Senate File 586 - Introduced SENATE FILE 586 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SF 566) (SUCCESSOR TO SSB 1236) A BILL FOR An Act relating to banks, making appropriations, providing 1 civil penalties, and making civil penalties applicable. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1359SZ (2) 89 jda/rn
S.F. 586 Section 1. Section 12.61, subsection 1, paragraph a, Code 1 2021, is amended to read as follows: 2 a. “Financial institution” means a state bank as defined in 3 section 524.103, subsection 41, a federally chartered state 4 bank having its principal office within this state, a federally 5 chartered credit union having its principal office within this 6 state, a federally chartered savings and loan association 7 having its principal office within the state, a credit union 8 organized under chapter 533 , or a trust company organized or 9 incorporated under the laws of this state. 10 Sec. 2. Section 422.61, subsection 1, Code 2021, is amended 11 to read as follows: 12 1. “Financial institution” means a state bank as defined in 13 section 524.103, subsection 41, a state bank chartered under 14 the laws of any other state, a national banking association, 15 a trust company, a federally chartered savings and loan 16 association, an out-of-state state chartered savings bank, a 17 financial institution chartered by the federal home loan bank 18 board, a non-Iowa chartered savings and loan association, or a 19 production credit association. 20 Sec. 3. Section 453A.8, subsection 6, Code 2021, is amended 21 to read as follows: 22 6. The director may authorize a bank as defined by section 23 524.103 , subsection 8, to sell stamps. A bank authorized to 24 sell stamps shall comply with all of the requirements governing 25 the sale of stamps by the department. Section 453A.12 shall 26 apply to any bank authorized to sell stamps. 27 Sec. 4. Section 524.102, Code 2021, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 10. The opportunity for state banks to 30 adopt, in a manner that is compatible with and subject to the 31 purposes of this chapter, new and emerging technologies that 32 enhance the efficiency and convenience of banking products and 33 services. 34 Sec. 5. Section 524.103, Code 2021, is amended by adding the 35 -1- LSB 1359SZ (2) 89 jda/rn 1/ 96
S.F. 586 following new subsections: 1 NEW SUBSECTION . 2A. “Affiliate” means the same as defined 2 in section 524.1101. 3 NEW SUBSECTION . 22A. “Federal savings association” means a 4 corporation organized under 12 U.S.C. §1464. 5 NEW SUBSECTION . 32A. “National bank” means a corporation 6 organized under 12 U.S.C. §21 whose deposits are insured by 7 the federal deposit insurance corporation or whose powers are 8 limited exclusively to the exercise of trust or fiduciary 9 powers. 10 NEW SUBSECTION . 34A. “Out-of-state bank” means a 11 corporation, other than a credit union, industrial bank, or 12 trust company, that is authorized by the laws of another state 13 to solicit, receive, or accept money or its equivalent for 14 deposit or to otherwise engage in the business of banking. 15 NEW SUBSECTION . 36A. “Safe deposit box” means a safe, lock 16 box, or other secure storage receptacle located on the premises 17 of a bank. 18 Sec. 6. Section 524.103, subsections 6, 8, 10, 12, 13, 16, 19 17, 20, 22, 25, 27, 29, 33, 34, 38, 39, 41, 44, and 48, Code 20 2021, are amended to read as follows: 21 6. “Articles of incorporation” means the original , amended, 22 or restated articles of incorporation and all amendments 23 thereto and includes articles of merger. “Articles of 24 incorporation” also means the original or restated articles of 25 organization and all amendments including articles of merger if 26 a state bank is organized as a limited liability company under 27 this chapter . 28 8. “Bank” means a corporation or limited liability company 29 organized under this chapter or 12 U.S.C. §21 , a national bank, 30 a federal savings association, or an out-of-state bank . 31 10. “Board of directors” means the board of directors of a 32 state bank as provided in section 524.601 . For a state bank 33 organized as a limited liability company under this chapter , 34 “board of directors” means a board of directors or board of 35 -2- LSB 1359SZ (2) 89 jda/rn 2/ 96
S.F. 586 managers as designated by the limited liability company in its 1 articles of organization or operating agreement. 2 12. “Business of banking” means engaging in the regular 3 business of soliciting, receiving, or accepting money or its 4 equivalent for deposit, and any other business generally done 5 by banks. 6 13. “Calculation date” means the most recent of the 7 following: 8 a. The date the state bank’s statement of condition is 9 required to be filed pursuant to section 524.220, subsection 2 . 10 b. The date an event occurs that reduces or increases the 11 state bank’s aggregate capital by ten percent or more. 12 c. As the superintendent may direct. 13 16. “Chief executive officer” means the person designated by 14 the board of directors to be responsible for the implementation 15 of and adherence to board policies and resolutions by all 16 officers and employees of the state bank. 17 17. a. “Contractual commitment to advance funds” means a 18 state bank’s obligation to do either of the following: 19 (1) Advance funds under a standby letter of credit or other 20 similar arrangement. 21 (2) Make payment, directly or indirectly, to a third person 22 contingent upon default by a customer of the state bank in 23 performing an obligation and to make such payment in keeping 24 with the agreed upon terms of the customer’s contract with 25 a third person, or to make payments upon some other stated 26 condition. 27 b. The term does not include commercial letters of credit 28 and similar instruments where the issuing state bank expects 29 the beneficiary to draw on the issuer, that do not guarantee 30 payment, and that do not provide for payment in the event of a 31 default by a third person. 32 20. “Director” means a member of the board of directors 33 and includes a manager of a state bank organized as a limited 34 liability company under this chapter . 35 -3- LSB 1359SZ (2) 89 jda/rn 3/ 96
S.F. 586 22. “Executive officer” means a person who participates or 1 has authority to participate, other than in the capacity of a 2 director or manager , in major policymaking functions of a state 3 bank, whether or not the officer has an official title, whether 4 or not such a title designates the officer as an assistant, or 5 whether or not the officer is serving without salary or other 6 compensation. The chief executive officer, chairperson of the 7 board, the president, every vice president, and the cashier 8 of a state bank are deemed to be executive officers, unless 9 such an officer is excluded, by resolution of the board of 10 directors of a state bank or by the bylaws of the state bank, 11 from participation, other than in the capacity of a director, 12 in major policymaking functions of the state bank, and the 13 officer does not actually participate in the major policymaking 14 functions. All officers who serve on a board of directors are 15 deemed to be executive officers, except as provided for in 16 section 524.701, subsection 3 . 17 25. “Insured bank” means a state bank the deposits of which 18 are insured in accordance with the provisions of the Federal 19 Deposit Insurance Act. 20 27. “Member” means a person with a membership interest 21 in a state bank organized as a limited liability company or 22 incorporated as a mutual corporation under this chapter . 23 29. “Membership interest” means a member’s share of the 24 profits and losses, the right to receive distributions of 25 assets, and any right to vote or participate in management of a 26 state bank organized as a limited liability company under this 27 chapter or of a state bank incorporated as a mutual corporation 28 under this chapter . 29 33. “Officer” means chief executive officer, executive 30 officer, or any other administrative official of a state bank 31 elected by the state bank’s board of directors to carry out any 32 of the state bank’s operating rules and policies. 33 34. “Operations subsidiary” means a wholly owned corporation 34 incorporated and controlled by a state bank that performs 35 -4- LSB 1359SZ (2) 89 jda/rn 4/ 96
S.F. 586 functions which the state bank is authorized to perform. 1 38. “Shareholder” means one who is a holder of record of 2 shares in a state bank. If a state bank is organized as a 3 limited liability company under this chapter , “shareholder” 4 means a member of the limited liability company. If a state 5 bank is incorporated as a mutual corporation under this 6 chapter , “shareholder” means a member of the mutual corporation. 7 39. “Shares” means the units into which the proprietary 8 interests in a state bank incorporated as a stock corporation 9 are divided , including any membership interests of a state bank 10 organized as a limited liability company under this chapter . 11 41. “State bank” means any bank incorporated pursuant to 12 the provisions of this chapter after January 1, 1970, and any 13 “state bank” incorporated pursuant to the laws of this state and 14 doing business as such on January 1, 1970, or a bank organized 15 as a limited liability company or a mutual corporation under 16 this chapter. 17 44. “Supervised financial organization” as defined and used 18 in the Iowa consumer credit code, chapter 537 , includes a 19 person state bank organized pursuant to this chapter . 20 48. “Unincorporated area” means a village within which an 21 area where a state bank or national bank has its principal 22 place of business that is not within a municipal corporation . 23 Sec. 7. Section 524.103, subsection 26, Code 2021, is 24 amended by striking the subsection. 25 Sec. 8. Section 524.105, subsection 2, Code 2021, is amended 26 to read as follows: 27 2. All state banks are subject to the provisions and 28 requirements of this chapter in every particular, and all 29 national banks out-of-state banks, and federal savings 30 associations , now or hereafter doing business in this state, 31 are subject to the provisions of this chapter , to the extent 32 applicable, from July 1, 1995 2021 . 33 Sec. 9. Section 524.107, subsections 1 and 2, Code 2021, are 34 amended to read as follows: 35 -5- LSB 1359SZ (2) 89 jda/rn 5/ 96
S.F. 586 1. A person, other than a state bank which is subject to 1 the provisions of this chapter , an out-of-state bank, and 2 a national bank or federal savings association authorized 3 by the laws of the United States to engage in the business 4 of receiving money for deposit, and except as provided in 5 subsection 2 , shall not engage in this state in the business 6 of receiving money for deposit, transact the business of 7 banking, or establish in this state a place of business for 8 such purpose. 9 2. A person doing business in this state shall not use 10 the words “bank” or “trust” or use any derivative, plural, 11 or compound of the words “bank”, “banking”, or “bankers” , or 12 “trust” in any manner which would tend to create the impression 13 that the person is authorized to engage in the business of 14 banking or to act in a fiduciary capacity, except a state 15 bank authorized to do so by this chapter or a an out-of-state 16 bank authorized to do so by the laws of another state, a 17 national bank to the extent permitted by the laws of the 18 United States, a bank holding company as defined in section 19 524.1801 , a savings and loan holding company as defined in 12 20 U.S.C. §1467a, or a federal savings association to the extent 21 permitted by the laws of the United States , or, insofar as the 22 word “trust” is concerned, an individual permissibly serving 23 as a fiduciary in this state, pursuant to section 633.63 , 24 or, insofar as the words “trust” and “bank” are concerned, 25 a nonresident corporate fiduciary permissibly serving as a 26 fiduciary in this state pursuant to section 633.64 . 27 Sec. 10. Section 524.109, subsection 1, Code 2021, is 28 amended to read as follows: 29 1. A state bank may be organized under this chapter as a 30 bankers’ bank. The bankers’ bank is subject to all rights, 31 privileges, duties, restrictions, penalties, liabilities, 32 conditions and limitations applicable to a state bank 33 generally, except as limited in the definition of bankers’ 34 bank contained in section 524.103 , subsection 9 . However, a 35 -6- LSB 1359SZ (2) 89 jda/rn 6/ 96
S.F. 586 bankers’ bank shall have the same powers as those granted by 1 federal law and regulation to a national bank organized as a 2 bankers’ bank under 12 U.S.C. §27. 3 Sec. 11. Section 524.203, Code 2021, is amended to read as 4 follows: 5 524.203 Superintendent —— vacancy. 6 If the office of the superintendent of banking is vacant 7 or the superintendent is unable to serve , the chief of the 8 bank bureau of the banking division shall be the acting 9 superintendent until the governor appoints a new superintendent 10 or acting superintendent. If the chief of the bank bureau is 11 unable to serve, the chief examiner of the finance bank bureau 12 of the banking division shall be the acting superintendent 13 until the governor appoints a new superintendent or acting 14 superintendent. If both the chief of the bank bureau and 15 the chief examiner of the finance bank bureau are unable to 16 serve, the chief of the professional licensing and regulation 17 finance bureau of the banking division shall be the acting 18 superintendent until the governor appoints a new superintendent 19 or acting superintendent. 20 Sec. 12. Section 524.207, subsections 2 and 6, Code 2021, 21 are amended to read as follows: 22 2. All fees and assessments generated as the result of 23 a federally chartered national bank or federal savings and 24 loan association converting to a state-chartered state bank 25 on or after December 31, 2015, and thereafter, are payable 26 to the superintendent. The superintendent shall pay all the 27 fees and assessments received by the superintendent pursuant 28 to this subsection to the treasurer of state within the time 29 required by section 12.10 and the fees and assessments shall 30 be deposited into the department of commerce revolving fund 31 created in section 546.12 . An amount equal to such fees 32 and assessments deposited into the department of commerce 33 revolving fund is appropriated from the department of commerce 34 revolving fund to the banking division of the department of 35 -7- LSB 1359SZ (2) 89 jda/rn 7/ 96
S.F. 586 commerce for the fiscal year in which a federally chartered 1 national bank or federal savings and loan association converted 2 to a state-chartered state bank and an amount equal to such 3 annualized fees and assessments deposited into the department 4 of commerce revolving fund in succeeding years is appropriated 5 from the department of commerce revolving fund to the banking 6 division of the department of commerce for succeeding fiscal 7 years for purposes related to the discharge of the duties and 8 responsibilities imposed upon the banking division of the 9 department of commerce, the superintendent, and the state 10 banking council by the laws of this state. This appropriation 11 shall be in addition to the appropriation of moneys otherwise 12 described in this section . If a state-chartered state 13 bank converts to a federally chartered national bank or 14 federal savings and loan association, any appropriation made 15 pursuant to this subsection for the following fiscal year 16 shall be reduced by the amount of the assessment paid by the 17 state-chartered state bank during the fiscal year in which the 18 state-chartered state bank converted to a federally chartered 19 national bank or federal savings and loan association. 20 6. All moneys received by the superintendent pursuant 21 to a multi-state settlement with a provider of financial 22 services such as a mortgage lender, a mortgage servicer, or 23 any other person regulated by the banking division of the 24 department of commerce shall be deposited into the department 25 of commerce revolving fund created in section 546.12 and 26 an amount equal to the amount deposited into the fund is 27 appropriated to the banking division of the department of 28 commerce for the fiscal year in which such moneys are received 29 and in succeeding fiscal years for the purpose of promoting 30 financial-related education and supporting those duties of 31 the banking division related to financial regulation that are 32 limited to nonrecurring expenses such as equipment purchases, 33 training, technology, and retirement payouts related to the 34 oversight of mortgage lending, state-chartered state banks, and 35 -8- LSB 1359SZ (2) 89 jda/rn 8/ 96
S.F. 586 other financial services regulated by the banking division. 1 This appropriation shall be in addition to the appropriation of 2 moneys otherwise described in this section . The superintendent 3 shall submit a report to the department of management and to 4 the legislative services agency detailing the expenditure 5 of moneys appropriated to the banking division pursuant to 6 this subsection during each fiscal year. The initial report 7 shall be submitted on or before September 15, 2016, and each 8 September 15 thereafter. Moneys appropriated pursuant to 9 this subsection are not subject to section 8.33 and shall not 10 be transferred, used, obligated, appropriated, or otherwise 11 encumbered except as provided in this subsection . 12 Sec. 13. Section 524.208, Code 2021, is amended to read as 13 follows: 14 524.208 Examiners and other employees. 15 The superintendent may appoint examiners and other 16 employees , including for the banking division’s internal 17 information technology group, as the superintendent deems 18 necessary to the proper discharge of the duties imposed upon 19 the superintendent by the laws of this state. Pay plans shall 20 be established for employees, other than clerical employees or 21 employees of the professional licensing and regulation bureau 22 of the banking division, who examine the accounts and affairs 23 of state banks and who examine the accounts and affairs of 24 other persons, subject to supervision and regulation by the 25 superintendent, which are substantially equivalent to those 26 paid by the federal deposit insurance corporation and other 27 federal supervisory agencies in this area of the United States. 28 Sec. 14. Section 524.211, subsection 1, Code 2021, is 29 amended to read as follows: 30 1. The superintendent, general counsel, examiners, and 31 other employees assigned to the bank bureau of the banking 32 division are prohibited from obtaining a loan of money or 33 property from a state-chartered state bank, or any person 34 or entity affiliated with a state-chartered state bank, 35 -9- LSB 1359SZ (2) 89 jda/rn 9/ 96
S.F. 586 unless they do not personally participate in the examination, 1 oversight, or official review concerning the regulation of the 2 state bank. 3 Sec. 15. Section 524.211, Code 2021, is amended by adding 4 the following new subsection: 5 NEW SUBSECTION . 8. The superintendent shall not 6 participate in the examination, oversight, or official review 7 concerning the regulation of any state bank or any other 8 enterprise, person, or affiliate subject to the regulatory 9 purview of the banking division of which the superintendent 10 is a shareholder, member, partner, owner, director, officer, 11 or employee. The superintendent shall recuse themselves from 12 participation in any such examination, oversight, or official 13 review and the state banking council shall designate a member 14 who satisfies the qualifications identified in section 524.201, 15 subsection 1, and who is not a shareholder, member, partner, 16 owner, director, officer, or employee of the regulated entity 17 to act in place of the superintendent. 18 Sec. 16. Section 524.212, subsection 1, Code 2021, is 19 amended to read as follows: 20 1. The superintendent, members of the state banking 21 council, general counsel, examiners, or other employees of the 22 banking division shall not disclose, in any manner, to any 23 person other than the person examined and those regulatory 24 agencies referred to in section 524.217, subsection 2 , any 25 information relating specifically to the supervision and 26 regulation of any state bank, persons subject to the provisions 27 of chapter 533A , 533C , 533D, 535B, 535D, 536 , or 536A , any 28 affiliate of any state bank, or an affiliate of a person 29 subject to the provisions of chapter 533A , 533C , 536 , or 30 536A , except when ordered to do so by a court of competent 31 jurisdiction and then only in those instances referred to in 32 section 524.215, subsection 2 , paragraphs “a” , “b” , “c” , “e” , 33 and “f” . 34 Sec. 17. Section 524.217, subsection 6, Code 2021, is 35 -10- LSB 1359SZ (2) 89 jda/rn 10/ 96
S.F. 586 amended to read as follows: 1 6. The superintendent may enter into contractual agreements 2 with other state regulators of financial institutions to share 3 examiners or to assist in each state’s respective examinations 4 or other supervisory activities. A contractual agreement 5 pursuant to this section may provide for reimbursement to the 6 state providing assistance . The division of banking shall be 7 reimbursed for any costs incurred when providing services to 8 other states pursuant to this subsection . Any division of 9 banking personnel assisting another state with its examination 10 examinations or other supervisory activities shall be covered 11 by the provisions of the other state’s tort claims act, to the 12 extent permitted by the laws of the other state. If the law 13 of the other state does not extend coverage to the division 14 of banking personnel working on the other state’s examination 15 examinations or other supervisory activities , the provisions of 16 chapter 669 shall apply. 17 Sec. 18. Section 524.218, Code 2021, is amended by striking 18 the section and inserting in lieu thereof the following: 19 524.218 Regulation and examination of service providers. 20 1. Whenever a state bank, or any subsidiary or affiliate 21 of a state bank that is subject to examination by the 22 superintendent, causes to be performed for itself, by contract 23 or otherwise, a covered service, such performance shall be 24 subject to regulation and examination by the superintendent to 25 the same extent as if the covered service was being performed 26 by the state bank itself. 27 2. For purposes of this section, “covered service” means and 28 includes all of the following: 29 a. Data processing services. 30 b. Activities that support financial services, including 31 but not limited to lending, funds transfer, payment processing, 32 fiduciary activities, trading activities, and deposit taking. 33 c. Internet-related services, including but not limited to 34 web services and electronic bill payments, mobile applications, 35 -11- LSB 1359SZ (2) 89 jda/rn 11/ 96
S.F. 586 system and software development and maintenance, and security 1 monitoring. 2 d. Activities related to the business of banking. 3 3. The superintendent may, in the superintendent’s 4 discretion, accept examinations authorized or required to 5 be conducted by this section, which are made by other state 6 or federal financial regulatory agencies listed in section 7 534.217, subsection 2, in lieu of any examination authorized or 8 required under the laws of this state. 9 Sec. 19. Section 524.220, subsection 1, Code 2021, is 10 amended to read as follows: 11 1. A state bank shall , upon request, render a full, clear, 12 and accurate statement of its condition to the superintendent, 13 in a format prescribed by the superintendent, verified by the 14 oath of two of its officers, and attested by at least two of 15 the directors. The superintendent may, in the superintendent’s 16 discretion, use any form of statement of condition that is used 17 by the federal deposit insurance corporation or the federal 18 reserve system , and the superintendent may rely on a statement 19 of condition a state bank submits to the federal deposit 20 insurance corporation or the federal reserve system . 21 Sec. 20. Section 524.221, subsection 3, Code 2021, is 22 amended to read as follows: 23 3. The provisions of this section , insofar as applicable, 24 shall apply to the records of a national bank , or a federally 25 chartered savings bank or a federally chartered federal savings 26 and loan association , or an out-of-state bank . 27 Sec. 21. Section 524.223, Code 2021, is amended to read as 28 follows: 29 524.223 Power of superintendent to issue orders. 30 1. Whenever it shall appear to the superintendent that a 31 state bank , or any director, officer, employee, or substantial 32 shareholder of the state bank, is engaging or has engaged, 33 or the superintendent has reasonable cause to believe that 34 the state bank , director, officer, employee, or substantial 35 -12- LSB 1359SZ (2) 89 jda/rn 12/ 96
S.F. 586 shareholder is about to engage, in an unsafe or unsound 1 practice in conducting the business of such state bank, or is 2 violating or has violated, or the superintendent has reasonable 3 cause to believe that the state bank , director, officer, 4 employee, or substantial shareholder is about to violate, any 5 provision of this chapter or of any regulation adopted pursuant 6 to this chapter , or any condition imposed in writing by the 7 superintendent in connection with the approval of any matter 8 required by this chapter , or any written agreement entered into 9 with the superintendent, or any provision of chapter 12C or 10 any rules adopted pursuant to chapter 12C , the superintendent 11 may issue and serve upon the state bank , director, officer, 12 employee, or substantial shareholder a notice containing a 13 statement of the facts constituting the alleged violation or 14 violations, or the unsafe or unsound practice or practices, 15 and fixing a time and place at which a hearing will be held to 16 determine whether an order to cease and desist should be issued 17 to the state bank , director, officer, employee, or substantial 18 shareholder . 19 2. If the state bank , director, officer, employee, or 20 substantial shareholder fails to appear at the hearing it shall 21 be deemed to have consented to the issuance of a cease and 22 desist order. In the event of such consent, or if upon the 23 record made at such hearing, the superintendent shall find 24 that any violation or unsafe or unsound practice specified in 25 the notice has been established, the superintendent may issue 26 and serve upon the state bank , director, officer, employee, 27 or substantial shareholder an order to cease and desist from 28 any such violation or practice. Such order may require the 29 state bank and its directors, officers , and employees , and 30 shareholders to cease and desist from any such violation or 31 practice and, further, to take affirmative action to correct 32 the conditions resulting from any such violation or practice. 33 In addition, if the violation or practice involves a failure 34 to comply with chapter 12C or any rules adopted pursuant to 35 -13- LSB 1359SZ (2) 89 jda/rn 13/ 96
S.F. 586 chapter 12C , the superintendent may recommend to the committee 1 established under section 12C.6 that the bank be removed from 2 the list of financial institutions eligible to accept public 3 funds under section 12C.6A and may require that during the 4 current calendar quarter and up to the next succeeding eight 5 calendar quarters that the bank do any one or more of the 6 following: 7 a. Not accept public funds deposits. 8 b. Return to the depositors some or all uninsured public 9 funds held in demand deposits and, when deposit instruments 10 or agreements mature, return to the depositors some or 11 all deposits representing proceeds of such instruments or 12 agreements. 13 c. Pledge collateral to the treasurer of state having a 14 value at all times up to one hundred ten percent of the public 15 funds held by the bank. 16 d. Comply with such other requirements as the superintendent 17 may impose. 18 3. Any order issued pursuant to this section shall become 19 effective upon service of the order on the state bank , 20 director, officer, employee, or substantial shareholder 21 and shall remain effective except to such extent that it is 22 stayed, modified, terminated, or set aside by action of the 23 superintendent or of the district court of the Polk county in 24 which the state bank has its principal place of business . 25 4. The superintendent may apply to the district court of 26 the Polk county in which the state bank has its principal place 27 of business for the enforcement of any order pursuant to this 28 section and such court shall have jurisdiction and power to 29 order and require compliance. 30 5. For purposes of this section, “substantial shareholder” 31 means a shareholder exercising a controlling influence over the 32 management or policies of a state bank as determined by the 33 superintendent. 34 Sec. 22. Section 524.224, Code 2021, is amended to read as 35 -14- LSB 1359SZ (2) 89 jda/rn 14/ 96
S.F. 586 follows: 1 524.224 Grounds for management of state bank by 2 superintendent order to cease business —— appointment of 3 receiver . 4 1. The superintendent may take over the management of the 5 property and business of , without prior notice or hearings, 6 order a state bank to cease to carry on its business whenever 7 it appears to the superintendent determines that: 8 a. The state bank has violated its articles of incorporation 9 or any law of this state. 10 b. The capital of the state bank is impaired. 11 c. The state bank is conducting its business in an unsafe 12 or unsound manner. 13 d. The state bank is insolvent or is otherwise in such 14 condition that it is unsound, unsafe or inexpedient for it to 15 transact business. 16 e. The state bank has suspended or refused payment of its 17 deposits or other liabilities contrary to the terms thereof , 18 or the superintendent determines the state bank is unlikely to 19 be able to pay its deposits or other liabilities in the near 20 future . 21 f. The state bank refuses to make its records available 22 to the superintendent for examination or otherwise refuses to 23 make available, through an officer or employee having knowledge 24 thereof, information required by the superintendent for the 25 proper discharge of the duties of the superintendent’s office. 26 g. The state bank neglects or refuses to observe any order 27 of the superintendent made pursuant to the provisions of this 28 chapter , unless the enforcement of such order is stayed in a 29 proceeding brought by the state bank. 30 h. The state bank has not transacted any business or 31 performed any of the duties, contemplated by its authorization 32 to do business, for a period of one year thirty days . 33 i. The state bank has failed to renew its corporate 34 existence in the manner provided for in section 524.314 within 35 -15- LSB 1359SZ (2) 89 jda/rn 15/ 96
S.F. 586 one hundred eighty days prior to the expiration thereof. 1 2. The superintendent shall thereafter manage the 2 property and business of the state bank until such time 3 as the superintendent may relinquish to the state bank the 4 management thereof, upon such conditions as the superintendent 5 may prescribe, or until its affairs be finally dissolved as 6 provided in this chapter Upon ordering a state bank to cease 7 to carry on its business, the superintendent shall immediately 8 appoint the federal deposit insurance corporation as receiver 9 pursuant to section 524.1310 . 10 Sec. 23. Section 524.225, Code 2021, is amended to read as 11 follows: 12 524.225 Procedures —— judicial review. 13 Judicial review of the actions of the superintendent may be 14 sought in accordance with chapter 17A . However, contested case 15 provisions of chapter 17A , the Iowa administrative procedure 16 Act, do not apply to an action by the superintendent to take 17 over the management of or to manage order a state bank to 18 cease to carry on its business and to appoint a receiver , as 19 authorized by sections section 524.224 and 524.226 . 20 Sec. 24. Section 524.228, Code 2021, is amended to read as 21 follows: 22 524.228 Interim Emergency cease and desist order —— final 23 order —— suspension. 24 1. If it appears to the superintendent that a state bank, 25 or any director, officer, employee, or substantial shareholder 26 of the state bank is engaging in or is about to engage in an 27 unsafe or unsound practice or dishonest act in conducting the 28 business of the state bank that is likely to cause insolvency 29 or substantial dissipation of assets or earnings of the state 30 bank, or is likely to seriously weaken the condition of the 31 state bank or otherwise seriously prejudice the interests of 32 its depositors prior to the completion of the proceedings 33 conducted pursuant to section 524.223 , 524.606, subsection 34 2 , or 524.707, subsection 2 , the superintendent may issue an 35 -16- LSB 1359SZ (2) 89 jda/rn 16/ 96
S.F. 586 interim emergency order requiring the state bank, director, 1 officer, employee, or substantial shareholder to cease and 2 desist from any such practice or act, and to take affirmative 3 action, including suspension of the director, officer, or 4 employee to prevent such insolvency, dissipation, condition, or 5 prejudice pending completion of the proceedings. The interim 6 emergency order becomes effective upon service upon the state 7 bank, or upon the director, officer, employee, or substantial 8 shareholder of the state bank and, unless set aside, limited, 9 or suspended by a court as provided in this chapter , remains 10 effective and enforceable pending the completion of the 11 administrative proceedings pursuant to the interim emergency 12 order and until such time as the superintendent dismisses the 13 charges specified in the interim emergency order, or, if a 14 final cease and desist order is issued against the state bank 15 or the director, officer, employee, or substantial shareholder 16 until the effective date of the final order. 17 2. Within ten days after the state bank concerned or any 18 director, officer, employee, or substantial shareholder is 19 served with an interim emergency order, the state bank or such 20 director, officer, employee, or substantial shareholder may 21 apply to the district court in the of Polk county in which the 22 bank has its principal place of business, for an injunction 23 setting aside, limiting, or suspending the enforcement, 24 operation, or effectiveness of such interim emergency order 25 pending the completion of the administrative proceedings. If 26 serious prejudice to the interests of the superintendent, the 27 state bank, the officer, director, employee, or substantial 28 shareholder would result from such hearing, the court may order 29 the judicial proceeding to be conducted in camera. 30 3. The interim emergency order shall contain a concise 31 statement of the facts constituting the alleged unsafe or 32 unsound practice or alleged dishonest act, and shall fix a time 33 and place at which a hearing will be held to determine whether 34 a final order to cease and desist should issue against the 35 -17- LSB 1359SZ (2) 89 jda/rn 17/ 96
S.F. 586 state bank or any director, officer, employee, or substantial 1 shareholder. The hearing shall be fixed for a date not later 2 than thirty days after service of the interim emergency order 3 unless a later date is set at the request of the party so 4 served. If the state bank, or the director, officer, employee, 5 or substantial shareholder fails to appear at the hearing, the 6 state bank, or the director, officer, employee, or substantial 7 shareholder is deemed to have consented to the issuance of a 8 cease and desist order. In the event of such consent, or if 9 upon the record made at the hearing the superintendent finds 10 that any unsafe or unsound practice or dishonest act specified 11 in the interim emergency order has been established, the 12 superintendent may issue and serve upon the state bank, or the 13 director, officer, employee, or substantial shareholder a final 14 order to cease and desist from any such practice or act. The 15 order may require the state bank, or the director, officer, 16 employee, or substantial shareholder to cease and desist from 17 any such practice or act and, further, to take affirmative 18 action, including suspension of the director, officer, or 19 employee. 20 4. A hearing provided for in this section shall be presided 21 over by an administrative law judge appointed in accordance 22 with section 17A.11 . The hearing shall be private, unless 23 the superintendent determines after full consideration of 24 the views of the party afforded the hearing, that a public 25 hearing is necessary to protect the public interest. After 26 the hearing, and within thirty days after the case has been 27 submitted for decision, the superintendent shall review the 28 proposed order of the administrative law judge and render a 29 final decision, including findings of fact upon which the 30 decision is predicated, and issue and serve upon each party to 31 the proceeding an order consistent with this section . 32 5. Any final order issued by the superintendent pursuant to 33 subsection 3 becomes effective upon service of the final order 34 on the state bank, director, officer, employee, or substantial 35 -18- LSB 1359SZ (2) 89 jda/rn 18/ 96
S.F. 586 shareholder and shall remain effective except to the extent 1 that it is stayed, modified, terminated, or set aside by action 2 of the superintendent or of the district court of the Polk 3 county in which the state bank has its principal place of 4 business in accordance with the terms of chapter 17A . 5 6. In the case of violation or threatened violation of, or 6 failure to obey, an interim emergency order issued pursuant to 7 subsection 1 or a final order issued pursuant to subsection 8 3 , the superintendent may apply to the district court of the 9 Polk county in which the state bank has its principal place of 10 business for the enforcement of the order and such court shall 11 have jurisdiction and power to order and require compliance 12 with the interim emergency order or final order. 13 7. For purposes of this section , “substantial shareholder” 14 means a shareholder exercising a controlling influence over the 15 management or policies of a state bank as determined by the 16 superintendent. 17 Sec. 25. NEW SECTION . 524.230 Superintendent authority —— 18 supervision of state bank. 19 1. The superintendent may, by order and without prior 20 notice, appoint a supervisor for a state bank if the 21 superintendent determines that the state bank is in an 22 unsafe and unsound condition and an order of supervision is 23 necessary to protect the best interests of the state bank, its 24 depositors, creditors, shareholders, or the public. 25 2. A state bank that is under an order of supervision 26 shall not, without the prior approval of the superintendent 27 or the supervisor, unless otherwise permitted by the order of 28 supervision, do any of the following: 29 a. Dispose of, sell, transfer, convey, or encumber the state 30 bank’s assets. 31 b. Lend or invest the state bank’s money. 32 c. Incur a debt, liability, or obligation. 33 d. Pay a cash dividend. 34 e. Remove an executive officer or director, effect any 35 -19- LSB 1359SZ (2) 89 jda/rn 19/ 96
S.F. 586 change in the positions of executive officer or director, or 1 change the number of executive officers or directors. 2 3. The superintendent may serve as supervisor of a state 3 bank or may appoint as supervisor any person, including an 4 employee of the banking division, who the superintendent 5 determines is qualified for the position. 6 4. The superintendent, during the period of supervision 7 of the state bank, may require reimbursement by the state 8 bank to the extent of the reasonable expenses attributable to 9 the service of a supervisor, including costs incurred by the 10 division of banking and expenses of the supervisor and any 11 professional employees appointed to assist or represent the 12 supervisor. 13 5. A supervisor appointed pursuant to this section shall 14 serve until the date specified in the order of supervision or 15 the date when the superintendent determines that the conditions 16 necessary to terminate the order have been satisfied, whichever 17 is earlier. The superintendent may terminate an order of 18 supervision at any time. 19 6. When a state bank has adequately addressed the 20 conditions that necessitated the order of supervision, the 21 superintendent shall return the state bank to its former or 22 new management under conditions reasonable and necessary to 23 prevent a recurrence of the conditions that caused the order 24 of supervision. 25 7. The superintendent, at any time during the period of 26 supervision of a state bank, may order the state bank to cease 27 to carry on its business in accordance with the provisions of 28 section 524.224. Notwithstanding any other provision of law 29 to the contrary, the banking division, the superintendent, the 30 examiners, and all other employees of the banking division 31 shall not be liable to any person if a state bank subject to a 32 supervision order pursuant to this section ceases to carry on 33 the business of banking pursuant to section 524.224 or closes 34 or fails pursuant to any applicable provision of federal law. 35 -20- LSB 1359SZ (2) 89 jda/rn 20/ 96
S.F. 586 Sec. 26. Section 524.301, Code 2021, is amended to read as 1 follows: 2 524.301 Incorporators —— organizers. 3 A state bank may be incorporated or organized as a limited 4 liability company under this chapter by one or more individuals 5 eighteen years of age or older, a majority of whom shall be 6 residents of this state and citizens of the United States. 7 Sec. 27. Section 524.302, subsection 1, unnumbered 8 paragraph 1, Code 2021, is amended to read as follows: 9 The articles of incorporation of a state bank, in the form 10 prescribed by the superintendent, shall must set forth all of 11 the following: 12 Sec. 28. Section 524.302, subsection 1, paragraph b, Code 13 2021, is amended to read as follows: 14 b. The location physical address of its proposed principal 15 place of business including the name of the municipal 16 corporation , if any, and county. 17 Sec. 29. Section 524.303, subsection 2, Code 2021, is 18 amended to read as follows: 19 2. Applicable fees, payable to the secretary of state as 20 specified in section 489.117 or section 490.122 , for the filing 21 and recording of the articles of incorporation. 22 Sec. 30. Section 524.304, subsection 1, unnumbered 23 paragraph 1, Code 2021, is amended to read as follows: 24 The incorporators or organizers of a state bank shall, 25 within thirty days of the acceptance of the application for 26 processing, publish notice of the proposed incorporation or 27 organization once each week for two successive weeks in a 28 newspaper of general circulation published in the municipal 29 corporation which is proposed as the principal place of 30 business of the state bank, or if there is none, a newspaper 31 of general circulation published in the county, or in a county 32 adjoining the county, in which the proposed state bank is to 33 have its principal place of business. The notice shall set 34 forth all of the following: 35 -21- LSB 1359SZ (2) 89 jda/rn 21/ 96
S.F. 586 Sec. 31. Section 524.305, subsection 1, paragraph b, Code 1 2021, is amended to read as follows: 2 b. The convenience and needs of the public will be served 3 by the proposed state bank , including by accepting deposits 4 from, lending money in, and processing payments in the area the 5 proposed state bank will primarily serve . 6 Sec. 32. Section 524.305, subsections 3 and 4, Code 2021, 7 are amended to read as follows: 8 3. Within thirty days after the date of the second 9 publication of the notice required under section 524.304 , any 10 interested person may submit written comments and information 11 to the superintendent concerning the application. Comments 12 challenging the legality of an application must be submitted 13 separately in writing. The superintendent may extend 14 the thirty-day comment period, if, in the judgment of the 15 superintendent, extenuating circumstances which justify the 16 extension exist. 17 4. Within thirty days after the date of the second 18 publication of the notice required by section 524.304 , 19 any interested person may submit a written request of the 20 superintendent for a hearing on the application. The request 21 shall state the nature of the issues or facts to be presented 22 and the reasons why written submissions would be insufficient 23 to make an adequate presentation to the superintendent. If the 24 reasons are related to factual disputes, the disputes shall be 25 described. A written request for a hearing shall be evaluated 26 by the superintendent, who may grant or deny the request in 27 whole or in part. A hearing request shall generally be granted 28 only if it is determined that written submissions would be 29 inadequate or that a hearing would otherwise be beneficial 30 to the decision-making process. A hearing may be limited to 31 issues considered material by the superintendent. 32 Sec. 33. Section 524.306, Code 2021, is amended to read as 33 follows: 34 524.306 Incorporation or organization of state bank. 35 -22- LSB 1359SZ (2) 89 jda/rn 22/ 96
S.F. 586 1. Unless a delayed effective date or time is specified, the 1 corporate or organizational existence of a state bank begins 2 when the articles of incorporation, with the superintendent’s 3 approval indicated on the articles of incorporation, are filed 4 with the secretary of state. The secretary of state shall 5 record the articles of incorporation and forward a copy of them 6 to the county recorder of the county in which the state bank is 7 to have its principal place of business. 8 2. The secretary of state’s acknowledgment of filing of 9 the articles of incorporation is conclusive proof that the 10 incorporators or organizers satisfied all conditions precedent 11 to incorporation or organization, except in a proceeding 12 instituted by the superintendent to cancel or revoke the 13 incorporation or involuntarily dissolve the corporation or 14 organization. 15 Sec. 34. Section 524.307, Code 2021, is amended to read as 16 follows: 17 524.307 Initial organization of state bank. 18 Upon incorporation , or organization as a limited liability 19 company, of the state bank, the initial board of directors 20 shall hold an organizational meeting within this state, at 21 the call of a majority of the directors, to complete the 22 organization of the state bank by electing officers, adopting 23 bylaws, if any are to be adopted, and conducting any other 24 business properly brought before the board at the meeting. 25 Sec. 35. Section 524.310, subsection 2, Code 2021, is 26 amended to read as follows: 27 2. The provisions of this section shall not require any 28 state bank existing and operating on January 1, 1970, to add 29 to, modify or otherwise change its corporate or organizational 30 name, either on January 1, 1970, or upon renewal of its 31 corporate existence pursuant to section 524.314 at any time 32 thereafter . 33 Sec. 36. Section 524.312, Code 2021, is amended to read as 34 follows: 35 -23- LSB 1359SZ (2) 89 jda/rn 23/ 96
S.F. 586 524.312 Location of state bank —— exceptions. 1 1. A state bank originally incorporated or organized 2 pursuant to this chapter shall have its principal place of 3 business within the city limits of a municipal corporation. 4 The existence of a state bank shall not, however, be affected 5 by the subsequent discontinuance of the municipal corporation. 6 A state bank existing and operating on January 1, 1970, which 7 does not have its principal place of business within the city 8 limits of a municipal corporation, may renew its corporate 9 or organizational existence pursuant to section 524.314 10 without regard to this section and may also operate as a bank 11 or convert to and operate as a bank office when acquired 12 by or merged into another state bank and approved by the 13 superintendent state of Iowa . 14 2. A state bank may, with the prior written approval of the 15 superintendent, change the location of its principal place of 16 business to a new location within the state. 17 3. If a change in the location of the principal place 18 of business of a state bank is proposed, application for 19 approval of the superintendent shall be made as required by the 20 superintendent pursuant to this section . A change in location 21 of the principal place of business of a state bank, including 22 a change from one municipal corporation to another municipal 23 corporation within an urban complex, requires an amendment to 24 the articles of incorporation pursuant to sections 524.1502 , 25 524.1504 , and 524.1506 . A state bank seeking approval of a 26 change of location pursuant to this subsection shall publish 27 a notice of the proposed change of location in a newspaper 28 of general circulation in the municipal corporation or 29 unincorporated area in which the state bank has its principal 30 place of business, or if there is none, in a newspaper of 31 general circulation in the county, or in a county adjoining 32 the county, in which the state bank has its principal place of 33 business, and in the municipal corporation in which it seeks to 34 establish its principal place of business, or if there is none, 35 -24- LSB 1359SZ (2) 89 jda/rn 24/ 96
S.F. 586 in a newspaper of general circulation in the county, or in a 1 county adjoining the county, in which the municipal corporation 2 is located. The notice shall be published within thirty days 3 after the application to the superintendent for approval 4 of the change in location is accepted for processing. The 5 notice shall set forth the name of the state bank, the present 6 location of its principal place of business, the location to 7 which it proposes to move its principal place of business, and 8 the date upon which the application was accepted for processing 9 by the superintendent. 10 4. Within thirty days after acceptance of an application 11 for approval of a change of location of the principal place 12 of business of a state bank pursuant to subsection 3 , the 13 superintendent shall commence an investigation into the 14 circumstances of the application as deemed necessary by 15 the superintendent, giving due consideration to factors 16 substantially similar to those set forth in section 524.305, 17 subsection 1 , paragraphs “c” through “f” . Within one hundred 18 eighty ninety days after the application has been accepted for 19 processing, the superintendent shall approve or disapprove 20 the application on the basis of the investigation. The 21 superintendent shall give written notice of the decision to the 22 state bank, and in the event of disapproval a statement of the 23 reasons for the disapproval. If the superintendent approves 24 the change in location the superintendent shall deliver 25 the articles of amendment to the secretary of state. As a 26 condition of receiving the decision of the superintendent with 27 respect to the application, the state bank shall reimburse the 28 superintendent for all expenses incurred by the superintendent 29 in connection with the application. 30 5. A state bank approved under the provisions of section 31 524.305, subsection 8 , shall not commence its business at 32 any location other than within a municipal corporation or 33 unincorporated area in which was located the principal place of 34 business or an office of the state bank the condition of which 35 -25- LSB 1359SZ (2) 89 jda/rn 25/ 96
S.F. 586 was the basis for the superintendent authorizing incorporation 1 or organization of the new state bank. 2 Sec. 37. Section 524.313, Code 2021, is amended to read as 3 follows: 4 524.313 Bylaws. 5 A state bank may adopt bylaws. The power to adopt, amend, 6 or repeal bylaws or adopt new bylaws is vested in the board of 7 directors unless reserved to the shareholders by the articles 8 of incorporation. The bylaws of a state bank may contain any 9 provisions for the regulation and management of the affairs 10 of the state bank not inconsistent with law or the articles 11 of incorporation. For a state bank organized as a limited 12 liability company under this chapter , “bylaws” means the 13 operating agreement of the state bank. 14 Sec. 38. Section 524.521, Code 2021, is amended to read as 15 follows: 16 524.521 Authorized shares. 17 1. The articles of incorporation of a state bank 18 incorporated as a stock corporation must prescribe the classes 19 of shares and series of shares within a class and the number 20 of shares of each class that the state bank is authorized 21 to issue. If more than one class or series of shares is 22 authorized, the articles of incorporation must prescribe a 23 distinguishing designation for each class or series, and before 24 the issuance of shares of a class or series, describe the 25 terms, including the preferences, rights, and limitations of 26 that class or series . Prior to the issuance of shares of a 27 class, the preferences, limitations, and relative rights of 28 that class must be described in the articles of incorporation. 29 All Except to the extent otherwise permitted by section 30 524.522, all shares of a class or series must have terms, 31 including preferences, rights, and limitations , and relative 32 rights identical with those of other shares of the same class 33 except to the extent otherwise permitted by section 524.523 or 34 series . 35 -26- LSB 1359SZ (2) 89 jda/rn 26/ 96
S.F. 586 2. The articles of incorporation of a state bank 1 incorporated as a stock corporation must authorize both of the 2 following: 3 a. One or more classes or series of shares that together 4 have unlimited full voting rights. 5 b. One or more classes or series of shares, which may be the 6 same class , or classes , or series as those with voting rights, 7 that together are entitled to receive the net assets of the 8 state bank upon dissolution. 9 3. The articles of incorporation of a state bank 10 incorporated as a stock corporation may authorize one or more 11 classes or series of shares that have any of the following 12 qualities: 13 a. Have special, conditional, or limited voting rights, or 14 no right to vote, unless prohibited by this chapter . 15 b. Are redeemable or convertible as specified in the 16 articles of incorporation in any of the following ways: 17 (1) At the option of the state bank, the shareholders, or 18 another person or upon the occurrence of a designated specified 19 event. 20 (2) For cash, indebtedness, securities, or other property. 21 (3) In a designated amount or in an amount determined 22 in accordance with a designated formula or by reference to 23 extrinsic data or events. 24 c. Preferred shares are redeemable only by resolution 25 of the board of directors with the prior approval of the 26 superintendent. Preferred shares which are redeemable 27 according to the terms of their issuance shall be redeemed 28 only in accordance with such terms. Preferred shares which 29 are redeemed shall be canceled and shall not be reissued. 30 Preferred shares which are not redeemable according to the 31 terms of their issuance are redeemable only pro rata, by lot, 32 or by such other equitable method as determined by the board 33 of directors. 34 d. (1) If preferred shares are redeemed by a state bank, 35 -27- LSB 1359SZ (2) 89 jda/rn 27/ 96
S.F. 586 the redemption effects a cancellation of the shares, and 1 a statement of cancellation shall be filed as provided in 2 this paragraph. The filing of the statement of cancellation 3 constitutes an amendment to the articles of incorporation and 4 reduces the number of preferred shares of the class which the 5 state bank is authorized to issue by the number which are 6 canceled. 7 (2) The statement of cancellation shall be executed by the 8 state bank by its president or a vice president and by its 9 cashier or an assistant cashier, and acknowledged by one of the 10 officers signing such statement, and shall set forth all of the 11 following: 12 (a) The name of the state bank and the effective date of its 13 articles of incorporation. 14 (b) The number of preferred shares canceled through 15 redemption, itemized by classes. 16 (c) The aggregate number of issued shares, itemized by 17 classes, after giving effect to the cancellation. 18 (d) The amount, expressed in dollars, of the stated capital 19 of the state bank after giving effect to the cancellation. 20 (e) The number of shares which the state bank has authority 21 to issue, itemized by classes, after giving effect to the 22 cancellation. 23 (3) The statement of cancellation, together with the 24 applicable filing and recording fees, shall be delivered to 25 the superintendent who shall, if the superintendent finds the 26 statement of cancellation satisfies the requirements of this 27 section , deliver it to the secretary of state for filing and 28 recording in the secretary of state’s office and the statement 29 of cancellation shall also be filed and recorded in the office 30 of the county recorder . The capital of the state bank is 31 deemed to be reduced by the par value of the shares canceled 32 upon the effective date of the redemption. 33 e. Entitle the holders to distributions calculated in 34 any manner, including dividends that may be cumulative, 35 -28- LSB 1359SZ (2) 89 jda/rn 28/ 96
S.F. 586 noncumulative, or partially cumulative. 1 f. Have preference over any other class or series of 2 shares with respect to distributions, including dividends and 3 distributions upon the dissolution of the state bank. 4 4. The description of the designations, preferences, 5 rights, and limitations , and relative rights of share classes 6 or series of shares in subsection 3 is not all-inclusive 7 exhaustive . 8 5. Unless the articles of incorporation or bylaws otherwise 9 provide, the board of directors, by resolution duly adopted and 10 with the approval of the superintendent as provided in section 11 524.405 , may issue from time to time, in whole or in part, the 12 shares authorized by the articles of incorporation. 13 Sec. 39. Section 524.522, subsection 1, unnumbered 14 paragraph 1, Code 2021, is amended to read as follows: 15 If the articles of incorporation provide for such, the 16 board of directors may determine, in whole or in part, the 17 preferences, rights, and limitations , and relative rights, 18 within the limits set forth in section 524.521 , of either of 19 the following: 20 Sec. 40. Section 524.523, subsection 2, unnumbered 21 paragraph 1, Code 2021, is amended to read as follows: 22 Each At a minimum, each share certificate must state on its 23 face , at a minimum, all of the following: 24 Sec. 41. Section 524.523, subsection 3, Code 2021, is 25 amended by striking the subsection and inserting in lieu 26 thereof the following: 27 3. a. If the state bank is authorized to issue different 28 classes of shares or series of shares within a class, the 29 front or back of each certificate must summarize all of the 30 following: 31 (1) The preferences, rights, and limitations applicable to 32 each class and series. 33 (2) Any variations in preferences, rights, and limitations 34 among the holders of the same class or series. 35 -29- LSB 1359SZ (2) 89 jda/rn 29/ 96
S.F. 586 (3) The authority of the board of directors to determine the 1 terms of future classes or series. 2 b. Alternatively, each certificate may state conspicuously 3 on its front or back that the state bank will furnish to the 4 shareholder the information in paragraph “a” on request in 5 writing and without charge. 6 Sec. 42. Section 524.523, subsection 4, Code 2021, is 7 amended to read as follows: 8 4. Each share certificate must be signed either manually or 9 in facsimile by two officers as set forth in subsection 1 , and 10 may bear the corporate seal or its facsimile. 11 Sec. 43. Section 524.524, Code 2021, is amended to read as 12 follows: 13 524.524 Consideration for shares. 14 Except in the case of a distribution of shares authorized by 15 section 524.543 or shares issued upon exchanges or conversion, 16 common or preferred shares of a state bank may be issued only 17 for cash in an amount not less than that determined approved 18 by the superintendent. 19 Sec. 44. Section 524.525, subsection 4, paragraph b, Code 20 2021, is amended to read as follows: 21 b. Unless the subscription agreement provides otherwise, the 22 state bank may rescind the agreement and may sell the shares 23 if the debt remains unpaid more than twenty days after the 24 state bank sends delivers a written demand for payment to the 25 subscriber. 26 Sec. 45. Section 524.526, Code 2021, is amended to read as 27 follows: 28 524.526 Fractional shares. 29 1. A state bank incorporated as a stock corporation may 30 issue fractions of a share or in lieu of doing so may do any of 31 the following: 32 a. Issue fractions of a share or pay Pay in money cash the 33 value of fractions of a share. 34 b. Issue scrip in registered or bearer form entitling the 35 -30- LSB 1359SZ (2) 89 jda/rn 30/ 96
S.F. 586 holder to receive a full share upon surrendering enough scrip 1 to equal a full share. 2 b. c. Arrange for disposition of fractional shares by the 3 shareholders of the state bank. 4 c. Issue scrip in registered or bearer form entitling the 5 holder to receive a full share upon surrendering enough scrip 6 to equal a full share. 7 2. Each certificate representing scrip must be 8 conspicuously labeled “scrip” and must contain the information 9 required by section 524.523, subsection 2 . 10 3. The holder of a fractional share or scrip is entitled 11 to exercise the rights of a shareholder, including the right 12 rights to vote, to receive dividends, and to participate in 13 the assets of the state bank upon liquidation, but only if the 14 fractional share or scrip provides for such rights. 15 4. The board of directors may authorize the issuance of 16 scrip subject to any condition considered desirable , including 17 either of the following: 18 a. That the scrip will become void if not exchanged for full 19 shares before a specified date. 20 b. That the shares for which the scrip is exchangeable may 21 be sold and the proceeds paid to the scrip holders. 22 Sec. 46. Section 524.527, subsections 1 and 2, Code 2021, 23 are amended to read as follows: 24 1. A purchaser of the shares of a state bank incorporated 25 as a stock corporation is not liable to the state bank, its 26 creditors, or depositors with respect to the shares except to 27 pay the consideration for which the shares were authorized to 28 be issued under section 524.521 , or the consideration specified 29 in the subscription agreement authorized under section 524.525 . 30 2. Unless otherwise provided in the articles of 31 incorporation, a A shareholder of a state bank is not 32 personally liable for any liabilities of the state bank, 33 including liabilities arising from the acts or debts of the 34 state bank, its creditors, or depositors . , subject to the 35 -31- LSB 1359SZ (2) 89 jda/rn 31/ 96
S.F. 586 following exceptions: 1 a. To the extent provided in a provision of the articles 2 of incorporation permitted by section 524.302, subsection 2, 3 paragraph “c” . 4 b. By reason of the shareholder’s own acts or conduct. 5 Sec. 47. Section 524.528, subsections 1 and 2, Code 2021, 6 are amended to read as follows: 7 1. The shareholders of a state bank do not have a preemptive 8 right to acquire the state bank’s unissued shares except to the 9 extent provided in the articles of incorporation so provide . 10 2. A statement included in the articles of incorporation 11 that “the state bank elects to have preemptive rights”, or 12 words of similar import effect , means that , the following 13 principles apply except to the extent otherwise expressly 14 provided in the articles of incorporation , the following 15 principles apply expressly provide otherwise : 16 a. A shareholder The shareholders of a state bank has have 17 a preemptive right, granted on uniform terms and conditions 18 prescribed by the board of directors to provide a fair and 19 reasonable opportunity to exercise the right, to acquire a 20 proportional amount of the state bank’s unissued shares upon 21 the decision of the board of directors to issue such shares. 22 b. A shareholder may waive the shareholder’s preemptive 23 right. A waiver evidenced in writing is irrevocable even 24 though it is not supported by consideration. 25 c. There is no preemptive right with respect to any of the 26 following: 27 (1) Shares issued as compensation to directors, managers, 28 officers, employees, or agents , or employees of the state bank, 29 its subsidiaries, or its affiliates. 30 (2) Shares issued to satisfy conversion or option rights 31 created to provide compensation to directors, managers, 32 officers, employees, or agents , or employees of the state bank, 33 its subsidiaries, or its affiliates. 34 (3) Shares authorized in the articles of incorporation 35 -32- LSB 1359SZ (2) 89 jda/rn 32/ 96
S.F. 586 that are issued within six months from the effective date of 1 incorporation or organization. 2 d. A holder Holders of shares of any class or series without 3 general voting rights power but with preferential rights to 4 distributions or assets has have no preemptive rights with 5 respect to shares of any class or series . 6 e. A holder Holders of shares of any class or series with 7 general voting rights power but without preferential rights 8 to distributions or assets has have no preemptive rights with 9 respect to shares of any class or series with preferential 10 rights to distributions or assets unless the shares with 11 preferential rights are convertible into or carry a right to 12 subscribe for or acquire shares without preferential rights. 13 f. Shares subject to preemptive rights that are not acquired 14 by shareholders may be issued to any person for a period of one 15 year after being offered to shareholders at a consideration 16 set by the board of directors that is not lower than the 17 consideration set for the exercise of preemptive rights. An 18 offer at a lower consideration or after the expiration of one 19 year is subject to the shareholders’ preemptive rights. 20 Sec. 48. Section 524.532, Code 2021, is amended to read as 21 follows: 22 524.532 Meetings of shareholders. 23 Meetings of shareholders may be held at a place , within 24 this state, as provided in the articles of incorporation or 25 the bylaws, or as fixed in accordance with their provisions. 26 In the absence of any such provision, all meetings shall be 27 held at the principal place of business of the state bank. 28 An annual meeting of the shareholders shall be held during 29 the specific month as shall be provided in the articles of 30 incorporation, at the location, date , and time as stated in 31 or fixed in accordance with the bylaws. Failure to hold the 32 annual meeting during the month shall not work a forfeiture 33 or dissolution of the state bank. Special meetings of the 34 shareholders may be called by the president, the board of 35 -33- LSB 1359SZ (2) 89 jda/rn 33/ 96
S.F. 586 directors, the holders of not less than one-tenth of all the 1 shares entitled to vote at the meeting, or other officers or 2 persons as provided in the articles of incorporation or the 3 bylaws. If a state bank holds a shareholder meeting at a 4 location outside this state, the articles of incorporation or 5 bylaws must permit any or all shareholders to participate by 6 any means of communication as specified in section 524.533, 7 subsection 4. 8 Sec. 49. Section 524.533, subsections 1 and 3, Code 2021, 9 are amended to read as follows: 10 1. Written notice stating the place, day and hour of a 11 meeting of the shareholders and, in case of a special meeting, 12 the purpose or purposes for which the meeting is called, shall 13 be delivered not less than ten nor more than sixty days before 14 the date of the meeting, either personally or by mail, by or 15 at the direction of the president, the cashier, or the officer 16 or persons calling the meeting, to each shareholder of record 17 entitled to vote at the meeting. If mailed, the notice is 18 deemed to be delivered when deposited in the United States mail 19 addressed to the shareholder at the shareholder’s address as 20 it appears on the stock transfer books of the state bank with 21 postage prepaid. As used in this section, the term “notice” 22 means as defined in section 490.141. 23 3. A shareholder’s attendance at a meeting results in both 24 all of the following: 25 a. Waives the shareholder’s objection to lack of notice or 26 defective notice of the meeting, unless the shareholder at the 27 beginning of the meeting or promptly upon the shareholder’s 28 arrival objects to holding the meeting or transacting business 29 at the meeting. 30 b. Waives the shareholder’s objection to consideration 31 of a particular matter at the meeting that is not within the 32 purpose or purposes described in the meeting notice, unless 33 the shareholder objects to considering the matter when it is 34 presented. 35 -34- LSB 1359SZ (2) 89 jda/rn 34/ 96
S.F. 586 Sec. 50. Section 524.535, subsection 2, Code 2021, is 1 amended to read as follows: 2 2. The bylaws or, in the absence of an applicable bylaw, 3 the board of directors may fix or provide the manner of fixing , 4 in advance, a date as the record date for any determination of 5 shareholders entitled to notice of or a shareholder’s meeting, 6 to demand a special meeting, to vote , or to take any other 7 action at a meeting of shareholders , the . A record date to be 8 fixed under this section shall not be more than seventy days 9 and, in the case of a meeting of shareholders, not less than 10 ten days prior to before the date on which of the meeting or 11 particular action , requiring the determination of shareholders , 12 is to be taken and shall not be retroactive . If a record date 13 is not fixed for the determination of shareholders entitled 14 to notice of or to vote at a meeting of shareholders, or 15 shareholders entitled to receive payment of a dividend, the 16 date on which notice of the meeting is mailed or the date on 17 which the resolution of the board of directors declaring such 18 dividend is adopted, as the case may be, shall be the record 19 date for the determination of shareholders. If a determination 20 of shareholders entitled to vote at any meeting of shareholders 21 has been made as provided in this section , the determination 22 applies to any adjournment of the meeting. 23 Sec. 51. Section 524.536, Code 2021, is amended by striking 24 the section and inserting in lieu thereof the following: 25 524.536 Shareholders’ voting list for meeting. 26 1. The officer or agent having charge of the stock transfer 27 books for shares of a state bank shall, at least ten days 28 before each meeting of shareholders, prepare a complete 29 alphabetical list of the names of all its shareholders who 30 are entitled to vote at the meeting or any adjournment of the 31 meeting. The list shall be arranged by voting group and within 32 each voting group by class or series of shares, and show the 33 address of and the number of shares held by each shareholder. 34 Nothing contained in this subsection shall require the state 35 -35- LSB 1359SZ (2) 89 jda/rn 35/ 96
S.F. 586 bank to include on such list the electronic mail address or 1 other electronic contact information of a shareholder. 2 2. a. The shareholders’ list shall be available for 3 inspection by any shareholder beginning ten days before the 4 meeting and continuing through the meeting. The shareholders’ 5 list shall be made available in at least one of the following 6 locations: 7 (1) The state bank’s principal place of business. 8 (2) A reasonably accessible electronic network, provided 9 that the information required to gain access to the list is 10 provided with the notice of the meeting. In the event that 11 the state bank determines to make the list available on an 12 electronic network, the state bank shall take reasonable 13 steps to ensure that such information is available only to 14 shareholders of the state bank. 15 b. A shareholder, or the shareholder’s agent or attorney, 16 is entitled on written demand to inspect the list at any time 17 during usual business hours and at the shareholders’ expense, 18 during the period it is available for inspection. 19 3. The list of shareholders shall also be produced and 20 kept open at the time and place of the meeting and is subject 21 to the inspection of a shareholder, or a shareholder’s agent 22 or attorney, during the entire duration of the meeting. The 23 original stock transfer books are prima facie evidence as to 24 which shareholders are entitled to examine the list or transfer 25 books or to vote at a meeting of shareholders. 26 4. Failure to comply with the requirements of this section 27 shall not affect the validity of action taken at a meeting of 28 shareholders. 29 Sec. 52. Section 524.537, Code 2021, is amended by adding 30 the following new subsection: 31 NEW SUBSECTION . 3. If a quorum is present, the affirmative 32 vote of the majority of the shares represented at the meeting 33 and entitled to vote on the subject matter shall be the act of 34 the shareholders, unless the vote of a greater number or voting 35 -36- LSB 1359SZ (2) 89 jda/rn 36/ 96
S.F. 586 by classes is required by the laws of this state or of the 1 United States or by the articles of incorporation or bylaws. 2 This requirement does not apply to the election of directors as 3 provided in section 524.538, subsection 4. 4 Sec. 53. Section 524.538, subsections 1, 3, and 5, Code 5 2021, are amended to read as follows: 6 1. Each outstanding share of a state bank shall be entitled 7 to one vote on each matter submitted to a vote at a meeting of 8 shareholders, except to the extent that the voting rights of 9 the shares of a class or series may be limited or denied by the 10 articles of incorporation. 11 3. A shareholder may vote either in person or by proxy 12 executed in writing by the shareholder or by the shareholder’s 13 duly authorized attorney in fact attorney-in-fact . A proxy 14 shall not be valid after eleven months from the date of its 15 execution. 16 5. In an election of directors, a state bank shall not 17 vote its own shares held by it as sole trustee unless under 18 the terms of the trust the manner in which such shares shall 19 be voted may be determined by a donor or beneficiary of the 20 trust and unless such donor or beneficiary actually directs 21 how the shares shall be voted. However, shares held in trust 22 by a state bank pursuant to an instrument in effect prior to 23 January 1, 1970, under the terms of which the manner in which 24 such shares shall be voted could not be determined by a donor 25 or beneficiary of the trust, may be voted in an election of 26 directors of a state bank upon petition filed by the state 27 bank, to a court of competent jurisdiction, and the appointment 28 by such court of an individual to determine the manner in which 29 the shares shall be voted. When the shares of a state bank are 30 held by such state bank and one or more persons as trustees, 31 the shares may be voted by such other person or persons as 32 trustees, in the same manner as if the person or persons were 33 the sole trustee. Whenever shares cannot be voted by reason 34 of being held by a state bank as sole trustee, the shares shall 35 -37- LSB 1359SZ (2) 89 jda/rn 37/ 96
S.F. 586 be excluded in determining whether matters voted upon by the 1 shareholders were adopted by the requisite number of shares. 2 Sec. 54. Section 524.538A, Code 2021, is amended to read as 3 follows: 4 524.538A Voting by member of mutual corporation. 5 All holders of savings, demand, or other authorized 6 accounts of a state bank incorporated as or converted to be 7 a mutual corporation are members of the state bank. In the 8 consideration of all questions requiring action by the members 9 of the state bank, each holder of an account shall be permitted 10 to cast one vote for each one hundred dollars, or fraction 11 thereof, of the withdrawal value of the member’s account. No 12 member, however, shall cast more than one thousand member 13 votes. All accounts shall be nonassessable. 14 Sec. 55. Section 524.544, subsection 1, Code 2021, is 15 amended to read as follows: 16 1. Whenever any person proposes to purchase or otherwise 17 acquire directly or indirectly any of the outstanding shares 18 of a state bank, and the proposed purchase or acquisition 19 would result in control or in a change in control of the 20 state bank, the person proposing to purchase or acquire the 21 shares shall first apply in writing to the superintendent 22 for a certificate of approval for the proposed change of 23 control. The superintendent shall grant the certificate if 24 the superintendent is satisfied that the person who proposes 25 to obtain control of the state bank is qualified by character, 26 experience , and financial responsibility to control and 27 operate the state bank in a sound and legal manner, and that 28 the interests of the depositors, creditors , and shareholders 29 of the state bank, and of the public generally, will not be 30 jeopardized by the proposed change of control. A person 31 which will become a bank holding company upon completion of 32 an acquisition shall make application to the superintendent 33 for a certificate of approval as provided in this section . 34 Any other bank holding company shall comply with section 35 -38- LSB 1359SZ (2) 89 jda/rn 38/ 96
S.F. 586 524.1804 in lieu of seeking a certificate of approval under 1 this section . In any situation where the president or cashier 2 of a state bank has reason to believe any of the foregoing 3 requirements have not been complied with, it shall be the duty 4 of the president or cashier to promptly report in writing such 5 facts to the superintendent upon obtaining knowledge thereof. 6 As used in this section , the term “control” means the power, 7 directly or indirectly, to elect the board of directors. If 8 there is any doubt as to whether a change in the ownership 9 of the outstanding shares is sufficient to result in control 10 thereof, or to effect a change in the control thereof, such 11 doubt shall be resolved in favor of reporting the facts to the 12 superintendent. 13 Sec. 56. Section 524.544, Code 2021, is amended by adding 14 the following new subsection: 15 NEW SUBSECTION . 1A. As used in this section, the term 16 “control” means owning, controlling, or having the power to vote 17 twenty-five percent or more of any class of voting securities 18 of a state bank or having the power, directly or indirectly, 19 to elect the board of directors. If there is any doubt as to 20 whether a change in the ownership of the outstanding shares is 21 sufficient to result in control thereof, or to effect a change 22 in the control thereof, such doubt shall be resolved in favor 23 of reporting the facts to the superintendent. 24 Sec. 57. Section 524.544, subsection 2, Code 2021, is 25 amended by striking the subsection. 26 Sec. 58. Section 524.604, subsection 1, paragraph d, Code 27 2021, is amended to read as follows: 28 d. Review of the adequacy of the state bank’s internal 29 controls and determination of the most appropriate method 30 to satisfy the state bank’s audit needs pursuant to section 31 524.608 . 32 Sec. 59. Section 524.604, subsection 2, Code 2021, is 33 amended to read as follows: 34 2. Directors of a state bank shall discharge the duties 35 -39- LSB 1359SZ (2) 89 jda/rn 39/ 96
S.F. 586 of their position in good faith and with that diligence, care 1 and skill which ordinarily prudent persons would exercise 2 under similar circumstances in like positions. The directors 3 shall have a continuing responsibility to assure themselves 4 that the state bank is being managed according to law and that 5 the practices and policies adopted by the board are being 6 implemented. 7 Sec. 60. Section 524.605, subsection 1, paragraph a, Code 8 2021, is amended to read as follows: 9 a. Directors of a state bank who vote for or assent to 10 the declaration of any dividend or other distribution of the 11 assets of a state bank to its shareholders in willful or 12 negligent violation of the provisions of this chapter , or of 13 any restrictions contained in the articles of incorporation, 14 or of any order by the superintendent restricting the payment 15 of dividends or other distribution of assets, shall be jointly 16 and severally liable to the state bank for the amount of such 17 dividend which is paid or the value of such assets which 18 are distributed in excess of the amount of such dividend or 19 distribution which could have been paid or distributed without 20 a violation of the provisions of this chapter , or of the 21 restrictions in the articles of incorporation , or of any order 22 by the superintendent restricting the payment of dividends or 23 other distribution of assets . 24 Sec. 61. Section 524.606, subsection 2, paragraph a, Code 25 2021, is amended to read as follows: 26 a. If, in the opinion of the superintendent, any director 27 of a state bank or bank holding company has violated any 28 law relating to such state bank or bank holding company , or 29 has engaged in unsafe or unsound practices in conducting the 30 business of such state bank or bank holding company, or has 31 caused such state bank or bank holding company to violate any 32 provision of this chapter or any other law relating to banks 33 or banking, the superintendent may cause notice to be served 34 upon such director, to appear before the superintendent to 35 -40- LSB 1359SZ (2) 89 jda/rn 40/ 96
S.F. 586 show cause why the director should not be removed from office. 1 A copy of such notice shall be sent to each director of the 2 state bank or bank holding company affected, by registered or 3 certified mail. If, after granting the accused director a 4 reasonable opportunity to be heard, the superintendent finds 5 that the director violated any law relating to such state 6 bank or bank holding company , or engaged in unsafe or unsound 7 practices in conducting the business of such state bank or bank 8 holding company, or has caused such state bank or bank holding 9 company to violate any provision of this chapter or any other 10 law relating to banks or banking, the superintendent, in the 11 superintendent’s discretion, may order that such director be 12 removed from office, and that such director be prohibited from 13 serving in any capacity in any other state bank, bank holding 14 company, bank affiliate, trust company, or an entity licensed 15 under chapter 533A , 533C , 533D , 535B , 536 , or 536A . A copy 16 of the order shall be served upon such director and upon the 17 state bank or bank holding company of which the person is a 18 director at which time the person shall cease to be a director 19 of the state bank or bank holding company. The resignation, 20 termination of employment, or separation of such director, 21 including a separation caused by the closing of the state 22 bank or bank holding company at which the person serves as a 23 director, does not affect the jurisdiction and authority of the 24 superintendent to cause notice to be served and proceed under 25 this subsection against the director, if the notice is served 26 before the end of the six-year period beginning on the date the 27 director ceases to be a director with the state bank. 28 Sec. 62. Section 524.607, subsections 1 and 2, Code 2021, 29 are amended to read as follows: 30 1. The board of directors shall hold at least nine regular 31 meetings each calendar year. No more than one regular meeting 32 shall be held in any one calendar month. Unless the articles 33 of incorporation or bylaws provide otherwise, any director may 34 participate in any meeting of the board of directors may permit 35 -41- LSB 1359SZ (2) 89 jda/rn 41/ 96
S.F. 586 directors to participate in meetings through the use of any 1 means of communication by which all directors participating 2 may simultaneously hear each other during the meeting. A 3 director participating in a meeting by this means is deemed to 4 be present at the meeting. 5 2. A special meeting may be called by any executive officer 6 or a director. Notice of a meeting shall be given to each 7 director, either personally or by mail, at least two days in 8 advance of the meeting. Notice of a regular meeting shall 9 not be required if the articles of incorporation, bylaws, or 10 a resolution of the board of directors provide for a regular 11 monthly meeting date. As used in this section, the term 12 “notice” means as defined in section 490.141. 13 Sec. 63. Section 524.607, Code 2021, is amended by adding 14 the following new subsection: 15 NEW SUBSECTION . 2A. A director may waive any notice 16 required by this chapter, the articles of incorporation, or the 17 bylaws before or after the date and time stated in the notice. 18 Except as provided in subsection 3, the waiver must be in 19 writing, signed by the director entitled to the notice, whether 20 before or after the time stated in the notice, and delivered to 21 the state bank for filing by the state bank with the minutes or 22 corporate records. 23 Sec. 64. Section 524.607, subsection 3, Code 2021, is 24 amended by striking the subsection and inserting in lieu 25 thereof the following: 26 3. A director’s attendance at or participation in a meeting 27 waives any required notice to the director of such meeting 28 unless all of the following apply: 29 a. The director at the beginning of the meeting, or promptly 30 upon arrival, objects to holding the meeting or transacting 31 business at the meeting because the meeting is not lawfully 32 called or convened. 33 b. The director does not, after objecting, vote for or 34 assent to action taken at the meeting. 35 -42- LSB 1359SZ (2) 89 jda/rn 42/ 96
S.F. 586 Sec. 65. Section 524.607, subsection 4, Code 2021, is 1 amended by striking the subsection. 2 Sec. 66. Section 524.607A, subsection 1, Code 2021, is 3 amended to read as follows: 4 1. Unless the articles of incorporation or bylaws provide 5 otherwise, action required or permitted to be taken under this 6 chapter at a board of directors’ meeting may be taken without 7 a meeting if the action is consented to by all members of the 8 board. The action must be evidenced by one or more written 9 consents describing the action taken, signed by each director, 10 and included in the minutes or filed with the corporate 11 records reflecting the action taken. A consent may be signed 12 by manual, facsimile, conformed, or electronic signature and 13 may be delivered by electronic transmission. As used in this 14 subsection, “electronic signature” means the same as defined in 15 section 554D.103. 16 Sec. 67. Section 524.608, Code 2021, is amended to read as 17 follows: 18 524.608 Auditing procedures. 19 1. In addition to any examination made by the banking 20 division or other supervisory agency, the board of directors 21 shall review the adequacy of the state bank’s internal controls 22 and cause to be made no less frequently than once each calendar 23 year additional auditing procedures that the board deems to 24 be appropriate. The board shall determine the state bank’s 25 audit needs and record in the board’s minutes the extent to 26 which audit procedures are to be employed. A report which 27 summarizes significant audit findings shall be delivered to the 28 superintendent as soon as practical upon completion. 29 2. The superintendent may require that more comprehensive 30 auditing procedures be applied to a state bank’s account 31 records when deemed necessary. These auditing procedures 32 may range from limited scope agreed-upon procedures to an 33 unqualified audit opinion. 34 Sec. 68. Section 524.610, subsection 1, Code 2021, is 35 -43- LSB 1359SZ (2) 89 jda/rn 43/ 96
S.F. 586 amended to read as follows: 1 1. The shareholders of a state bank shall fix the 2 reasonable compensation of directors for their services as 3 members of the board of directors. Subject to approval by 4 the shareholders at an annual or special meeting called for 5 that purpose, the shareholders of a state bank may adopt a 6 pension or profit-sharing plan, or both, or other plan of 7 deferred compensation for directors, to which a state bank may 8 contribute. Changes to such a pension or profit-sharing plan 9 or other plan of deferred compensation, other than changes 10 that affect eligibility requirements for directors under the 11 plan, benefits provided to directors pursuant to the plan, and 12 contributions required by the state bank or directors under 13 the plan, may be adopted by the board of directors without 14 shareholder approval. 15 Sec. 69. Section 524.611, subsection 2, Code 2021, is 16 amended to read as follows: 17 2. The oath shall be signed by the director, acknowledged 18 before an officer individual authorized to take acknowledgments 19 of deeds perform notarial acts , and delivered to the 20 superintendent. 21 Sec. 70. Section 524.703, subsection 2, Code 2021, is 22 amended to read as follows: 23 2. Subject to approval by the shareholders at an annual or 24 special meeting called for the purpose, the board of directors 25 of a state bank may adopt a pension or profit-sharing plan, 26 or both, or other plan of deferred compensation, for both 27 officers and employees, to which the state bank may contribute. 28 Changes to such a pension or profit-sharing plan or other 29 plan of deferred compensation, other than changes that affect 30 eligibility requirements for officers and employees under the 31 plan, benefits provided to officers and employees pursuant to 32 the plan, and contributions required by state banks, officers, 33 or employees under the plan, may be adopted by the board of 34 directors without shareholder approval. 35 -44- LSB 1359SZ (2) 89 jda/rn 44/ 96
S.F. 586 Sec. 71. Section 524.707, subsection 2, Code 2021, is 1 amended to read as follows: 2 2. Section 524.606, subsection 2 , which provides for the 3 removal of directors by the superintendent, shall have equal 4 application to officers and employees of a state bank, bank 5 holding company, bank affiliate, or trust company. 6 Sec. 72. Section 524.802, subsections 9, 11, and 13, Code 7 2021, are amended to read as follows: 8 9. Acquire and hold shares of stock in the appropriate 9 federal home loan bank and to exercise all powers conferred 10 on member banks of the federal home loan bank system that are 11 not inconsistent with this chapter . A purchase of federal 12 home loan bank shares which causes the state bank’s holdings 13 to exceed fifteen percent of aggregate capital , including 14 where the ownership of shares exceeding fifteen percent of 15 the state bank’s aggregate capital is needed to support the 16 state bank’s participation in the federal home loan bank’s 17 acquired member assets program provided for in 12 C.F.R. pt. 18 955, requires the prior approval of the superintendent. In 19 addition, a state bank may own federal home loan bank shares 20 in an amount exceeding fifteen percent of the state bank’s 21 aggregate capital, but not exceeding twenty-five percent of 22 the state bank’s aggregate capital, if the ownership of shares 23 exceeding fifteen percent is needed to support the state bank’s 24 participation in the federal home loan bank’s acquired member 25 assets program as provided for in 12 C.F.R. pt. 955 . 26 11. Become Subject to section 524.109, subsection 2, become 27 a member of a bankers’ bank. 28 13. Acquire, hold, and improve real estate for the sole 29 purpose of economic or community development, provided that 30 the state bank’s aggregate investment in all acquisitions and 31 improvements of real estate under this subsection shall not 32 exceed fifteen percent of a state bank’s aggregate capital and 33 shall be subject to the prior approval of the superintendent , 34 the state bank provides the superintendent with thirty days’ 35 -45- LSB 1359SZ (2) 89 jda/rn 45/ 96
S.F. 586 prior written notice of its intention to acquire, hold, and 1 improve the real estate, and the superintendent does not object 2 to the state bank’s proposed plan within thirty days . For 3 purposes of this section, the term “community development” 4 includes public welfare investments as defined in section 5 524.901, subsection 7, paragraph “a” , and other investments as 6 permitted under 12 U.S.C. §24 and its implementing regulations. 7 Sec. 73. NEW SECTION . 524.802A Electronic activities of 8 state bank. 9 1. A state bank may conduct in electronic form any 10 activities that are expressly authorized for state banks under 11 any provision of this chapter, including in sections 524.801, 12 524.802, and 524.804, and activities that are the functional 13 equivalent of any activities expressly authorized for state 14 banks under this chapter. A state bank may perform, provide, 15 or deliver through electronic means any activity, function, 16 product, or service it is authorized to perform by any 17 provision of this chapter and must comply with all applicable 18 laws and regulations. 19 2. Subject to the prior approval of the superintendent, 20 a state bank may, beginning on July 1, 2021, engage in new 21 or innovative electronic activities that are part of the 22 business of banking. When determining whether a state bank is 23 authorized to engage in a new or innovative electronic activity 24 that is not traditionally offered by banks via electronic 25 means, the superintendent shall consider whether the activity 26 is expressly authorized for state banks under this chapter, 27 whether the activity is the functional equivalent of any 28 activity authorized for state banks, whether the activity 29 is a logical extension of any activity authorized for state 30 banks, whether the state bank has the expertise necessary to 31 understand and manage the activity, and whether the activity 32 presents risks similar to those state banks already assume. 33 3. A state bank that engages in any new or innovative 34 electronic activities must conduct these activities in a 35 -46- LSB 1359SZ (2) 89 jda/rn 46/ 96
S.F. 586 safe and sound manner and must maintain adequate systems to 1 identify, measure, monitor, and control the risks associated 2 with its electronic activities. These systems must include 3 policies, procedures, internal controls, and management 4 information systems governing the electronic activities of 5 the state bank and may be tailored to the specific risks 6 presented by the electronic activities of the state bank. A 7 state bank engaging in new or innovative electronic activities 8 must also maintain adequate and effective information security 9 infrastructure and controls. 10 4. The superintendent may adopt rules pursuant to chapter 11 17A to implement the provisions of this section, including 12 but not limited to application procedures, identifying the 13 systems, processes, and technologies a state bank must maintain 14 in order to engage in certain new or innovative electronic 15 activities, and determining that additional new or innovative 16 electronic activities are authorized for state banks without 17 prior approval. 18 Sec. 74. Section 524.803, subsection 3, Code 2021, is 19 amended to read as follows: 20 3. Any real property which is held by a state bank pursuant 21 to this section and which it ceases to use for banking 22 purposes, or is acquired for future use but not used within 23 a reasonable period of time five years after title is vested 24 in the state bank , shall be sold or disposed of by the state 25 bank as directed by the superintendent. This deadline may be 26 extended up to an additional five years with prior approval of 27 the superintendent, but in no event may a state bank hold the 28 property for more than ten years. 29 Sec. 75. Section 524.810A, subsection 1, unnumbered 30 paragraph 1, Code 2021, is amended to read as follows: 31 A bank shall permit a person named in and authorized by a 32 court order to open, examine, and remove the contents of a safe 33 deposit box located at the bank. If a court order has not been 34 delivered to the bank, the following persons may access and 35 -47- LSB 1359SZ (2) 89 jda/rn 47/ 96
S.F. 586 remove any or all contents of a safe deposit box located at a 1 state bank which box is described in an ownership or rental 2 agreement or lease between the state bank and a deceased owner 3 or lessee: 4 Sec. 76. Section 524.812, subsection 3, Code 2021, is 5 amended to read as follows: 6 3. If the contents are not claimed within two years after 7 their removal from the safe deposit box, the state bank may 8 proceed to sell so much of the contents as is necessary to 9 pay the past due rentals and the expense incurred in opening 10 the safe deposit box, replacement of the locks thereon and 11 the sale of the contents. The sale shall be held at the time 12 and place specified in a notice published prior to the sale 13 once each week for two successive weeks in a newspaper of 14 general circulation published in the municipal corporation or 15 unincorporated area in which the state bank has its principal 16 place of business, or if there is none, a newspaper of general 17 circulation published in the county, or in a county adjoining 18 the county, in which the state bank has its principal place of 19 business. The state bank shall also post this notice on the 20 state bank’s internet site for at least two weeks prior to the 21 sale. A copy of the notice so published shall be mailed to the 22 customer at the customer’s last known address as shown upon the 23 records of the state bank. The notice shall contain the name 24 of the customer and need only describe the contents of the safe 25 deposit box in general terms. The contents of any number of 26 safe deposit boxes may be sold under one notice of sale and the 27 cost thereof apportioned ratably among the several safe deposit 28 box customers involved. At the time and place designated 29 in said notice the contents taken from each respective safe 30 deposit box shall be sold separately to the highest bidder for 31 cash and the proceeds of each sale applied to the rentals and 32 expenses due to the state bank and the residue from any such 33 sale shall be held by the state bank for the account of the 34 customer or customers. Any amount so held as proceeds from 35 -48- LSB 1359SZ (2) 89 jda/rn 48/ 96
S.F. 586 such sale shall be credited with interest at the customary 1 annual rate for savings accounts at said state bank, or in lieu 2 thereof, at the customary rate of interest in the community 3 where such proceeds are held. The crediting of interest shall 4 not activate said account to avoid an abandonment as unclaimed 5 property under chapter 556 . 6 Sec. 77. Section 524.816, Code 2021, is amended by striking 7 the section and inserting in lieu thereof the following: 8 524.816 Deposit account insurance. 9 A state bank organized under this chapter shall be an 10 insured bank and shall acquire and maintain insurance from the 11 federal deposit insurance corporation, or its successor, to 12 protect each depositor against loss of funds held on account 13 by the state bank to the extent the federal deposit insurance 14 corporation insures such deposits. 15 Sec. 78. Section 524.819, Code 2021, is amended to read as 16 follows: 17 524.819 Clearing checks at par. 18 Checks drawn on a state bank shall be cleared at par by the 19 state bank on which they are drawn. This section shall not be 20 applicable where checks are received by a state bank as special 21 collection items. 22 Sec. 79. Section 524.821, Code 2021, is amended to read as 23 follows: 24 524.821 Electronic transmission of funds —— restrictions. 25 1. A state bank may engage in any transaction incidental 26 to the conduct of the business of banking and otherwise 27 permitted by applicable law, by means of either the direct 28 transmission of electronic impulses to or from customers and 29 banks or the recording of electronic impulses or other indicia 30 of a transaction for delayed transmission to a bank. Subject 31 to the provisions of chapter 527 , except as preempted by 32 other applicable law, a state bank may utilize, establish , or 33 operate, alone or with one or more other banks, federal savings 34 and loan associations incorporated under federal law , credit 35 -49- LSB 1359SZ (2) 89 jda/rn 49/ 96
S.F. 586 unions incorporated under the provisions of chapter 533 or 1 federal law, corporations licensed under chapter 536A , or third 2 parties, the satellite terminals permitted under chapter 527 , 3 by means of which customers and banks may transmit and receive 4 electronic impulses constituting transactions pursuant to this 5 section . However, except as preempted by other applicable 6 law, such utilization, establishment, or operation shall be 7 lawful only when in compliance with chapter 527 . Nothing in 8 this section shall be construed as authority for any person to 9 engage in transactions not otherwise permitted by applicable 10 law, nor shall anything in this section be deemed to repeal, 11 replace or in any other way affect any applicable law or rule 12 regarding the maintenance of or access to financial information 13 maintained by any bank. 14 2. A state bank which offers its customers, or any of them, 15 the opportunity to engage in transactions with or through the 16 state bank in the manner authorized by subsection 1 shall not 17 require a customer to deal with or through the state bank in 18 that manner in lieu of writing checks in the usual manner 19 upon a conventional checking account, and shall not impose 20 any extraordinary charge upon customers who choose to write 21 checks in the usual manner upon a conventional checking account 22 maintained at that state bank. The term “extraordinary charge” , 23 as used in this subsection , is a charge in excess of a fair and 24 reasonable charge, based upon the costs to the state bank of 25 providing and maintaining checking account services. 26 Sec. 80. Section 524.901, subsection 7, paragraph a, 27 subparagraph (2), Code 2021, is amended to read as follows: 28 (2) Community development corporations or community 29 development projects Public welfare investments to the same 30 extent a national bank may invest in such corporations or 31 projects pursuant to 12 U.S.C. §24 and its implementing 32 regulations . 33 Sec. 81. Section 524.901, subsection 7, paragraph a, 34 subparagraph (3), Code 2021, is amended by striking the 35 -50- LSB 1359SZ (2) 89 jda/rn 50/ 96
S.F. 586 subparagraph. 1 Sec. 82. Section 524.901, subsection 7, paragraph c, Code 2 2021, is amended by adding the following new subparagraph: 3 NEW SUBPARAGRAPH . (02) The term “public welfare 4 investment” means an investment that primarily benefits low 5 and moderate-income individuals, low and moderate-income 6 areas, or other areas targeted by a governmental entity for 7 redevelopment. “Public welfare investment” includes investments 8 that primarily support any of the types of activities 9 identified in 12 C.F.R. §24.6. “Public welfare investment” 10 includes an investment that would receive consideration under 11 12 C.F.R. pt. 25 as a qualified investment. “Public welfare 12 investment” includes an investment in any of the following 13 areas: 14 (a) A targeted service area as defined in section 8B.1, 15 subsection 13. 16 (b) A small city as defined in section 15.352, subsection 17 10. 18 (c) An area of the state that is not part of a federally 19 designated standard metropolitan statistical area. 20 Sec. 83. Section 524.901, subsection 8, Code 2021, is 21 amended to read as follows: 22 8. A state bank, in the exercise of the powers granted in 23 this chapter , may purchase cash value life insurance contracts 24 which may include provisions for the lump sum payment of 25 premiums and which may include insurance against the loss of 26 the lump sum payment. State banks may only purchase cash 27 value life insurance contracts if the contract is tied to an 28 employee benefit the state bank is obligated to pay. The cash 29 value life insurance contracts , together with the investment in 30 annuity contracts authorized in subsection 8A, purchased from 31 any one company shall not exceed fifteen percent of aggregate 32 capital of the state bank, and in the aggregate from all 33 companies, together with the investment in annuity contracts 34 authorized in subsection 8A, shall not exceed twenty-five 35 -51- LSB 1359SZ (2) 89 jda/rn 51/ 96
S.F. 586 percent of aggregate capital of the state bank unless the state 1 bank has obtained the approval of the superintendent prior 2 to the purchase of any cash value life insurance contract in 3 excess of this limitation. Purchase and sale of such contracts 4 shall be conducted in accordance with safe and sound banking 5 practices. 6 Sec. 84. Section 524.901, Code 2021, is amended by adding 7 the following new subsections: 8 NEW SUBSECTION . 8A. A state bank, in the exercise of 9 the powers granted in this chapter, may purchase annuity 10 contracts so long as the annuity contract is tied to an 11 employee benefit the state bank is obligated to pay. The 12 total investment in annuity contracts purchased from any 13 one company, together with the cash value of life insurance 14 contracts authorized in subsection 8, shall not exceed fifteen 15 percent of aggregate capital of the state bank, and in the 16 aggregate from all companies, together with the cash value of 17 life insurance contracts authorized in subsection 8, shall not 18 exceed twenty-five percent of aggregate capital of the state 19 bank unless the state bank has obtained the approval of the 20 superintendent prior to the purchase of any cash value life 21 insurance contract in excess of this limitation. Purchase and 22 sale of such contracts shall be conducted in accordance with 23 safe and sound banking practices. 24 NEW SUBSECTION . 10. A state bank, upon the approval of the 25 superintendent, may invest in the shares or equity interests 26 of any corporation or other entity which develops or utilizes 27 new or innovative technologies that are or may be applicable 28 to the provision of banking or other financial products or 29 services, including the covered services identified in section 30 524.218, subsection 2. A state bank’s total investment in 31 any combination of shares or equity interests of the entities 32 identified in this paragraph shall not exceed five percent of 33 its aggregate capital. 34 Sec. 85. Section 524.904, subsection 2, Code 2021, is 35 -52- LSB 1359SZ (2) 89 jda/rn 52/ 96
S.F. 586 amended to read as follows: 1 2. A state bank may grant loans and extensions of credit to 2 one borrower in an amount not to exceed fifteen percent of the 3 state bank’s aggregate capital as defined in section 524.103 , 4 unless the additional lending provisions provision described in 5 subsection 3 or 4 apply applies . 6 Sec. 86. Section 524.904, subsection 3, paragraphs a, b, and 7 e, Code 2021, are amended by striking the paragraphs. 8 Sec. 87. Section 524.904, subsection 4, Code 2021, is 9 amended by striking the subsection. 10 Sec. 88. Section 524.904, subsection 5, paragraph a, Code 11 2021, is amended to read as follows: 12 a. A state bank may grant loans and extensions of credit 13 to a borrowing group in an amount not to exceed twenty-five 14 percent of the state bank’s aggregate capital if all loans and 15 extensions of credit to any one borrower within a borrowing 16 group conform to subsection 2 or 3 , and the financial strength, 17 assets, guarantee, or endorsement of any one borrowing group 18 member is not relied upon as a basis for loans and extensions 19 of credit to any other borrowing group member. A state bank 20 may grant loans and extensions of credit to a borrowing group 21 in an amount not to exceed thirty-five percent of aggregate 22 capital if all loans and extensions of credit to any one 23 borrower within a borrowing group conform to subsection 2, 24 3, or 4 , and the financial strength, assets, guarantee, or 25 endorsement of any one borrowing group member is not relied 26 upon as a basis for loans and extensions of credit to any 27 other borrowing group member. While not to be construed as an 28 endorsement of the quality of any loan or extension of credit, 29 the superintendent may authorize a state bank to grant loans 30 and extensions of credit to a borrowing group in an amount not 31 to exceed fifty percent of aggregate capital if all loans and 32 extensions of credit to any one borrower within a borrowing 33 group conform to subsection 2 or 3 , and the financial strength, 34 assets, guarantee, or endorsement of any one borrowing group 35 -53- LSB 1359SZ (2) 89 jda/rn 53/ 96
S.F. 586 member is not relied upon as a basis for loans and extensions 1 of credit to any other borrowing group member. 2 Sec. 89. Section 524.905, subsections 2 and 3, Code 2021, 3 are amended to read as follows: 4 2. Protective payments —— escrow accounts. A bank may 5 include in the loan documents signed by the borrower a 6 provision requiring the borrower to pay the bank each month in 7 addition to interest and principal under the note an amount 8 equal to one-twelfth of the estimated annual real estate 9 taxes, special assessments, hazard insurance premium, mortgage 10 insurance premium, or any other payment agreed to by the 11 borrower and the bank in order to better secure the loan. The 12 bank shall be deemed to be acting in a fiduciary capacity with 13 respect to these funds. A bank receiving funds in escrow 14 pursuant to an escrow agreement executed on or after July 1, 15 1982 in connection with a loan as defined in section 535.8, 16 subsection 1 , shall may pay interest to the borrower on those 17 funds , calculated on a daily basis, at the rate the bank pays 18 to depositors of funds in ordinary savings accounts . A bank 19 which maintains an escrow account in connection with any loan 20 authorized by this section , whether or not the mortgage has 21 been assigned to a third person, shall each year deliver to the 22 mortgagor a written annual accounting of all transactions made 23 with respect to the loan and escrow account. 24 3. Escrow reports. A state bank may act as an escrow agent 25 with respect to real property, and may receive funds and make 26 disbursements from escrowed funds in that capacity. The state 27 bank shall be deemed to be acting in a fiduciary capacity with 28 respect to these funds. A state bank which maintains such 29 an escrow account relating to a mortgage , whether or not the 30 mortgage has been assigned to a third person, shall deliver 31 to the mortgagor a written summary of all transactions made 32 with respect to the loan and escrow accounts during each 33 calendar escrow account computation year as defined in 12 34 C.F.R. §1024.17 . However, the mortgagor and mortgagee may, by 35 -54- LSB 1359SZ (2) 89 jda/rn 54/ 96
S.F. 586 mutual agreement, select a fiscal year reporting period other 1 than the calendar year. The summary shall be delivered or 2 mailed not later than thirty days following the escrow account 3 computation year to which disclosure relates and shall include 4 the information required for annual escrow account statements 5 under 12 C.F.R. §1024.17 . The summary shall contain all of the 6 following information: 7 a. The name and address of the mortgagee. 8 b. The name and address of the mortgagor. 9 c. A summary of escrow account activity during the year as 10 follows: 11 (1) The balance of the escrow account at the beginning of 12 the year. 13 (2) The aggregate amount of deposits to the escrow account 14 during the year. 15 (3) The aggregate amount of withdrawals from the escrow 16 account for each of the following categories: 17 (a) Payments against loan principal. 18 (b) Payments against interest. 19 (c) Payments against real estate taxes. 20 (d) Payments for real property insurance premiums. 21 (e) All other withdrawals. 22 (4) The balance of the escrow account at the end of the 23 year. 24 d. A summary of loan principal for the year as follows: 25 (1) The amount of principal outstanding at the beginning of 26 the year. 27 (2) The aggregate amount of payments against principal 28 during the year. 29 (3) The amount of principal outstanding at the end of the 30 year. 31 Sec. 90. Section 524.910, subsection 2, Code 2021, is 32 amended to read as follows: 33 2. Real property purchased by a state bank at sales upon 34 foreclosure of mortgages or deeds of trust owned by it, or 35 -55- LSB 1359SZ (2) 89 jda/rn 55/ 96
S.F. 586 acquired upon judgments or decrees obtained or rendered for 1 debts due it, or real property conveyed to it in satisfaction 2 of debts previously contracted in the course of its business, 3 or real property obtained by it through redemption as a 4 junior mortgagee or judgment creditor, shall be sold or 5 otherwise disposed of by the state bank within five years 6 after title is vested in the state bank, unless the time is 7 extended by the superintendent. This deadline may be extended 8 up to an additional five years with prior approval of the 9 superintendent, but in no event shall a state bank hold such 10 property for more than ten years. 11 Sec. 91. Section 524.1003, subsection 1, paragraph a, Code 12 2021, is amended to read as follows: 13 a. If the superintendent at any time concludes that a state 14 bank authorized to act in a fiduciary capacity is managing its 15 accounts in an unsafe or unsound manner, or in a manner in 16 conflict with the provisions of this chapter , and such state 17 bank refuses to correct such practices upon following notice to 18 do so, the superintendent may forthwith direct that the state 19 bank cease to act as a fiduciary and proceed to resign its 20 fiduciary positions . 21 Sec. 92. Section 524.1003, subsection 1, paragraph b, Code 22 2021, is amended by striking the paragraph and inserting in 23 lieu thereof the following: 24 b. After directing the state bank to cease to act as a 25 fiduciary, the superintendent shall file a petition in the 26 district court of Polk county setting forth in general terms 27 that the state bank is acting as fiduciary with respect to 28 certain property and that it is necessary and desirable that 29 successor fiduciaries be appointed for such property. 30 Sec. 93. Section 524.1003, subsection 1, Code 2021, is 31 amended by adding the following new paragraphs: 32 NEW PARAGRAPH . c. Following the filing of a petition 33 pursuant to paragraph “b” by the superintendent, the district 34 court shall issue an order requiring all persons interested 35 -56- LSB 1359SZ (2) 89 jda/rn 56/ 96
S.F. 586 in the state bank’s fiduciary accounts to appoint a successor 1 fiduciary by a specific date, acknowledge the fiduciary 2 succession as described in the will, trust instrument, or 3 other governing instrument of the fiduciary account, or show 4 cause why the district court should not appoint a successor 5 fiduciary. Such order may also appoint a temporary fiduciary 6 for the fiduciary accounts held by the state bank who shall 7 be obligated to take possession of the fiduciary accounts 8 and perform necessary tax, investment, distribution, asset 9 protection, and reporting obligations required of the fiduciary 10 accounts and perform necessary tax, investment, distribution, 11 asset protection, and reporting obligations required of the 12 fiduciary until a permanent successor is appointed. Neither 13 the temporary nor permanent successor fiduciary shall be 14 liable for the actions of the state bank and shall not be 15 responsible for reviewing the action or inaction of the 16 preceding fiduciary. The state bank’s liability for any action 17 or inaction in its former fiduciary positions shall not be 18 impacted by the transfer of fiduciary duties pursuant to this 19 section. The district court may assess the fees and costs of 20 the temporary fiduciary against the state bank. 21 NEW PARAGRAPH . d. Following the appointment of a temporary 22 fiduciary, the district court shall enter an order directing 23 the temporary fiduciary to provide notice of the petition 24 and the order described in this section, through a means 25 approved by the district court, to all persons shown in the 26 records of the state bank to have a beneficial interest in 27 the fiduciary accounts or entitled to notice or an accounting 28 under the terms of the will, trust instrument, or other 29 governing instrument of the fiduciary account, chapter 633, 30 633A, 633B, or other applicable statute under which the state 31 bank has been operating as a fiduciary. The district court 32 may also order publication of the notice for two consecutive 33 weeks in newspapers of general circulation in one or more 34 counties as prescribed by the district court, and publication 35 -57- LSB 1359SZ (2) 89 jda/rn 57/ 96
S.F. 586 on the temporary fiduciary’s internet site for at least twenty 1 days, to the extent the district court deems such published 2 notice necessary to protect the interests of absent or remote 3 beneficiaries. 4 Sec. 94. Section 524.1003, subsection 2, Code 2021, is 5 amended by striking the subsection and inserting in lieu 6 thereof the following: 7 2. At least twenty days after providing notice of a petition 8 and order appointing the temporary fiduciary as described in 9 this section, the district court shall appoint a permanent 10 successor fiduciary for any fiduciary account where appropriate 11 parties have failed to cause a successor fiduciary to be 12 appointed. A successor fiduciary appointed in accordance with 13 the terms of this section shall succeed to all the rights, 14 powers, titles, duties, and responsibilities of the state bank 15 except that the successor fiduciary shall not exercise the 16 powers given in the instrument creating the powers that by 17 its express terms are personal to the state bank previously 18 designated and except claims or liabilities arising out of the 19 management of the fiduciary account prior to the date of the 20 transfer. 21 Sec. 95. Section 524.1004, Code 2021, is amended by striking 22 the section and inserting in lieu thereof the following: 23 524.1004 Voluntary relinquishment of fiduciary capacity. 24 1. A state bank desiring to completely surrender its 25 authorization to act in any fiduciary capacity shall file with 26 the superintendent a certified copy of a resolution by the 27 board of directors signifying such intent. 28 2. Following the filing with the superintendent of the 29 resolution to surrender its authorization to act in a fiduciary 30 capacity, the state bank shall file a petition in the district 31 court in which the state bank has its principal place of 32 business setting forth in general terms that the state bank is 33 acting as fiduciary with respect to certain property, that the 34 state bank desires to cease its fiduciary function and resign 35 -58- LSB 1359SZ (2) 89 jda/rn 58/ 96
S.F. 586 its fiduciary positions, and that it is necessary and desirable 1 that successor fiduciaries be appointed for such property. 2 3. The filing of the petition shall operate as a resignation 3 of the state bank from all of its fiduciary positions. During 4 the adjudication of the petition, the state bank shall retain 5 all fiduciary rights, powers, titles, duties, responsibilities, 6 and accounts it held prior to filing the petition. The state 7 bank’s liability for any action or inaction in its former 8 fiduciary positions shall not be impacted by the transfer of 9 fiduciary duties pursuant to this section. 10 4. Following the filing of the petition, the district 11 court shall issue an order requiring all persons interested 12 in such fiduciary accounts to appoint a successor fiduciary 13 by a specific date, acknowledge the fiduciary succession as 14 described in the will, trust instrument, or other governing 15 instrument of the fiduciary account, or show cause why the 16 district court should not appoint a successor fiduciary. The 17 district court shall also enter an order directing the state 18 bank to provide notice of the petition and the order described 19 in this section, through a means approved by the district 20 court, to all persons shown in the records of the state bank 21 to have a beneficial interest in the fiduciary accounts or 22 entitled to notice or an accounting under the terms of the 23 will, trust instrument, or other governing instrument of the 24 fiduciary account, chapter 633, 633A, 633B, or other applicable 25 statute under which the state bank has been operating as a 26 fiduciary. The district court may also order publication of 27 the notice for two consecutive weeks in newspapers of general 28 circulation in one or more counties as prescribed by the 29 district court, and publication on the state bank’s internet 30 site for at least twenty days, to the extent the district court 31 deems such published notice necessary to protect the interests 32 of absent or remote beneficiaries. 33 5. At least twenty days after the state bank provides notice 34 of the petition and order as described in this section, the 35 -59- LSB 1359SZ (2) 89 jda/rn 59/ 96
S.F. 586 district court shall appoint a permanent successor fiduciary 1 for any fiduciary account where appropriate parties have 2 failed to cause a successor fiduciary to be appointed. A 3 successor fiduciary appointed in accordance with the terms of 4 this section shall succeed to all the rights, powers, titles, 5 duties, and responsibilities of the state bank except that the 6 successor fiduciary shall not exercise powers given in the 7 instrument creating the powers that by its express terms are 8 personal to the state bank previously designated and except 9 claims or liabilities arising out of the management of the 10 fiduciary account prior to the date of the transfer. 11 6. Following the adjudication of the petition described 12 in this section, the state bank shall proceed to amend its 13 articles of incorporation, in accordance with the provisions 14 of this chapter, in a manner to indicate that it is no longer 15 authorized to act in a fiduciary capacity. The superintendent 16 shall approve the proposed amendment, in the manner provided 17 for in this chapter, if the superintendent is satisfied that 18 the state bank has properly relieved itself of its fiduciary 19 responsibilities. 20 Sec. 96. NEW SECTION . 524.1005A Nonresident corporate 21 fiduciaries. 22 An out-of-state bank or a trust company chartered or 23 organized under the laws of another state may only act 24 in a fiduciary capacity in this state if it satisfies the 25 requirements for nonresident corporate fiduciaries pursuant to 26 section 633.64. 27 Sec. 97. Section 524.1007, Code 2021, is amended by striking 28 the section and inserting in lieu thereof the following: 29 524.1007 Succession of fiduciary accounts to another 30 financial institution. 31 1. A state bank or other entity authorized to act in 32 a fiduciary capacity may enter into an agreement for the 33 succession of any fiduciary accounts with one or more other 34 banks or trust companies, including trust companies organized 35 -60- LSB 1359SZ (2) 89 jda/rn 60/ 96
S.F. 586 under the laws of another state, that are authorized to act in 1 a fiduciary capacity under the laws of this state, the laws 2 of another state, or a national bank to the extent permitted 3 by the laws of the United States. In the agreement, the 4 succeeding bank or trust company may agree to succeed the 5 relinquishing bank or trust company as a fiduciary to those 6 fiduciary accounts which are designated in the agreement. The 7 designation of accounts may be by general class or description 8 and may include fiduciary accounts subject and not subject to 9 court administration and fiduciary accounts to arise in the 10 future under wills, trusts, court orders, or other documents 11 under which the relinquishing bank or trust company is named 12 as a fiduciary or is named to become a fiduciary upon the death 13 of a testator or settlor or upon the happening of any other 14 subsequent event. 15 2. The relinquishing bank or trust company shall provide, 16 at least twenty days preceding the effective date for the 17 succession of the fiduciary accounts, notice of the pending 18 succession, as required by chapter 633, 633A, 633B, or any 19 other applicable chapter, to all persons shown in the records 20 of the relinquishing bank or trust company to have a beneficial 21 interest in the fiduciary accounts or entitled to notice or an 22 accounting under the terms of the will, trust instrument, or 23 other governing instrument of the fiduciary account, chapter 24 633, 633A, or 633B, or other applicable statute under which 25 the relinquishing bank or trust company has been operating as 26 a fiduciary. In order to account for unknown or prospective 27 appointments, the relinquishing bank or trust company shall 28 publish a notice of the succession to fiduciary accounts in a 29 newspaper published in the county of the principal place of 30 business of the relinquishing bank or trust company, and the 31 notice must be published on the relinquishing bank or trust 32 company’s internet site for at least twenty days preceding the 33 effective date of the agreement for the succession of fiduciary 34 accounts. For any fiduciary accounts that are employee benefit 35 -61- LSB 1359SZ (2) 89 jda/rn 61/ 96
S.F. 586 plans, the relinquishing bank or trust company may satisfy this 1 subsection by sending the required notice to the plan sponsors. 2 3. Following the publication and notice described in 3 this section, the succeeding bank or trust company shall, on 4 the effective date of the agreement for the succession of 5 fiduciary accounts and without further notice, approval, or 6 authorization, succeed to the relinquishing bank or trust 7 company as to the fiduciary accounts and the fiduciary powers, 8 rights, privileges, duties, and liabilities for the fiduciary 9 accounts. On the effective date of the succession to fiduciary 10 accounts, the relinquishing bank or trust company is released 11 from the fiduciary duties under the fiduciary accounts and 12 shall discontinue its exercise of fiduciary powers over the 13 fiduciary accounts. Notice of such fiduciary succession 14 shall be filed of record for each parcel of real estate in 15 this state subject to such fiduciary succession unless all 16 of the fiduciary accounts held by the relinquishing bank or 17 trust company are subject to the agreement for succession 18 of fiduciary accounts, in which case the relinquishing bank 19 or trust company shall file notice of the succession in the 20 county recorder’s office of all counties in which the fiduciary 21 accounts of the relinquishing bank or trust company owned real 22 estate prior to the effective date of the agreement. This 23 subsection does not absolve a relinquishing bank or trust 24 company from liabilities arising out of a breach of fiduciary 25 duty occurring prior to the effective date of the succession 26 to fiduciary accounts. 27 4. Within sixty days after the mailing and publication of 28 the notice, a person with an interest in a fiduciary account 29 included within the notice and agreement required by subsection 30 1 may apply to the district court in the county in which the 31 notice is published for the appointment of a new fiduciary on 32 the ground that the succeeding fiduciary will adversely affect 33 the administration of the fiduciary account. After notice to 34 all interested parties and a hearing on the issues, the court 35 -62- LSB 1359SZ (2) 89 jda/rn 62/ 96
S.F. 586 may appoint a new fiduciary to replace the succeeding fiduciary 1 if it finds that the substitution of the succeeding fiduciary 2 will adversely affect the administration of the account and 3 that the appointment of a new fiduciary would be in the best 4 interests of the beneficiaries of the fiduciary account. This 5 subsection is in addition to section 633.65 and any other 6 applicable provision governing the removal of a fiduciary. 7 5. The privilege of succeeding to fiduciary accounts that 8 is extended to a state bank or trust company by this section is 9 also extended on the same terms and conditions to a national 10 bank organized under 12 U.S.C. §21 et seq. to engage generally 11 in the banking business, and to out-of-state banks and trust 12 companies that are authorized to serve as a fiduciary in this 13 state pursuant to section 633.64. 14 6. For a fiduciary account governed by Iowa law, a 15 relinquishing bank or trust company may transfer the situs of 16 the fiduciary account to a jurisdiction other than Iowa if the 17 will, trust instrument, or other governing instrument of the 18 fiduciary account so provides, if all persons interested in 19 the fiduciary account consent to the transfer, or as otherwise 20 authorized by applicable law. 21 Sec. 98. Section 524.1009, Code 2021, is amended to read as 22 follows: 23 524.1009 Succession to fiduciary accounts and appointments —— 24 application for appointment of new fiduciary merger . 25 1. If a party to a plan of merger was authorized to act in a 26 fiduciary capacity and if the resulting state or national bank 27 is similarly authorized, the resulting state or national bank 28 shall be automatically substituted by reason of the merger as 29 fiduciary of all accounts held in that capacity by such party 30 to the plan of merger , without further action and without any 31 order or decree of any court or public officer, and shall have 32 all the rights and be subject to all the obligations of such 33 party as fiduciary. 34 2. No designation, nomination, or appointment as fiduciary 35 -63- LSB 1359SZ (2) 89 jda/rn 63/ 96
S.F. 586 of a party to a plan of merger shall lapse by reason of the 1 merger. The resulting state or national bank, if authorized 2 to act in a fiduciary capacity, shall be entitled to act 3 as fiduciary pursuant to each designation, nomination, or 4 appointment to the same extent as the party to the plan of 5 merger so named could have acted in the absence of the merger. 6 2A. The relinquishing bank shall provide, at least twenty 7 days preceding the effective date for the succession of 8 the fiduciary accounts, notice of the pending succession, 9 as required by chapter 633, 633A, 633B, or any other 10 applicable chapter, to all persons shown in the records of 11 the relinquishing bank to have a beneficial interest in the 12 fiduciary accounts or entitled to notice or an accounting under 13 the terms of the will, trust instrument, or other governing 14 instrument of the fiduciary account, chapter 633, 633A, or 15 633B, or other applicable statute under which the relinquishing 16 bank has been operating as a fiduciary. In order to account 17 for unknown or prospective appointments, the relinquishing bank 18 shall publish a notice of the succession to fiduciary accounts 19 in a newspaper published in the county of the principal place 20 of business of the relinquishing bank, and the notice must be 21 published on the relinquishing bank’s internet site for at 22 least twenty days preceding the effective date of the merger. 23 For any fiduciary accounts that are employee benefit plans, the 24 relinquishing bank may satisfy this subsection by sending the 25 required notice to the plan sponsors. 26 3. Any person with an interest in an account held in a 27 fiduciary capacity by a party to a plan of merger may, within 28 sixty days after the effective date of the merger the mailing 29 and publication of the notice , apply to the district court in 30 the county in which the resulting state or national bank has 31 its principal place of business, notice is published for the 32 appointment of a new fiduciary to replace the resulting state 33 or national bank on the ground that the merger will adversely 34 affect the administration of the fiduciary account. The court 35 -64- LSB 1359SZ (2) 89 jda/rn 64/ 96
S.F. 586 shall have the discretion to appoint a new fiduciary to replace 1 the resulting state or national bank if it should find, upon 2 hearing after notice to all interested parties, that the merger 3 will adversely affect the administration of the fiduciary 4 account and that the appointment of a new fiduciary will be 5 in the best interests of the beneficiaries of the fiduciary 6 account. This provision is in addition to any other provision 7 of law governing the removal of fiduciaries and is subject to 8 the terms upon which the party to the plan of merger which held 9 the fiduciary account was designated as fiduciary. 10 4. The resulting bank shall record a copy of the articles 11 of merger in the county recorder’s office of all counties in 12 which the fiduciary accounts of the relinquishing bank owned 13 real estate prior to the effective date of the merger. 14 Sec. 99. Section 524.1106, Code 2021, is amended to read as 15 follows: 16 524.1106 Fees paid to an affiliate —— approval by 17 superintendent. 18 Any contract or arrangement for management or financial 19 services which involves payment for these services by a state 20 bank to a person who owns shares in that state bank, or to any 21 other affiliate, must be approved by the superintendent prior 22 to such contract or arrangement becoming binding upon the state 23 bank made in compliance with 12 U.S.C. §371c and 12 U.S.C. 24 §371c-1 , and may also be reviewed by the superintendent at any 25 time after original approval . Any contract or arrangement for 26 consultation or other services which involve payment of those 27 services by a state bank to any person who individually or 28 whose spouse or immediate family or any combination thereof 29 owns fifteen percent or more of the outstanding shares of 30 that state bank or is an officer or director thereof, or to 31 an affiliate may be reviewed by the superintendent. Fees 32 paid to an affiliate must be substantially the same as those 33 prevailing at the time for comparable transactions involving 34 nonaffiliated companies in accordance with the provisions of 35 -65- LSB 1359SZ (2) 89 jda/rn 65/ 96
S.F. 586 12 U.S.C. §371c-1. The superintendent shall have authority to 1 determine whether or not such fees are reasonable in relation 2 to the services performed, and if the superintendent determines 3 they are unreasonable, to require that they be reduced to a 4 reasonable amount or eliminated and the excess refunded, or 5 that such contract or arrangement not be entered into by the 6 state bank. 7 Sec. 100. Section 524.1201, Code 2021, is amended to read 8 as follows: 9 524.1201 General provisions. 10 1. A state bank may establish and operate any number of bank 11 offices at any location in this state subject to the approval 12 and regulation of the superintendent. The superintendent 13 shall supervise and regulate all out-of-state branches and 14 offices of a state bank. A bank office may furnish all banking 15 services ordinarily furnished to customers and depositors 16 at the principal place of business of the state bank which 17 operates the office , and a bank office manager or an officer 18 of the bank shall be physically present at each bank office 19 during a majority of its business hours. The central executive 20 and official business and principal recordkeeping functions of 21 a state bank shall be exercised only at its principal place 22 of business or at another bank office as authorized by the 23 superintendent for these functions . 24 2. Notwithstanding subsection 1 , data Data processing 25 services referred to in section 524.804 may be performed for 26 the state bank at some other secure location. All transactions 27 of a bank office shall be immediately transmitted to the 28 principal place of business or other bank office authorized 29 under subsection 1 of the state bank which operates the office, 30 and no current recordkeeping functions shall be maintained 31 at a bank office other than the bank office authorized under 32 subsection 1 , except to the extent the state bank which 33 operates the office deems it desirable to keep there duplicates 34 of the records kept at the principal place of business or 35 -66- LSB 1359SZ (2) 89 jda/rn 66/ 96
S.F. 586 authorized bank office of the state bank. 1 3. Notwithstanding any of the other provisions of this 2 section , original loan documentation and trust recordkeeping 3 functions may be located at any authorized bank office or at 4 any other secure location approved by the superintendent. 5 Sec. 101. Section 524.1206, Code 2021, is amended to read 6 as follows: 7 524.1206 Identification of legally chartered name of bank —— 8 required use of name. 9 A state or national bank, at its locations in this state, 10 shall identify its principal place of business, any bank 11 office, or any bank branch in a manner which includes its 12 legally chartered name or a reasonable variation of such name. 13 A bank doing business in this state electronically shall 14 identify its legally chartered name in any online, mobile, or 15 digital customer interface. The legally chartered name of the 16 state bank, out-of-state bank, or national bank shall be used 17 in all legal documents of such bank. 18 Sec. 102. Section 524.1301, unnumbered paragraph 1, Code 19 2021, is amended to read as follows: 20 A majority of the incorporators, organizers, or initial 21 directors of a state bank that has not issued shares or has not 22 commenced business may dissolve the state bank by delivering 23 articles of dissolution to the superintendent, together with 24 the applicable filing and recording fees , for filing with the 25 secretary of state that set forth all of the following: 26 Sec. 103. Section 524.1303, subsection 2, Code 2021, is 27 amended to read as follows: 28 2. Upon acceptance for processing of an application for 29 approval of a plan of dissolution on forms prescribed by 30 the superintendent, the superintendent shall conduct such 31 investigation as the superintendent may deem necessary to 32 determine whether the plan of dissolution adequately protects 33 the interests of depositors, other creditors , and shareholders 34 and, if the plan of dissolution involves an acquisition of 35 -67- LSB 1359SZ (2) 89 jda/rn 67/ 96
S.F. 586 assets and assumption of liabilities by another state bank, 1 whether such acquisition and assumption would be consistent 2 with adequate and sound banking and in the public interest, on 3 the basis of factors substantially similar to those set forth 4 in section 524.1403, subsection 1 , paragraph “d” . 5 Sec. 104. Section 524.1303, subsections 3, 4, 5, and 6, Code 6 2021, are amended by striking the subsections. 7 Sec. 105. Section 524.1304, subsection 2, Code 2021, is 8 amended to read as follows: 9 2. Upon approval of the plan of voluntary dissolution by 10 the superintendent, the superintendent shall file with the 11 secretary of state articles of dissolution prepared by the 12 applicant in conformance with section 524.1304A . Upon filing 13 of the articles of dissolution with the secretary of state, 14 the state bank shall cease to accept deposits or carry on its 15 business, except insofar as may be necessary for the proper 16 winding up of the business of the state bank in accordance 17 with the approved plan of dissolution. Upon request, the 18 superintendent shall expressly revoke the authorization to 19 do business of any state bank that has voluntarily dissolved 20 pursuant to this section and shall return the physical copy 21 of such state bank’s authorization to do business in a manner 22 clearly indicating that the authorization has been revoked. 23 Sec. 106. Section 524.1305, subsection 1, paragraph d, Code 24 2021, is amended to read as follows: 25 d. Distributing Making distributions of its remaining 26 property assets among its shareholders according to their 27 interests. 28 Sec. 107. Section 524.1305, subsection 2, paragraph d, Code 29 2021, is amended to read as follows: 30 d. Changing quorum any of the following: 31 (1) Quorum or voting requirements for its board of directors 32 or shareholders ; changing provisions . 33 (2) Provisions for selection, resignation, or removal of 34 its directors or officers or both ; or changing provisions . 35 -68- LSB 1359SZ (2) 89 jda/rn 68/ 96
S.F. 586 (3) Provisions for amending its bylaws. 1 Sec. 108. Section 524.1305, subsection 3, paragraphs a, b, 2 and d, Code 2021, are amended to read as follows: 3 a. By mail to each depositor and creditor, except those as 4 to whom the liability of the state bank has been assumed by 5 another financial institution insured by the federal deposit 6 insurance corporation pursuant to the plan of dissolution , at 7 their last address of record as shown upon the books of the 8 state bank, including a statement of the amount shown by the 9 books of the state bank to be due to such depositor or creditor 10 and a demand that any claim for a greater amount be filed with 11 the state bank any time before a specified date at least ninety 12 days after the date of the notice. 13 b. By mail to each lessee of a safe-deposit box and each 14 customer for whom property is held in safekeeping, except those 15 as to whom the liability of the state bank has been assumed by 16 another financial institution insured by the federal deposit 17 insurance corporation pursuant to the plan of dissolution , 18 at their last address of record as shown upon the books of 19 the state bank, including a demand that all property held in 20 a safe-deposit box or held in safekeeping by the state bank 21 be withdrawn by the person entitled to the property before a 22 specified date which is at least ninety days after the date of 23 the notice. 24 d. By a conspicuous posting at each office of the state 25 bank and by posting on the state bank’s internet site for 26 at least thirty days following the filing of the articles of 27 dissolution . 28 Sec. 109. Section 524.1306, subsection 2, Code 2021, is 29 amended to read as follows: 30 2. The statement of revocation of voluntary dissolution 31 proceedings, whether by consent of shareholders or by act of 32 the state bank, shall be delivered to the superintendent, 33 together with the applicable filing and recording fee, who 34 shall, if the superintendent finds that they satisfy the 35 -69- LSB 1359SZ (2) 89 jda/rn 69/ 96
S.F. 586 requirements of this section , deliver them to the secretary 1 of state for filing and recording in the secretary of state’s 2 office , and the same shall be filed and recorded in the office 3 of the county recorder . 4 Sec. 110. Section 524.1308A, Code 2021, is amended by adding 5 the following new subsection: 6 NEW SUBSECTION . 5. As used in this section, the term 7 “notice” means as defined in section 490.141. 8 Sec. 111. Section 524.1308B, subsection 2, unnumbered 9 paragraph 1, Code 2021, is amended to read as follows: 10 A The notice made pursuant to this section must satisfy all 11 of the following requirements: 12 Sec. 112. Section 524.1308B, subsection 2, paragraph a, 13 Code 2021, is amended to read as follows: 14 a. Be published at least once in accordance with all of the 15 following: 16 (1) One time in a newspaper of general circulation in the 17 county where the dissolved state bank’s principal office is or 18 was located. 19 (2) Be posted conspicuously for at least thirty days on the 20 dissolved state bank’s internet site. 21 Sec. 113. Section 524.1309, Code 2021, is amended to read 22 as follows: 23 524.1309 Becoming subject to chapter 489 or 490 . 24 In lieu of the dissolution procedure prescribed in sections 25 524.1303 through 524.1306 , a state bank may cease to carry 26 on the business of banking and, after compliance with this 27 section , continue as a corporation subject to chapter 490 ; or 28 if the state bank is organized as a limited liability company 29 under this chapter , continue as a limited liability company 30 subject to chapter 489 . 31 1. A state bank that has commenced business may propose 32 to voluntarily cease to carry on the business of banking and 33 become a corporation subject to chapter 490 , or a limited 34 liability company subject to chapter 489 , upon the affirmative 35 -70- LSB 1359SZ (2) 89 jda/rn 70/ 96
S.F. 586 vote of the holders of at least a majority of the shares 1 entitled to vote on such proposal, adopting a plan involving 2 both a provision for acquisition of its assets and assumption 3 of its liabilities by another state bank, national bank, or 4 other financial institution insured by the federal deposit 5 insurance corporation, and a provision for continuance of 6 its business if acquisition of its assets and assumption of 7 its liabilities is not effected, or any other plan providing 8 for the cessation of banking business and the payment of its 9 liabilities. 10 2. The application to the superintendent for approval 11 of a plan described in subsection 1 shall be treated by 12 the superintendent in the same manner as an application for 13 approval of a plan of dissolution under section 524.1303, 14 subsection 2, and shall be subject to section 524.1303, 15 subsection 3 524.1305, subsections 8 and 9 . 16 3. Immediately upon adoption and approval of a plan to 17 voluntarily cease to carry on the business of banking and 18 become a corporation subject to chapter 490 , or a limited 19 liability company subject to chapter 489 the state bank 20 shall submit an application for the required approval by the 21 superintendent in the manner prescribed by the superintendent. 22 As part of this application , the state bank shall deliver to 23 the superintendent a plan to cease the business of banking 24 and become a corporation subject to chapter 490 , or a limited 25 liability company subject to chapter 489 , which shall be 26 signed by two of its duly authorized officers and shall 27 contain the name of the state bank, the post office address 28 of its principal place of business, the name and address of 29 its officers and directors, the number of shares entitled 30 to vote on the plan and the number of shares voted for or 31 against the plan, respectively, the nature of the business 32 to be conducted by the corporation under chapter 490 , or by 33 the limited liability company subject to chapter 489 , and the 34 general nature of the assets to be held by the corporation or 35 -71- LSB 1359SZ (2) 89 jda/rn 71/ 96
S.F. 586 company. As part of the application, the state bank shall 1 also deliver to the superintendent articles of intent to be 2 subject to chapter 490, together with the applicable filing 3 fees, which shall set forth that the state bank has complied 4 with this section, that it intends to cease to carry on the 5 business of banking, and the information required by section 6 490.202 relative to the contents of articles of incorporation 7 under chapter 490. 8 4. Upon approval of the plan by the superintendent, the 9 state bank shall immediately surrender to the superintendent 10 its authorization to do business as a bank and shall cease 11 to accept deposits and carry on the banking business except 12 insofar as may be necessary for it to complete the settlement 13 of its affairs as a state bank in accordance with subsection 14 5 . Upon request, the superintendent shall expressly revoke 15 the state bank’s authorization to do business and return the 16 physical copy of such state bank’s authorization to do business 17 in a manner clearly indicating that the authorization has been 18 revoked. 19 5. The board of directors has full power to complete the 20 settlement of the affairs of the state bank. Within thirty 21 days after approval by the superintendent of the plan to cease 22 the business of banking and become a corporation subject 23 to chapter 490 , or a limited liability company subject to 24 chapter 489 , the state bank shall give notice of its intent 25 to persons identified in section 524.1305, subsection 3 , in 26 the manner provided for in that subsection. In completing 27 the settlement of its affairs as a state bank, the state bank 28 shall also follow the procedure prescribed in section 524.1305 , 29 subsections 4, 5, and 6 . 30 6. Upon completion of all the requirements of this section , 31 the state bank shall deliver to the superintendent articles of 32 intent to be subject to chapter 490 or 489 , together with the 33 applicable filing and recording fees, which shall set forth 34 that the state bank has complied with this section , that it has 35 -72- LSB 1359SZ (2) 89 jda/rn 72/ 96
S.F. 586 ceased to carry on the business of banking, and the information 1 required by section 490.202 relative to the contents of 2 articles of incorporation under chapter 490 , or articles of 3 organization under chapter 489 . If the superintendent finds 4 that the state bank has complied with all requirements of 5 this section and that the articles of intent to be subject to 6 chapter 490 or 489 satisfy the requirements of this section , 7 the superintendent shall deliver them to the secretary of state 8 for filing and recording in the secretary of state’s office , 9 and the superintendent shall file and record them in the office 10 of the county recorder . 11 7. Upon the filing of the articles of intent to be subject 12 to chapter 490 or 489 , the state bank shall immediately 13 cease to be a state bank subject to this chapter , and shall 14 immediately cease to have the powers of a state bank subject 15 to this chapter and shall become a corporation subject to 16 chapter 490 or a limited liability company subject to chapter 17 489 . The secretary of state shall issue a certificate as to 18 the filing of the articles of intent to be subject to chapter 19 490 or 489 and send the certificate to the corporation or 20 limited liability company or its representative. The articles 21 of intent to be subject to chapter 490 or 489 shall be the 22 articles of incorporation of the corporation or a limited 23 liability company . The provisions of chapter 490 or 489 24 becoming applicable to a corporation or limited liability 25 company formerly doing business as a state bank shall not 26 affect any right accrued or established, or liability or 27 penalty incurred under this chapter prior to the filing with 28 the secretary of state of the articles of intent to be subject 29 to chapter 490 or 489 . 30 8. A shareholder of a state bank who objects to adoption 31 by the state bank of a plan to cease to carry on the business 32 of banking and to continue as a corporation subject to chapter 33 490 , or a limited liability company subject to chapter 489 , 34 is entitled to appraisal rights provided for in chapter 490, 35 -73- LSB 1359SZ (2) 89 jda/rn 73/ 96
S.F. 586 subchapter XIII , or in chapter 489 , section 489.604 . 1 9. A state bank, at any time prior to the approval of the 2 articles of intent to become subject to chapter 490 or 489 , 3 may revoke the proceedings in the manner prescribed by section 4 524.1306 . 5 Sec. 114. Section 524.1310, subsection 1, paragraph a, Code 6 2021, is amended to read as follows: 7 a. In a situation in which the superintendent has required, 8 in accordance with section 524.226 524.224 , that the state 9 bank cease to carry on its business, the superintendent shall 10 immediately tender to the federal deposit insurance corporation 11 the receivership for the state bank. The affairs of the state 12 bank shall thereafter be governed by this section , section 13 524.1311 , and the provisions of federal law, and shall be 14 subject to federal court jurisdiction, and the assets of the 15 state bank shall be distributed in accordance with section 16 524.1312 . If there is a conflict between the provisions of 17 state and federal law, federal law shall govern. 18 Sec. 115. Section 524.1311, subsection 2, Code 2021, is 19 amended to read as follows: 20 2. After the involuntary dissolution of a state bank, the 21 superintendent shall file notice of the dissolution with the 22 secretary of state and the county recorder of the county in 23 which the state bank is located . No fee shall be charged by 24 the secretary of state or the county recorder for the filing 25 or recording . The corporate existence of the state bank 26 shall cease upon filing of the notice of dissolution with the 27 secretary of state. 28 Sec. 116. Section 524.1401, Code 2021, is amended to read 29 as follows: 30 524.1401 Authority to merge. 31 1. Upon compliance with the requirements of this chapter , 32 one or more state banks, one or more out-of-state banks, one or 33 more national banks, one or more federal savings associations, 34 one or more corporations, or any combination of these entities, 35 -74- LSB 1359SZ (2) 89 jda/rn 74/ 96
S.F. 586 with the approval of the superintendent, may merge into a state 1 bank pursuant to a plan of merger . 2 2. Upon compliance with the requirements of this chapter , 3 one or more state banks may merge into a national bank , federal 4 savings association, or out-of-state bank . The authority of 5 a state bank to merge into a national bank or federal savings 6 association is subject to the condition that at the time of the 7 transaction the laws of the United States shall authorize a 8 national bank or federal savings association located in this 9 state, without approval by the comptroller of the currency of 10 the United States, to merge into a state bank under limitations 11 no more restrictive than those contained in this chapter with 12 respect to the merger of a state bank into a national bank or 13 federal savings association . The authority of a state bank to 14 merge into an out-of-state bank is subject to the condition 15 that at the time of the transaction the laws of the home state 16 of the resulting bank shall authorize a bank organized under 17 the laws of such home state, without approval by the home 18 state’s bank regulatory authority, to merge into a state bank 19 under limitations no more restrictive than those contained in 20 this chapter with respect to the merger of a state bank into an 21 out-of-state bank. 22 3. Upon compliance with the requirements of this chapter , 23 one or more state banks may merge with one or more federal 24 associations. The authority of a state bank to merge into a 25 federal association is subject to the conditions the laws of 26 the United States authorize at the time of the transaction. 27 4. 3. As used in this section , the term “merger” or “merge” 28 means any plan by which the assets and liabilities of an 29 entity are combined with those of one or more other entities, 30 including transactions in which one of the corporate entities 31 survives and transactions in which a new corporate entity is 32 created. 33 Sec. 117. Section 524.1402, Code 2021, is amended to read 34 as follows: 35 -75- LSB 1359SZ (2) 89 jda/rn 75/ 96
S.F. 586 524.1402 Requirements for a merger. 1 The requirements for a merger which must be satisfied by the 2 parties to the merger are as follows: 3 1. The parties shall adopt a plan stating of merger which 4 must include all of the following: 5 a. The names of the parties proposing to merge and the name 6 of the bank into which they propose to merge, which is the 7 “resulting bank”. 8 a. As to each party to the merger, the party’s name, 9 jurisdiction of formation, and type of entity. 10 b. The resulting bank’s name, jurisdiction of formation, and 11 type of entity, and, if the resulting bank is to be created in 12 the merger, a statement to that effect. 13 b. c. The terms and conditions of the proposed merger. 14 c. d. The manner and basis of converting the shares of each 15 party into any combination of shares , obligations, or other 16 securities of the resulting bank or of any other corporation, 17 or, in whole or in part, into cash or other property , 18 obligations, rights to acquire shares or other securities, 19 cash, or other property . 20 d. e. The rights of the shareholders of each of the 21 parties. 22 e. f. An agreement concerning the merger. 23 f. g. Such other provisions with respect to the proposed 24 merger which are deemed necessary or desirable. 25 2. In the case of a state bank which is a party to the 26 plan of merger , if the proposed merger will result in a state 27 bank subject to this chapter , adoption of the plan of merger 28 by such state bank requires the affirmative vote of at least 29 a majority of the directors and approval by the shareholders, 30 in the manner and according to the procedures prescribed in 31 section 490.1104 , at a meeting called in accordance with 32 the terms of that section. In the case of a national bank, 33 or if the proposed merger will result in a national bank, 34 adoption of the plan of merger by each party to the merger 35 -76- LSB 1359SZ (2) 89 jda/rn 76/ 96
S.F. 586 shall require the affirmative vote of at least such directors 1 and shareholders whose affirmative vote on the plan of merger 2 is required under the laws of the United States. Subject to 3 applicable requirements of the laws of the United States in a 4 case in which a national bank is a party to a plan of merger , 5 any modification of a plan of merger which has been adopted 6 shall be made by any method provided in the plan of merger , or 7 in the absence of such provision, by the same vote as required 8 for adoption. 9 3. If a proposed merger will result in a state bank, 10 application for the required approval by the superintendent 11 shall be made in the manner prescribed by the superintendent. 12 There shall also be delivered to the superintendent, when 13 available, the following: 14 a. Articles of merger. 15 b. Applicable fees payable to the secretary of state, as 16 specified in section 490.122 , for the filing and recording of 17 the articles of merger. 18 c. If there is any modification of the plan of merger at 19 any time prior to the approval by the superintendent under 20 section 524.1403 , an amendment of the application and, if 21 necessary, of the articles of merger, signed in the same manner 22 as the originals, setting forth the modification of the plan of 23 merger , the method by which the modification was adopted and 24 any related change in the provisions of the articles of merger. 25 d. Proof of publication of the notice required by subsection 26 4 . 27 4. If a proposed merger will result in a state bank, within 28 thirty days after the application for merger is accepted for 29 processing, the parties to the plan shall publish a notice of 30 the proposed transaction in a newspaper of general circulation 31 published in the municipal corporation or unincorporated 32 area in which each party to the plan has its principal place 33 of business, or if there is none, in a newspaper of general 34 circulation published in the county, or in a county adjoining 35 -77- LSB 1359SZ (2) 89 jda/rn 77/ 96
S.F. 586 the county, in which each party to the plan has its principal 1 place of business. The notice shall be on forms prescribed by 2 the superintendent and shall set forth the names of the parties 3 to the plan and the resulting state bank, the location and 4 post office address of the principal place of business of the 5 resulting state bank and of each office to be maintained by 6 the resulting state bank, and the purpose or purposes of the 7 resulting state bank. Proof of publication of the notice shall 8 be delivered to the superintendent within fourteen days. 9 5. Within thirty days after the date of the publication of 10 the notice required under subsection 4 , any interested person 11 may submit to the superintendent written comments and data 12 on the application. Comments challenging the legality of an 13 application shall be submitted separately in writing. The 14 superintendent may extend the thirty-day comment period if, in 15 the superintendent’s judgment, extenuating circumstances exist. 16 6. Within thirty days after the date of the publication 17 of the notice required under subsection 4 , any interested 18 person may submit to the superintendent a written request for a 19 hearing on the application. The request shall state the nature 20 of the issues or facts to be presented and the reasons why 21 written submissions would be insufficient to make an adequate 22 presentation to the superintendent. If the reasons are related 23 to factual disputes, the disputes shall be described. Written 24 requests for hearings shall be evaluated by the superintendent, 25 who may grant or deny such requests in whole or in part. A 26 hearing request shall generally be granted only if it is 27 determined that written submissions would be inadequate or that 28 a hearing would otherwise be beneficial to the decision-making 29 process. A hearing may be limited to issues considered 30 material by the superintendent. 31 7. If a request for a hearing is denied, the superintendent 32 shall notify the applicant and all interested persons and 33 shall state the reasons for the denial. Interested persons 34 may submit to the superintendent, with simultaneous copies 35 -78- LSB 1359SZ (2) 89 jda/rn 78/ 96
S.F. 586 to the applicant, additional written comments or data on the 1 application within fourteen days after the date of the notice 2 of denial. The applicant shall be provided an additional seven 3 days, after the fourteen-day deadline has expired, within which 4 to respond to any comments submitted within the fourteen-day 5 period. The superintendent may waive this seven-day period 6 upon request by the applicant. A copy of any response 7 submitted by the applicant shall also be mailed simultaneously 8 by the applicant to the interested persons. 9 8. 4. The articles of merger shall be signed by two a duly 10 authorized officers officer of each party to the plan of merger 11 and shall contain all of the following: 12 a. The names name, jurisdiction of formation, and type 13 of entity of the parties each party to the plan , and of the 14 resulting state bank of merger . 15 b. The name, jurisdiction of formation, and type of entity 16 of the resulting state bank. 17 b. c. The location and the post office address of the 18 principal place of business of each party to the plan of 19 merger , and of each additional office maintained by the parties 20 to the plan of merger , and the location and post office address 21 of the principal place of business of the resulting state bank, 22 and of each additional office to be maintained by the resulting 23 state bank. 24 c. d. The votes by which the plan of merger was adopted, 25 and the date and place of each meeting in connection with such 26 adoption. 27 d. e. The number of directors constituting the board of 28 directors, and the names and addresses of the individuals who 29 are to serve as directors until the next annual meeting of the 30 shareholders or until their successors be elected and qualify. 31 e. f. Any amendment of the articles of incorporation of the 32 resulting state bank. 33 f. The plan of merger. 34 9. 5. If a proposed merger will result in a national bank, 35 -79- LSB 1359SZ (2) 89 jda/rn 79/ 96
S.F. 586 federal savings association, or out-of-state bank, a state bank 1 which is a party to the plan of merger shall do all of the 2 following: 3 a. Notify the superintendent of the proposed merger. 4 b. Provide such evidence of the adoption of the plan of 5 merger as the superintendent may request. 6 c. Notify the superintendent of any abandonment or 7 disapproval of the plan of merger . 8 d. File with the superintendent and with the secretary of 9 state evidence of approval of the merger by the comptroller 10 of the currency of the United States if the merger results 11 in a national bank or federal savings association, or the 12 approval of the merger by the home state chartering authority 13 of the resulting out-of-state bank if the merger results in an 14 out-of-state bank . 15 e. Notify the superintendent of the date upon which the 16 merger is to become effective. 17 Sec. 118. Section 524.1403, Code 2021, is amended to read 18 as follows: 19 524.1403 Approval of merger by superintendent. 20 1. Upon receipt of an application for approval of a 21 merger and of the supporting items required by section 22 524.1402, subsection 3 , the superintendent shall conduct 23 such investigation as the superintendent deems necessary to 24 ascertain the following: 25 a. The articles of merger and supporting items satisfy the 26 requirements of this chapter . 27 b. The plan of merger and any modification of the plan of 28 merger adequately protects the interests of depositors, other 29 creditors and shareholders. 30 c. The requirements for a merger under all applicable laws 31 have been satisfied and the resulting state bank would satisfy 32 the requirements of this chapter with respect to it. 33 d. The merger would be consistent with adequate and 34 sound banking and in the public interest on the basis of 35 -80- LSB 1359SZ (2) 89 jda/rn 80/ 96
S.F. 586 the financial history and condition of the parties to the 1 plan, including the adequacy of the capital structure of 2 the resulting state bank, the character of the management 3 of the resulting state bank, the potential effect of the 4 merger on competition, and the convenience and needs of the 5 area primarily to be served by the resulting state bank , 6 particularly the resulting state bank’s plans to accept 7 deposits from, lend money in, and process payments in the area 8 primarily to be served by the resulting state bank . 9 2. a. Within one hundred eighty days after acceptance of 10 the application for processing, or within an additional period 11 of not more than sixty days after receipt of an amendment of 12 the application, the superintendent shall approve or disapprove 13 the application on the basis of the investigation. The plan of 14 merger shall not be modified at any time after approval of the 15 application by the superintendent. 16 b. If the superintendent finds that the superintendent 17 must act immediately on the pending application in order to 18 protect the interests of depositors or the assets of any 19 party to the plan, the superintendent may proceed without 20 requiring publication of the notice required under section 21 524.1402, subsection 4 . As a condition of receiving the 22 decision of the superintendent with respect to the pending 23 application, the parties to the plan of merger shall reimburse 24 the superintendent for all the expenses incurred in connection 25 with the application. The superintendent shall give to the 26 parties to the plan of merger written notice of the decision 27 and, in the event of disapproval, a statement of the reasons 28 for the decision. The decision of the superintendent shall be 29 subject to judicial review pursuant to chapter 17A . 30 Sec. 119. Section 524.1404, Code 2021, is amended to read 31 as follows: 32 524.1404 Procedure after approval by the superintendent —— 33 issuance of certificate of merger. 34 If applicable state or federal laws require the approval of 35 -81- LSB 1359SZ (2) 89 jda/rn 81/ 96
S.F. 586 the merger by a federal or state agency, the superintendent may 1 withhold delivery of the approved articles of merger until the 2 superintendent receives notice of the decision of such agency. 3 If the final approval of the agency is not given within six 4 months of the superintendent’s approval, the superintendent 5 shall notify the parties to the plan of merger that the 6 approval of the superintendent has been rescinded for that 7 reason. If such agency gives its approval, the superintendent 8 shall deliver the articles of merger, with the superintendent’s 9 approval indicated on the articles, to the secretary of state, 10 and shall notify the parties to the plan of merger . The 11 receipt of the approved articles of merger by the secretary of 12 state constitutes filing of the articles of merger with that 13 office. The secretary of state shall record the articles of 14 merger, and the articles shall be filed and recorded in the 15 office of the county recorder in each county in which the 16 parties to the plan had previously maintained a principal place 17 of business. On the date upon which the merger is effective 18 the secretary of state shall issue a certificate of merger and 19 send the same to the resulting state bank and a copy of the 20 certificate of merger to the superintendent. 21 Sec. 120. Section 524.1405, subsection 2, Code 2021, is 22 amended by striking the subsection and inserting in lieu 23 thereof the following: 24 2. When a merger takes effect, all of the following apply: 25 a. Every other financial institution to the merger merges 26 into the surviving financial institution and the separate 27 existence of every party except the surviving financial 28 institution ceases. 29 b. All property owned by, and every contract right possessed 30 by, each financial institution or other authorized entity that 31 is a party to the merger, other than the resulting bank, are 32 the property and contract rights of the resulting bank without 33 transfer, reversion, or impairment. 34 c. All debts, obligations, and other liabilities of each 35 -82- LSB 1359SZ (2) 89 jda/rn 82/ 96
S.F. 586 financial institution or other authorized entity that is a 1 party to the merger, other than the resulting bank, are debts, 2 obligations, or liabilities of the resulting bank. 3 d. The name of the survivor may, but need not be, 4 substituted in any pending proceeding for the name of any party 5 to the merger whose separate existence ceased in the merger. 6 e. For a resulting state bank, the articles of incorporation 7 of the resulting state bank are amended to the extent provided 8 in the articles of merger. 9 f. The articles of incorporation of a resulting state bank 10 that is created by the merger become effective. 11 g. The shares of each financial institution or authorized 12 entity that is a party to the merger, that are to be converted 13 in accordance with the terms of the merger into any combination 14 of shares or other securities, obligations, rights to acquire 15 shares or other securities, cash, or other property, are 16 converted, and the former holders of such shares are entitled 17 only to the rights provided in the articles of merger or to 18 their rights under section 524.1406. 19 h. Except as provided by law or the terms of the merger, 20 all the rights, privileges, franchises, and immunities of each 21 financial institution or other authorized entity that is a 22 party to the merger, other than the resulting bank, are the 23 rights, privileges, franchises, and immunities of the resulting 24 bank. 25 Sec. 121. Section 524.1405, Code 2021, is amended by adding 26 the following new subsection: 27 NEW SUBSECTION . 3. Upon request, the superintendent shall 28 expressly revoke the authorization to do business of any state 29 bank that is a party to the merger, other than the resulting 30 state bank, and shall return the physical copy of such state 31 bank’s authorization to do business in a manner clearly 32 indicating that the authorization has been revoked. 33 Sec. 122. Section 524.1406, Code 2021, is amended to read 34 as follows: 35 -83- LSB 1359SZ (2) 89 jda/rn 83/ 96
S.F. 586 524.1406 Appraisal rights of shareholders. 1 1. A shareholder of a state bank, which is a party to a 2 proposed merger plan of merger which will result in a state 3 bank subject to this chapter , who objects to the plan of merger 4 is entitled to appraisal rights as provided in chapter 490, 5 subchapter XIII . 6 2. If a shareholder of a national bank which is a party to 7 a proposed merger plan of merger which will result in a state 8 bank, or a shareholder of a state bank which is a party to a 9 plan of merger which will result in a national bank, objects to 10 the plan of merger and complies with the requirements of the 11 applicable laws of the United States, the resulting state bank 12 or national bank, as the case may be, is liable for the value of 13 the shareholder’s shares as determined in accordance with such 14 laws of the United States. 15 Sec. 123. Section 524.1408, Code 2021, is amended to read 16 as follows: 17 524.1408 Merger of corporation or limited liability company 18 substantially owned by a state bank. 19 A state bank owning at least ninety percent of the 20 outstanding shares, of each class, of another corporation 21 or limited liability company which it is authorized to own 22 under this chapter may merge the other corporation or limited 23 liability company into itself without approval by a vote of 24 the shareholders of either the state bank or the subsidiary 25 corporation or limited liability company. The board of 26 directors of the state bank shall approve a plan of merger, 27 mail the plan of merger to shareholders of record of the 28 subsidiary corporation or holders of membership interests in 29 the subsidiary limited liability company, and prepare and 30 execute articles of merger in the manner provided for in 31 section 490.1105 . The articles of merger, together with the 32 applicable filing and recording fees, shall be delivered to 33 the superintendent who shall, if the superintendent approves 34 of the proposed merger and if the superintendent finds the 35 -84- LSB 1359SZ (2) 89 jda/rn 84/ 96
S.F. 586 articles of merger satisfy the requirements of this section , 1 deliver them to the secretary of state for filing and recording 2 in the secretary of state’s office , and they shall be filed 3 in the office of the county recorder . The secretary of state 4 upon filing the articles of merger shall issue a certificate of 5 merger and send the certificate to the state bank and a copy of 6 it to the superintendent. 7 Sec. 124. Section 524.1409, Code 2021, is amended to read 8 as follows: 9 524.1409 Conversion of national bank , or federal savings 10 association , out-of-state bank, or state or federally chartered 11 credit union into state bank. 12 A national bank or federal savings association, an 13 out-of-state bank, or a state or federally chartered credit 14 union may, subject to the provisions of this chapter , may 15 convert into a state bank upon authorization by and compliance 16 with the laws of the United States, adoption of a plan of 17 conversion by the affirmative vote of at least a majority 18 of its directors and the holders of two-thirds of each 19 class of its shares at a meeting held upon not less than ten 20 days’ notice to all shareholders, and upon approval of the 21 superintendent. 22 Sec. 125. Section 524.1410, Code 2021, is amended to read 23 as follows: 24 524.1410 Application for approval by superintendent. 25 A national bank or federal savings association , out-of-state 26 bank, or a state or federally chartered credit union shall 27 make an application to the superintendent for approval of the 28 conversion in a manner prescribed by the superintendent and 29 shall deliver to the superintendent, when available: 30 1. Articles of conversion. 31 2. As soon as available, proof of publication of the notice 32 required by section 524.1412 . 33 3. 2. The applicable fee payable to the secretary of state, 34 under section 490.122 , for the filing and recording of the 35 -85- LSB 1359SZ (2) 89 jda/rn 85/ 96
S.F. 586 articles of conversion. 1 Sec. 126. Section 524.1411, unnumbered paragraph 1, Code 2 2021, is amended to read as follows: 3 The articles of conversion shall be signed by two duly 4 authorized officers of the national bank or federal savings 5 association , out-of-state bank, or state or federally chartered 6 credit union, and shall contain all of the following: 7 Sec. 127. Section 524.1411, subsection 1, Code 2021, is 8 amended to read as follows: 9 1. The name of the national bank or federal savings 10 association , out-of-state bank, or state or federally chartered 11 credit union, and the name of the resulting state bank. 12 Sec. 128. Section 524.1413, subsection 2, Code 2021, is 13 amended to read as follows: 14 2. Within ninety days after the application has been 15 accepted for processing, the superintendent shall approve or 16 disapprove the application on the basis of the investigation. 17 As a condition of receiving the decision of the superintendent 18 with respect to the application, the national bank or federal 19 savings association , out-of-state bank, or state or federally 20 chartered credit union shall reimburse the superintendent for 21 all expenses incurred in connection with the application. 22 The superintendent shall give the national bank or federal 23 savings association , out-of-state bank, or state or federally 24 chartered credit union written notice of the decision and, in 25 the event of disapproval, a statement of the reasons for the 26 decision. If the superintendent approves the application, 27 the superintendent shall deliver the articles of conversion, 28 with the superintendent’s approval indicated on the articles 29 of conversion, to the secretary of state. The decision 30 of the superintendent shall be subject to judicial review 31 pursuant to chapter 17A . Notwithstanding the terms of the 32 Iowa administrative procedure Act, chapter 17A , a petition for 33 judicial review must be filed within thirty days after the 34 superintendent notifies the national bank or federal savings 35 -86- LSB 1359SZ (2) 89 jda/rn 86/ 96
S.F. 586 association of the superintendent’s decision. 1 Sec. 129. Section 524.1414, Code 2021, is amended to read 2 as follows: 3 524.1414 Receipt by secretary of state —— county recorder . 4 The receipt of the approved articles of conversion by 5 the secretary of state constitutes filing of the articles of 6 conversion with that office. The secretary of state shall 7 record the articles of conversion and the articles shall be 8 filed and recorded in the office of the county recorder in the 9 county in which the resulting state bank has its principal 10 place of business. 11 Sec. 130. Section 524.1415, Code 2021, is amended to read 12 as follows: 13 524.1415 Effect of filing of articles of conversion with 14 secretary of state. 15 1. The conversion is effective upon the filing of the 16 articles of conversion with the secretary of state, or at any 17 later date and time as specified in the articles of conversion. 18 The acknowledgment of filing is conclusive evidence of the 19 performance of all conditions required by this chapter for 20 conversion of a national bank or federal savings association , 21 out-of-state bank, or state or federally chartered credit union 22 into a state bank, except as against the state. 23 2. When a conversion becomes effective, the existence of 24 the national bank or federal savings association , out-of-state 25 bank, or state or federally chartered credit union shall 26 continue in the resulting state bank which shall have all the 27 property, rights, powers, and duties of the national bank or 28 federal savings association, out-of-state bank, or state or 29 federally chartered credit union, except that the resulting 30 state bank shall have only the authority to engage in such 31 business and exercise such powers as it would have, and shall 32 be subject to the same prohibitions and limitations to which 33 it would be subject, upon original incorporation under this 34 chapter . The articles of incorporation of the resulting 35 -87- LSB 1359SZ (2) 89 jda/rn 87/ 96
S.F. 586 state bank shall be the provisions stated in the articles of 1 conversion. 2 3. A liability of the national bank or federal savings 3 association , out-of-state bank, or state or federally chartered 4 credit union , or of the national bank’s or federal savings 5 association’s , out-of-state bank’s, or state or federally 6 chartered credit union’s shareholders, directors, or officers, 7 is not affected by the conversion. A lien on any property of 8 the national bank or federal savings association , out-of-state 9 bank, or state or federally chartered credit union is not 10 impaired by the conversion. A claim existing or action pending 11 by or against the national bank or federal savings association , 12 out-of-state bank, or state or federally chartered credit union 13 may be prosecuted to judgment as if the conversion had not 14 taken place, or the resulting state bank may be substituted in 15 its place. 16 4. The title to all real estate and other property owned by 17 the converting national bank or federal savings association , 18 out-of-state bank, or state or federally chartered credit union 19 is vested in the resulting state bank without reversion or 20 impairment. 21 Sec. 131. Section 524.1416, Code 2021, is amended by adding 22 the following new subsection: 23 NEW SUBSECTION . 3. Upon request, the superintendent shall 24 expressly revoke the authorization to do business of any state 25 bank that converts into a national bank or federal savings 26 association pursuant to this section and shall return the 27 physical copy of such state bank’s authorization to do business 28 in a manner clearly indicating that the authorization has been 29 revoked. 30 Sec. 132. Section 524.1417, subsection 2, Code 2021, is 31 amended to read as follows: 32 2. If a shareholder of a national bank , or federal savings 33 association , or out-of-state bank, or a member of a state or 34 federally chartered credit union, that converts into a state 35 -88- LSB 1359SZ (2) 89 jda/rn 88/ 96
S.F. 586 bank objects to the plan of conversion and complies with 1 the requirements of applicable laws of the United States, 2 the resulting state bank is liable for the value of the 3 shareholder’s shares as determined in accordance with such laws 4 of the United States. 5 Sec. 133. Section 524.1421, subsection 2, paragraph d, Code 6 2021, is amended to read as follows: 7 d. The applicable fee payable to the secretary of state, 8 under section 490.122 , for the filing and recording of the 9 articles of conversion. 10 Sec. 134. Section 524.1422, Code 2021, is amended to read 11 as follows: 12 524.1422 Notice of mutual to stock conversion. 13 Within thirty days after an application for conversion has 14 been accepted for processing, the mutual corporation, mutual 15 holding company, federal mutual association, or federal mutual 16 holding company shall publish a notice of the delivery of the 17 articles of conversion to the superintendent in a newspaper of 18 general circulation published in the municipal corporation or 19 unincorporated area in which the mutual corporation, mutual 20 holding company, federal mutual association, or federal mutual 21 holding company has its principal place of business, or if 22 there is none, a newspaper of general circulation published 23 in the county, or in a county adjoining the county, in which 24 the mutual corporation, mutual holding company, federal 25 mutual association, or federal mutual holding company has its 26 principal place of business. A copy of the notice shall also 27 be posted on the internet site of the mutual corporation, 28 mutual holding company, federal mutual association, or federal 29 mutual holding company for at least thirty days. The notice 30 shall set forth the information required by the superintendent. 31 Sec. 135. Section 524.1502, subsection 3, Code 2021, is 32 amended to read as follows: 33 3. Adoption of each amendment shall require the affirmative 34 vote of the holders of a majority of the shares entitled 35 -89- LSB 1359SZ (2) 89 jda/rn 89/ 96
S.F. 586 to vote thereon and, if any class or series is entitled to 1 vote thereon on the amendment as a class separate group , the 2 affirmative vote of the holders of a majority of the shares of 3 each class or series entitled to vote thereon as a class on the 4 amendment by that separate group . 5 Sec. 136. Section 524.1503, subsections 1, 3, and 4, Code 6 2021, are amended to read as follows: 7 1. The holders of the outstanding shares of a class are 8 entitled to vote as a separate voting group on a proposed 9 amendment if the amendment does would do any of the following: 10 a. Increases Increase or decreases decrease the aggregate 11 number of authorized shares of the class. 12 b. Increases Increase or decreases decrease the par value of 13 the shares of the class. 14 c. Effects Effect an exchange or reclassification of all or 15 part of the shares of the class into shares of another class 16 or effects a cancellation of all or part of the shares of the 17 class. 18 d. Effects Effect an exchange or reclassification, or 19 creates the right of exchange, of all or part of the shares of 20 another class into shares of that class. 21 e. Changes Change the designation, rights, preferences, or 22 limitations of all or part of the shares of the class. 23 f. Changes Change the shares of all or part of the class 24 into a different number of shares of the same class. 25 g. Creates Create a new class of shares having rights or 26 preferences with respect to distributions or to dissolution 27 that are prior, superior, or substantially equal to the shares 28 of the class. 29 h. Increases Increase the rights, preferences, or number 30 of authorized shares of any class that, after giving effect 31 to the amendment, have rights or preferences with respect to 32 distributions or to dissolution that are prior, superior, or 33 substantially equal to the shares of the class. 34 i. Limits Limit or denies deny an existing preemptive right 35 -90- LSB 1359SZ (2) 89 jda/rn 90/ 96
S.F. 586 of all or part of the shares of the class. 1 j. Cancels Cancel or otherwise affects affect rights to 2 distributions or dividends that have accumulated but not yet 3 been declared on all or part of the shares of the class. 4 3. If a proposed amendment that entitles two or more classes 5 or series of shares to vote as separate voting groups under 6 this section would affect those two or more classes or series 7 in the same or a substantially similar way, the shares of all 8 the classes or series so affected must vote together as a 9 single voting group on the proposed amendment. 10 4. A class or series of shares is entitled to the voting 11 rights granted by this section although even if the articles of 12 incorporation provide that the shares are nonvoting shares. 13 Sec. 137. Section 524.1504, subsection 1, paragraphs c and 14 e, Code 2021, are amended to read as follows: 15 c. The text of each amendment adopted , which shall be set 16 forth in full . 17 e. For a state bank incorporated as a stock corporation, the 18 number of shares entitled to vote on the amendment, and if the 19 shares of any class are entitled to vote thereon as a class, 20 the number of shares of each class. For a mutual corporation, 21 the number of member votes entitled to be cast. 22 Sec. 138. Section 524.1504, subsection 2, Code 2021, is 23 amended to read as follows: 24 2. The articles of amendment shall be delivered to the 25 superintendent together with the applicable fees for the filing 26 and recording of the articles of amendment. 27 Sec. 139. Section 524.1506, subsection 1, Code 2021, is 28 amended to read as follows: 29 1. The secretary of state shall record the articles of 30 amendment, and the articles of amendment shall be filed in the 31 office of the county recorder in the county in which the state 32 bank has its principal place of business. The secretary of 33 state upon the filing of the articles of amendment shall issue 34 a certificate of amendment and send the same to the state bank. 35 -91- LSB 1359SZ (2) 89 jda/rn 91/ 96
S.F. 586 Sec. 140. Section 524.1508, subsection 4, Code 2021, is 1 amended to read as follows: 2 4. The restated articles of incorporation shall be 3 delivered to the superintendent together with the applicable 4 fees for the filing and recording of the restated articles 5 of incorporation. The superintendent shall conduct such 6 investigation and give approval or disapproval, as provided in 7 section 524.1505 . If the superintendent approves the restated 8 articles of incorporation, the superintendent shall deliver 9 them with the written approval on the restated articles of 10 incorporation to the secretary of state for filing , and the 11 restated articles of incorporation shall be filed in the office 12 of the county recorder . The secretary of state upon filing 13 the restated articles of incorporation shall issue a restated 14 certificate of incorporation and send the certificate to the 15 state bank or its representative. 16 Sec. 141. Section 524.1601, Code 2021, is amended by adding 17 the following new subsection: 18 NEW SUBSECTION . 5. In addition to the criminal penalties 19 provided in subsections 1, 2, 3, and 4, the superintendent may 20 impose a civil penalty on any director, officer, or employee 21 of a state bank or bank holding company for any violation 22 enumerated in subsection 1, 2, 3, or 4. The amount of the 23 civil penalty imposed shall be determined in the same manner 24 as prescribed by those subsections for calculating criminal 25 penalties. 26 Sec. 142. Section 524.1801, unnumbered paragraph 1, Code 27 2021, is amended to read as follows: 28 As used in this chapter subchapter unless the context 29 otherwise requires: 30 Sec. 143. Section 524.1802, subsection 1, paragraph h, Code 31 2021, is amended to read as follows: 32 h. “Incorporated in any state” means a limited liability 33 company organized as a state bank under this chapter and a 34 limited liability company organized as a state bank under the 35 -92- LSB 1359SZ (2) 89 jda/rn 92/ 96
S.F. 586 laws of any state as defined in 12 U.S.C. §1813(a)(3). 1 Sec. 144. Section 524.1805, subsections 1, 2, 3, 4, and 5, 2 Code 2021, are amended by striking the subsections. 3 Sec. 145. Section 524.2001, Code 2021, is amended to read 4 as follows: 5 524.2001 Applicability of other chapters. 6 Chapters 489, 490 , 491 , 492 , and 493 do not apply to banks 7 except as provided by this chapter . 8 Sec. 146. REPEAL. Sections 524.226, 524.302A, 524.314, 9 524.315, 524.1008, 524.1205, and 524.1412, Code 2021, are 10 repealed. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to banks, makes appropriations, provides 15 civil penalties, and makes civil penalties applicable. 16 The bill modifies numerous provisions of Code chapter 524, 17 and makes conforming changes to Code sections 12.61, 422.61, 18 and 453A.8. 19 The bill adds the following new defined terms to Code section 20 524.103: “affiliate”, “national bank”, “out-of-state bank”, 21 and “safe deposit box”. Additionally, the bill modifies the 22 following defined terms in Code section 524.103: “articles 23 of incorporation”, “bank”, “board of directors”, “business 24 of banking”, “calculation date”, “chief executive officer”, 25 “contractual commitment to advance funds”, “director”, 26 “executive officer”, “insured bank”, “member”, “membership 27 interest”, “officer”, “operations subsidiary”, “shareholder”, 28 “shares”, “state bank”, “supervised financial organization”, 29 and “unincorporated area”. The bill strikes from Code section 30 524.103 the term “manager”. 31 The bill establishes who will serve as the superintendent 32 of banking when the office is vacant or the superintendent is 33 unable to serve. The bill modifies the rights and obligations 34 of the superintendent, including the superintendent’s rights 35 -93- LSB 1359SZ (2) 89 jda/rn 93/ 96
S.F. 586 and obligations with respect to ordering a state bank to cease 1 to carry on business. Additionally, the bill amends Code 2 section 524.207, which appropriates money from the department 3 of commerce revolving fund to the division of banking. The 4 bill provides that the amount of the appropriation from the 5 department of commerce revolving fund is determined by the 6 amount of fees and assessments paid to the superintendent. 7 The bill modifies the type of entity a state bank may utilize 8 when incorporating and modifies the steps in the incorporation 9 process. 10 The bill amends provisions of Code chapter 524, subchapter 11 V, related to fractional shares, record dates, voting lists, 12 share information that is required to be included in the state 13 bank’s articles of incorporation, and voting by a member of a 14 mutual corporation. 15 The bill provides for the participation in a meeting of 16 the directors and the notice required in conjunction with 17 the meetings. Additionally, the bill establishes who may 18 administer an oath to a director. 19 The bill modifies provisions relating to the decisions of 20 officers that do not require shareholder approval. 21 The bill establishes the types and amounts of assets that 22 state banks are authorized to hold and invest in. The bill 23 authorizes state banks to conduct certain activities in 24 electronic form. Additionally, the bill modifies provisions 25 related to safe deposit boxes. 26 The bill amends provisions related to a state bank’s ability 27 to invest in certain public welfare investments, when a state 28 bank may purchase cash value life insurance contracts, and 29 real property purchased by a state bank at a foreclosure sale. 30 Additionally, the bill modifies provisions related to the 31 granting of loans and extensions of credit by a state bank. 32 The bill modifies provisions related to when a state bank 33 is required to cease acting as a fiduciary, the duties of a 34 temporary fiduciary, the voluntary relinquishment of fiduciary 35 -94- LSB 1359SZ (2) 89 jda/rn 94/ 96
S.F. 586 capacity, and the succession of fiduciary accounts. 1 The bill requires that fees paid to an affiliate must be made 2 in compliance with 12 U.S.C. §371c and 12 U.S.C. §371c-1. 3 The bill amends provisions related to the superintendent’s 4 authority over out-of-state offices of a state bank. 5 Additionally, the bill establishes where data processing 6 services may take place. The bill requires a bank doing 7 business in this state electronically to identify its legally 8 chartered name in any online interface. 9 The bill makes syntax and terminology changes to Code 10 sections 524.1301, 524.1303, 524.1305, and 524.1306. 11 Additionally, the bill modifies provisions related to a state 12 bank ceasing to carry on the business of banking and continuing 13 as a corporation. 14 The bill modifies provisions relating to the types of 15 entities that may merge into a state bank and the types of 16 entities a state bank may merge into. The bill establishes 17 information that must be included in the articles of merger and 18 the plan of merger. Additionally, the bill provides for the 19 types of entities that may convert into a state bank and the 20 requirements related to articles of conversion. 21 The bill modifies provisions related to the affirmative vote 22 required of a class or series of shares to adopt an amendment 23 to the state bank’s articles of incorporation. The bill makes 24 syntax and terminology changes to Code section 524.1503. 25 The bill authorizes the superintendent to impose civil 26 penalties on a director, officer, or employee of a state bank 27 or bank holding company in enumerated instances. 28 The bill strikes subsections 1 through 5 from Code 29 section 524.1805, which provide restrictions on mergers and 30 acquisitions. 31 The bill modifies Code section 524.2001 to strike the 32 reference to Code chapter 489, the revised uniform limited 33 liability company Act. 34 The bill repeals Code section 524.226, which provides for 35 -95- LSB 1359SZ (2) 89 jda/rn 95/ 96
S.F. 586 the management of a state bank by the superintendent after 1 taking over the management of the property and business of the 2 state bank. 3 The bill repeals Code section 524.302A, which provides for 4 the requirements associated with articles of incorporation for 5 state banks organized as limited liability companies. 6 The bill repeals Code section 524.314, which provides for 7 the renewal of the corporate existence of state banks existing 8 and operating on January 1, 1970. 9 The bill repeals Code section 524.315, which provides that 10 state banks organized as limited liability companies are also 11 subject to Code chapter 489. 12 The bill repeals Code section 524.1008, which provides for 13 the succession of fiduciary accounts to an independent bank. 14 The bill repeals Code section 524.1205, which allows a state 15 bank to acquire, establish, operate, or relocate a branch in 16 a state other than this state. 17 The bill repeals Code section 524.1412, which provides for 18 publication of notice after the superintendent accepted the 19 application for conversion. 20 -96- LSB 1359SZ (2) 89 jda/rn 96/ 96