Bill Summary – FastDemocracy

House File 131 - Enrolled
                                                       House File 131
                                  AN ACT
     RELATING TO MATTERS UNDER THE PURVIEW OF THE CREDIT UNION
        DIVISION OF THE DEPARTMENT OF COMMERCE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    Section 1. Section 12C.16, subsection 1, paragraph b,
 subparagraph (1), unnumbered paragraph 1, Code 2024, is amended
 to read as follows:
    The credit union may deposit, maintain, pledge and assign
 for the benefit of the public officer in the manner provided
 in this chapter, securities approved by the public officer,
 the market value of which is not less than one hundred ten one
 hundred percent of the total deposits of public funds placed
 by that public officer in the credit union, less the amount
 of deposits that are federally insured. The securities shall
 consist of any of the following:
    Sec. 2. Section 533.205, subsection 8, Code 2024, is amended
 to read as follows:
    8. A credit union director shall not receive compensation
 for service as a director. However, a A credit union director
 may be reimbursed for reasonable expenses directly related to
 such service as a director. Subject to its bylaws, a credit
 union may provide compensation to members of the credit union’s
 board, elected pursuant to section 533.204, in an amount not to
 exceed sixteen thousand dollars per year per board member for
 a credit union with one billion dollars or greater in assets,
 or not to exceed eight thousand dollars per year per board
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 member for a credit union with less than one billion dollars
 in assets.
    Sec. 3. Section 533.205, Code 2024, is amended by adding the
 following new subsections:
    NEW SUBSECTION. 10. A director of a state credit union
 shall not receive terms or be paid a rate of interest on
 deposits by a state credit union of which the person is a
 director that are more favorable than that provided to any
 other member under similar circumstances. Any waiver of
 ordinary or customary charges related to deposit accounts shall
 not violate this subsection.
    NEW SUBSECTION. 11. A director of a state credit union
 shall not purchase any assets from, lease any assets from, sell
 any assets to, or lease any assets to a state credit union
 of which the person is a director except upon terms not less
 favorable to the state credit union than those offered to or
 by other persons. All purchases from, leases from, sales to,
 and leases to a director shall receive prior approval from the
 majority of the board of directors voting in the absence of the
 interested director.
    NEW SUBSECTION. 12. A director of a state credit union
 shall not receive anything of value, other than compensation
 and expense reimbursement authorized by this section, for
 procuring, or attempting to procure, any loan or extension
 of credit to the state credit union or for procuring, or
 attempting to procure, an investment by the state credit union.
    NEW SUBSECTION. 13. a. In addition to any other liability
 imposed by law upon the directors of a state credit union, the
 directors of a state credit union shall be liable for all of
 the following:
    (1) The directors of a state credit union who vote for,
 or assent to, the declaration of any dividend or other
 distribution of the assets of the state credit union to the
 state credit union’s members in willful or negligent violation
 of this chapter, any restrictions contained in the articles of
 incorporation, or any order by the superintendent restricting
 the payment of dividends or other distribution of assets, shall
 be jointly and severally liable to the state credit union for
 the amount of the dividend which is paid, or the value of
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 such assets which are distributed, in excess of the amount of
 such dividend or distribution which could have been paid or
 distributed had the violation not occurred.
    (2) The directors of a state credit union who vote for,
 or assent to, any distribution of the assets of the state
 credit union to the state credit union’s members during the
 dissolution of the state credit union without the payment and
 discharge of, or making adequate provision for, all known
 debts, obligations, and liabilities of the state credit union
 shall be jointly and severally liable to the state credit union
 for the value of the distributed assets to the extent that such
 debts, obligations, and liabilities of the state credit union
 are not thereafter paid and discharged.
    (3) The directors of a state credit union who willfully
 or negligently vote for, or assent to, a loan or an extension
 of credit in violation of this chapter shall be jointly and
 severally liable to the state credit union for the total amount
 of any loss sustained by the state credit union.
    (4) The directors of a state credit union who willfully or
 negligently vote for, or assent to, any investment of funds of
 the state credit union in violation of this chapter shall be
 jointly and severally liable to the state credit union for the
 amount of any loss sustained by the state credit union on the
 investment of funds.
    b. A director shall not be liable under paragraph “a” if
 the director relied and acted in good faith on information
 that was held out to the director to be correct by any officer
 of the state credit union, or was stated in a written report
 by a certified public accountant or firm of certified public
 accounts. A director shall not be deemed to be negligent if
 the director in good faith exercised the diligence, care, and
 skill which an ordinarily prudent person would exercise as a
 director under similar circumstances.
    c. When deemed necessary by the superintendent, and after
 affording an opportunity for a hearing upon adequate notice,
 the superintendent may require that a director whom the
 superintendent reasonably believes to be liable to a state
 credit union pursuant to paragraph “a” to place in an escrow
 account in an insured credit union located in this state,
                                                 House File 131, p. 4
 as directed by the superintendent, an amount sufficient to
 discharge any liability which may accrue pursuant to paragraph
 “a”. Upon a final determination of the amount of liability owed
 pursuant to paragraph “a”, the superintendent shall pay over the
 amount due to the state credit union from the escrow account.
 Any portion of the escrow account in excess of the amount of
 liability owed shall be refunded on a pro rata basis to the
 directors required to contribute to the escrow account pursuant
 to this paragraph.
    d. The liability provisions of this subsection shall not
 apply to a director of a credit union who is not directly
 compensated for services as a director other than the
 reimbursement of actual expenses.
    NEW SUBSECTION. 14. a. Any director held liable for
 the payment of a dividend or other distribution of assets of
 a state credit union under subsection 13 shall be entitled
 to contribution from any member of the state credit union
 who accepted or received a dividend or other distribution of
 assets, knowing that the dividend or distribution of assets was
 made in violation of this chapter, in proportion to the amount
 received by each member.
    b. Any director held liable under subsection 13 shall be
 entitled to contribution from any other director found to be
 similarly liable.
    NEW SUBSECTION. 15. a. A director of a state credit union
 who is present at a meeting of the state credit union’s board
 of directors shall be presumed to have assented to any matter
 taken up by, or action taken by, the board, unless the director
 dissents by doing any of the following:
    (1) Has the director’s dissent entered into the minutes of
 the board meeting.
    (2) Files the director’s written dissent with the
 individual acting as the secretary of the board meeting before
 the adjournment of the board meeting.
    (3) Forwards the director’s written dissent by registered
 or certified mail to the board secretary of the state credit
 union promptly after the adjournment of the board meeting.
    b. The right to dissent pursuant to paragraph “a” shall not
 apply to a director who votes in favor of the action of the
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 board.
    NEW SUBSECTION. 16. Any action seeking to impose liability
 under this section, other than liability for contribution,
 shall be commenced within five years of the event giving rise
 to the liability.
    Sec. 4. Section 533.206, Code 2024, is amended to read as
 follows:
    533.206 Meetings of the board.
    1. The board of directors shall hold at least six regular
 board meetings each calendar year. No more than one regular
 meeting shall be held in any one calendar month, nor shall
 a credit union go longer than two consecutive months without
 holding a board meeting. If a credit union has an individual
 rating of a four or five, or a composite rating of three, four,
 or five under the Iowa regulatory risk rating system, the board
 shall meet monthly.
    2. With respect to a newly chartered credit union, the board
 of directors shall meet not less frequently than monthly during
 each of the first five years of the credit union’s existence.
    3. Unless the bylaws provide otherwise, the board of
 directors may permit any and all directors to participate in
 all except one meeting per year of the board of directors
 through the use of any means of communication by which all
 directors participating in the meeting may simultaneously hear
 each other and communicate during the meeting. A director
 participating in a meeting by this means is deemed to be
 present at the meeting.
    Sec. 5. Section 533.210, subsections 1 and 2, Code 2024, are
 amended to read as follows:
    1. The board of directors may expel any a member of a state
 credit union who has failed to do either engaged in any of the
 following:
    a. Carry Failing to carry out the member’s obligations to
 the state credit union.
    b. Comply Failing to comply with the state credit union’s
 bylaws or policies.
    c. Being physically or verbally abusive to credit union
 members or staff.
    d. Committing fraud, attempted fraud, or other illegal
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 conduct that a member has been convicted of in relation to the
 credit union.
    2. A member of a state credit union may be expelled by a
 majority vote of the board of directors at a regular or special
 meeting of the board.
    a. An expelled member may request a hearing before the
 membership of the state credit union superintendent, which
 shall be held within sixty ninety days of an expelled member’s
 request.
    b. At the hearing, the membership superintendent may
 reinstate the expelled member by majority vote, upon terms and
 conditions prescribed at the hearing if the credit union fails
 to prove the member was noncompliant with the obligations in
 this section.
     ______________________________     ______________________________
     PAT GRASSLEY                       AMY SINCLAIR
     Speaker of the House               President of the Senate
        I hereby certify that this bill originated in the House and
     is known as House File 131, Ninetieth General Assembly.
                                        ______________________________
                                        MEGHAN NELSON
                                        Chief Clerk of the House
     Approved _______________, 2024     ______________________________
                                        KIM REYNOLDS
                                        Governor
Statutes affected: 
Introduced: 12C.16, 533.205, 533.206, 533.210
Reprinted: 12C.16, 12C.17, 533.205, 533.206, 533.210
Enrolled: 12C.16, 533.205, 533.204, 533.206