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March 28, 2008 - The Kansas House of Representatives voted to approve a bill on March 28 affecting Kansas state-chartered credit union field of membership (FOM). One hundred and fifteen members voted for the bill and eight voted against it.
This vote on SB 535 enacts new legislation and amends regulations affecting FOM, branches and mergers. 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 still allows for 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 also implements changes to the Kansas geographic FOM requirements, including:
• A credit union with a statewide FOM is required to adopt a FOM of contiguous political jurisdictions with a population maximum of one million by January 1, 2009.
• A credit union whose headquarters is located in a MSA (as of February 2008) can continue its FOM if it includes multiple contiguous political jurisdictions and doesn’t exceed one million persons. If it doesn’t meet these criteria, the credit union will need to make changes by January 1, 2009.
• A credit union whose headquarters is not located in a MSA (as of February 2008) can continue its FOM if its FOM includes multiple contiguous political jurisdictions having an aggregate total population exceeding one 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 will use contiguous political jurisdictions as one of the factors in geographic FOM determinations.
To view text of the SB 535, click here.
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