Iowa Senate Bill SSB1099

Iowa 2023-2024 Regular Session

• Introduced: 1/30/23
• Refer: 1/30/23

Caption

A bill for an act relating to matters under the purview of the credit union division of the department of commerce.

Impact

The bill introduces changes to how credit union directors can be compensated, allowing such compensation under the specific bylaws of each credit union. Previously, directors were prohibited from receiving payment for their service. Additionally, the bill requires that credit unions maintain a minimum frequency of board meetings. Those with higher risk ratings must meet monthly, and new credit unions are required to do so for their initial five years. This aims to improve governance and oversight in the credit union sector, potentially leading to more robust financial management practices.

Summary

Senate Study Bill 1099 aims to revise several statutes related to credit unions under the jurisdiction of the Iowa Department of Commerce. A key change in the bill is the adjustment of the security requirement for public funds deposited in credit unions, reducing the required collateral from 110% to 100% of the amount deposited in excess of federally insured limits. This modification is expected to enhance operational flexibility for credit unions while ensuring security for public funds.

Contention

Another significant aspect of SSB1099 is the expanded criteria for member expulsion from a credit union. The bill outlines various behaviors that could lead to expulsion, including failure to participate in credit union affairs, abusive behaviors, or engaging in fraudulent activities. This change could lead to more stringent regulations concerning member conduct, which could be a point of contention among advocates for member rights. The enhanced expulsion procedures also involve a hearing process, providing an opportunity for expelled members to contest their expulsion, thus balancing the need for discipline with fair treatment.