Iowa Administrative Code › Agency 187 - Banking Division › Chapter 2 - Application Procedures › Rule 187-2.18 - New or Innovative Electronic Activities

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Scope.
Iowa Code section 524.802A as enacted by 2022 Iowa
			 Acts, Senate File 586, authorizes a state bank to engage in new or innovative
			 electronic activities that are part of the business of banking. When
			 considering a proposal to engage in new or innovative electronic activities,
			 the superintendent will consider whether the activity is expressly authorized
			 for state banks under Iowa Code chapter 524, whether the activity is the
			 functional equivalent or a logical extension of any activity authorized for
			 state banks, whether the state bank has the expertise necessary to understand
			 and manage the activity and the associated risks, and whether the activity
			 presents similar risks to those state banks already assume.
(2)
Board responsibilities.
The board of directors of a state bank considering engaging in a new or
			 innovative electronic activity shall first evaluate the risks associated with
			 the proposed new or innovative electronic activity and ensure that the state
			 bank conducts the proposed new or innovative electronic activities in
			 compliance with Iowa Code section 524.802A(3)  as enacted by 2022 Iowa Acts,
			 Senate File 586.
(3)
Application.
A state bank desiring to engage in new or
			 innovative electronic activities should first meet with the superintendent to
			 discuss the proposed electronic activities. After meeting with the
			 superintendent, a state bank proposing to engage in new or innovative
			 electronic activities shall submit a formal proposal to the superintendent that
			 shall, at a minimum, contain the following information:
a. A description of the proposed new or
			 innovative electronic activities, including how the proposed electronic
			 activities align with the strategy and business objectives of the state
			 bank.
b. A description of any state
			 or federal laws and regulations expected to apply to the proposed electronic
			 activities. Examples: compliance (terms, conditions, disclosures), Bank Secrecy
			 Act, federal securities laws.
c. A
			 description of the state bank's corporate governance process that will oversee
			 the proposed electronic activities, including ongoing monitoring to identify
			 and handle any problems or incidents that may arise.
d. A description of the resources and
			 management information systems necessary to oversee the electronic
			 activities.
e. Due diligence
			 materials, including risk assessments (e.g., operational risk, liquidity risk,
			 strategic risk, compliance risk) and information on third-party
			 relationships.
f. A description of
			 any other licenses or approvals required from any regulatory authority to
			 engage in the proposed new or innovative electronic activities.
g. A description of the capital position of
			 the state bank in relation to the risks associated with the proposed new or
			 innovative electronic activities.
h. A description of the state bank's exit
			 strategy for the proposed new or innovative electronic activity if the activity
			 proves unsuccessful.