1. A state credit union may provide its members with share draft accounts.

 a. “Share draft” means a negotiable draft which is payable upon demand and is used to withdraw funds from a share draft account.
 b. A share draft is an item for purposes of chapter 554, article 4.
 c. The term does not include a draft issued by a state credit union for the transfer of funds between the issuing credit union and another credit union, a bank, a savings and loan association chartered under federal law, or another depository financial institution.

Terms Used In Iowa Code 533.313

  • Account: means the same as defined in section 554. See Iowa Code 554E.1
  • Board: means the engineering and land surveying examining board provided by this chapter. See Iowa Code 542B.2
  • credit union: is a lso a "supervised financial organization" as that term is defined and used in chapter 537, the Iowa consumer credit code. See Iowa Code 533.102
  • financial institution: means any credit union, bank, savings bank, or savings and loan association chartered under federal or state law. See Iowa Code 533.402
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • 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 credit union: means a credit union organized pursuant to section 533. See Iowa Code 533.102
  • Superintendent: means the superintendent of credit unions appointed pursuant to section 533. See Iowa Code 533.102
 2. A share draft account is an account that is a demand account from which a state credit union has agreed that funds may be withdrawn by means of a share draft. A share draft account may bear interest or dividends as determined by the board of directors, provided that the state credit union shall not pay interest or dividends on a share draft account at a rate that exceeds the maximum interest rate which a regulated financial institution is able to pay on comparable instruments as allowed by the depository institutions deregulatory committee.
 3. A state credit union may guarantee payment for a share draft if both the following conditions are met:

 a. A specific guarantee authorization is obtained for the share draft from the state credit union.
 b. The guarantee authorization is immediately noted on the share draft account to prevent the withdrawal of funds needed to pay the guaranteed share draft.
 4. A state credit union may charge fees and penalties on share drafts and apply fees and penalties to the state credit union’s income in relation to share draft services.
 5. The superintendent may adopt rules relating to share draft programs as necessary to administer this chapter.
  Previous section
Next section  
 Chapter 533 Contents