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. Additionally, it permits political subdivisions to invest up to 25 percent of their public funds in a joint investment trust, provided that the trust does not pay individuals or entities that do not provide 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. Violations of these provisions are classified as breaches of fiduciary duty, exposing the involved parties to civil and criminal penalties.

The bill also updates the list of entities with which credit unions can deposit securities. It removes corporate central credit unions from this list and allows credit unions to pledge securities through a registered securities broker-dealer. This broker-dealer is required to report on the pledged collateral regularly. Overall, the bill aims to enhance the investment options for public funds while ensuring proper oversight and accountability in the management of these investments.

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