Bill Text: IA HF2328 | 2013-2014 | 85th General Assembly | Introduced


Bill Title: A bill for an act relating to matters under the purview of the credit union division of the department of commerce, and including effective date provisions. (Formerly HSB 569)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2014-03-04 - Withdrawn. H.J. 403. [HF2328 Detail]

Download: Iowa-2013-HF2328-Introduced.html
House File 2328 - Introduced HOUSE FILE 2328 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 569) A BILL FOR An Act relating to matters under the purview of the credit 1 union division of the department of commerce, and including 2 effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5580HV (2) 85 rn/rj
H.F. 2328 Section 1. NEW SECTION . 533.209A Prohibited relationships. 1 A director shall not be related by consanguinity or affinity 2 within the third degree to any person employed by a state 3 credit union in a senior management position. For purposes 4 of this section, “senior management position” includes a state 5 credit union’s chief executive officer, president, or manager; 6 assistant chief executive officer, assistant president, vice 7 president, or assistant manager; or chief financial officer or 8 treasurer. 9 Sec. 2. Section 533.301, subsection 1, paragraph c, Code 10 2014, is amended to read as follows: 11 c. Other state credit unions. 12 Sec. 3. Section 533.301, subsection 5, paragraph i, Code 13 2014, is amended to read as follows: 14 i. Corporate bonds as defined by and subject to terms 15 and conditions imposed by the superintendent, provided that 16 the superintendent shall not approve investment in corporate 17 bonds unless the bonds are rated in the two highest grades 18 of corporate bonds by a nationally accepted rating agency 19 investment grade . For purposes of this paragraph, “investment 20 grade” means the issuer of a security has an adequate capacity 21 to meet the financial commitments under the security for the 22 projected life of the asset or exposure, even under adverse 23 economic conditions. An issuer has adequate capacity to 24 meet the financial commitments of a security if the risk of 25 default by the obligor is low and the full and timely repayment 26 of principal and interest on the security is expected. A 27 state credit union may consider any or all of the following 28 nonexhaustive or nonmutually exclusive factors, to the extent 29 appropriate, with respect to the credit risk of a security: 30 (1) Credit spreads. 31 (2) Securities-related research. 32 (3) Internal or external credit risk assessments. 33 (4) Default statistics. 34 (5) Inclusion on an index. 35 -1- LSB 5580HV (2) 85 rn/rj 1/ 5
H.F. 2328 (6) Priorities and enhancements. 1 (7) Price, yield, or volume. 2 (8) Asset class-specific factors. 3 Sec. 4. Section 533.301, subsection 28, Code 2014, is 4 amended to read as follows: 5 28. Sell, to persons in the field of membership, negotiable 6 checks, including traveler’s checks; money orders; and other 7 similar money transfer instruments including international 8 and domestic electronic fund transfers and remittance checks 9 transfers . 10 Sec. 5. NEW SECTION . 533.405A Involuntary dissolution. 11 1. If the superintendent has taken over management of the 12 property and business of a state credit union pursuant to 13 section 533.502, and determined that the state credit union 14 cannot be reorganized or merged with another credit union, the 15 superintendent may move for the involuntary dissolution of the 16 state credit union and shall apply to the district court for 17 appointment as receiver with the authority to dissolve the 18 state credit union. 19 2. If a state credit union is in the process of a 20 voluntary dissolution, and pursuant to section 533.405, 21 the superintendent finds that the state credit union is not 22 making reasonable progress toward terminating its affairs, the 23 superintendent may move for the involuntary dissolution of the 24 state credit union and shall apply to the district court for 25 appointment as receiver with the authority to dissolve the 26 state credit union. 27 3. The provisions of section 533.503 shall apply when the 28 superintendent is acting as receiver, and as receiver the 29 superintendent shall distribute the assets pursuant to the 30 provisions of section 533.404. 31 Sec. 6. Section 533.503, Code 2014, is amended by adding the 32 following new subsections: 33 NEW SUBSECTION . 2A. The superintendent as receiver may sue 34 and defend in the superintendent’s name with respect to the 35 -2- LSB 5580HV (2) 85 rn/rj 2/ 5
H.F. 2328 affairs of a state credit union. 1 NEW SUBSECTION . 5. The superintendent as receiver shall 2 hold all records of the receivership for a period of two years 3 after the court decree dissolving the state credit union 4 and discharging the receiver, and at the termination of the 5 two-year period, the records may then be destroyed. 6 Sec. 7. EFFECTIVE UPON ENACTMENT. The following provision 7 or provisions of this Act, being deemed of immediate 8 importance, take effect upon enactment: 9 1. The section of this Act amending section 533.301, 10 subsection 1, paragraph “c”. 11 2. The section of this Act amending section 533.301, 12 subsection 5, paragraph “i”. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill relates to matters under the purview of the credit 17 union division of the department of commerce. 18 The bill provides that a director shall not be related 19 by consanguinity or affinity within the third degree to any 20 person employed by a state credit union in a senior management 21 position. The bill defines “senior management position” to 22 include a credit union’s chief executive officer, president, 23 or manager; assistant chief executive officer, assistant 24 president, vice president, or assistant manager; or chief 25 financial officer or treasurer. 26 The bill provides that a state credit union shall be 27 authorized to receive payments for ownership shares, for other 28 shares, or as deposits, from other credit unions. Currently, 29 this authorization applies strictly to other state credit 30 unions. 31 The bill modifies provisions relating to investments by a 32 state credit union in corporate bonds to delete a requirement 33 that the bonds are rated in the two highest grades of corporate 34 bonds by a nationally accepted rating agency and substituting 35 -3- LSB 5580HV (2) 85 rn/rj 3/ 5
H.F. 2328 the requirement that the bonds be considered investment grade. 1 The bill defines “investment grade” to mean the issuer of 2 a security has an adequate capacity to meet the financial 3 commitments under the security for the projected life of the 4 asset or exposure, even under adverse economic conditions. The 5 bill provides that an issuer has adequate capacity to meet the 6 financial commitments of a security if the risk of default 7 by the obligor is low and the full and timely repayment of 8 principal and interest on the security is expected. The bill 9 specifies a list of nonexhaustive or nonmutually exclusive 10 factors which a credit union may consider, to the extent 11 appropriate, with respect to the credit risk of a security. 12 The bill changes a reference to “remittance checks” to 13 “remittance transfers” regarding the ability of a state credit 14 union to sell, to persons in the field of membership, specified 15 checks, money orders, and other similar money transfer 16 instruments. 17 Additionally, the bill establishes new involuntary 18 dissolution provisions relating to state credit unions. The 19 bill provides that if the superintendent has taken over 20 management of the property and business of a state credit 21 union and determined that the state credit union cannot 22 be reorganized or merged with another credit union, the 23 superintendent may move for the involuntary dissolution of the 24 state credit union and shall apply to the district court for 25 appointment as receiver with the authority to dissolve the 26 state credit union. Further, the bill provides that if a state 27 credit union is in the process of a voluntary dissolution, and 28 the superintendent of credit unions finds that the state credit 29 union is not making reasonable progress toward terminating 30 its affairs, the superintendent may move for the involuntary 31 dissolution of the state credit union and shall apply to the 32 district court for appointment as receiver with the authority 33 to dissolve the state credit union. 34 The bill adds two new provisions applicable to the 35 -4- LSB 5580HV (2) 85 rn/rj 4/ 5
H.F. 2328 superintendent acting as receiver. The bill provides that 1 the superintendent as receiver may sue and defend in the 2 superintendent’s name with respect to the affairs of a state 3 credit union, and shall hold all records of the receivership 4 for a period of two years after the court decree dissolving the 5 state credit union and discharging the receiver, which, at the 6 termination of the two-year period, may be destroyed. 7 The bill provides that the provisions relating to 8 authorization to receive specified payments from other credit 9 unions, and relating to the requirement that investments be 10 made in corporate bonds which are considered “investment 11 grade”, take effect upon enactment. 12 -5- LSB 5580HV (2) 85 rn/rj 5/ 5
feedback