12C.16 - SECURITY FOR DEPOSIT OF PUBLIC FUNDS.
12C.16 SECURITY FOR DEPOSIT OF PUBLIC FUNDS.
1. Before a deposit of public funds is made by a public officer
with a credit union in excess of the amount federally insured, the
public officer shall obtain security for the deposit by one or more
of the following:
a. The credit union may give to the public officer a
corporate surety bond of a surety corporation approved by the
treasury department of the United States and authorized to do
business in this state, which bond shall be in an amount equal to the
public funds on deposit at any time. The bond shall be conditioned
that the deposit shall be paid promptly on the order of the public
officer making the deposit and shall be approved by the officer
making the deposit.
b. (1) The credit union may deposit, maintain, pledge and
assign for the benefit of the public officer in the manner provided
in this chapter, securities approved by the public officer, the
market value of which is not less than one hundred ten percent of the
total deposits of public funds placed by that public officer in the
credit union. The securities shall consist of any of the following:
(a) Direct obligations of, or obligations that are insured or
fully guaranteed as to principal and interest by, the United States
of America or an agency or instrumentality of the United States of
America.
(b) Public bonds or obligations of this state or a political
subdivision of this state.
(c) Public bonds or obligations of another state or a political
subdivision of another state whose bonds are rated within the two
highest classifications of prime as established by at least one of
the standard rating services approved by the superintendent of
banking pursuant to chapter 17A.
(d) To the extent of the guarantee, loans, obligations, or
nontransferable letters of credit upon which the payment of principal
and interest is fully secured or guaranteed by the United States of
America or an agency or instrumentality of the United States of
America or the United States central credit union, a corporate
central credit union organized under section 533.213, or a corporate
credit union whose activities are subject to regulation by the
national credit union administration, and the rating of any one of
such credit unions remains within the two highest classifications of
prime established by at least one of the standard rating services
approved by the superintendent of banking by rule pursuant to chapter
17A. The treasurer of state shall adopt rules pursuant to chapter
17A to implement this section.
(e) First lien mortgages which are valued according to practices
acceptable to the treasurer of state.
(f) Investments in an open-end management investment company
registered with the federal securities and exchange commission under
the federal Investment Company Act of 1940, 15 U.S.C. § 80a, which is
operated in accordance with 17 C.F.R. § 270.2a-7.
(2) Direct obligations of, or obligations that are insured or
fully guaranteed as to principal and interest by, the United States
of America, which may be used to secure the deposit of public funds
under subparagraph (1), subparagraph division (a), include
investments in an investment company or investment trust registered
under the federal Investment Company Act of 1940, 15 U.S.C. § 80a,
the portfolio of which is limited to the United States government
obligations described in subparagraph (1), subparagraph division (a),
and to repurchase agreements fully collateralized by the United
States government obligations described in subparagraph (1),
subparagraph division (a), if the investment company or investment
trust takes delivery of the collateral either directly or through an
authorized custodian.
2. If public funds are secured by both the assets of a credit
union and a bond of a surety company, the assets and bond shall be
held as security for a rateable proportion of the deposit on the
basis of the market value of the assets and of the total amount of
the surety bonds. Section History: Recent Form
84 Acts, ch 1230, § 20
C85, § 453.16
85 Acts, ch 194, §3; 88 Acts, ch 1090, § 1; 92 Acts, ch 1156, §
25--30
C93, § 12C.16
99 Acts, ch 117, §7, 15; 2006 Acts, ch 1040, §1; 2007 Acts, ch
174, §78; 2008 Acts, ch 1032, §3; 2008 Acts, ch 1191, §27; 2009 Acts,
ch 41, §263
Referred to in § 12C.1