge of the duties 21 imposed on the superintendent under Code chapter 533. The bill 22 provides that the cost of operating the credit union division 23 shall also include but not be limited to the costs incurred 24 due to additional time and other division resources required 25 for either performing services for the credit union that are 26 customarily performed by the credit union, or performing 27 services related to a particular examination that exceed 28 estimates for an individual credit union’s examination based on 29 specified factors, and that an individual fee assessment for 30 such costs may be made in addition to a credit union’s annual 31 fee. The bill states that the annual fee may be paid in one or 32 more installments, as provided by rule by the superintendent. 33 The bill also provides that a separate examination fee shall 34 be payable by a corporation, credit union service organization, 35 -15- LSB 5194DP (13) 84 rn/rj 15/ 18

S.F. _____ H.F. _____ or other person subject to an examination pursuant to Code 1 section 533.113 in an amount determined by the superintendent, 2 which shall reflect but not be limited to the time required 3 for the examination and the costs of the examination. The 4 bill provides that the costs of the examination shall include 5 components similar to the previously referenced fee payable 6 by state credit unions including but not be limited to costs 7 and expenses for salaries and benefits, expenses and travel 8 for employees, office facilities, supplies, equipment, and 9 administrative costs and expenses incurred in the discharge 10 of duties imposed upon the superintendent. The bill provides 11 that this examination fee shall be due within 30 days of 12 presentation of the fee statement to the corporation, credit 13 union service organization, or other person examined by the 14 division. Further, the bill specifies that the assessment of a 15 credit union, credit union service organization, corporation, 16 or other person subject to an examination for the expense 17 of accountants, investigators, and other experts reasonably 18 necessary to assist in the conduct of the examination, is 19 separate from and not included in the annual fee. 20 The bill deletes a provision in Code section 533.309 21 that prohibits credit unions from setting off fees against 22 a member’s ownership share. The bill modifies provisions 23 contained in Code sections 533.210 and 533.302 relating to 24 withdrawing members providing advance notice of the withdrawal 25 of shares or deposits in the credit union, and referring to 26 expelled or withdrawn members. 27 The bill additionally coordinates voting procedures 28 throughout Code chapter 533 pursuant to modifications to 29 Code section 533.203. The bill provides that when a vote 30 is required, the board of directors of the credit union by 31 majority vote shall select one of several alternative methods 32 for conducting the vote, unless a procedure for a particular 33 vote is otherwise specified. The alternative methods include 34 by a vote of a majority of the members present at a meeting, 35 -16- LSB 5194DP (13) 84 rn/rj 16/ 18

S.F. _____ H.F. _____ if that number constitutes a quorum and if the proposed vote 1 was contained in the notice of the meeting; by a majority vote 2 of members voting by mailed or electronic ballot according 3 to procedures specified by rule of the superintendent or 4 as specified in the bylaws; or by a combination of these 5 procedures as established by rule of the superintendent or 6 as specified in the bylaws. The bill provides that notice 7 shall be given to members of the results of the vote, and 8 that ballots of members shall be preserved for at least 9 60 days after the results are tallied and notice given to 10 members, and until any challenge is resolved. The bill 11 further provides that voting shall remain confidential and 12 secret from all interested parties, that each member is only 13 allowed to vote once, that the board of directors may satisfy 14 notice requirements by sending the notice electronically to 15 members who have opted to receive notices electronically, 16 and that credit unions may send account statements and 17 other communications electronically to members who opt to 18 receive communications electronically. Comparable provisions 19 are included with reference to amending the articles of 20 incorporation or the bylaws of a credit union, provided a 21 majority of the board of directors votes to proceed with 22 such an amendment. Additionally, the bill relocates current 23 provisions regarding votes to modify, amend, reverse, or 24 instruct the board of directors contained in Code section 25 533.203 to a separate Code section 533.203A, and specifies 26 notice durations. The bill references the modified voting 27 procedures with regard to several forms of voting in Code 28 chapter 533, and provides applicable notice requirements. 29 The bill addresses elections of the board of directors, 30 modifying Code section 533.204 to refer to ongoing annual 31 meetings, as well as the initial election of the board. 32 Membership of the board is changed from not less than nine 33 members to consisting of at least seven members, serving 34 staggered terms of three years. The bill provides that the 35 -17- LSB 5194DP (13) 84 rn/rj 17/ 18