House File 131 - IntroducedA Bill ForAn Act 1relating to matters under the purview of the credit
2union division of the department of commerce.
1   Section 1.  Section 12C.16, subsection 1, paragraph b,
2subparagraph (1), unnumbered paragraph 1, Code 2023, is amended
3to read as follows:
   4The credit union may deposit, maintain, pledge and assign
5for the benefit of the public officer in the manner provided
6in this chapter, securities approved by the public officer,
7the market value of which is not less than one hundred ten one
percent of the total deposits of public funds placed
9by that public officer in the credit union, less the amount
10of deposits that are federally insured
. The securities shall
11consist of any of the following:
12   Sec. 2.  Section 12C.16, subsection 1, paragraph b,
13subparagraph (1), subparagraph division (d), Code 2023, is
14amended to read as follows:
   15(d)  To the extent of the guarantee, loans, obligations, or
 Nontransferable letters of credit upon which
17the payment of principal and interest is fully secured or
18guaranteed by the United States of America, or an agency or
19instrumentality of the United States of America, a corporate
20central credit union organized under section 533.213
21national cooperative bank, the federal home loan bank
, or a
 any corporate credit union whose activities are subject to
23regulation by the national credit union administration, and the
24rating of any one of such credit unions remains within the two
25highest classifications of prime established by at least one
26of the standard rating services approved by the superintendent
27of banking by rule pursuant to chapter 17A
 and whose capital
28level remains well-capitalized pursuant to 12 C.F.R. pt.704,
29or any other entity approved by the treasurer of state
. The
30treasurer of state shall may adopt rules pursuant to chapter
3117A to implement this section.
32   Sec. 3.  Section 533.205, subsection 8, Code 2023, is amended
33to read as follows:
   348.  A credit union director shall not receive compensation
35for service as a director. However, a director may be
 Subject to its bylaws, a credit union may provide
2compensation to directors for their service and reimburse
for reasonable expenses directly related to such
5   Sec. 4.  Section 533.206, Code 2023, is amended to read as
   7533.206  Meetings of the board.
   81.  The board of directors shall hold at least six regular
9board meetings each calendar year. No more than one regular
10meeting shall be held in any one calendar month, nor shall
11a credit union go longer than two consecutive months without
12holding a board meeting. If a credit union has an individual
13rating of a four or five, or a composite rating of three, four,
14or five under the Iowa regulatory risk rating system, the board
15shall meet monthly.

   162.  With respect to a newly chartered credit union, the board
17of directors shall meet not less frequently than monthly during
18each of the first five years of the credit union’s existence.

   193.  Unless the bylaws provide otherwise, the board of
20directors may permit any and all directors to participate in
21all except one meeting per year of the board of directors
22through the use of any means of communication by which all
23directors participating in the meeting may simultaneously hear
24each other and communicate during the meeting. A director
25participating in a meeting by this means is deemed to be
26present at the meeting.
27   Sec. 5.  Section 533.210, subsections 1 and 2, Code 2023, are
28amended to read as follows:
   291.  The board of directors may expel any a member of a state
30credit union who has failed to do either engaged in any of the
   32a.  Carry Failing to carry out the member’s obligations to
33the state credit union.
   34b.  Comply Failing to comply with the state credit union’s
35bylaws or policies.
   1c.  Being physically or verbally abusive to credit union
2members or staff.
   3d.  Committing fraud, attempted fraud, or other illegal
4conduct that a member has been convicted of in relation to the
5credit union.
   62.  A member of a state credit union may be expelled by a
7majority vote of the board of directors at a regular or special
8meeting of the board.
   9a.  An expelled member may request a hearing before the
10membership of the state credit union superintendent, which
11shall be held within sixty ninety days of an expelled member’s
   13b.  At the hearing, the membership superintendent may
14reinstate the expelled member by majority vote, upon terms and
15conditions prescribed at the hearing
 if the credit union fails
16to prove the member was noncompliant with the obligations in
17this section
18   Sec. 6.  Section 533.304, subsection 2, Code 2023, is amended
19to read as follows:
   202.  A state credit union may invest in either any of the
21following to the extent that the total investments under this
22section shall not be more than five percent of the state credit
23union’s assets:
   24a.  Shares or equity interests in venture capital funds that
25agree to invest an amount equal to at least fifty percent of
26the state credit union’s investment in small businesses having
27their principal offices within this state and having either
28more than one-half of their assets within this state or more
29than one-half of their employees employed within this state.
   30b.  Shares or equity interests in small businesses having
31their principal offices within this state and having either
32more than one-half of their assets within this state or more
33than one-half of their employees employed within this state. A
34state credit union shall not invest in more than twenty percent
35of the total capital and surplus of any one small business
-3-1under this paragraph.
   2c.  Any other investment instrument as authorized by the
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
   7This bill relates to matters under the purview of the credit
8union division of the department of commerce.
   9The bill modifies the amount of securities that a credit
10union may manage for the benefit of a public officer from 110
11percent to 100 percent of the total deposits of public funds,
12less the amount of deposits that are federally insured.
   13The bill provides that a public officer shall obtain
14security for a deposit in excess of the amount federally
15insured by acquiring a nontransferable letter of credit
16from the United States, an agency or instrumentality of the
17United States, a national cooperative bank, federal home loan
18bank, any corporate credit union whose capital level remains
19well-capitalized, or any other entity approved by the treasurer
20of the state.
   21The bill modifies language to allow a credit union director
22compensation subject to the bylaws of a credit union. Current
23law does not allow compensation to a credit union director for
   25The bill requires credit union boards to hold regular
26meetings. A credit union with an individual rating of a four
27or five, or a composite rating of three, four, or five under
28the Iowa regulatory risk rating system is required to meet
29monthly. A new credit union is required to meet monthly for
30the first five years.
   31The bill expands activity that may constitute expulsion from
32a credit union to include failing to participate in the affairs
33of the credit union, being physically abusive to a credit union
34member or staff, being verbally abusive to a credit union
35member or staff, or committing fraud, attempted fraud, or other
-4-1illegal conduct resulting in a conviction in relation to the
2credit union.
   3The bill modifies the expulsion hearing procedure. A member
4may request a hearing before the credit union superintendent,
5which shall occur 90 days after the member’s request. The
6superintendent of credit unions may reinstate the expelled
7member if the credit union fails to prove the member was
8noncompliant with the requirements of Code section 533.205.
9Current law provides that the membership of a credit union may
10reinstate an expelled member by majority vote upon the terms
11and conditions prescribed at the hearing.
   12The bill provides that a credit union may invest in
13investment instruments as authorized by the superintendent.