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March 27, 2008 - A vote by the Kansas House of Representatives is expected before its session closes April 5 on a bill affecting Kansas state-chartered credit union field of membership (FOM).
SB 535 would enact new legislation and amend regulations affecting FOM, branches and mergers. The Kansas House is in session until April 5 and a vote may occur within the next few days. The bill was introduced by the Kansas Bankers Association (KBA) and it was amended with language negotiated by the KBA and Kansas Credit Union Association.
The bill would still allow multiple common bonds of occupation or association but after July 1, 2008, no approved geographic area can consist of any congressional district or the entire state of Kansas. Instead, the geographic area may include a single political jurisdiction or multiple contiguous political jurisdictions not exceeding 500,000 persons. If the headquarters of the credit union is located with a Metropolitan Statistical Area (MSA), a different maximum population applies.
SB 535 would also implement changes to the Kansas geographic FOM requirements, including:
• A credit union with a statewide FOM would be required to adopt a FOM of contiguous political jurisdictions with a population maximum of 1 million by January 1, 2009.
• A credit union whose headquarters is located in a MSA (as of February 2008) could continue its FOM if it includes multiple contiguous political jurisdictions and doesn’t exceed 1 million persons. If it doesn’t meet these criteria, the credit union would need to make changes by January 1, 2009.
• A credit union whose headquarters is not located in a MSA (as of February 2008) could continue its FOM, if its FOM includes multiple contiguous political jurisdictions having an aggregate total population exceeding 1 million.
The Kansas Department of Credit Unions (KDCU) has no official position on the bill. “Our role is to interpret and implement the law,” stated John P. Smith, administrator of the KDCU.
In April 2007, a bill was passed in the Missouri legislature that authorized FOM expansions for counties in which a main office branch is located or counties contiguous to such areas. The FOM bill in Kansas would use contiguous political jurisdictions in geographic FOM determinations.
To view text of the SB 535, click here. NASCUS will provide updates on its website as news develops.
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