Iowa Senate Bill SF196

Iowa 2023-2024 Regular Session

• Introduced: 2/2/23
• Refer: 2/28/23

Caption

A bill for an act relating to matters under the purview of the banking division of the department of commerce, including permissible investments, notice requirements, and requirements for a person obtaining control of a state bank.(Formerly SSB 1021.)

Impact

The bill raises the permissible investment limit of state banks from 15% to 20% of their aggregate capital in certain types of tax equity financing transactions. This adjustment aims to enhance flexibility and encourage investments in projects that generate tax benefits, although the state's involvement is limited to a passive investment role. By allowing state banks to explore these financial avenues, the bill could result in increased opportunities for funding projects that may have previously been deemed too risky or outside the banks' investment guidelines. Furthermore, the requirement for obtaining approval when changing control of a state bank is reiterated to ensure that community interests are preserved.

Summary

Senate File 196 relates to various regulatory measures under the purview of the banking division of the Department of Commerce. It introduces amendments concerning permissible investments by state banks, notice requirements for meetings, and the process for individuals seeking control of a state bank. Notably, the bill allows for a more flexible approach to how notices of meetings are delivered, enabling the use of any method of delivery allowed under existing law, thereby simplifying communication processes among shareholders and directors.

Contention

As with many legislative proposals, there may be concerns regarding the implications of allowing state banks greater latitude in investment decisions. Opponents may argue that increasing the investment cap could lead to riskier financial behaviors that might jeopardize the stability of state banks. Additionally, the bill's provision for using varied notice methods could raise questions about transparency and communication effectiveness, with critics possibly fearing that less stringent notice requirements might impair shareholders' ability to stay adequately informed about crucial banking operations.