House File 131 - ReprintedA 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 of Des
22Moines, Iowa
, or a any corporate credit union whose activities
capital level remains well-capitalized pursuant to 12
24C.F.R. pt.704 and is subject to regulation by the national
25credit union administration, and the rating of any one of such
26credit unions remains within the two highest classifications
27of prime established by at least one of the standard rating
28services approved by the superintendent of banking by rule
29pursuant to chapter 17A
, or any other entity approved by the
30treasurer of state
. The treasurer of state shall adopt rules
31pursuant to chapter 17A to implement this section.
32   Sec. 3.  Section 12C.16, Code 2023, is amended by adding the
33following new subsection:
34   NEW SUBSECTION.  3.  If the credit rating of the national
35cooperative bank or the federal home loan bank of Des Moines,
-1-1Iowa, is lowered to a rating not within the two highest
2classifications of prime as established by at least one of
3the standard rating services approved by the superintendent
4of banking by rule pursuant to chapter 17A, or a corporate
5credit union’s capital levels fall below the well-capitalized
6standard in 12 C.F.R. pt.704, then the national cooperative
7bank, federal home loan bank of Des Moines, Iowa, or corporate
8credit union shall immediately notify the treasurer of state
9and each credit union that is securing public deposits by use
10of a letter of credit issued by the bank or corporate credit
11union. Each credit union, upon such a notification from the
12national cooperative bank, federal home loan bank of Des
13Moines, Iowa, corporate credit union, or treasurer of state,
14shall immediately return the deposits, with interest accrued to
15the date of notification, to the public units that are secured
16by letter of credit.
17   Sec. 4.  Section 12C.17, subsection 1, paragraph c, Code
182023, is amended to read as follows:
   19c.  The securities shall be deposited with the federal
20reserve bank, national cooperative bank, the federal home loan
21bank of Des Moines, Iowa, a corporate central credit union
22organized under section 533.213,
or a corporate credit union
23whose activities are subject to regulation by the national
24credit union administration pursuant to a bailment agreement
25or a pledge custody agreement.
26   Sec. 5.  Section 533.205, subsection 8, Code 2023, is amended
27to read as follows:
   288.  A credit union director shall not receive compensation
29for service as a director. However, a director may be
 Subject to its bylaws, a credit union may provide
31compensation to directors for their service and reimburse
for reasonable expenses directly related to such
34   Sec. 6.  Section 533.205, Code 2023, is amended by adding the
35following new subsections:
-2-1   NEW SUBSECTION.  10.  A director of a state credit union
2shall not receive terms or be paid a rate of interest on
3deposits by a state credit union of which the person is a
4director that are more favorable than that provided to any
5other member under similar circumstances. Any waiver of
6ordinary or customary charges related to deposit accounts shall
7not violate this subsection.
8   NEW SUBSECTION.  11.  A director of a state credit union
9shall not purchase any assets from, lease any assets from, sell
10any assets to, or lease any assets to a state credit union
11of which the person is a director except upon terms not less
12favorable to the state credit union than those offered to or
13by other persons. All purchases from, leases from, sales to,
14and leases to a director shall receive prior approval from the
15majority of the board of directors voting in the absence of the
16interested director.
17   NEW SUBSECTION.  12.  A director of a state credit union
18shall not receive anything of value, other than compensation
19and expense reimbursement authorized by this section, for
20procuring, or attempting to procure, any loan or extension
21of credit to the state credit union or for procuring, or
22attempting to procure, an investment by the state credit union.
23   Sec. 7.  Section 533.206, Code 2023, is amended to read as
   25533.206  Meetings of the board.
   261.  The board of directors shall hold at least six regular
27board meetings each calendar year. No more than one regular
28meeting shall be held in any one calendar month, nor shall
29a credit union go longer than two consecutive months without
30holding a board meeting. If a credit union has an individual
31rating of a four or five, or a composite rating of three, four,
32or five under the Iowa regulatory risk rating system, the board
33shall meet monthly.

   342.  With respect to a newly chartered credit union, the board
35of directors shall meet not less frequently than monthly during
-3-1each of the first five years of the credit union’s existence.

   23.  Unless the bylaws provide otherwise, the board of
3directors may permit any and all directors to participate in
4all except one meeting per year of the board of directors
5through the use of any means of communication by which all
6directors participating in the meeting may simultaneously hear
7each other and communicate during the meeting. A director
8participating in a meeting by this means is deemed to be
9present at the meeting.
10   Sec. 8.  Section 533.210, subsections 1 and 2, Code 2023, are
11amended to read as follows:
   121.  The board of directors may expel any a member of a state
13credit union who has failed to do either engaged in any of the
   15a.  Carry Failing to carry out the member’s obligations to
16the state credit union.
   17b.  Comply Failing to comply with the state credit union’s
18bylaws or policies.
   19c.  Being physically or verbally abusive to credit union
20members or staff.
   21d.  Committing fraud, attempted fraud, or other illegal
22conduct that a member has been convicted of in relation to the
23credit union.
   242.  A member of a state credit union may be expelled by a
25majority vote of the board of directors at a regular or special
26meeting of the board.
   27a.  An expelled member may request a hearing before the
28membership of the state credit union superintendent, which
29shall be held within sixty ninety days of an expelled member’s
   31b.  At the hearing, the membership superintendent may
32reinstate the expelled member by majority vote, upon terms and
33conditions prescribed at the hearing
 if the credit union fails
34to prove the member was noncompliant with the obligations in
35this section
1   Sec. 9.  Section 533.304, subsection 2, Code 2023, is amended
2to read as follows:
   32.  A state credit union may invest in either any of the
4following to the extent that the total investments under this
5section shall not be more than five percent of the state credit
6union’s assets:
   7a.  Shares or equity interests in venture capital funds that
8agree to invest an amount equal to at least fifty percent of
9the state credit union’s investment in small businesses having
10their principal offices within this state and having either
11more than one-half of their assets within this state or more
12than one-half of their employees employed within this state.
   13b.  Shares or equity interests in small businesses having
14their principal offices within this state and having either
15more than one-half of their assets within this state or more
16than one-half of their employees employed within this state. A
17state credit union shall not invest in more than twenty percent
18of the total capital and surplus of any one small business
19under this paragraph.
   20c.  Shares or equity interests of any corporation or
21other entity which develops or utilizes new or innovative
22technologies that are or may be applicable to the provision of
23financial services or products, subject to the approval of the