Senate File 458 - Introduced SENATE FILE 458 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO SSB 1061) A BILL FOR An Act relating to eligibility requirements for financial 1 institutions in which public funds may be deposited. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1873SV (1) 91 sc/ns
S.F. 458 Section 1. Section 12B.10, subsection 7, unnumbered 1 paragraph 1, Code 2025, is amended to read as follows: 2 Notwithstanding sections 12C.2 , 12C.4 , and 12C.6 , 12C.6A, 3 and any other provision of law relating to the deposits of 4 public funds, if public funds are deposited in a depository, 5 as defined in section 12C.1 , any uninsured portion of the 6 public funds invested through the depository may be invested 7 in insured deposits or certificates of deposit arranged by 8 the depository that are placed in or issued by one or more 9 federally insured banks or savings associations regardless of 10 location for the account of the public funds depositor if all 11 of the following requirements are satisfied: 12 Sec. 2. Section 12C.6, subsection 2, paragraph f, Code 2025, 13 is amended to read as follows: 14 f. The notice shall also provide the name and address of a 15 state official to whom inquiries can be sent. Actions of the 16 treasurer of state under this section and section 12C.6A are 17 exempt from chapter 17A . 18 Sec. 3. Section 524.223, subsection 2, unnumbered paragraph 19 1, Code 2025, is amended to read as follows: 20 If the state bank, director, officer, employee, or 21 substantial shareholder fails to appear at the hearing , it 22 shall be deemed to have consented to the issuance of a cease 23 and desist order. In the event of such consent, or if upon 24 the record made at such hearing, the superintendent shall find 25 that any violation or unsafe or unsound practice specified in 26 the notice has been established, the superintendent may issue 27 and serve upon the state bank, director, officer, employee, or 28 substantial shareholder an order to cease and desist from any 29 such violation or practice. Such order may require the state 30 bank and its directors, officers, employees, and shareholders 31 to cease and desist from any such violation or practice and, 32 further, to take affirmative action to correct the conditions 33 resulting from any such violation or practice. In addition, 34 if the violation or practice involves a failure to comply with 35 -1- LSB 1873SV (1) 91 sc/ns 1/ 2
S.F. 458 chapter 12C or any rules adopted pursuant to chapter 12C , the 1 superintendent may recommend to the treasurer of state that 2 the bank be removed from the list of financial institutions 3 eligible to accept public funds under section 12C.6A and may 4 require that during the current calendar quarter and up to the 5 next succeeding eight calendar quarters that the bank do any 6 one or more of the following: 7 Sec. 4. REPEAL. Section 12C.6A, Code 2025, is repealed. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanations substance by the members of the general assembly. 11 This bill repeals Code section 12C.6A, which prohibits 12 public funds from being deposited in a financial institution 13 that does not demonstrate a commitment to serving the needs of 14 the local community in which the institution is chartered to 15 do business, requires the treasurer of state to create a list 16 of financial institutions that are eligible to accept public 17 funds, creates requirements for such financial institutions 18 relating to public comments and annual submissions to the 19 treasurer of state, and establishes a process for challenging 20 an institutions eligibility to receive public funds. 21 -2- LSB 1873SV (1) 91 sc/ns 2/ 2