H.F. 131 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 of Des 21 Moines, Iowa , or a any corporate credit union whose activities 22 are capital level remains well-capitalized pursuant to 12 23 C.F.R. pt. 704 and is subject to regulation by the national 24 credit union administration , and the rating of any one of such 25 credit unions remains within the two highest classifications 26 of prime established by at least one of the standard rating 27 services approved by the superintendent of banking by rule 28 pursuant to chapter 17A , or any other entity approved by the 29 treasurer of state . The treasurer of state shall adopt rules 30 pursuant to chapter 17A to implement this section . 31 Sec. 3. Section 12C.16, Code 2023, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 3. If the credit rating of the national 34 cooperative bank or the federal home loan bank of Des Moines, 35 -1- HF 131 (2) 90 es/rn/md 1/ 5

H.F. 131 Iowa, is lowered to a rating not within the two highest 1 classifications of prime as established by at least one of 2 the standard rating services approved by the superintendent 3 of banking by rule pursuant to chapter 17A, or a corporate 4 credit union’s capital levels fall below the well-capitalized 5 standard in 12 C.F.R. pt. 704, then the national cooperative 6 bank, federal home loan bank of Des Moines, Iowa, or corporate 7 credit union shall immediately notify the treasurer of state 8 and each credit union that is securing public deposits by use 9 of a letter of credit issued by the bank or corporate credit 10 union. Each credit union, upon such a notification from the 11 national cooperative bank, federal home loan bank of Des 12 Moines, Iowa, corporate credit union, or treasurer of state, 13 shall immediately return the deposits, with interest accrued to 14 the date of notification, to the public units that are secured 15 by letter of credit. 16 Sec. 4. Section 12C.17, subsection 1, paragraph c, Code 17 2023, is amended to read as follows: 18 c. The securities shall be deposited with the federal 19 reserve bank, national cooperative bank, the federal home loan 20 bank of Des Moines, Iowa, a corporate central credit union 21 organized under section 533.213 , or a corporate credit union 22 whose activities are subject to regulation by the national 23 credit union administration pursuant to a bailment agreement 24 or a pledge custody agreement. 25 Sec. 5. Section 533.205, subsection 8, Code 2023, is amended 26 to read as follows: 27 8. A credit union director shall not receive compensation 28 for service as a director. However, a director may be 29 reimbursed Subject to its bylaws, a credit union may provide 30 compensation to directors for their service and reimburse 31 directors for reasonable expenses directly related to such 32 service. 33 Sec. 6. Section 533.205, Code 2023, is amended by adding the 34 following new subsections: 35 -2- HF 131 (2) 90 es/rn/md 2/ 5

H.F. 131 NEW SUBSECTION . 10. A director of a state credit union 1 shall not receive terms or be paid a rate of interest on 2 deposits by a state credit union of which the person is a 3 director that are more favorable than that provided to any 4 other member under similar circumstances. Any waiver of 5 ordinary or customary charges related to deposit accounts shall 6 not violate this subsection. 7 NEW SUBSECTION . 11. A director of a state credit union 8 shall not purchase any assets from, lease any assets from, sell 9 any assets to, or lease any assets to a state credit union 10 of which the person is a director except upon terms not less 11 favorable to the state credit union than those offered to or 12 by other persons. All purchases from, leases from, sales to, 13 and leases to a director shall receive prior approval from the 14 majority of the board of directors voting in the absence of the 15 interested director. 16 NEW SUBSECTION . 12. A director of a state credit union 17 shall not receive anything of value, other than compensation 18 and expense reimbursement authorized by this section, for 19 procuring, or attempting to procure, any loan or extension 20 of credit to the state credit union or for procuring, or 21 attempting to procure, an investment by the state credit union. 22 Sec. 7. Section 533.206, Code 2023, is amended to read as 23 follows: 24 533.206 Meetings of the board. 25 1. The board of directors shall hold at least six regular 26 board meetings each calendar year. No more than one regular 27 meeting shall be held in any one calendar month, nor shall 28 a credit union go longer than two consecutive months without 29 holding a board meeting. If a credit union has an individual 30 rating of a four or five, or a composite rating of three, four, 31 or five under the Iowa regulatory risk rating system, the board 32 shall meet monthly. 33 2. With respect to a newly chartered credit union, the board 34 of directors shall meet not less frequently than monthly during 35 -3- HF 131 (2) 90 es/rn/md 3/ 5

H.F. 131 each of the first five years of the credit union’s existence. 1 3. Unless the bylaws provide otherwise, the board of 2 directors may permit any and all directors to participate in 3 all except one meeting per year of the board of directors 4 through the use of any means of communication by which all 5 directors participating in the meeting may simultaneously hear 6 each other and communicate during the meeting. A director 7 participating in a meeting by this means is deemed to be 8 present at the meeting. 9 Sec. 8. Section 533.210, subsections 1 and 2, Code 2023, are 10 amended to read as follows: 11 1. The board of directors may expel any a member of a state 12 credit union who has failed to do either engaged in any of the 13 following: 14 a. Carry Failing to carry out the member’s obligations to 15 the state credit union. 16 b. Comply Failing to comply with the state credit union’s 17 bylaws or policies. 18 c. Being physically or verbally abusive to credit union 19 members or staff. 20 d. Committing fraud, attempted fraud, or other illegal 21 conduct that a member has been convicted of in relation to the 22 credit union. 23 2. A member of a state credit union may be expelled by a 24 majority vote of the board of directors at a regular or special 25 meeting of the board. 26 a. An expelled member may request a hearing before the 27 membership of the state credit union superintendent , which 28 shall be held within sixty ninety days of an expelled member’s 29 request. 30 b. At the hearing, the membership superintendent may 31 reinstate the expelled member by majority vote, upon terms and 32 conditions prescribed at the hearing if the credit union fails 33 to prove the member was noncompliant with the obligations in 34 this section . 35 -4- HF 131 (2) 90 es/rn/md 4/ 5

H.F. 131 Sec. 9. Section 533.304, subsection 2, Code 2023, is amended 1 to read as follows: 2 2. A state credit union may invest in either any of the 3 following to the extent that the total investments under this 4 section shall not be more than five percent of the state credit 5 union’s assets: 6 a. Shares or equity interests in venture capital funds that 7 agree to invest an amount equal to at least fifty percent of 8 the state credit union’s investment in small businesses having 9 their principal offices within this state and having either 10 more than one-half of their assets within this state or more 11 than one-half of their employees employed within this state. 12 b. Shares or equity interests in small businesses having 13 their principal offices within this state and having either 14 more than one-half of their assets within this state or more 15 than one-half of their employees employed within this state. A 16 state credit union shall not invest in more than twenty percent 17 of the total capital and surplus of any one small business 18 under this paragraph. 19 c. Shares or equity interests of any corporation or 20 other entity which develops or utilizes new or innovative 21 technologies that are or may be applicable to the provision of 22 financial services or products, subject to the approval of the 23 superintendent. 24 -5- HF 131 (2) 90 es/rn/md 5/ 5