This bill amends existing laws regarding the investment of public funds in Iowa. It allows the uninsured portion of public funds deposited in a depository to be invested in insured deposits or certificates of deposit issued by credit unions, expanding the options for public fund investments. Additionally, it establishes that a political subdivision may invest up to 25 percent of its public funds in a joint investment trust, provided that the trust does not pay individuals or entities that do not offer direct operational services. Before investing, the governing body must acknowledge the risks associated with such investments, including the lack of federal insurance and the potential for loss of principal.

The bill also introduces penalties for violations of these provisions, categorizing them as breaches of fiduciary duty that could lead to criminal and civil remedies. It removes corporate central credit unions from the list of entities eligible for securities deposits and allows credit unions to pledge securities through registered securities broker-dealers. These broker-dealers are required to report on pledged collateral regularly, ensuring transparency and accountability in the management of public funds.

Statutes affected:
Introduced: 12B.10, 12C.2, 12C.17