H.F. _____ Section 1. Section 12C.16, subsection 1, paragraph b, 1 subparagraph (1), unnumbered paragraph 1, Code 2023, is amended 2 to read as follows: 3 The credit union may deposit, maintain, pledge and assign 4 for the benefit of the public officer in the manner provided 5 in this chapter , securities approved by the public officer, 6 the market value of which is not less than one hundred ten one 7 hundred percent of the total deposits of public funds placed 8 by that public officer in the credit union , less the amount 9 of deposits that are federally insured . The securities shall 10 consist of any of the following: 11 Sec. 2. Section 12C.16, subsection 1, paragraph b, 12 subparagraph (1), subparagraph division (d), Code 2023, is 13 amended to read as follows: 14 (d) To the extent of the guarantee, loans, obligations, or 15 nontransferable Nontransferable letters of credit upon which 16 the payment of principal and interest is fully secured or 17 guaranteed by the United States of America , or an agency or 18 instrumentality of the United States of America, a corporate 19 central credit union organized under section 533.213 the 20 national cooperative bank, the federal home loan bank , or a 21 any corporate credit union whose activities are subject to 22 regulation by the national credit union administration , and the 23 rating of any one of such credit unions remains within the two 24 highest classifications of prime established by at least one 25 of the standard rating services approved by the superintendent 26 of banking by rule pursuant to chapter 17A and whose capital 27 level remains well-capitalized pursuant to 12 C.F.R. pt. 704, 28 or any other entity approved by the treasurer of state . The 29 treasurer of state shall may adopt rules pursuant to chapter 30 17A to implement this section . 31 Sec. 3. Section 533.205, subsection 8, Code 2023, is amended 32 to read as follows: 33 8. A credit union director shall not receive compensation 34 for service as a director. However, a director may be 35 -1- LSB 1104YC (10) 90 es/rn 1/ 5

H.F. _____ reimbursed Subject to its bylaws, a credit union may provide 1 compensation to directors for their service and reimburse 2 directors for reasonable expenses directly related to such 3 service. 4 Sec. 4. Section 533.206, Code 2023, is amended to read as 5 follows: 6 533.206 Meetings of the board. 7 1. The board of directors shall hold at least six regular 8 board meetings each calendar year. No more than one regular 9 meeting shall be held in any one calendar month, nor shall 10 a credit union go longer than two consecutive months without 11 holding a board meeting. If a credit union has an individual 12 rating of a four or five, or a composite rating of three, four, 13 or five under the Iowa regulatory risk rating system, the board 14 shall meet monthly. 15 2. With respect to a newly chartered credit union, the board 16 of directors shall meet not less frequently than monthly during 17 each of the first five years of the credit union’s existence. 18 3. Unless the bylaws provide otherwise, the board of 19 directors may permit any and all directors to participate in 20 all except one meeting per year of the board of directors 21 through the use of any means of communication by which all 22 directors participating in the meeting may simultaneously hear 23 each other and communicate during the meeting. A director 24 participating in a meeting by this means is deemed to be 25 present at the meeting. 26 Sec. 5. Section 533.210, subsections 1 and 2, Code 2023, are 27 amended to read as follows: 28 1. The board of directors may expel any a member of a state 29 credit union who has failed to do either engaged in any of the 30 following: 31 a. Carry Failing to carry out the member’s obligations to 32 the state credit union. 33 b. Comply Failing to comply with the state credit union’s 34 bylaws or policies. 35 -2- LSB 1104YC (10) 90 es/rn 2/ 5

H.F. _____ c. Being physically or verbally abusive to credit union 1 members or staff. 2 d. Committing fraud, attempted fraud, or other illegal 3 conduct that a member has been convicted of in relation to the 4 credit union. 5 2. A member of a state credit union may be expelled by a 6 majority vote of the board of directors at a regular or special 7 meeting of the board. 8 a. An expelled member may request a hearing before the 9 membership of the state credit union superintendent , which 10 shall be held within sixty ninety days of an expelled member’s 11 request. 12 b. At the hearing, the membership superintendent may 13 reinstate the expelled member by majority vote, upon terms and 14 conditions prescribed at the hearing if the credit union fails 15 to prove the member was noncompliant with the obligations in 16 this section . 17 Sec. 6. Section 533.304, subsection 2, Code 2023, is amended 18 to read as follows: 19 2. A state credit union may invest in either any of the 20 following to the extent that the total investments under this 21 section shall not be more than five percent of the state credit 22 union’s assets: 23 a. Shares or equity interests in venture capital funds that 24 agree to invest an amount equal to at least fifty percent of 25 the state credit union’s investment in small businesses having 26 their principal offices within this state and having either 27 more than one-half of their assets within this state or more 28 than one-half of their employees employed within this state. 29 b. Shares or equity interests in small businesses having 30 their principal offices within this state and having either 31 more than one-half of their assets within this state or more 32 than one-half of their employees employed within this state. A 33 state credit union shall not invest in more than twenty percent 34 of the total capital and surplus of any one small business 35 -3- LSB 1104YC (10) 90 es/rn 3/ 5

H.F. _____ under this paragraph. 1 c. Any other investment instrument as authorized by the 2 superintendent. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill relates to matters under the purview of the credit 7 union division of the department of commerce. 8 The bill modifies the amount of securities that a credit 9 union may manage for the benefit of a public officer from 110 10 percent to 100 percent of the total deposits of public funds, 11 less the amount of deposits that are federally insured. 12 The bill provides that a public officer shall obtain 13 security for a deposit in excess of the amount federally 14 insured by acquiring a nontransferable letter of credit 15 from the United States, an agency or instrumentality of the 16 United States, a national cooperative bank, federal home loan 17 bank, any corporate credit union whose capital level remains 18 well-capitalized, or any other entity approved by the treasurer 19 of the state. 20 The bill modifies language to allow a credit union director 21 compensation subject to the bylaws of a credit union. Current 22 law does not allow compensation to a credit union director for 23 service. 24 The bill requires credit union boards to hold regular 25 meetings. A credit union with an individual rating of a four 26 or five, or a composite rating of three, four, or five under 27 the Iowa regulatory risk rating system is required to meet 28 monthly. A new credit union is required to meet monthly for 29 the first five years. 30 The bill expands activity that may constitute expulsion from 31 a credit union to include failing to participate in the affairs 32 of the credit union, being physically abusive to a credit union 33 member or staff, being verbally abusive to a credit union 34 member or staff, or committing fraud, attempted fraud, or other 35 -4- LSB 1104YC (10) 90 es/rn 4/ 5

H.F. _____ illegal conduct resulting in a conviction in relation to the 1 credit union. 2 The bill modifies the expulsion hearing procedure. A member 3 may request a hearing before the credit union superintendent, 4 which shall occur 90 days after the member’s request. The 5 superintendent of credit unions may reinstate the expelled 6 member if the credit union fails to prove the member was 7 noncompliant with the requirements of Code section 533.205. 8 Current law provides that the membership of a credit union may 9 reinstate an expelled member by majority vote upon the terms 10 and conditions prescribed at the hearing. 11 The bill provides that a credit union may invest in 12 investment instruments as authorized by the superintendent. 13 -5- LSB 1104YC (10) 90 es/rn 5/ 5