House
File
328
-
Reprinted
HOUSE
FILE
328
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
HSB
79)
(As
Amended
and
Passed
by
the
House
March
2,
2011
)
A
BILL
FOR
An
Act
relating
to
matters
under
the
purview
of
the
division
1
of
banking
of
the
department
of
commerce,
and
including
2
effective
date
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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328
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328
Section
1.
Section
524.211,
subsection
3,
Code
2011,
is
1
amended
to
read
as
follows:
2
3.
The
superintendent,
general
counsel,
examiners,
and
3
other
employees
of
the
banking
division,
who
have
credit
4
relations
with
a
person
or
entity
licensed
or
registered
5
pursuant
to
chapter
535B
,
535D,
or
536C
,
are
prohibited
from
6
participating
in
decisions,
oversight,
and
official
review
7
of
matters
concerning
the
regulation
of
the
licensee
or
8
registrant.
9
Sec.
2.
Section
524.212,
subsection
2,
Code
2011,
is
amended
10
to
read
as
follows:
11
2.
The
superintendent
may
receive
documents,
materials,
12
or
other
information,
including
otherwise
confidential
and
13
privileged
documents,
materials,
or
other
information,
from
14
other
local,
state,
federal,
and
international
regulatory
15
agencies,
the
conference
of
state
bank
supervisors
and
its
16
affiliates
or
subsidiaries,
the
American
association
of
17
mortgage
regulators
and
its
affiliates
or
subsidiaries,
and
18
the
national
association
of
consumer
credit
administrators
19
and
its
affiliates
or
subsidiaries,
and
shall
maintain
as
20
confidential
and
privileged
any
such
document,
material,
or
21
other
information
received
with
notice
or
the
understanding
22
that
it
is
confidential
or
privileged
under
the
laws
of
the
23
jurisdiction
that
is
the
source
of
the
document,
material,
or
24
other
information.
With
respect
to
documents,
materials,
or
25
other
information
that
is
shared
or
stored
electronically,
26
the
superintendent
is
authorized
to
take
any
necessary
steps
27
to
ensure
the
division’s
information
technology
systems
28
comply
with
the
information
technology
security
requirements
29
established
by
any
of
the
regulatory
agencies
or
associations
30
of
state
regulatory
agencies
described
in
this
section.
31
Sec.
3.
Section
524.904,
subsection
5,
Code
2011,
is
amended
32
to
read
as
follows:
33
5.
a.
A
state
bank
may
grant
loans
and
extensions
of
credit
34
to
a
corporate
borrowing
group
in
an
amount
not
to
exceed
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328
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328
twenty-five
percent
of
the
state
bank’s
aggregate
capital
if
1
all
loans
and
extensions
of
credit
to
any
one
borrower
within
2
a
corporate
borrowing
group
conform
to
subsection
2
or
3
,
and
3
the
financial
strength,
assets,
guarantee,
or
endorsement
of
4
any
one
corporate
borrowing
group
member
is
not
relied
upon
5
as
a
basis
for
loans
and
extensions
of
credit
to
any
other
6
corporate
borrowing
group
member.
A
state
bank
may
grant
loans
7
and
extensions
of
credit
to
a
corporate
borrowing
group
in
an
8
amount
not
to
exceed
thirty-five
percent
of
aggregate
capital
9
if
all
loans
and
extensions
of
credit
to
any
one
borrower
10
within
a
corporate
borrowing
group
conform
to
subsection
2,
11
3
,
or
4,
and
the
financial
strength,
assets,
guarantee,
or
12
endorsement
of
any
one
corporate
borrowing
group
member
is
not
13
relied
upon
as
a
basis
for
loans
and
extensions
of
credit
to
14
any
other
corporate
borrowing
group
member.
A
corporate
group
15
includes
a
person
and
all
corporations
in
which
the
person
16
owns
or
controls
fifty
percent
or
more
of
the
shares
entitled
17
to
vote.
While
not
to
be
construed
as
an
endorsement
of
the
18
quality
of
any
loan
or
extension
of
credit,
the
superintendent
19
may
authorize
a
state
bank
to
grant
loans
and
extensions
of
20
credit
to
a
borrowing
group
in
an
amount
not
to
exceed
fifty
21
percent
of
aggregate
capital
if
all
loans
and
extensions
of
22
credit
to
any
one
borrower
within
a
borrowing
group
conform
23
to
subsection
2
or
3,
and
the
financial
strength,
assets,
24
guarantee,
or
endorsement
of
any
one
borrowing
group
member
is
25
not
relied
upon
as
a
basis
for
loans
and
extensions
of
credit
26
to
any
other
borrowing
group
member.
27
b.
For
the
purposes
of
this
subsection,
a
borrowing
28
group
includes
a
person
and
any
legal
entity,
including
but
29
not
limited
to
corporations,
limited
liability
companies,
30
partnerships,
trusts,
and
associations
where
the
following
31
exist:
32
(1)
The
interests
of
a
group
of
more
than
one
borrower,
33
or
any
combination
of
the
members
of
the
group,
are
so
34
interrelated
that
they
should
be
considered
a
unit
for
the
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328
purpose
of
applying
the
lending
limit
limitations
of
this
1
section.
For
the
purposes
of
this
subparagraph,
interrelated
2
borrowers
include
but
are
not
limited
to
borrowers
having
3
separate
operations
that
cannot
exist
without
the
other,
4
borrowers
sharing
collateral,
borrowers
commingling
assets,
5
borrowers
sharing
operational
proceeds,
or
borrowers
for
whom
6
there
is
a
common
source
of
repayment
for
the
borrowers’
loans.
7
(2)
One
or
more
persons
owns
or
controls
fifty
percent
or
8
more
of
the
voting
securities
or
membership
interests
of
the
9
borrowing
entity
or
a
member
of
the
group.
10
(3)
One
or
more
persons
controls,
in
any
manner,
the
11
election
of
a
majority
of
the
directors,
managers,
trustees,
12
or
other
persons
exercising
similar
functions
of
the
borrowing
13
entity
or
a
member
of
the
group.
14
(4)
One
or
more
persons
has
the
power
to
vote
fifty
percent
15
or
more
of
any
class
of
voting
securities
or
membership
16
interests
of
the
borrowing
entity
or
a
member
of
the
group.
17
c.
To
demonstrate
compliance
with
this
subsection,
a
18
bank
shall
maintain
in
its
files,
at
a
minimum,
all
of
the
19
following:
20
(1)
Documentation
demonstrating
the
current
ownership
of
21
the
borrowing
entity.
22
(2)
Documentation
identifying
the
persons
who
have
voting
23
rights
in
the
borrowing
entity.
24
(3)
Documentation
identifying
the
board
of
directors
and
25
senior
management
of
the
borrowing
entity.
26
(4)
The
bank’s
assessment
of
the
borrowing
entity’s
means
27
of
servicing
the
loan
or
extension
of
credit,
including
28
specific
reasons
in
support
of
that
assessment.
The
assessment
29
shall
include
an
analysis
of
the
borrowing
entity’s
financial
30
history,
its
present
and
projected
economic
and
financial
31
performance,
and
the
significance
of
any
financial
support
32
provided
to
the
borrowing
entity
by
members
of
the
borrowing
33
group
and
third
parties.
34
Sec.
4.
Section
524.904,
subsection
7,
Code
2011,
is
amended
35
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328
by
adding
the
following
new
paragraph:
1
NEW
PARAGRAPH
.
m.
A
renewal
or
restructuring
of
a
loan
as
2
a
new
loan
or
extension
of
credit
following
the
exercise
by
3
a
state
bank
of
reasonable
efforts,
consistent
with
safe
and
4
sound
banking
practices,
to
bring
the
loan
into
conformance
5
with
the
lending
limit,
unless
new
funds
are
advanced
by
the
6
bank
to
the
borrower
or
unless
a
new
borrower
replaces
the
7
original
borrower
or
unless
the
superintendent
determines
that
8
the
renewal
or
restructuring
was
undertaken
as
a
means
to
evade
9
the
bank’s
lending
limit.
10
Sec.
5.
Section
524.1201,
subsection
4,
Code
2011,
is
11
amended
by
striking
the
subsection.
12
Sec.
6.
Section
535B.4,
Code
2011,
is
amended
by
adding
the
13
following
new
subsection:
14
NEW
SUBSECTION
.
8A.
A
licensee
may
not
establish
branch
15
locations
outside
of
the
United
States.
16
Sec.
7.
Section
535B.6,
Code
2011,
is
amended
to
read
as
17
follows:
18
535B.6
Licensing
of
foreign
corporation
certain
corporations
.
19
1.
An
applicant
that
is
a
foreign
corporation
incorporated
20
under
the
laws
of
another
state
in
the
United
States
must
be
21
authorized
to
do
business
in
this
state.
A
foreign
corporation
22
Such
a
corporation
shall
file
with
the
license
application
both
23
of
the
following:
24
1.
a.
An
irrevocable
consent,
duly
acknowledged,
that
25
suits
and
actions
may
be
commenced
against
that
licensee
in
the
26
courts
of
this
state
by
service
of
process
in
the
usual
manner
27
provided
for
by
the
statutes
and
court
rules
of
this
state.
28
2.
b.
Proof
of
authorization
to
do
business
in
this
state.
29
2.
Businesses
that
are
incorporated
outside
of
the
United
30
States
are
not
eligible
for
a
license.
31
Sec.
8.
Section
535D.4,
subsection
1,
Code
2011,
is
amended
32
to
read
as
follows:
33
1.
On
or
after
January
1,
2010,
an
individual
shall
not
34
engage
in
the
business
of
a
mortgage
loan
originator
with
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328
respect
to
any
dwelling
or
residential
real
estate
located
in
1
this
state
without
first
obtaining
and
maintaining
annually
2
a
license
under
this
chapter
.
Each
licensed
mortgage
loan
3
originator
must
register
with
and
maintain
a
valid
unique
4
identifier
issued
by
the
nationwide
mortgage
licensing
system
5
and
registry.
6
Sec.
9.
NEW
SECTION
.
535D.23
Reports
of
condition
required
7
——
exceptions.
8
Each
mortgage
loan
originator
licensee
shall
submit
9
reports
of
condition
to
the
nationwide
mortgage
licensing
10
system
and
registry
unless
the
mortgage
loan
originator’s
11
activity
is
included
in
a
report
submitted
by
the
mortgage
12
loan
originator’s
employer
in
accordance
with
section
535B.11,
13
subsection
3,
section
535B.18,
or
section
536A.14,
subsection
14
2.
The
reports
shall
be
in
such
form
and
shall
contain
such
15
information
as
the
nationwide
mortgage
licensing
system
and
16
registry
may
require.
17
Sec.
10.
EFFECTIVE
UPON
ENACTMENT.
The
section
of
this
18
Act
amending
section
524.904,
subsection
7,
takes
effect
upon
19
enactment.
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