H.F. _____ Section 1. Section 524.211, subsection 3, Code 2011, is 1 amended to read as follows: 2 3. The superintendent, general counsel, examiners, and 3 other employees of the banking division, who have credit 4 relations with a person or entity licensed or registered 5 pursuant to chapter 535B , 535D, or 536C , are prohibited from 6 participating in decisions, oversight, and official review 7 of matters concerning the regulation of the licensee or 8 registrant. 9 Sec. 2. Section 524.212, subsection 2, Code 2011, is amended 10 to read as follows: 11 2. The superintendent may receive documents, materials, 12 or other information, including otherwise confidential and 13 privileged documents, materials, or other information, from 14 other local, state, federal, and international regulatory 15 agencies, the conference of state bank supervisors and its 16 affiliates or subsidiaries, the American association of 17 mortgage regulators and its affiliates or subsidiaries, and 18 the national association of consumer credit administrators 19 and its affiliates or subsidiaries, and shall maintain as 20 confidential and privileged any such document, material, or 21 other information received with notice or the understanding 22 that it is confidential or privileged under the laws of the 23 jurisdiction that is the source of the document, material, or 24 other information. With respect to documents, materials, or 25 other information that is shared or stored electronically, 26 the superintendent is authorized to take any necessary steps 27 to ensure the division’s information technology systems 28 comply with the information technology security requirements 29 established by any of the regulatory agencies or associations 30 of state regulatory agencies described in this section. 31 Sec. 3. Section 524.904, subsection 5, Code 2011, is amended 32 to read as follows: 33 5. a. A state bank may grant loans and extensions of credit 34 to a corporate group in an amount not to exceed twenty-five 35 -1- LSB 1246YC (1) 84 rn/sc 1/ 7

H.F. _____ percent of the state bank’s aggregate capital if all loans and 1 extensions of credit to any one borrower within a corporate 2 group conform to subsection 2 or 3 , and the financial strength, 3 assets, guarantee, or endorsement of any one corporate group 4 member is not relied upon as a basis for loans and extensions 5 of credit to any other corporate group member. A state bank 6 may grant loans and extensions of credit to a corporate group 7 in an amount not to exceed thirty-five percent of aggregate 8 capital if all loans and extensions of credit to any one 9 borrower within a corporate group conform to subsection 2, 10 3 , or 4, and the financial strength, assets, guarantee, or 11 endorsement of any one corporate group member is not relied 12 upon as a basis for loans and extensions of credit to any other 13 corporate group member. A corporate group includes a person 14 and all corporations in which the person owns or controls fifty 15 percent or more of the shares entitled to vote. While not to 16 be construed as an endorsement of the quality of any loan or 17 extension of credit, the superintendent may authorize a state 18 bank to grant loans and extensions of credit to a corporate 19 group in an amount not to exceed fifty percent of aggregate 20 capital if all loans and extensions of credit to any one 21 borrower within a corporate group conform to subsection 2 or 3, 22 and the financial strength, assets, guarantee, or endorsement 23 of any one corporate group member is not relied upon as a basis 24 for loans and extensions of credit to any other corporate group 25 member. 26 b. For the purposes of this subsection, a corporate group 27 includes the following: 28 (1) The interests of a group of more than one borrower, 29 or any combination of the members of the group, are so 30 interrelated that they should be considered a unit for the 31 purpose of applying the lending limit limitations of this 32 section. 33 (2) One or more persons owns or controls fifty percent or 34 more of the voting securities or membership interests of the 35 -2- LSB 1246YC (1) 84 rn/sc 2/ 7

H.F. _____ borrowing entity or a member of the group. 1 (3) One or more persons controls, in any manner, the 2 election of a majority of the directors, managers, trustees, 3 or other persons exercising similar functions of the borrowing 4 entity or a member of the group. 5 (4) One or more persons has the power to vote fifty percent 6 or more of any class of voting securities or membership 7 interests of the borrowing entity or a member of the group. 8 c. To demonstrate compliance with this subsection, a 9 bank shall maintain in its files, at a minimum, all of the 10 following: 11 (1) Documentation demonstrating the current ownership of 12 the borrowing entity. 13 (2) Documentation identifying the persons who have voting 14 rights in the borrowing entity. 15 (3) Documentation identifying the board of directors and 16 senior management of the borrowing entity. 17 (4) The bank’s assessment of the borrowing entity’s means 18 of servicing the loan or extension of credit, including 19 specific reasons in support of that assessment. The assessment 20 shall include an analysis of the borrowing entity’s financial 21 history, its present and projected economic and financial 22 performance, and the significance of any financial support 23 provided to the borrowing entity by members of the corporate 24 group and third parties. 25 Sec. 4. Section 524.904, subsection 7, Code 2011, is amended 26 by adding the following new paragraph: 27 NEW PARAGRAPH . m. A renewal or restructuring of a loan as 28 a new loan or extension of credit following the exercise by 29 a state bank of reasonable efforts, consistent with safe and 30 sound banking practices, to bring the loan into conformance 31 with the lending limit, unless new funds are advanced by the 32 bank to the borrower or unless a new borrower replaces the 33 original borrower or unless the superintendent determines that 34 the renewal or restructuring was undertaken as a means to evade 35 -3- LSB 1246YC (1) 84 rn/sc 3/ 7

H.F. _____ the bank’s lending limit. 1 Sec. 5. Section 524.1201, subsection 4, Code 2011, is 2 amended by striking the subsection. 3 Sec. 6. Section 535B.4, Code 2011, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 8A. A licensee may not establish branch 6 locations outside of the United States. 7 Sec. 7. Section 535B.6, Code 2011, is amended to read as 8 follows: 9 535B.6 Licensing of foreign corporation certain corporations . 10 1. An applicant that is a foreign corporation incorporated 11 under the laws of another state in the United States must be 12 authorized to do business in this state. A foreign corporation 13 Such a corporation shall file with the license application both 14 of the following: 15 1. a. An irrevocable consent, duly acknowledged, that 16 suits and actions may be commenced against that licensee in the 17 courts of this state by service of process in the usual manner 18 provided for by the statutes and court rules of this state. 19 2. b. Proof of authorization to do business in this state. 20 2. Businesses that are incorporated outside of the United 21 States are not eligible for a license. 22 Sec. 8. Section 535D.4, subsection 1, Code 2011, is amended 23 to read as follows: 24 1. On or after January 1, 2010, an individual shall not 25 engage in the business of a mortgage loan originator with 26 respect to any dwelling or residential real estate located in 27 this state without first obtaining and maintaining annually 28 a license under this chapter . Each licensed mortgage loan 29 originator must register with and maintain a valid unique 30 identifier issued by the nationwide mortgage licensing system 31 and registry. 32 Sec. 9. NEW SECTION . 535D.23 Reports of condition required 33 —— exceptions. 34 Each mortgage loan originator licensee shall submit 35 -4- LSB 1246YC (1) 84 rn/sc 4/ 7

H.F. _____ reports of condition to the nationwide mortgage licensing 1 system and registry unless the mortgage loan originator’s 2 activity is included in a report submitted by the mortgage 3 loan originator’s employer in accordance with section 535B.11, 4 subsection 3, section 535B.18, or section 536A.14, subsection 5 2. The reports shall be in such form and shall contain such 6 information as the nationwide mortgage licensing system and 7 registry may require. 8 EXPLANATION 9 This bill makes several changes in connection with banking 10 and mortgage regulation by the division of banking of the 11 department of commerce. 12 The bill provides that the superintendent of banking 13 is authorized to ensure that the division’s information 14 technology systems comply with information technology 15 security requirements established by any regulatory agency or 16 association of regulatory agencies specified in Code section 17 524.212. 18 The bill makes changes regarding provisions relating to 19 a state bank granting loans and extensions of credit to a 20 corporate group. The bill provides that, while not to be 21 construed as an endorsement of the quality of any loan or 22 extension of credit, the superintendent may authorize a state 23 bank to grant loans and extensions of credit to a corporate 24 group in an amount not to exceed 50 percent of aggregate 25 capital if all loans and extensions of credit to any one 26 borrower within a corporate group conform to an applicable 27 percentage of capital limitations and the financial strength, 28 assets, guarantee, or endorsement of any one corporate group 29 member is not relied upon as a basis for loans and extensions 30 of credit to any other corporate group member. 31 The bill modifies the definition of a corporate group for 32 purposes of applying corporate group bank lending limits. A 33 corporate group shall include the interests of a group of 34 more than one borrower, or any combination of the members 35 -5- LSB 1246YC (1) 84 rn/sc 5/ 7

H.F. _____ of the group, which are so interrelated that they should be 1 considered a unit for the purpose of applying the lending 2 limits; one or more persons owning or controlling 50 percent 3 or more of the voting securities or membership interests 4 of the borrowing entity or a member of the group; one or 5 more persons controlling, in any manner, the election of a 6 majority of the directors, managers, trustees, or other persons 7 exercising similar functions of the borrowing entity or a 8 member of the group; or one or more persons having the power 9 to vote 50 percent or more of any class of voting securities 10 or membership interests of the borrowing entity or a member 11 of the group. The bill states that required documentation to 12 demonstrate compliance with corporate group bank lending limits 13 includes, at a minimum, demonstrating the current ownership 14 of the borrowing entity, identifying the persons who have 15 voting rights in the borrowing entity, identifying the board 16 of directors and senior management of the borrowing entity, 17 and the bank’s assessment of the borrowing entity’s means of 18 servicing the loan or extension of credit including specific 19 reasons in support of that assessment. 20 The bill deletes a provision which states that a bank shall 21 not operate a loan production office or deposit production 22 office in Iowa unless either the bank has received approval 23 from the superintendent or the bank operated the loan 24 production office or deposit production office prior to July 25 1, 2006. 26 The bill includes in the list of exemptions from a bank’s 27 lending limit a renewal or restructuring of a loan as a new 28 loan or extension of credit if efforts had been made to bring 29 the loan into conformance with the lending limit, unless as 30 part of the renewal or restructuring new funds are advanced 31 by the bank to the borrower or a new borrower replaces the 32 original borrower or the superintendent determines that a 33 renewal or restructuring was undertaken as a means to evade the 34 bank’s lending limit. 35 -6- LSB 1246YC (1) 84 rn/sc 6/ 7

H.F. _____ The bill provides that a mortgage banker or mortgage broker 1 licensed under Code chapter 535B may not establish branch 2 locations outside of the United States, specifies that an 3 applicant incorporated under the laws of another state in the 4 United States must be authorized to do business in Iowa, and 5 specifies that businesses that are incorporated outside of the 6 United States are not eligible for licensure. 7 The bill adds persons or entities licensed under Code 8 chapter 535D, the mortgage licensing act, to provisions 9 prohibiting the superintendent, general counsel, examiners, 10 and other employees of the banking division, if engaged in 11 credit relations with the person or entity, from participating 12 in specified regulatory actions over the person or entity. 13 The bill provides that an individual shall not engage in 14 the business of a mortgage loan originator with respect 15 to any dwelling or residential real estate located in this 16 state without obtaining and maintaining a license under Code 17 chapter 535D. This provision had previously been restricted 18 to “residential real estate”. The bill establishes a new 19 requirement that each mortgage loan originator licensee under 20 the Code chapter shall submit to the nationwide mortgage 21 licensing system and registry reports of condition required by 22 the system and registry, unless the mortgage loan originator’s 23 activity is included in a mortgage call report submitted by 24 the originator’s employer in accordance with specified Code 25 sections. 26 -7- LSB 1246YC (1) 84 rn/sc 7/ 7