Bill Text: IA SSB1098 | 2017-2018 | 87th General Assembly | Introduced


Bill Title: A bill for an act relating to state credit union examinations and board meetings called by the superintendent of credit unions, and providing penalties.

Spectrum: Committee Bill

Status: (N/A - Dead) 2017-02-23 - Subcommittee recommends passage. [SSB1098 Detail]

Download: Iowa-2017-SSB1098-Introduced.html
Senate Study Bill 1098 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF COMMERCE/CREDIT UNION DIVISION BILL) A BILL FOR An Act relating to state credit union examinations and board 1 meetings called by the superintendent of credit unions, and 2 providing penalties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1366DP (5) 87 gh/rn/rj
S.F. _____ H.F. _____ Section 1. Section 533.113, Code 2017, is amended to read 1 as follows: 2 533.113 Examinations. 3 1. The superintendent may do any or all of the following: 4 a. Make or cause to be made an examination of a credit 5 union whenever the superintendent believes such examination is 6 necessary or advisable, but in no event less frequently than 7 once during each twenty-four-month period. 8 b. Make or cause to be made such limited examinations at 9 such times and with such frequency as the superintendent deems 10 necessary and advisable to determine the condition of any state 11 credit union and whether any person has violated the provisions 12 of this chapter . 13 c. Make or cause to be made an examination of any 14 corporation or credit union service organization in which a 15 state credit union owns shares or has made an investment. 16 d. Make or cause to be made an examination of any person 17 having business transactions or a relationship with any 18 state credit union when such examination is deemed necessary 19 and advisable in order to determine whether the capital of 20 the state credit union is impaired or whether the safety of 21 its deposits, its financial information or accounts, or its 22 computer systems or computer networks, is imperiled. 23 e. Accept, in lieu of the examination of a state credit 24 union, or any corporation or credit union service organization 25 in which a state credit union owns shares or has made an 26 investment, or of any person having business transactions or a 27 relationship with any state credit union, an examination report 28 prepared by a federal regulatory authority. 29 f. Accept, in lieu of the examination of a state credit 30 union, an audit report conducted by a certified public 31 accounting firm selected from a list of firms previously 32 approved by the superintendent. The cost of the audit shall be 33 paid by the state credit union. 34 g. Accept, in lieu of the examination of an out-of-state 35 -1- LSB 1366DP (5) 87 gh/rn/rj 1/ 6
S.F. _____ H.F. _____ credit union which also conducts business in this state, an 1 examination report prepared by a state or federal regulatory 2 authority. 3 h. Retain, at the examinee’s expense, accountants, 4 investigators, and other experts as reasonably necessary to 5 assist in the conduct of the examination. Any person so 6 retained shall serve in a purely advisory capacity at the 7 direction of the superintendent. 8 2. A state credit union and all of its officers and agents 9 shall give to the representatives of the superintendent free 10 and unimpeded access to all books, papers, securities, records, 11 and other sources of information under their control. 12 3. a. A report of examination shall be forwarded to the 13 chairperson of a state credit union within thirty days after 14 the completion of the examination. Within thirty days of the 15 receipt of this report, a meeting of the directors shall be 16 called by the state credit union to consider matters contained 17 in the report and the action taken shall be set forth in the 18 minutes of the board. 19 b. The report of examination of any affiliate or of any 20 person examined as provided in this subsection shall not be 21 transmitted by the superintendent to any such affiliate or 22 person or to the board of directors of any state credit union 23 unless authorized or requested by such affiliate or person. 24 c. All reports of examinations, including any copies of 25 such reports in the possession of any person other than the 26 superintendent or employee of the credit union division, 27 including any state credit union, agency, or institution 28 to which any report of such examination may be furnished 29 under this section, or section 533.108 or 533.325, shall be 30 confidential communications, shall not be subject to subpoena 31 from any person except as provided in section 533.108, 32 subsection 2, paragraph “b” , and shall not be published, shared, 33 or made public in any way by any person without the written 34 authorization of the credit union division and the execution of 35 -2- LSB 1366DP (5) 87 gh/rn/rj 2/ 6
S.F. _____ H.F. _____ a confidentiality agreement between all of the parties pursuant 1 to section 533.108, subsection 1, paragraph “d” . 2 d. All reports of examinations, including any copies of 3 such reports in the possession of any person other than the 4 superintendent or employee of the credit union division, shall 5 remain the exclusive property of the credit union division. 6 4. a. Whenever the superintendent deems it necessary 7 and advisable, the superintendent may notify the board of 8 directors of a state credit union that a meeting will be held 9 at a place and time and manner as the superintendent directs. 10 The superintendent’s notice may disclose the purpose of the 11 meeting. 12 b. The superintendent may present to the board at the 13 meeting any item the superintendent desires to bring to the 14 attention of the board, including but not limited to any report 15 of an examination required or allowed by this chapter , any 16 conclusions or projections drawn by the superintendent, any 17 recommendations made relative to a report of an examination, 18 and any other matters concerning the operation and condition of 19 the state credit union. 20 c. The state credit union shall cause the matters presented 21 at the meeting to be recorded in the minutes of the meeting. 22 d. Each member of the board of directors shall furnish 23 the superintendent a statement on forms supplied by the 24 superintendent that the member is familiar with the matters 25 presented by the superintendent. 26 5. 4. The superintendent may require any of the following 27 state credit unions to submit to an additional examination 28 or to an independent audit performed by a certified public 29 accounting firm as provided in subsection 1 , paragraph “f” , at 30 the expense of the state credit union: 31 a. A state credit union where the records are inadequate. 32 b. A state credit union in which the books have not been 33 balanced as of the end of the month not less than thirty days 34 previously. 35 -3- LSB 1366DP (5) 87 gh/rn/rj 3/ 6
S.F. _____ H.F. _____ c. A state credit union whose affairs are in an unfavorable 1 condition. 2 6. 5. The superintendent may furnish a copy of the 3 examination report and materials relating to any or all 4 examinations made of any state credit union and any affiliate 5 of a state credit union to any or all of the following, 6 including any official or supervising examiner of any office 7 or regulatory authority: 8 a. The national credit union administration. 9 b. The federal deposit insurance corporation. 10 c. The federal reserve system. 11 d. The office of the comptroller of the currency. 12 e. The federal home loan bank. 13 f. Financial institution regulatory authorities of other 14 states. 15 g. The financial crimes enforcement network of the United 16 States department of the treasury. 17 7. If the superintendent concludes that a state 18 credit union’s affairs are in an unfavorable condition, 19 the superintendent may direct the state credit union to 20 consider consolidation, dissolution, or any other form of 21 reorganization. 22 6. The superintendent may impose a penalty, after notice 23 in writing and opportunity for a hearing, for a violation of 24 this section. If a state credit union fails to satisfactorily 25 resolve the matter within sixty days from receipt of such 26 notice, the superintendent may impose a penalty against the 27 state credit union in an amount not to exceed one hundred 28 dollars per day per violation for each day that the violation 29 remains unresolved. 30 Sec. 2. NEW SECTION . 533.113A Meetings of the board called 31 by superintendent. 32 1. Whenever the superintendent deems it necessary and 33 advisable, the superintendent may notify the board of directors 34 of a state credit union that a meeting will be held at a 35 -4- LSB 1366DP (5) 87 gh/rn/rj 4/ 6
S.F. _____ H.F. _____ place and time and manner as the superintendent directs. 1 The superintendent’s notice may disclose the purpose of the 2 meeting. 3 2. The superintendent may present to the board at the 4 meeting any item the superintendent desires to bring to the 5 attention of the board, including but not limited to any report 6 of an examination required or allowed by this chapter, any 7 conclusions or projections drawn by the superintendent, any 8 recommendations made relative to a report of an examination, 9 and any other matters concerning the operation and condition of 10 the state credit union. 11 3. Each member of a board of directors required to hold a 12 meeting with the superintendent pursuant to this section shall 13 furnish a statement to the superintendent, on forms supplied by 14 the superintendent, that the member acknowledges the matters 15 presented by the superintendent. 16 4. A state credit union required to hold a meeting with the 17 superintendent pursuant to this section shall cause the matters 18 presented at such meeting to be recorded in the minutes of the 19 meeting. 20 5. If the superintendent concludes that a state 21 credit union’s affairs are in an unfavorable condition, 22 the superintendent may direct the state credit union to 23 consider consolidation, dissolution, or any other form of 24 reorganization. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 This bill relates to state credit union examinations and 29 board meetings called by the superintendent. 30 The bill modifies Code section 533.113, relating to the 31 examinations of state credit unions, by providing that the 32 reports of examinations, including any copies furnished to any 33 person outside of the credit union division, are confidential 34 communications, are not subject to subpoena, are not to be 35 -5- LSB 1366DP (5) 87 gh/rn/rj 5/ 6
S.F. _____ H.F. _____ published or made public by any person without the credit 1 union division’s written authorization and the execution of a 2 confidentiality agreement between all of the parties, and are 3 the exclusive possession of the credit union division. The 4 bill authorizes penalties for any violation of Code section 5 533.113. The superintendent may impose a penalty of not more 6 than $100 per day per violation for each day that the violation 7 is unresolved, after notice and an opportunity for a hearing 8 and a 60-day period for resolving the violation. 9 The bill deletes Code section 533.113(4), allowing the 10 superintendent to call a meeting of the board of directors of 11 a state credit union, and Code section 533.113(7), allowing 12 the superintendent to direct a state credit union to consider 13 consolidation, dissolution, or any other form of reorganization 14 if the superintendent concludes that its affairs are in an 15 unfavorable condition. However, the language from these 16 sections is incorporated into new Code section 533.113A. 17 In addition, the bill requires each member of a board of 18 directors required to hold a meeting with the superintendent 19 under new Code section 533.113A to furnish a statement to 20 the superintendent that the member acknowledges the matters 21 presented at the meeting. The matters presented at such 22 meeting must also be recorded in the meeting minutes. 23 -6- LSB 1366DP (5) 87 gh/rn/rj 6/ 6
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