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House Study Bill 30 - IntroducedA Bill ForAn Act 1relating to matters under the purview of the banking
2division of the department of commerce, including
3permissible investments, notice requirements, and
4requirements for a person obtaining control of a state bank.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 524.533, subsection 1, Code 2023, is
2amended to read as follows:
31. Written notice stating the place, day, and hour of a
4meeting of the shareholders and, in case of a special meeting,
5the purpose or purposes for which the meeting is called, shall
6be delivered not less than ten nor more than sixty days before
7the date of the meeting, either personally or by mail, by or
8at the direction of the president, the cashier, or the officer
9or persons calling the meeting, to each shareholder of record
10entitled to vote at the meeting. If mailed, the notice is
11deemed to be delivered when deposited in the United States mail
12addressed to the shareholder at the shareholder’s address as
13it appears on the stock transfer books of the state bank with
14postage prepaid. As used in this section, the term “notice”
15means as defined in section 490.141. The written notice
16required by this section may be given by any method of delivery
17that is permitted in section 490.141, and the notice shall
18be deemed to be delivered when the notice becomes effective
19pursuant to section 490.141, subsection 9.
20 Sec. 2. Section 524.544, subsection 1, Code 2023, is amended
21to read as follows:
221. Whenever any person proposes to purchase or otherwise
23acquire directly or indirectly any of the outstanding shares
24of a state bank, and the proposed purchase or acquisition
25would result in control or in a change in control of the
26state bank, the person proposing to purchase or acquire the
27shares shall first apply in writing to the superintendent
28for a certificate of approval for the proposed change of
29control. The superintendent shall grant the certificate if
30the superintendent is satisfied that the person who proposes
31to obtain control of the state bank is qualified by character,
32experience, and financial responsibility to control and operate
33the state bank in a sound and legal manner, and that the
34interests of the depositors, creditors, and shareholders of
35the state bank, and of the public generally, particularly the
-1-1state bank’s plans to accept deposits from, lend money in, and
2process payments in the area the state bank primarily serves,
3will not be jeopardized by the proposed change of control. A
4person which will become a bank holding company upon completion
5of an acquisition shall make application to the superintendent
6for a certificate of approval as provided in this section.
7Any other bank holding company shall comply with section
8524.1804 in lieu of seeking a certificate of approval under
9this section. In any situation where the president or cashier
10of a state bank has reason to believe any of the foregoing
11requirements have not been complied with, it shall be the duty
12of the president or cashier to promptly report in writing such
13facts to the superintendent upon obtaining knowledge thereof.
14 Sec. 3. Section 524.607, subsection 2, Code 2023, is amended
15to read as follows:
162. A special meeting may be called by any executive officer
17or a director. Notice of a meeting shall be given to each
18director, either personally or by mail, at least two days in
19advance of the meeting. Notice of a regular meeting shall
20not be required if the articles of incorporation, bylaws, or
21a resolution of the board of directors provide for a regular
22monthly meeting date. As used in this section, the term
23“notice” means as defined in section 490.141. The written
24notice required by this section may be given by any method of
25delivery that is permitted in section 490.141, and the notice
26is deemed to be delivered when the notice becomes effective
27pursuant to section 490.141, subsection 9.
28 Sec. 4. Section 524.901, subsection 7, paragraph a, Code
292023, is amended by adding the following new subparagraph:
30 NEW SUBPARAGRAPH. (6) Tax equity financing transactions in
31which a state bank provides equity financing to fund a project
32or projects that generate tax credits or other tax benefits
33and the equity-based structure of the transaction permits the
34transfer of such tax credits or other tax benefits to the state
35bank. A state bank may take a majority financial position in
-2-1a project, but shall be a passive investor and shall not take
2a management position. The investment of state bank funds in
3a tax credit-generating project are subject to the following
4restrictions:
5(a) The state bank shall not participate in the operation of
6any project or facility resulting from such a transaction or
7the sale of energy, if any, derived from the project.
8(b) The state bank shall obtain a legal opinion or otherwise
9demonstrate a good-faith determination that the tax credits
10or other tax benefits are available before engaging in a tax
11equity financing transaction.
12(c) The tax credits, tax benefits, or other payments the
13state bank receives from the transaction shall repay the state
14bank’s investment and provide the expected rate of return at
15the time of the investment.
16(d) Except as provided under subparagraph division (c),
17the state bank shall not share in any appreciation in value of
18its interests in the project or in any of the real or personal
19assets associated with the project.
20 Sec. 5. Section 524.901, subsection 7, paragraph b, Code
212023, is amended to read as follows:
22b. A state bank’s total investment in any combination of
23the shares or equity interests of the entities identified in
24paragraph “a”, subparagraphs (1) through (5) (6) shall be
25limited to fifteen twenty percent of its aggregate capital.
26 Sec. 6. Section 524.1308A, subsection 5, Code 2023, is
27amended to read as follows:
285. As used in this section, the term “notice” means as
29defined in section 490.141. The written notice required by
30subsection 2 may be given by any method of delivery that is
31permitted in section 490.141, and the notice is deemed to be
32delivered when the notice becomes effective pursuant to section
33490.141, subsection 9.
34 Sec. 7. REPEAL. Section 524.901, subsection 11, Code 2023,
35is repealed.
-3-1EXPLANATION
2The inclusion of this explanation does not constitute agreement with
3the explanation’s substance by the members of the general assembly.
4This bill relates to matters under the purview of the banking
5division of the department of commerce, including permissible
6investments, notice requirements, and requirements for a person
7obtaining control of a state bank.
8The bill deletes requirements for notice to be delivered
9personally or by mail for specified meetings and dissolution
10proceedings and instead provides that notice may be given by
11any method allowed, and shall be deemed effective as provided
12in Code section 490.141.
13The bill provides that a person obtaining control of a state
14bank shall not jeopardize the interests of the bank, including
15the state bank’s plans to accept deposits, lend money, and
16process payments in the area that the state bank primarily
17serves.
18The bill provides that a state bank may invest up to 5
19percent of its aggregate capital in tax equity financing
20transactions that fund projects that generate tax credits. The
21state bank shall be a passive investor in the project but may
22take a majority financial position. The investment in a tax
23credit project is subject to certain restrictions, including
24that the state bank shall repay the bank’s investment and
25provide the expected rate of return.
26The bill provides that the state bank’s total investment
27in investment options provided in Code section 524.901(7)(a)
28shall be limited to 20 percent of the bank’s aggregate capital.
29Current law provides that a bank is limited to 15 percent of
30the bank’s aggregate capital.
31The bill repeals Code section 524.901(11), which allows a
32state bank to invest up to 5 percent of its aggregate capital
33in innovative financial technology products or services.
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2division of the department of commerce, including
3permissible investments, notice requirements, and
4requirements for a person obtaining control of a state bank.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 524.533, subsection 1, Code 2023, is
2amended to read as follows:
31. Written notice stating the place, day, and hour of a
4meeting of the shareholders and, in case of a special meeting,
5the purpose or purposes for which the meeting is called, shall
6be delivered not less than ten nor more than sixty days before
7the date of the meeting, either personally or by mail, by or
8at the direction of the president, the cashier, or the officer
9or persons calling the meeting, to each shareholder of record
10entitled to vote at the meeting. If mailed, the notice is
11deemed to be delivered when deposited in the United States mail
12addressed to the shareholder at the shareholder’s address as
13it appears on the stock transfer books of the state bank with
14postage prepaid. As used in this section, the term “notice”
15means as defined in section 490.141. The written notice
16required by this section may be given by any method of delivery
17that is permitted in section 490.141, and the notice shall
18be deemed to be delivered when the notice becomes effective
19pursuant to section 490.141, subsection 9.
20 Sec. 2. Section 524.544, subsection 1, Code 2023, is amended
21to read as follows:
221. Whenever any person proposes to purchase or otherwise
23acquire directly or indirectly any of the outstanding shares
24of a state bank, and the proposed purchase or acquisition
25would result in control or in a change in control of the
26state bank, the person proposing to purchase or acquire the
27shares shall first apply in writing to the superintendent
28for a certificate of approval for the proposed change of
29control. The superintendent shall grant the certificate if
30the superintendent is satisfied that the person who proposes
31to obtain control of the state bank is qualified by character,
32experience, and financial responsibility to control and operate
33the state bank in a sound and legal manner, and that the
34interests of the depositors, creditors, and shareholders of
35the state bank, and of the public generally, particularly the
-1-1state bank’s plans to accept deposits from, lend money in, and
2process payments in the area the state bank primarily serves,
3will not be jeopardized by the proposed change of control. A
4person which will become a bank holding company upon completion
5of an acquisition shall make application to the superintendent
6for a certificate of approval as provided in this section.
7Any other bank holding company shall comply with section
8524.1804 in lieu of seeking a certificate of approval under
9this section. In any situation where the president or cashier
10of a state bank has reason to believe any of the foregoing
11requirements have not been complied with, it shall be the duty
12of the president or cashier to promptly report in writing such
13facts to the superintendent upon obtaining knowledge thereof.
14 Sec. 3. Section 524.607, subsection 2, Code 2023, is amended
15to read as follows:
162. A special meeting may be called by any executive officer
17or a director. Notice of a meeting shall be given to each
18director, either personally or by mail, at least two days in
19advance of the meeting. Notice of a regular meeting shall
20not be required if the articles of incorporation, bylaws, or
21a resolution of the board of directors provide for a regular
22monthly meeting date. As used in this section, the term
23“notice” means as defined in section 490.141. The written
24notice required by this section may be given by any method of
25delivery that is permitted in section 490.141, and the notice
26is deemed to be delivered when the notice becomes effective
27pursuant to section 490.141, subsection 9.
28 Sec. 4. Section 524.901, subsection 7, paragraph a, Code
292023, is amended by adding the following new subparagraph:
30 NEW SUBPARAGRAPH. (6) Tax equity financing transactions in
31which a state bank provides equity financing to fund a project
32or projects that generate tax credits or other tax benefits
33and the equity-based structure of the transaction permits the
34transfer of such tax credits or other tax benefits to the state
35bank. A state bank may take a majority financial position in
-2-1a project, but shall be a passive investor and shall not take
2a management position. The investment of state bank funds in
3a tax credit-generating project are subject to the following
4restrictions:
5(a) The state bank shall not participate in the operation of
6any project or facility resulting from such a transaction or
7the sale of energy, if any, derived from the project.
8(b) The state bank shall obtain a legal opinion or otherwise
9demonstrate a good-faith determination that the tax credits
10or other tax benefits are available before engaging in a tax
11equity financing transaction.
12(c) The tax credits, tax benefits, or other payments the
13state bank receives from the transaction shall repay the state
14bank’s investment and provide the expected rate of return at
15the time of the investment.
16(d) Except as provided under subparagraph division (c),
17the state bank shall not share in any appreciation in value of
18its interests in the project or in any of the real or personal
19assets associated with the project.
20 Sec. 5. Section 524.901, subsection 7, paragraph b, Code
212023, is amended to read as follows:
22b. A state bank’s total investment in any combination of
23the shares or equity interests of the entities identified in
24paragraph “a”, subparagraphs (1) through (5) (6) shall be
25limited to fifteen twenty percent of its aggregate capital.
26 Sec. 6. Section 524.1308A, subsection 5, Code 2023, is
27amended to read as follows:
285. As used in this section, the term “notice” means as
29defined in section 490.141. The written notice required by
30subsection 2 may be given by any method of delivery that is
31permitted in section 490.141, and the notice is deemed to be
32delivered when the notice becomes effective pursuant to section
33490.141, subsection 9.
34 Sec. 7. REPEAL. Section 524.901, subsection 11, Code 2023,
35is repealed.
-3-1EXPLANATION
2The inclusion of this explanation does not constitute agreement with
3the explanation’s substance by the members of the general assembly.
4This bill relates to matters under the purview of the banking
5division of the department of commerce, including permissible
6investments, notice requirements, and requirements for a person
7obtaining control of a state bank.
8The bill deletes requirements for notice to be delivered
9personally or by mail for specified meetings and dissolution
10proceedings and instead provides that notice may be given by
11any method allowed, and shall be deemed effective as provided
12in Code section 490.141.
13The bill provides that a person obtaining control of a state
14bank shall not jeopardize the interests of the bank, including
15the state bank’s plans to accept deposits, lend money, and
16process payments in the area that the state bank primarily
17serves.
18The bill provides that a state bank may invest up to 5
19percent of its aggregate capital in tax equity financing
20transactions that fund projects that generate tax credits. The
21state bank shall be a passive investor in the project but may
22take a majority financial position. The investment in a tax
23credit project is subject to certain restrictions, including
24that the state bank shall repay the bank’s investment and
25provide the expected rate of return.
26The bill provides that the state bank’s total investment
27in investment options provided in Code section 524.901(7)(a)
28shall be limited to 20 percent of the bank’s aggregate capital.
29Current law provides that a bank is limited to 15 percent of
30the bank’s aggregate capital.
31The bill repeals Code section 524.901(11), which allows a
32state bank to invest up to 5 percent of its aggregate capital
33in innovative financial technology products or services.
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