Iowa Administrative Code

the merger, a portion of the field of membership, assets, liabilities, shares, and capital of one credit union is transferred to another credit union. A spin-off of a well-defined segment or branch of a credit union’s membership to another credit union is an option undertaken to …

off must file, in addition to other merger documents detailed by the division, a plan that addresses the following points, at a minimum, in support for their spin-off plan: 16.2(1) Why the spin-off is being requested. 16.2(2) What part of the field of membership is to be spun off…

current monthly financial statements from both credit unions and a copy of the proposed voting ballot. 16.3(1) Membership notice and voting requirements shall be the same as for regular mergers under rule 189—12.6(533), with certain exceptions. Only those members directly affecte…

the following definitions apply as used in these rules: “Adjusted trading” means selling an investment to a counterparty at a price above its current fair value and simultaneously purchasing or committing to purchase from the counterparty another investment at a price above its c…

17.1(1) These rules implement the authority of credit unions organized in accordance with Iowa Code chapter 533 to engage in investment and deposit activities which would be permitted if the credit union were federally chartered in accordance with Iowa Code sections 533.301(5)“j”…

17.10(1) At least quarterly, a credit union must prepare a written report listing all of its shares and deposits in banks, credit unions, and other depository institutions, that have one or more of the following features: a. Embedded options; b. Remaining maturities greater than …

17.11(1) Before purchasing or selling a security, a credit union must obtain either price quotations on the security from at least two broker-dealers or a price quotation on the security from an industry- recognized information provider. This requirement to obtain price quotation…

17.12(1) At least monthly, a credit union must prepare a written report setting forth, for each security held, the fair value and dollar change since the prior month end, with summary information for the entire portfolio. 17.12(2) At least quarterly, a credit union must prepare a…

17.13(1) Regular way settlement and delivery versus payment basis. A credit union may only contract for the purchase or sale of a security as long as the delivery of the security is by regular way settlement and the transaction is accomplished on a delivery versus payment basis. …

17.14(1) Variable rate investment. A credit union may invest in a variable rate investment, as long as the index is tied to domestic interest rates. Except in the case of U.S. Treasury inflation-protected securities, the variable rate investment cannot, for example, be tied to fo…

short sales.

17.16(1) Derivatives. A credit union may not purchase or sell financial derivatives, such as futures, options, interest rate swaps, or forward rate swaps. This prohibition does not apply to: a. Any derivatives permitted under NCUA rules and regulations, 12 CFR 701.21(i) and 189—s…

17.17(1) A credit union’s officials and senior management employees, and their immediate family members, may not receive anything of value in connection with their investment transactions. This prohibition also applies to any other employee, such as an investment officer, if the …

17.19(1) Under an investment pilot program, the credit union division will permit a limited number of credit unions to engage in investment activities prohibited by this rule but otherwise permitted by the Federal Credit Union Act, 12 U.S.C. Section 1757. 17.19(2) Except as provi…

17.20(1) A state-chartered credit union that engages in an investment activity that it believes to be permissible for federal credit unions, whether or not addressed by these rules, must provide the superintendent, when requested, satisfactory documentation that the activity is n…

director, officer, or employee of the state credit union on an account at the state credit union when the payment of funds is made in accordance with any of the following: 1. A written, preauthorized, interest-bearing extension of credit plan that specifies a method of repayment.…

written investment policies consistent with Iowa Code chapter 533, the Federal Credit Union Act, these rules, and other applicable laws and regulations and must review the policies at least annually. These policies may be part of a broader, asset-liability management policy. Writ…

17.4(1) State-chartered credit unions with assets of $10 million or greater must comply with generally accepted accounting principles (GAAP) in reports filed with the superintendent and maintained by the credit union. State-chartered credit unions with assets less than $10 millio…

17.5(1) Except as provided in 17.5(2), 17.5(3) and 17.5(4), a credit union must retain discretionary control over its purchase and sale of investments. A credit union has not delegated discretionary control to an investment adviser when the credit union reviews all recommendation…

investment and the issuing entity before purchasing it, except for investments issued or fully guaranteed as to principal and interest by the U.S. government or its agencies, enterprises, or corporations or fully insured (including accumulated interest) by the National Credit Uni…

notice, no later than the next regularly scheduled monthly board meeting, of any investment that either is outside of board policy after purchase or has failed a requirement of these rules. The board of directors must document its action regarding the investment in the minutes of…

17.8(1) A credit union may purchase and sell investments through a broker-dealer as long as the broker-dealer is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.) or is a depository institu…

17.9(1) A credit union’s purchased investments and repurchase collateral must be in the credit union’s possession, recorded as owned by the credit union through the Federal Reserve Book Entry System, or held by a board of directors-approved safekeeper under a written custodial ag…

meaning shown below: “Allowance for loan and lease losses” means an estimate of loan and lease losses in the entire loan portfolio, including estimated inherent losses. Credit unions with assets of $10 million or greater must conform with generally accepted accounting principles …

18.2(1) Each credit union shall establish and maintain a legal reserve for contingencies as provided by Iowa Code chapter 533. The totals of the legal reserve and the allowance for loan losses account shall be combined for determining the applicable percentage of gross income to …

18.3(1) Credit unions with assets of $10 million or greater must prepare financial statements in accordance with generally accepted accounting principles (GAAP). Credit unions with assets of less than $10 million may prepare financial statements in accordance with authorized inte…

18.4(1) The amount carried in this account shall represent an amount at least equal to reasonably foreseeable loan and lease losses. Each credit union is required to establish and maintain a methodology to determine the amount needed in the allowance for loan and lease losses acc…

18.5(1) Credit unions are responsible for determining an adequate allowance for loan and lease losses account and adopting a reasonable methodology for doing so. Credit unions with assets $10 million or greater shall follow generally accepted accounting principles (GAAP). In dete…

18.6(1) The allowance for loan and lease losses account shall be charged with the amount of the uncollectible loans which have been authorized for charge-off by the board of directors or as directed by the superintendent. Likewise, recoveries on loans charged off shall be credite…

“Applicants” means those persons who make application to the credit union division. “Application” includes the documents required by the credit union division for chartering a credit union or for approval of an employee group to obtain service from an already chartered credit uni…

represent itself as a credit union in the course of obtaining and doing business. Failure to meet this requirement may be grounds for revocation of charter by the superintendent.

employee group may be served by an already chartered credit union without the requirement of a common bond relationship between the employee group and the chartered credit union effecting service. 2.11(1) Application to serve an employee group. A credit union desiring to serve an…

2.12(1) Inquiry and review. The superintendent may conduct an inquiry, and use any powers granted to the superintendent under Iowa Code chapter 533, as is deemed necessary in connection with any application under this chapter to determine if granting the application would be cons…

2.13(1) Contested case. Applicants may appeal the denial of an application by requesting a contested case hearing before the superintendent within 30 days of issuance of the decision. The costs of a contested case hearing shall be paid by a requester if the requester fails to pre…

consistent with Iowa Code chapter 533 and shall promote safety and soundness of all credit unions. The division shall determine that each application has sound economic basis and that approval of the application will not endanger the safety and soundness of other credit unions.

chartering of a credit union under the laws of the state of Iowa.

they shall determine that the proposed membership for the credit union has a common bond as required by this chapter and that there exists probable support for the credit union by the proposed membership. The persons shall also choose seven applicants to apply for charter with th…

2.5(1) Types of common bond. Common bonds shall include relationships based on association, occupation, industry, or employer, or residence or employment within a specified community. a. Association common bond shall be based on common loyalties, benefits, interests and activitie…

2.6(1) Applicants’ duties. The applicants for charter shall inform the superintendent of the division of the interest and commitment regarding forming a credit union. The applicants shall also obtain from the superintendent the necessary information regarding applying for a chart…

the purpose of this chapter is met and that each and every one of the following standards is met: 1. The proposed members possess a sufficient common bond; 2. The proposed management has the necessary financial expertise; 3. Chartering the credit union is in the interest of its p…

2.8(1) Organization meeting. Proposed members shall meet and through a majority vote approve the incorporation of the credit union chartered by the division. 2.8(2) Filing of corporate records. a. Articles of incorporation. Upon the division’s grant of a charter, the applicants s…

2.9(1) The board of directors shall hold at least 12 regular meetings each calendar year. No more than one regular meeting shall be held in one calendar month. 2.9(2) A quorum shall be required to undertake any credit union business and required at any meeting of the board of dir…

division at Credit Union Division, Attn: Rules Coordinator, 200 East Grand, Suite 370, Des Moines, Iowa 50309-1827. A petition is deemed filed when it is received by that office. The division must provide the petitioner with a file-stamped copy of the petition if the petitioner p…

the petition. The division may request a brief from the petitioner or from any other person concerning the substance of the petition.

Credit Union Division, Attn: Rules Coordinator, 200 East Grand, Suite 370, Des Moines, Iowa 50309-1827.