1. In addition to any other liabilities imposed by law upon directors of a state bank:

 a. Directors of a state bank who vote for or assent to the declaration of any dividend or other distribution of the assets of a state bank to its shareholders in willful or negligent violation of the provisions of this chapter, of any restrictions contained in the articles of incorporation, or of any order by the superintendent restricting the payment of dividends or other distribution of assets, shall be jointly and severally liable to the state bank for the amount of such dividend which is paid or the value of such assets which are distributed in excess of the amount of such dividend or distribution which could have been paid or distributed without a violation of the provisions of this chapter, of the restrictions in the articles of incorporation, or of any order by the superintendent restricting the payment of dividends or other distribution of assets.
 b. The directors of a state bank who vote for or assent to any distribution of assets of a state bank to its shareholders during the dissolution of the state bank without the payment and discharge of, or making adequate provision for, all known debts, obligations, and liabilities of the state bank shall be jointly and severally liable to the state bank for the value of such assets which are distributed, to the extent that such debts, obligations, and liabilities of the state bank are not thereafter paid and discharged.
 c. The directors of a state bank who, willfully or negligently, vote for or assent to loans or extensions of credit in violation of the provisions of this chapter, shall be jointly and severally liable to the state bank for the total amount of any loss sustained.
 d. The directors of a state bank who, willfully or negligently, vote for or assent to any investment of funds of the state bank in violation of the provisions of this chapter shall be jointly and severally liable to the state bank for the amount of any loss sustained on such investment.

Terms Used In Iowa Code 524.605

  • Account: means any account with a state bank and includes a demand, time or savings deposit account or any account for the payment of money to a state bank. See Iowa Code 524.103
  • Articles of incorporation: means the original, amended, or restated articles of incorporation and all amendments thereto and includes articles of merger. See Iowa Code 524.103
  • Assets: means all the property and rights of every kind of a state bank. See Iowa Code 524.103
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Bank: means a corporation organized under this chapter, a national bank, a federal savings association, or an out-of-state bank. See Iowa Code 524.103
  • Board: means the engineering and land surveying examining board provided by this chapter. See Iowa Code 542B.2
  • Director: means a member of the board of directors of a state bank. See Iowa Code 524.103
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Insured bank: means a bank the deposits of which are insured in accordance with the provisions of the Federal Deposit Insurance Act. See Iowa Code 524.103
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • notice: means as defined in section 490. See Iowa Code 524.533
  • Officer: means chief executive officer, executive officer, or any other administrative official of a state bank elected by the state bank's board of directors to carry out any of the state bank's operating rules and policies. See Iowa Code 524.103
  • Person: means as defined in section 4. See Iowa Code 524.103
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
  • State bank: means any bank incorporated pursuant to the provisions of this chapter after January 1, 1970, and any "state bank" incorporated pursuant to the laws of this state and doing business as such on January 1, 1970, or a bank organized as a mutual corporation under this chapter. See Iowa Code 524.103
  • Superintendent: means the superintendent of banking of this state. See Iowa Code 524.103
 2. A director of a state bank who is present at a meeting of its board of directors at which action on any matter is taken shall be presumed to have assented to the action taken unless the director’s dissent shall be entered in the minutes of the meeting or unless the director shall file the director’s written dissent to such action with the individual acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the cashier of the state bank promptly after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.
 3. A director shall not be liable under subsection 1, paragraph “a”, “b”, “c”, or “d” if the director relied and acted in good faith upon information represented to the director to be correct by an officer or officers of such state bank or stated in a written report by a certified public accountant or firm of such accountants. No director shall be deemed to be negligent within the meaning of this section if the director in good faith exercised that diligence, care, and skill which an ordinarily prudent person would exercise as a director under similar circumstances.
 4. Any director against whom a claim shall be asserted under or pursuant to this section for the payment of a dividend or other distribution of assets of a state bank and who shall be held liable thereon, shall be entitled to contribution from the shareholders who accepted or received any such dividend or assets, knowing such dividend or distribution to have been made in violation of the provisions of this chapter, in proportion to the amounts received by them respectively. Further, any director against whom a claim shall be asserted pursuant to this section for the payment of any liability imposed by this section shall be entitled to contribution from any director found to be similarly liable.
 5. Whenever the superintendent deems it necessary the superintendent may require, after affording an opportunity for a hearing upon adequate notice, that a director or directors whom the superintendent reasonably believes to be liable to a state bank pursuant to subsection 1, paragraph “a”, “b”, “c”, or “d”, to place in an escrow account in an insured bank located in this state, as directed by the superintendent, an amount sufficient to discharge any liability which may accrue pursuant to subsection 1, paragraph “a”, “b”, “c”, or “d”. The amount so deposited shall be paid over to the state bank by the superintendent upon final determination of the amount of such liability. Any portion of the escrow account which is not necessary to meet such liability shall be repaid on a pro rata basis to the directors who contributed to the fund.
 6. Any action seeking to impose liability under this section, other than liability for contribution, shall be commenced only within five years of the action complained of and not thereafter.
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