1.For purposes of this section, unless the context otherwise requires:
a.“Investment securities” means marketable obligations in the form of bonds, notes,
or debentures which have been publicly offered, are of sound value, or are secured so as
to be readily marketable at a fair value, and are within the four highest grades according
to a reputable rating service or represent unrated issues of equivalent value. “Investment
securities” does not include investments which are predominately speculative in nature.
b.“Shares” means proprietary units of ownership of a corporation.
2.A state bank shall not invest for its own account more than fifteen percent of its
aggregate capital in investment securities of any one obligor. The par value of the investment
securities shall be used to determin
Free access — add to your briefcase to read the full text and ask questions with AI
1. For purposes of this section, unless the context otherwise requires:
a. “Investment securities” means marketable obligations in the form of bonds, notes,
or debentures which have been publicly offered, are of sound value, or are secured so as
to be readily marketable at a fair value, and are within the four highest grades according
to a reputable rating service or represent unrated issues of equivalent value. “Investment
securities” does not include investments which are predominately speculative in nature.
b. “Shares” means proprietary units of ownership of a corporation.
2. A state bank shall not invest for its own account more than fifteen percent of its
aggregate capital in investment securities of any one obligor. The par value of the investment
securities shall be used to determine the amount that may be invested under this subsection,
and any premium paid by a state bank for any investment securities shall not be included in
determining the amount that may be invested under this subsection.
3. Subjectonlytotheexerciseofprudentbankingjudgment,astatebankmayinvestforits
own account without regard to the limitation provided in subsection 2 in any of the following:
a. Investment securities of the United States of which the payment of principal and
interest is fully and unconditionally guaranteed by the United States.
b. Investment securities issued, insured, or guaranteed by a department or an agency of
the United States government, provided that the securities, insurance, or guarantee commits
the full faith and credit of the United States for the repayment of the securities.
c. Investment securities of the federal national mortgage association or the association’s
successor.
d. Investment securities of the federal home loan mortgage corporation or the
corporation’s successor.
e. Investment securities of the student loan marketing association or the association’s
successor.
f. Investment securities of a federal home loan bank.
g. Investment securities of a farm credit bank.
h. InvestmentsecuritiesrepresentinggeneralobligationsofthestateofIowaorofpolitical
subdivisions of the state.
4. A state bank may invest without limit in the shares or units of investment companies
or investment trusts registered under the federal Investment Company Act of 1940, 15
U.S.C. §80a-1 et seq., the portfolio of which is limited to United States investment securities
described in subsection 3 or repurchase agreements fully collateralized by United States
investment securities described in subsection 3, if delivery of the collateral is taken either
directly or through an authorized custodian and the dollar-weighted average maturity of
the portfolio is not more than five years. All other investments by a state bank in the
shares or units of investment companies or investment trusts registered under the federal
Investment Company Act of 1940, 15 U.S.C. §80a-1 et seq., whose portfolios exclusively
contain investment securities permissible pursuant to subsections 2 and 3, shall not exceed
fifteen percent of the state bank’s aggregate capital.
5. To the extent necessary to meet minimum membership or participation criteria, a
state bank may invest for its own account in the shares of the appropriate federal reserve
bank, the appropriate federal home loan bank, the federal national agricultural mortgage
corporation or corporations engaged solely in the pooling of agricultural loans for federal
agricultural mortgage corporation guarantees, and other similar investments acceptable to
the superintendent and approved in writing by the superintendent. The bank’s investment
in the shares of each of the organizations is limited to fifteen percent of its aggregate
capital or a higher amount as approved by the superintendent. Notwithstanding the specific
requirements of this section, any shares of government-sponsored entities held by a state
bank on or before July 1, 1995, shall be authorized.
6. Astatebank, upontheapprovalofthesuperintendent, mayacquireandholdtheshares
of any corporation which a state bank is authorized to acquire and hold pursuant to this
chapter.
7. a. A state bank, upon the approval of the superintendent, may invest up to five percent
of its aggregate capital in the shares or equity interests of any of the following:
(1) Economic development corporations organized under chapter 496B to the extent
authorized by and subject to the limitations of that chapter.
(2) Public welfare investments to the same extent a national bank may invest in such
corporations or projects pursuant to 12 U.S.C. §24 and its implementing regulations.
(3) Venture capital funds which invest an amount equal to at least fifty percent of a state
bank’s investment in small businesses having their principal offices within this state and
having either more than one-half of their assets within this state or more than one-half of
their employees employed within this state.
(4) Smallbusinesseshavingaprincipalofficewithinthisstateandhavingeithermorethan
one-half of their assets within this state or more than one-half of their employees employed
within this state. An investment by a state bank in a small business under this subparagraph
shall be included with the obligations of the small business to the state bank that are incurred
as a result of the exercise by the state bank of the powers conferred in section 524.902 for the
purposeofdeterminingthetotalobligationsofthesmallbusinesspursuanttosection524.904.
A state bank’s equity interest investment in a small business, pursuant to this subparagraph,
shall not exceed a twenty percent ownership interest in the small business.
(5) Other entities, acceptable to the superintendent, whose sole purpose is to promote
economic or civic developments within a community or this state.
(6) Tax equity financing transactions in which a state bank provides equity financing to
fund a project or projects that generate tax credits or other tax benefits and the equity-based
structure of the transaction permits the transfer of such tax credits or other tax benefits to
the state bank. A state bank may take a majority financial position in a project, but shall be
a passive investor and shall not take a management position. The investment of state bank
funds in a tax credit-generating project are subject to the following restrictions:
(a) The state bank shall not participate in the operation of any project or facility resulting
from such a transaction or the sale of energy, if any, derived from the project.
(b) The state bank shall obtain a legal opinion or otherwise demonstrate a good-faith
determination that the tax credits or other tax benefits are available before engaging in a tax
equity financing transaction.
(c) The tax credits, tax benefits, or other payments the state bank receives from the
transaction shall repay the state bank’s investment and provide the expected rate of return
at the time of the investment.
(d) Except as provided under subparagraph division (c), the state bank shall not share in
any appreciation in value of its interests in the project or in any of the real or personal assets
associated with the project.
b. A state bank’s total investment in any combination of the shares or equity interests
of the entities identified in paragraph “a”, subparagraphs (1) through (6) shall be limited to
twenty percent of its aggregate capital.
c. For purposes of this subsection:
(1) The term “equity interests” means limited partnership interests and other equity
interests in which liability is limited to the amount of the investment, but does not mean
general partnership interests or other interests involving general liability.
(2) The term “public welfare investment” means an investment that primarily benefits low
andmoderate-incomeindividuals,lowandmoderate-incomeareas,orotherareastargetedby
a governmental entity for redevelopment. “Public welfare investment” includes investments
that primarily support any of the types of activities identified in 12 C.F.R. §24.6. “Public
welfare investment” includes an investment that would receive consideration under 12 C.F.R.
pt. 25 as a qualified investment. “Public welfare investment” includes an investment in any
of the following areas:
(a) A targeted service area as defined in section 8.76.
(b) A small city as defined in section 15.352, subsection 10.
(c) An area of the state that is not part of a federally designated standard metropolitan
statistical area.
(3) The term “small business” means a corporation, partnership, proprietorship, or other
entity which meets the appropriate United States small business administration definition
of small business and which is principally engaged in the development or exploitation of
inventions, technological improvements, new processes, or other products not previously
generally available in this state, or other investments which provide an economic benefit to
the state.
(4) The term “venture capital fund” means a corporation, partnership, proprietorship, or
other entity whose principal business is or will be the making of investments in, and the
providing of significant managerial assistance to, small businesses.
8. A state bank, in the exercise of the powers granted in this chapter, may purchase cash
value life insurance contracts which may include provisions for the lump sum payment of
premiums and which may include insurance against the loss of the lump sum payment. State
banks may only purchase cash value life insurance contracts if the contract is tied to an
employee benefit the state bank is obligated to pay. The cash value life insurance contracts,
together with the investment in annuity contracts authorized in subsection 9, purchased from
any one company shall not exceed fifteen percent of aggregate capital of the state bank,
and in the aggregate from all companies, together with the investment in annuity contracts
authorized in subsection 9, shall not exceed twenty-five percent of aggregate capital of the
state bank unless the state bank has obtained the approval of the superintendent prior to
the purchase of any cash value life insurance contract in excess of this limitation. Purchase
and sale of such contracts shall be conducted in accordance with safe and sound banking
practices.
9. A state bank, in the exercise of the powers granted in this chapter, may purchase
annuity contracts so long as the annuity contract is tied to an employee benefit the state
bank is obligated to pay. The total investment in annuity contracts purchased from any one
company, together with the cash value of life insurance contracts authorized in subsection 8,
shall not exceed fifteen percent of aggregate capital of the state bank, and in the aggregate
from all companies, together with the cash value of life insurance contracts authorized in
subsection 8, shall not exceed twenty-five percent of aggregate capital of the state bank
unless the state bank has obtained the approval of the superintendent prior to the purchase
of any cash value life insurance contract in excess of this limitation. Purchase and sale of
such contracts shall be conducted in accordance with safe and sound banking practices.
10. A state bank may invest without limitation for its own account in futures, forward,
and standby contracts to purchase and sell any of the instruments a state bank is authorized
to purchase and sell, subject to the prior approval of the superintendent and pursuant to
applicable federal laws and regulations governing such contracts. Purchase and sale of
such contracts shall be conducted in accordance with safe and sound banking practices and
with the level of the activity being reasonably related to the state bank’s business needs and
capacity to fulfill its obligations under the contracts.
11. A state bank, upon the approval of the superintendent, may invest in the shares or
equityinterestsofanycorporationorotherentitywhichdevelopsorutilizesneworinnovative
technologies that are or may be applicable to the provision of banking or other financial
products or services, including the covered services identified in section 524.218, subsection
2. A state bank’s total investment in any combination of shares or equity interests of the
entities identified in this paragraph shall not exceed five percent of its aggregate capital.