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Senate Study Bill 1098 - IntroducedA Bill ForAn Act 1relating to state credit union examinations and board
2meetings called by the superintendent of credit unions, and
3providing penalties.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 533.113, Code 2017, is amended to read
2as follows:
3533.113 Examinations.
41. The superintendent may do any or all of the following:
5a. Make or cause to be made an examination of a credit
6union whenever the superintendent believes such examination is
7necessary or advisable, but in no event less frequently than
8once during each twenty-four-month period.
9b. Make or cause to be made such limited examinations at
10such times and with such frequency as the superintendent deems
11necessary and advisable to determine the condition of any state
12credit union and whether any person has violated the provisions
13of this chapter.
14c. Make or cause to be made an examination of any
15corporation or credit union service organization in which a
16state credit union owns shares or has made an investment.
17d. Make or cause to be made an examination of any person
18having business transactions or a relationship with any
19state credit union when such examination is deemed necessary
20and advisable in order to determine whether the capital of
21the state credit union is impaired or whether the safety of
22its deposits, its financial information or accounts, or its
23computer systems or computer networks, is imperiled.
24e. Accept, in lieu of the examination of a state credit
25union, or any corporation or credit union service organization
26in which a state credit union owns shares or has made an
27investment, or of any person having business transactions or a
28relationship with any state credit union, an examination report
29prepared by a federal regulatory authority.
30f. Accept, in lieu of the examination of a state credit
31union, an audit report conducted by a certified public
32accounting firm selected from a list of firms previously
33approved by the superintendent. The cost of the audit shall be
34paid by the state credit union.
35g. Accept, in lieu of the examination of an out-of-state
-1-1credit union which also conducts business in this state, an
2examination report prepared by a state or federal regulatory
3authority.
4h. Retain, at the examinee’s expense, accountants,
5investigators, and other experts as reasonably necessary to
6assist in the conduct of the examination. Any person so
7retained shall serve in a purely advisory capacity at the
8direction of the superintendent.
92. A state credit union and all of its officers and agents
10shall give to the representatives of the superintendent free
11and unimpeded access to all books, papers, securities, records,
12and other sources of information under their control.
133. a. A report of examination shall be forwarded to the
14chairperson of a state credit union within thirty days after
15the completion of the examination. Within thirty days of the
16receipt of this report, a meeting of the directors shall be
17called by the state credit union to consider matters contained
18in the report and the action taken shall be set forth in the
19minutes of the board.
20b. The report of examination of any affiliate or of any
21person examined as provided in this subsection shall not be
22transmitted by the superintendent to any such affiliate or
23person or to the board of directors of any state credit union
24unless authorized or requested by such affiliate or person.
25c. All reports of examinations, including any copies of
26such reports in the possession of any person other than the
27superintendent or employee of the credit union division,
28including any state credit union, agency, or institution
29to which any report of such examination may be furnished
30under this section, or section 533.108 or 533.325, shall be
31confidential communications, shall not be subject to subpoena
32from any person except as provided in section 533.108,
33subsection 2, paragraph “b”, and shall not be published, shared,
34or made public in any way by any person without the written
35authorization of the credit union division and the execution of
-2-1a confidentiality agreement between all of the parties pursuant
2to section 533.108, subsection 1, paragraph “d”.
3d. All reports of examinations, including any copies of
4such reports in the possession of any person other than the
5superintendent or employee of the credit union division, shall
6remain the exclusive property of the credit union division.
74. a. Whenever the superintendent deems it necessary
8and advisable, the superintendent may notify the board of
9directors of a state credit union that a meeting will be held
10at a place and time and manner as the superintendent directs.
11The superintendent’s notice may disclose the purpose of the
12meeting.
13b. The superintendent may present to the board at the
14meeting any item the superintendent desires to bring to the
15attention of the board, including but not limited to any report
16of an examination required or allowed by this chapter, any
17conclusions or projections drawn by the superintendent, any
18recommendations made relative to a report of an examination,
19and any other matters concerning the operation and condition of
20the state credit union.
21c. The state credit union shall cause the matters presented
22at the meeting to be recorded in the minutes of the meeting.
23d. Each member of the board of directors shall furnish
24the superintendent a statement on forms supplied by the
25superintendent that the member is familiar with the matters
26presented by the superintendent.
275. 4. The superintendent may require any of the following
28state credit unions to submit to an additional examination
29or to an independent audit performed by a certified public
30accounting firm as provided in subsection 1, paragraph “f”, at
31the expense of the state credit union:
32a. A state credit union where the records are inadequate.
33b. A state credit union in which the books have not been
34balanced as of the end of the month not less than thirty days
35previously.
-3- 1c. A state credit union whose affairs are in an unfavorable
2condition.
36. 5. The superintendent may furnish a copy of the
4examination report and materials relating to any or all
5examinations made of any state credit union and any affiliate
6of a state credit union to any or all of the following,
7including any official or supervising examiner of any office
8or regulatory authority:
9a. The national credit union administration.
10b. The federal deposit insurance corporation.
11c. The federal reserve system.
12d. The office of the comptroller of the currency.
13e. The federal home loan bank.
14f. Financial institution regulatory authorities of other
15states.
16g. The financial crimes enforcement network of the United
17States department of the treasury.
187. If the superintendent concludes that a state
19credit union’s affairs are in an unfavorable condition,
20the superintendent may direct the state credit union to
21consider consolidation, dissolution, or any other form of
22reorganization.
236. The superintendent may impose a penalty, after notice
24in writing and opportunity for a hearing, for a violation of
25this section. If a state credit union fails to satisfactorily
26resolve the matter within sixty days from receipt of such
27notice, the superintendent may impose a penalty against the
28state credit union in an amount not to exceed one hundred
29dollars per day per violation for each day that the violation
30remains unresolved.
31 Sec. 2. NEW SECTION. 533.113A Meetings of the board called
32by superintendent.
331. Whenever the superintendent deems it necessary and
34advisable, the superintendent may notify the board of directors
35of a state credit union that a meeting will be held at a
-4-1place and time and manner as the superintendent directs.
2The superintendent’s notice may disclose the purpose of the
3meeting.
42. The superintendent may present to the board at the
5meeting any item the superintendent desires to bring to the
6attention of the board, including but not limited to any report
7of an examination required or allowed by this chapter, any
8conclusions or projections drawn by the superintendent, any
9recommendations made relative to a report of an examination,
10and any other matters concerning the operation and condition of
11the state credit union.
123. Each member of a board of directors required to hold a
13meeting with the superintendent pursuant to this section shall
14furnish a statement to the superintendent, on forms supplied by
15the superintendent, that the member acknowledges the matters
16presented by the superintendent.
174. A state credit union required to hold a meeting with the
18superintendent pursuant to this section shall cause the matters
19presented at such meeting to be recorded in the minutes of the
20meeting.
215. If the superintendent concludes that a state
22credit union’s affairs are in an unfavorable condition,
23the superintendent may direct the state credit union to
24consider consolidation, dissolution, or any other form of
25reorganization.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to state credit union examinations and
30board meetings called by the superintendent.
31The bill modifies Code section 533.113, relating to the
32examinations of state credit unions, by providing that the
33reports of examinations, including any copies furnished to any
34person outside of the credit union division, are confidential
35communications, are not subject to subpoena, are not to be
-5-1published or made public by any person without the credit
2union division’s written authorization and the execution of a
3confidentiality agreement between all of the parties, and are
4the exclusive possession of the credit union division. The
5bill authorizes penalties for any violation of Code section
6533.113. The superintendent may impose a penalty of not more
7than $100 per day per violation for each day that the violation
8is unresolved, after notice and an opportunity for a hearing
9and a 60-day period for resolving the violation.
10The bill deletes Code section 533.113(4), allowing the
11superintendent to call a meeting of the board of directors of
12a state credit union, and Code section 533.113(7), allowing
13the superintendent to direct a state credit union to consider
14consolidation, dissolution, or any other form of reorganization
15if the superintendent concludes that its affairs are in an
16unfavorable condition. However, the language from these
17sections is incorporated into new Code section 533.113A.
18In addition, the bill requires each member of a board of
19directors required to hold a meeting with the superintendent
20under new Code section 533.113A to furnish a statement to
21the superintendent that the member acknowledges the matters
22presented at the meeting. The matters presented at such
23meeting must also be recorded in the meeting minutes.
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2meetings called by the superintendent of credit unions, and
3providing penalties.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 533.113, Code 2017, is amended to read
2as follows:
3533.113 Examinations.
41. The superintendent may do any or all of the following:
5a. Make or cause to be made an examination of a credit
6union whenever the superintendent believes such examination is
7necessary or advisable, but in no event less frequently than
8once during each twenty-four-month period.
9b. Make or cause to be made such limited examinations at
10such times and with such frequency as the superintendent deems
11necessary and advisable to determine the condition of any state
12credit union and whether any person has violated the provisions
13of this chapter.
14c. Make or cause to be made an examination of any
15corporation or credit union service organization in which a
16state credit union owns shares or has made an investment.
17d. Make or cause to be made an examination of any person
18having business transactions or a relationship with any
19state credit union when such examination is deemed necessary
20and advisable in order to determine whether the capital of
21the state credit union is impaired or whether the safety of
22its deposits, its financial information or accounts, or its
23computer systems or computer networks, is imperiled.
24e. Accept, in lieu of the examination of a state credit
25union, or any corporation or credit union service organization
26in which a state credit union owns shares or has made an
27investment, or of any person having business transactions or a
28relationship with any state credit union, an examination report
29prepared by a federal regulatory authority.
30f. Accept, in lieu of the examination of a state credit
31union, an audit report conducted by a certified public
32accounting firm selected from a list of firms previously
33approved by the superintendent. The cost of the audit shall be
34paid by the state credit union.
35g. Accept, in lieu of the examination of an out-of-state
-1-1credit union which also conducts business in this state, an
2examination report prepared by a state or federal regulatory
3authority.
4h. Retain, at the examinee’s expense, accountants,
5investigators, and other experts as reasonably necessary to
6assist in the conduct of the examination. Any person so
7retained shall serve in a purely advisory capacity at the
8direction of the superintendent.
92. A state credit union and all of its officers and agents
10shall give to the representatives of the superintendent free
11and unimpeded access to all books, papers, securities, records,
12and other sources of information under their control.
133. a. A report of examination shall be forwarded to the
14chairperson of a state credit union within thirty days after
15the completion of the examination. Within thirty days of the
16receipt of this report, a meeting of the directors shall be
17called by the state credit union to consider matters contained
18in the report and the action taken shall be set forth in the
19minutes of the board.
20b. The report of examination of any affiliate or of any
21person examined as provided in this subsection shall not be
22transmitted by the superintendent to any such affiliate or
23person or to the board of directors of any state credit union
24unless authorized or requested by such affiliate or person.
25c. All reports of examinations, including any copies of
26such reports in the possession of any person other than the
27superintendent or employee of the credit union division,
28including any state credit union, agency, or institution
29to which any report of such examination may be furnished
30under this section, or section 533.108 or 533.325, shall be
31confidential communications, shall not be subject to subpoena
32from any person except as provided in section 533.108,
33subsection 2, paragraph “b”, and shall not be published, shared,
34or made public in any way by any person without the written
35authorization of the credit union division and the execution of
-2-1a confidentiality agreement between all of the parties pursuant
2to section 533.108, subsection 1, paragraph “d”.
3d. All reports of examinations, including any copies of
4such reports in the possession of any person other than the
5superintendent or employee of the credit union division, shall
6remain the exclusive property of the credit union division.
74. a. Whenever the superintendent deems it necessary
8and advisable, the superintendent may notify the board of
9directors of a state credit union that a meeting will be held
10at a place and time and manner as the superintendent directs.
11The superintendent’s notice may disclose the purpose of the
12meeting.
13b. The superintendent may present to the board at the
14meeting any item the superintendent desires to bring to the
15attention of the board, including but not limited to any report
16of an examination required or allowed by this chapter, any
17conclusions or projections drawn by the superintendent, any
18recommendations made relative to a report of an examination,
19and any other matters concerning the operation and condition of
20the state credit union.
21c. The state credit union shall cause the matters presented
22at the meeting to be recorded in the minutes of the meeting.
23d. Each member of the board of directors shall furnish
24the superintendent a statement on forms supplied by the
25superintendent that the member is familiar with the matters
26presented by the superintendent.
275. 4. The superintendent may require any of the following
28state credit unions to submit to an additional examination
29or to an independent audit performed by a certified public
30accounting firm as provided in subsection 1, paragraph “f”, at
31the expense of the state credit union:
32a. A state credit union where the records are inadequate.
33b. A state credit union in which the books have not been
34balanced as of the end of the month not less than thirty days
35previously.
-3- 1c. A state credit union whose affairs are in an unfavorable
2condition.
36. 5. The superintendent may furnish a copy of the
4examination report and materials relating to any or all
5examinations made of any state credit union and any affiliate
6of a state credit union to any or all of the following,
7including any official or supervising examiner of any office
8or regulatory authority:
9a. The national credit union administration.
10b. The federal deposit insurance corporation.
11c. The federal reserve system.
12d. The office of the comptroller of the currency.
13e. The federal home loan bank.
14f. Financial institution regulatory authorities of other
15states.
16g. The financial crimes enforcement network of the United
17States department of the treasury.
187. If the superintendent concludes that a state
19credit union’s affairs are in an unfavorable condition,
20the superintendent may direct the state credit union to
21consider consolidation, dissolution, or any other form of
22reorganization.
236. The superintendent may impose a penalty, after notice
24in writing and opportunity for a hearing, for a violation of
25this section. If a state credit union fails to satisfactorily
26resolve the matter within sixty days from receipt of such
27notice, the superintendent may impose a penalty against the
28state credit union in an amount not to exceed one hundred
29dollars per day per violation for each day that the violation
30remains unresolved.
31 Sec. 2. NEW SECTION. 533.113A Meetings of the board called
32by superintendent.
331. Whenever the superintendent deems it necessary and
34advisable, the superintendent may notify the board of directors
35of a state credit union that a meeting will be held at a
-4-1place and time and manner as the superintendent directs.
2The superintendent’s notice may disclose the purpose of the
3meeting.
42. The superintendent may present to the board at the
5meeting any item the superintendent desires to bring to the
6attention of the board, including but not limited to any report
7of an examination required or allowed by this chapter, any
8conclusions or projections drawn by the superintendent, any
9recommendations made relative to a report of an examination,
10and any other matters concerning the operation and condition of
11the state credit union.
123. Each member of a board of directors required to hold a
13meeting with the superintendent pursuant to this section shall
14furnish a statement to the superintendent, on forms supplied by
15the superintendent, that the member acknowledges the matters
16presented by the superintendent.
174. A state credit union required to hold a meeting with the
18superintendent pursuant to this section shall cause the matters
19presented at such meeting to be recorded in the minutes of the
20meeting.
215. If the superintendent concludes that a state
22credit union’s affairs are in an unfavorable condition,
23the superintendent may direct the state credit union to
24consider consolidation, dissolution, or any other form of
25reorganization.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to state credit union examinations and
30board meetings called by the superintendent.
31The bill modifies Code section 533.113, relating to the
32examinations of state credit unions, by providing that the
33reports of examinations, including any copies furnished to any
34person outside of the credit union division, are confidential
35communications, are not subject to subpoena, are not to be
-5-1published or made public by any person without the credit
2union division’s written authorization and the execution of a
3confidentiality agreement between all of the parties, and are
4the exclusive possession of the credit union division. The
5bill authorizes penalties for any violation of Code section
6533.113. The superintendent may impose a penalty of not more
7than $100 per day per violation for each day that the violation
8is unresolved, after notice and an opportunity for a hearing
9and a 60-day period for resolving the violation.
10The bill deletes Code section 533.113(4), allowing the
11superintendent to call a meeting of the board of directors of
12a state credit union, and Code section 533.113(7), allowing
13the superintendent to direct a state credit union to consider
14consolidation, dissolution, or any other form of reorganization
15if the superintendent concludes that its affairs are in an
16unfavorable condition. However, the language from these
17sections is incorporated into new Code section 533.113A.
18In addition, the bill requires each member of a board of
19directors required to hold a meeting with the superintendent
20under new Code section 533.113A to furnish a statement to
21the superintendent that the member acknowledges the matters
22presented at the meeting. The matters presented at such
23meeting must also be recorded in the meeting minutes.
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