12C.23A - PAYMENT OF LOSSES IN A BANK.
12C.23A PAYMENT OF LOSSES IN A BANK.
1. The acceptance of public funds by a bank pursuant to this
chapter constitutes all of the following:
a. Agreement by the bank to pledge collateral as required by
section 12C.22.
b. Consent by the bank to the disposition of the collateral
in accordance with this section.
c. Consent by the bank to assessments by the treasurer of
state in accordance with this chapter.
d. Agreement by the bank to provide accurate information and
to otherwise comply with the requirements of this chapter.
2. A bank is liable for payment if the bank fails to pay a check,
draft, or warrant drawn by a public funds depositor or to account for
a check, draft, warrant, order, or certificate of deposit, or any
public funds entrusted to the bank if, in failing to pay, the bank
acts contrary to the terms of an agreement between the bank and the
public funds depositor. The bank is also liable to the treasurer of
state for payment if the bank fails to pay an assessment by the
treasurer of state under subsection 3 when the assessment is due.
3. If a bank is closed by its primary state or federal regulator,
each public funds depositor with deposits in the bank shall notify
the treasurer of state of the amount of any claim within thirty days
of the closing. The treasurer of state shall implement the following
procedures:
a. In cooperation with the responsible regulatory officials
for the closed bank, the treasurer shall validate the amount of
public funds on deposit at the closed bank and the amount of deposit
insurance applicable to the deposits.
b. Any loss to a public funds depositor shall be satisfied
first by any federal deposit insurance, then by the sale or other
disposition of collateral pledged by the closed bank, then from the
assets of the closed bank. To the extent permitted by federal law,
the priority of claims are those established pursuant to section
524.1312, subsection 2. To the extent permitted by federal law, in
the distribution of an insolvent federally chartered bank's assets,
the order of payment of liabilities, if its assets are insufficient
to pay in full all its liabilities for which claims are made, shall
be in the same order as for a state bank as provided in section
524.1312, subsection 2.
c. The claim of a public funds depositor for purposes of this
section shall be the amount of the depositor's public funds deposits
plus interest to the date the funds are distributed to the public
funds depositor at the rate the bank agreed to pay on the public
funds reduced by the portion of the public funds that is insured by
federal deposit insurance.
d. If the loss of public funds is not covered by federal
deposit insurance and the proceeds of the closed bank's assets that
are liquidated within thirty days of the closing of the bank are not
sufficient to cover the loss, then any further payments to cover the
loss will come from the state sinking fund for public deposits in
banks. If the balance in that sinking fund is inadequate to pay the
entire loss, then the treasurer shall obtain the additional amount
needed by making an assessment against other banks whose public funds
deposits exceed federal deposit insurance coverage. A bank's
assessment shall be determined by multiplying the total amount of the
remaining loss to all public depositors in the closed bank by a
percentage that represents the assessed bank's proportional share of
the total of uninsured public funds deposits held by all banks and
all branches of out-of-state banks, based upon the average of the
uninsured public funds of the assessed bank or branch of an
out-of-state bank as of the end of the four calendar quarters prior
to the date of closing of the closed bank and the average of the
uninsured public funds in all banks and branches of out-of-state
banks as of the end of the four calendar quarters prior to the date
of closing of the closed bank, excluding the amount of uninsured
public funds held by the closed bank at the end of the four calendar
quarters. Each bank shall pay its assessment to the treasurer of
state within three business days after it receives notice of
assessment. For purposes of this section, when calculating uninsured
public funds, a bank shall include all deposits of customers of other
financial institutions as permitted by section 12B.10, subsection 7.
e. If a bank fails to pay its assessment when due, the
treasurer of state shall make additional assessments as may be
necessary against other banks that hold uninsured public funds to
satisfy any unpaid assessment. Any additional assessments shall be
determined, collected, and satisfied in the same manner as the first
assessment except that in calculating the amount of each such
additional assessment, the amount of uninsured public funds held by
the bank that fails to pay the assessment shall not be counted.
f. If a bank fails to pay its assessment when due, the
treasurer of state shall notify the superintendent or the comptroller
of the currency, as applicable, of the failure to pay the assessment.
If the bank that has failed to pay the assessment is a nationally
chartered financial institution, the superintendent shall immediately
notify the bank's primary federal regulator. If the assessment is
not paid within thirty days after the bank received the notice of
assessment, the treasurer of state shall initiate a lawsuit to
collect the amount of the assessment. If a bank is found to have
failed to pay the assessment as required by this subsection and is
ordered to pay the assessment, the court shall also order that the
bank pay court costs and reasonable attorney fees based on the amount
of time the attorney general's office spent preparing and bringing
the action, and reasonable expenses incurred by the treasurer of
state.
g. Following collection of the assessments, the treasurer of
state shall distribute funds to the public depositors of the closed
bank according to their validated claims unless a public depositor
requests in writing that the claims of other public depositors be
paid prior to payment to the public depositor making the request. By
receiving payment under this section, a public depositor shall be
deemed to have assigned to the treasurer of state any claim the
public depositor may have against the closed bank by reason of the
deposit of its public funds and all rights the public depositor may
have in funds that subsequently become available to depositors of the
closed bank. Section History: Recent Form
99 Acts, ch 117, §12, 15; 99 Acts, ch 208, §44, 45, 74; 2002 Acts,
ch 1096, §9, 17; 2003 Acts, ch 44, §7; 2004 Acts, ch 1080, §4--7;
2006 Acts, ch 1023, §6
Referred to in §12C.1, 12C.22, 12C.25