chapter-9•Chapter 9 — Banks and Banking; Trust Companies
Unofficial online text published by the Kansas Office of Revisor of Statutes; the printed volumes of the Kansas Statutes Annotated are the authoritative version. Current through the 2025 session laws.
Article 1 General Provisions
§ 9-101 Repealed
History: L. 1897, ch. 47, § 1; L. 1917, ch. 79, § 1; L. 1921, ch. 72, § 3; R.S. 1923, § 9-101; L. 1925, ch. 85, § 1; L. 1927, ch. 88, § 9; L. 1929, ch. 85, § 1; L. 1933, ch. 23, § 1 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-101a Repealed
History: L. 1931, ch. 86, § 1; L. 1933, ch. 24, § 1 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-101b, 9-101c Repealed
History: L. 1931, ch. 86, §§ 2, 3; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-101d Repealed
History: L. 1931, ch. 84, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-101e Repealed
History: L. 1931, ch. 84, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-101f Repealed
History: L. 1931, ch. 87, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-102 Repealed
History: L. 1897, ch. 47, § 2; L. 1903, ch. 68, § 1; L. 1908, ch. 15, § 1; R.S. 1923, § 9-102; L. 1925, ch. 86, § 1; L. 1927, ch. 88, § 10; L. 1929, ch. 86, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-103 Repealed
History: L. 1897, ch. 47, § 3; R.S. 1923, § 9-103; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-104 Repealed
History: L. 1897, ch. 47, § 4; R.S. 1923, § 9-104; L. 1933, ch. 25, § 1 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-105 Repealed
History: L. 1897, ch. 47, § 5; R.S. 1923, § 9-105; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-106 Repealed
History: L. 1897, ch. 47, § 6; R.S. 1923, § 9-106; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-107 Repealed
History: L. 1897, ch. 47, § 7; R.S. 1923, § 9-107; L. 1937, ch. 74, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-108 Repealed
History: L. 1897, ch. 47, § 8; R.S. 1923, § 9-108; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-109 Repealed
History: L. 1909, ch. 59, § 1; L. 1919, ch. 89, § 1; R.S. 1923, § 9-109; L. 1927, ch. 88, § 1; L. 1929, ch. 87, § 1; L. 1939, ch. 87, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-110 Repealed
History: L. 1897, ch. 47, § 10; R.S. 1923, § 9-110; L. 1937, ch. 75, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-111 Repealed
History: L. 1897, ch. 47, § 11; L. 1915, ch. 88, § 1; L. 1921, ch. 70, § 1; R.S. 1923, § 9-111; L. 1927, ch. 88, § 2; L. 1933, ch. 26, § 1 (Special Session); L. 1933, ch. 27, § 1 (Special Session); L. 1937, ch. 76, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-112 Repealed
History: L. 1897, ch. 47, § 12; L. 1909, ch. 59, § 2; L. 1915, ch. 89, § 1; L. 1919, ch. 90, § 1; R.S. 1923, § 9-112; L. 1927, ch. 88, § 3; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-113, 9-114 Repealed
History: L. 1915, ch. 89, §§ 2, 3; R.S. 1923, §§ 9-113, 9-114; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-115 Repealed
History: L. 1915, ch. 89, § 4; R.S. 1923, § 9-115; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-116 Repealed
History: L. 1915, ch. 89, § 5; R.S. 1923, § 9-116; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-117 Repealed
History: L. 1897, ch. 47, § 13; R.S. 1923, § 9-117; L. 1943, ch. 83, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-118 Repealed
History: L. 1897, ch. 47, § 14; L. 1921, ch. 71, § 1; R.S. 1923, § 9-118; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-119 Repealed
History: L. 1897, ch. 47, § 15; R.S. 1923, § 9-119; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-120 Repealed
History: L. 1897, ch. 47, § 16; R.S. 1923, § 9-120; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-121 Repealed
History: L. 1897, ch. 47, § 17; R.S. 1923, § 9-121; L. 1945, ch. 91, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-122 Repealed
History: L. 1897, ch. 47, § 18; R.S. 1923, § 9-122; L. 1939, ch. 87, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-123 Repealed
History: L. 1897, ch. 47, § 19; R.S. 1923, § 9-123; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-124 Repealed
History: L. 1897, ch. 47, § 20; R.S. 1923, § 9-124; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-125 Repealed
History: R.S. 1923, § 9-125; L. 1927, ch. 88, § 4; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-125a Repealed
History: L. 1931, ch. 83, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-125b, 9-125c Repealed
History: L. 1931, ch. 83, §§ 2, 3; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-126 Repealed
History: L. 1897, ch. 47, § 24; L. 1915, ch. 3, § 8; L. 1917, ch. 75, § 1; L. 1919, ch. 91, § 1; R.S. 1923, § 9-126; L. 1925, ch. 87, § 1; L. 1931, ch. 82, § 1; L. 1933, ch. 79, § 1; L. 1937, ch. 74, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-127, 9-128 Repealed
History: L. 1897, ch. 47, §§ 25, 26; R.S. 1923, §§ 9-127, 9-128; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-129 Repealed
History: L. 1897, ch. 47, § 27; R.S. 1923, § 9-129; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-130 Repealed
History: L. 1897, ch. 47, § 28; L. 1908, ch. 14, § 1; L. 1913, ch. 66, § 1; R.S. 1923, § 9-130; L. 1927, ch. 88, § 5; L. 1933, ch. 80, § 1; L. 1933, ch. 28, § 1 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-130a Repealed
History: L. 1933, ch. 81, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-131 Repealed
History: L. 1897, ch. 47, § 29; R.S. 1923, § 9-131; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-132 Repealed
History: L. 1897, ch. 47, § 30; R.S. 1923, § 9-132; L. 1927, ch. 88, § 6; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-133 Repealed
History: L. 1897, ch. 47, § 31; R.S. 1923, § 9-133; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-134 Repealed
History: L. 1897, ch. 47, § 32; R.S. 1923, § 9-134; L. 1937, ch. 77, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-135 Repealed
History: L. 1897, ch. 47, § 33; R.S. 1923, § 9-135; L. 1927, ch. 88, § 11; L. 1937, ch. 74, § 3; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-136 Repealed
History: L. 1897, ch. 47, § 34; R.S. 1923, § 9-136; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-137 Repealed
History: L. 1897, ch. 47, § 35; R.S. 1923, § 9-137; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-138 Repealed
History: L. 1897, ch. 47, § 36; L. 1907, ch. 64, § 1; R.S. 1923, § 9-138; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-139 Repealed
History: L. 1897, ch. 47, § 37; R.S. 1923, § 9-139; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-140 Repealed
History: L. 1897, ch. 47, § 38; L. 1909, ch. 59, § 6; L. 1921, ch. 71, § 2; R.S. 1923, § 9-140; L. 1927, ch. 88, § 7; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-141 Repealed
History: L. 1897, ch. 47, § 39; R.S. 1923, § 9-141; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-142 Repealed
History: L. 1897, ch. 47, § 40; L. 1905, ch. 69, § 1; L. 1911, ch. 65, § 1; R.S. 1923, § 9-142; L. 1927, ch. 89, § 1; L. 1933, ch. 82, § 1; L. 1933, ch. 25, § 2 (Special Session); L. 1935, ch. 73, § 1; L. 1937, ch. 78, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-143 Repealed
History: L. 1897, ch. 47, § 42; R.S. 1923, § 9-143; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-143a Repealed
History: L. 1929, ch. 90, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-144 Repealed
History: L. 1897, ch. 47, § 43; R.S. 1923, § 9-144; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-145 Repealed
History: L. 1897, ch. 47, § 44; R.S. 1923, § 9-145; L. 1937, ch. 74, § 4; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-146 Repealed
History: L. 1897, ch. 47, § 45; R.S. 1923, § 9-146; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-146a through 9-146c Repealed
History: L. 1933, ch. 29, §§ 1–3 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-147 Repealed
History: L. 1897, ch. 47, § 46; R.S. 1923, § 9-147; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-148 Repealed
History: L. 1897, ch. 47, § 47; R.S. 1923, § 9-148; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-149, 9-150 Repealed
History: L. 1897, ch. 47, §§ 48, 49; R.S. 1923, §§ 9-149, 9-150; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-151 Repealed
History: L. 1897, ch. 47, § 50; L. 1917, ch. 76, § 1; L. 1921, ch. 72, § 1; R.S. 1923, § 9-151; L. 1933, ch. 83, § 1; L. 1935, ch. 74, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-152 Repealed
History: L. 1897, ch. 47, § 51; L. 1917, ch. 76, § 2; L. 1921, ch. 72, § 2; R.S. 1923, § 9-152; Repealed, L. 1937, ch. 79, § 1; June 30.
§ 9-153 Repealed
History: L. 1897, ch. 47, § 52; R.S. 1923, § 9-153; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-154 Repealed
History: L. 1897, ch. 47, § 53; R.S. 1923, § 9-154; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-155 Repealed
History: L. 1897, ch. 47, § 54; R.S. 1923, § 9-155; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-155a Repealed
History: L. 1925, ch. 91, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-156 Repealed
History: L. 1897, ch. 47, § 55; L. 1909, ch. 59, § 7; R.S. 1923, § 9-156; L. 1929, ch. 88, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-157 Repealed
History: L. 1897, ch. 47, § 58; L. 1909, ch. 59, § 3; R.S. 1923, § 9-157; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-158 Repealed
History: L. 1909, ch. 59, § 4; R.S. 1923, § 9-158; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-159 Repealed
History: L. 1897, ch. 47, § 59; R.S. 1923, § 9-159; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-160, 9-161 Repealed
History: L. 1897, ch. 47, §§ 60, 61; R.S. 1923, §§ 9-160, 9-161; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-162 Repealed
History: L. 1897, ch. 47, § 62; R.S. 1923, § 9-162; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-163 Repealed
History: L. 1879, ch. 47, § 1; R.S. 1923, § 9-163; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-164 Repealed
History: L. 1879, ch. 47, § 2; R.S. 1923, § 9-164; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-165 Repealed
History: L. 1879, ch. 47, § 3; R.S. 1923, § 9-165; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-166 Repealed
History: L. 1879, ch. 47, § 4; R.S. 1923, § 9-166; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-167 Repealed
History: L. 1901, ch. 63, § 1; R.S. 1923, § 9-167; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-168 Repealed
History: L. 1907, ch. 66, § 1; R.S. 1923, § 9-168; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-169, 9-170 Repealed
History: L. 1909, ch. 60, §§ 1, 2; R.S. 1923, §§ 9-169, 9-170; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-171 Repealed
History: L. 1911, ch. 64, § 1; R.S. 1923, § 9-171; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-172 Repealed
History: L. 1911, ch. 3, § 1; R.S. 1923, § 9-172; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-173 Repealed
History: L. 1913, ch. 67, § 1; R.S. 1923, § 9-173; L. 1927, ch. 88, § 8; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-174 Repealed
History: L. 1925, ch. 90, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-175 Repealed
History: L. 1927, ch. 91, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-176 Repealed
History: L. 1933, ch. 78, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-177 Repealed
History: L. 1933, ch. 30, § 1 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-178 Repealed
History: L. 1933, ch. 30, § 2 (Special Session); L. 1937, ch. 80, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-179 Repealed
History: L. 1933, ch. 30, § 3 (Special Session); Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-180 Repealed
History: L. 1935, ch. 78, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-181, 9-182 Repealed
History: L. 1935, ch. 78, §§ 2, 3; Repealed, L. 1947, ch. 102, § 143; June 30.
Article 2 Depositors' Guaranty Fund
§ 9-201 Repealed
History: L. 1909, ch. 61, § 1; L. 1921, ch. 73, § 1; R.S. 1923, § 9-201; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-202 Repealed
History: L. 1909, ch. 61, § 2; R.S. 1923, § 9-202; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-203 Repealed
History: L. 1909, ch. 61, § 3; L. 1921, ch. 74, § 1; L. 1923, ch. 72, § 1; R.S. 1923, § 9-203; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-204 Repealed
History: L. 1909, ch. 61, § 4; L. 1911, ch. 62, § 1; R.S. 1923, § 9-204; L. 1925, ch. 88, § 1; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-205 Repealed
History: L. 1909, ch. 61, § 5; R.S. 1923, § 9-205; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-206 Repealed
History: L. 1909, ch. 61, § 6; L. 1911, ch. 61, § 1; L. 1923, ch. 72, § 2; R.S. 1923, § 9-206; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-207 Repealed
History: L. 1909, ch. 61, § 7; L. 1911, ch. 61, § 2; R.S. 1923, § 9-207; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-208 Repealed
History: L. 1909, ch. 61, § 8; R.S. 1923, § 9-208; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-209 Repealed
History: L. 1909, ch. 61, § 9; L. 1911, ch. 61, § 3; R.S. 1923, § 9-209; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-210 Repealed
History: L. 1909, ch. 61, § 10; R.S. 1923, § 9-210; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-211 Repealed
History: L. 1909, ch. 61, § 11; L. 1923, ch. 72, § 3; R.S. 1923, § 9-211; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-212 Repealed
History: L. 1909, ch. 61, § 12; L. 1917, ch. 78, § 1; R.S. 1923, § 9-212; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-213 Repealed
History: L. 1909, ch. 61, § 13; R.S. 1923, § 9-213; Repealed, L. 1929, ch. 89, § 1; March 14.
§§ 9-214, 9-215 Repealed
History: L. 1909, ch. 61, §§ 15, 16; R.S. 1923, §§ 9-214, 9-215; Repealed, L. 1929, ch. 89, § 1; March 14.
§ 9-216 Repealed
History: L. 1915, ch. 90, § 1; R.S. 1923, § 9-216; Repealed, L. 1927, ch. 90, § 1; March 21.
§ 9-217 Repealed
History: L. 1915, ch. 90, § 2; R.S. 1923, § 9-217; Repealed, L. 1927, ch. 90, § 1; March 21.
§ 9-218 Repealed
History: L. 1929, ch. 89, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-219 Repealed
History: L. 1929, ch. 89, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
Article 3 Deposit of Public Moneys
§ 9-301 Repealed
History: L. 1933, ch. 161, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-302 Repealed
History: L. 1933, ch. 161, § 2; L. 1939, ch. 88, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-303 Repealed
History: L. 1933, ch. 161, § 3; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-304 Repealed
History: L. 1933, ch. 161, § 4; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-305 Repealed
History: L. 1933, ch. 162, § 1; L. 1933, ch. 55, § 1 (Special Session); L. 1935, ch. 75, § 1; L. 1941, ch. 97, § 1; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-306 Repealed
History: L. 1933, ch. 162, § 2; L. 1935, ch. 75, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-307, 9-308 Repealed
History: L. 1933, ch. 162, §§ 3, 4; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-309, 9-310 Repealed
History: L. 1933, ch. 8, §§ 1, 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-311 Repealed
History: L. 1935, ch. 76, § 1; L. 1939, ch. 88, § 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-312 through 9-314 Repealed
History: L. 1939, ch. 90, §§ 1–3; Repealed, L. 1947, ch. 102, § 143; June 30.
Article 4 State Banking Board Duties
§§ 9-401, 9-402 Repealed
History: L. 1935, ch. 79, §§ 1, 2; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-403, 9-404 Repealed
History: L. 1935, ch. 79, §§ 3, 4; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-405 Repealed
History: L. 1935, ch. 79, § 5; Repealed, L. 1947, ch. 102, § 143; June 30.
Article 5 Miscellaneous Provisions
§§ 9-501 through 9-503 Repealed
History: L. 1935, ch. 77, §§ 1–3; L. 1937, ch. 81, §§ 1–3; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-504, 9-505 Repealed
History: L. 1957, ch. 75, §§ 1, 2; Repealed, L. 1985, ch. 55, § 8; July 1.
§§ 9-505a through 9-505c Repealed
History: L. 1974, ch. 44, §§ 1–3; Repealed, L. 1985, ch. 55, § 8; July 1.
§§ 9-506, 9-507 Repealed
History: L. 1957, ch. 75, §§ 3, 4; Repealed, L. 1974, ch. 44, § 4; March 21.
§ 9-508 Repealed
Revisor's Note: Section was amended by L. 2024, ch. 15, § 11, effective July 1, 2024, but that version was repealed by L. 2024, ch. 100, § 17.
History: L. 1967, ch. 73, § 1; L. 1995, ch. 18, § 1; L. 2006, ch. 113, § 5; L. 2012, ch. 161, § 4; L. 2013, ch. 45, § 1; L. 2014, ch. 120, § 2; L. 2015, ch. 33, § 1; L. 2017, ch. 52, § 5; L. 2024, ch. 15, § 11; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-509 Repealed
Revisor's Note: Section was amended by L. 2024, ch. 15, § 12, effective July 1, 2024, but that version was repealed by L. 2024, ch. 100, § 17.
History: L. 1967, ch. 73, § 2; L. 1986, ch. 55, § 1; L. 1992, ch. 62, § 1; L. 2006, ch. 113, § 6; L. 2012, ch. 161, § 5; L. 2013, ch. 45, § 2; L. 2014, ch. 120, § 3; L. 2015, ch. 33, § 2; L. 2017, ch. 52, § 6; L. 2024, ch. 15, § 12; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-510 Repealed
History: L. 1967, ch. 73, § 3; L. 2006, ch. 113, § 7; L. 2012, ch. 161, § 6; L. 2013, ch. 45, § 3; L. 2015, ch. 33, § 3; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-510a Repealed
History: L. 2005, ch. 133, § 1; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-511 Repealed
History: L. 1967, ch. 73, § 4; L. 1989, ch. 48, § 10; L. 1990, ch. 53, § 1; L. 2006, ch. 113, § 8; L. 2012, ch. 161, § 7; L. 2013, ch. 45, § 4; L. 2015, ch. 33, § 4; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-512 Repealed
History: L. 1967, ch. 73, § 5; L. 2006, ch. 113, § 9; L. 2012, ch. 161, § 8; L. 2018, ch. 75, § 26; L. 2023, ch. 25, § 1; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-513 Repealed
History: L. 1967, ch. 73, § 6; L. 2006, ch. 113, § 10; L. 2012, ch. 161, § 9; L. 2013, ch. 45, § 5; L. 2018, ch. 75, § 27; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-513a Repealed
History: L. 2006, ch. 113, § 2; L. 2012, ch. 161, § 10; L. 2015, ch. 33, § 5; L. 2017, ch. 52, § 7; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-513b Repealed
History: L. 2006, ch. 113, § 3; L. 2015, ch. 33, § 6; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-513c Repealed
History: L. 2006, ch. 113, § 4; L. 2011, ch. 11, § 1; L. 2012, ch. 161, § 11; L. 2013, ch. 45, § 6; L. 2014, ch. 120, § 4; L. 2016, ch. 82, § 2; L. 2018, ch. 87, § 1; L. 2019, ch. 62, § 7; L. 2021, ch. 82, § 2; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-513d Repealed
History: L. 2006, ch. 113, § 1; L. 2013, ch. 45, § 7; L. 2014, ch. 120, § 5; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-513e Repealed
Revisor's Note: Section was amended by L. 2024, ch. 15, § 13, effective July 1, 2024, but that version was repealed by L. 2024, ch. 100, § 17.
History: L. 2014, ch. 120, § 1; L. 2024, ch. 15, § 13; Repealed, L. 2024, ch. 64, § 65; January 1, 2025.
§ 9-514 Repealed
History: L. 1971, ch. 35, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-515 Repealed
History: L. 1971, ch. 35, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-516 Repealed
History: L. 1971, ch. 35, § 3; L. 1975, ch. 44, § 4; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-517 Repealed
History: L. 1971, ch. 35, § 4; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-518 Repealed
History: L. 1971, ch. 35, § 5; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-519 Bank holding companies; definitions
For the purposes of K.S.A. 9-520 through 9-524 and K.S.A. 9-532 through 9-541, and amendments thereto, unless otherwise required by the context:
(a) "Bank" means an insured bank as defined in 12 U.S.C. § 1813(h). "Bank" does not include a national bank that:
(1) Engages only in credit card operations;
(2) does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others;
(3) does not accept any savings or time deposits of less than $100,000;
(4) maintains only one office that accepts deposits; and
(5) does not engage in the business of making commercial loans.
(b) (1) "Bank holding company" means any company that:
(A) Directly or indirectly owns, controls, or has power to vote 25% or more of any class of the voting shares of a bank or 25% or more of any class of the voting shares of a company that is or becomes a bank holding company by virtue of this act;
(B) controls in any manner the election of a majority of the directors of a bank or of a company that is or becomes a bank holding company by virtue of this act;
(C) the commissioner determines, after notice and opportunity for a hearing to be conducted in accordance with the Kansas administrative procedure act, directly or indirectly exercises a controlling influence over the management or policies of the bank or company.
(2) Notwithstanding paragraph (1), no company:
(A) Shall be deemed to be a bank holding company by virtue of the company's ownership or control of shares acquired by the company in connection with such company's underwriting of securities if such shares are held only for such period of time as will permit the sale thereof on a reasonable basis;
(B) formed for the sole purpose of participating in a proxy solicitation shall be deemed to be a bank holding company by virtue of the company's control of voting rights of shares acquired in the course of such solicitation;
(C) shall be deemed to be a bank holding company by virtue of the company's ownership or control of shares acquired in securing or collecting a debt previously contracted in good faith, provided such shares are disposed of within a period of two years from the date on which such shares could have been disposed of by such company; or
(D) owning or controlling voting shares of a bank shall be deemed to be a bank holding company by virtue of the company's ownership or control of shares held in a fiduciary capacity except where such shares are held for the benefit of such company or the company's shareholders.
(c) "Company" means any corporation, limited liability company, trust, partnership, association or similar organization, including a bank, but does not include any corporation, the majority of the shares of which are owned by the United States or by any state, or any individual, partnership or qualified family partnership upon the determination by the commissioner that a general or limited partnership qualifies under the definition in 12 U.S.C. § 1841(o)(10).
(d) "Foreign bank" means any company organized under the laws of a foreign country, a territory of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands or any subsidiary or affiliate organized under such laws that engages in the business of banking.
(e) "Kansas bank" means any bank, as defined by subsection (a), that, in the case of a state chartered bank, is a bank chartered under the authority of the state of Kansas and, in the case of a national banking association, a bank with its charter location in Kansas.
(f) "Kansas bank holding company" means a bank holding company, as defined by subsection (b), with total subsidiary bank deposits in Kansas that exceed the bank holding company's subsidiary bank deposits in any other state.
(g) "Out-of-state bank holding company" means any holding company that is not a Kansas bank holding company as defined in subsection (f).
(h) "Subsidiary" means, with respect to a specified bank holding company:
(1) Any company with more than 5% of the voting shares, excluding shares owned by the United States or by any company wholly owned by the United States, that are directly or indirectly owned or controlled by, or held with power to vote, such bank holding company; or
(2) any company, the election of a majority of the directors of which is controlled in any manner by such bank holding company.
History: L. 1985, ch. 55, § 2; L. 1991, ch. 45, § 1; L. 1991, ch. 46, § 1; L. 1995, ch. 79, § 1; L. 1996, ch. 175, § 17; L. 2015, ch. 38, § 14; L. 2016, ch. 54, § 1; L. 2025, ch. 78, § 1; July 1.
§ 9-520 Same; ownership limitations; exceptions
(a) Excluding shares held under the circumstances set out in K.S.A. 9-519(b)(2), and amendments thereto, no bank holding company or any subsidiary thereof shall directly or indirectly acquire ownership or control of, or power to vote, any of the voting shares of any bank which holds Kansas deposits if, after such acquisition, the bank holding company and all subsidiaries would hold or control, in the aggregate, more than 15% of total Kansas deposits.
(b) This section shall not prohibit a bank holding company or any subsidiary thereof from acquiring ownership or control of, or power to vote, any of the voting shares of any bank if the commissioner, in the case of a bank organized under the laws of this state, or the comptroller of the currency, in the case of a national banking association, determines that an emergency exists and that the acquisition is appropriate in order to protect the public interest against the failure or probable failure of the bank.
(c) As used in this section, "Kansas deposits" means all deposits, shares or similar accounts held by banks, savings and loan associations, savings banks and building and loan associations attributable to any office in Kansas where deposits are accepted as determined by the commissioner on the basis of the most recent reports to supervisory authorities which are available at the time of the acquisition.
History: L. 1985, ch. 55, § 3; L. 1990, ch. 54, § 2; L. 1993, ch. 138, § 1; L. 1997, ch. 59, § 3; L. 2015, ch. 38, § 15; July 1.
§ 9-521 Repealed
History: L. 1985, ch. 55, § 4; Repealed, L. 1990, ch. 54, § 3; May 3.
§ 9-522 Repealed
History: L. 1985, ch. 55, § 5; Repealed, L. 1995, ch. 79, § 17; September 29.
§ 9-523 Repealed
History: L. 1985, ch. 55, § 6; L. 1991, ch. 45, § 2; L. 1993, ch. 189, § 2; L. 1995, ch. 79, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-524 Repealed
History: L. 1985, ch. 55, § 7; L. 1991, ch. 45, § 3; Repealed, L. 1995, ch. 79, § 17; September 29.
§§ 9-525 through 9-531 Repealed
History: L. 1986, ch. 57, §§ 1–7; Repealed, L. 1987, ch. 53, § 5; April 30.
§ 9-532 Same; authority; fee
(a) With prior approval of the commissioner: (1) Any company by virtue of acquisition of ownership or control of, or the power to vote the voting shares of, a bank or another company, may become a bank holding company; (2) any bank holding company may acquire, directly or indirectly, ownership or control of, or power to vote, any of the voting shares of, an interest in or all or substantially all of the assets of a Kansas state chartered bank or of a bank holding company that has an ownership interest in a Kansas state chartered bank.
(b) Request for approval shall be made by filing an application in such form as required by the commissioner, containing the information prescribed by K.S.A. 9-533, and amendments thereto, and by rules and regulations adopted by the commissioner.
(c) Any applicant making application under this section shall pay to the commissioner a fee in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
History: L. 1991, ch. 45, § 4; L. 1992, ch. 62, § 2; L. 1993, ch. 158, § 1; L. 1995, ch. 79, § 3; L. 2012, ch. 83, § 1; L. 2015, ch. 38, § 16; July 1.
§ 9-533 Same; application; required information
An application filed pursuant to K.S.A. 9-532, and amendments thereto, shall provide the following information and include the following documents:
(a) A copy of any application by an applicant seeking approval by a federal agency of the acquisition of the voting shares or assets of a Kansas state chartered bank or of a bank holding company that has an ownership interest in a Kansas state chartered bank and of any supplemental material or amendments filed with the application.
(b) Statements of the financial condition and future prospects, including current and projected capital positions and levels of indebtedness, of the applicant and the Kansas state chartered bank or bank holding company that has an ownership interest in a Kansas state chartered bank which is the subject of the application filed pursuant to K.S.A. 9-532, and amendments thereto.
(c) Information as to how the applicant proposes to adequately meet the convenience and needs of the community served by the Kansas state chartered bank or bank holding company that has an ownership interest in a Kansas state chartered bank which is the subject of the application filed pursuant to K.S.A. 9-532, and amendments thereto, and the communities served by other Kansas banks which are subsidiaries of the applicant, in accordance with 12 U.S.C. § 2901 et seq.
(d) Any additional information the commissioner deems necessary.
History: L. 1991, ch. 45, § 5; L. 1995, ch. 79, § 4; L. 2012, ch. 83, § 2; L. 2015, ch. 38, § 17; July 1.
§ 9-534 Same; application; approval; factors
In determining whether to approve an application filed pursuant to K.S.A. 9-532, and amendments thereto, the commissioner shall consider the following factors:
(a) Whether the subsidiary banks of the applicant are operated in a safe, sound and prudent manner.
(b) Whether the subsidiary banks of the applicant have provided adequate and appropriate services to their communities, including services contemplated by 12 U.S.C. § 2901 et seq.
(c) Whether the applicant proposes to provide adequate and appropriate services, including services contemplated by 12 U.S.C. § 2901 et seq., in the communities served by the Kansas state chartered bank or by the Kansas bank subsidiaries of the bank holding company that has an ownership interest in a Kansas state chartered bank.
(d) Whether the proposed acquisition will result in a Kansas state chartered bank or bank holding company that has an ownership interest in a Kansas state chartered bank that has adequate capital and good earnings prospects.
(e) Whether the financial condition of the applicant or any of the applicant's subsidiary banks would jeopardize the financial stability of the Kansas state chartered bank or bank holding company that has an ownership interest in a Kansas state chartered bank which is the subject of the application.
(f) Whether the competence, experience and integrity of the managerial resources of the applicant or any proposed management personnel of any Kansas state chartered bank or any Kansas bank subsidiaries of the bank holding company that has an ownership interest in a Kansas state chartered bank indicates that to permit such person to control a bank would not be in the interest of the depositors of a bank or in the interest of the public.
History: L. 1991, ch. 45, § 6; L. 1995, ch. 79, § 5; L. 2012, ch. 83, § 3; L. 2015, ch. 38, § 18; L. 2016, ch. 54, § 2; July 1.
§ 9-535 Bank holding companies; approval of application; applicant right to appeal
(a) The commissioner shall approve the application if the commissioner determines that the application favorably meets each and every factor prescribed in K.S.A. 9-534, and amendments thereto, the proposed acquisition is in the interest of the depositors and creditors of the Kansas state chartered bank or bank holding company that has an ownership interest in a Kansas state chartered bank that is the subject of the proposed acquisition and in the public interest generally.
(b) If the commissioner denies the application, the applicant shall have the right to a hearing before the state banking board to be conducted in accordance with the Kansas administrative procedure act. The state banking board shall render the board's decision affirming or rescinding the determination of the commissioner. Any action of the state banking board pursuant to this section is subject to review in accordance with the Kansas judicial review act.
History: L. 1991, ch. 45, § 7; L. 1995, ch. 79, § 6; L. 2010, ch. 17, § 25; L. 2012, ch. 83, § 4; L. 2015, ch. 38, § 19; L. 2024, ch. 64, § 59; July 1.
§ 9-536 Same; subject to change of control provisions
An applicant filing an application pursuant to K.S.A. 9-532, and amendments thereto, may be required to the extent applicable to supplement the application with such information as may be required pursuant to K.S.A. 9-1719 et seq., and amendments thereto.
History: L. 1991, ch. 45, § 8; L. 1995, ch. 79, § 7; L. 2015, ch. 38, § 20; July 1.
§ 9-537 Same; review of operations by commissioner; additional information
The commissioner at any time may review the activities of any bank holding company with a subsidiary bank in Kansas and its subsidiary banks to determine if the proposals of the company as stated in the information provided pursuant to K.S.A. 9-533, and amendments thereto, are being fulfilled. The commissioner may require the company and such banks to furnish such additional information as the commissioner finds necessary to make such determination.
History: L. 1991, ch. 45, § 9; L. 1995, ch. 79, § 8; September 29.
§ 9-538 Repealed
History: L. 1991, ch. 45, § 10; L. 1995, ch. 79, § 9; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-539 Repealed
History: L. 1991, ch. 45, § 11; L. 1995, ch. 79, § 10; L. 2000, ch. 106, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-540 Foreign bank prohibited from having branch bank in state
No foreign bank shall establish or maintain any branch, agency, office or other place of business in this state.
History: L. 1995, ch. 79, § 11; April 6.
§ 9-541 Acquisition of bank by out-of-state bank holding company; age limitation; exceptions
(a) No out-of-state bank holding company or any subsidiary thereof shall directly or indirectly acquire ownership or control of, or power to vote, more than 5% of any class of the voting shares of any Kansas bank unless such Kansas bank has been in existence and actively engaged in business for five or more years.
(b) This section shall not prohibit an out-of-state bank holding company or any subsidiary thereof from acquiring ownership or control of, or power to vote, more than 5% of the voting shares of any Kansas bank which has been organized solely for the purpose of, and does not open for business prior to, facilitating a merger of such Kansas bank with or into a Kansas bank which has been in existence and actively engaged in business for five or more years, or a consolidation of such Kansas bank and one or more Kansas banks which have been in existence and actively engaged in business for five or more years.
(c) This section shall not prohibit an out-of-state bank holding company or any subsidiary thereof from acquiring ownership or control of, or power to vote, more than 5% of any class of the voting shares of any Kansas bank if the commissioner, in the case of a bank organized under the laws of this state, or the comptroller of the currency, in the case of a national banking association, determines that an emergency exists and that the acquisition is appropriate in order to protect the public interest against the failure or probable failure of the Kansas bank.
History: L. 1995, ch. 79, § 12; April 6.
§ 9-542 Citation of code; statutes comprising
Articles 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 of chapter 9 of the Kansas Statutes Annotated, K.S.A. 74-3004, 74-3005, 74-3006, 75-1304, 75-1305 and 75-1306, and 75-1308, and K.S.A. 9-814, 9-815, 9-816, 9-1141, 9-1409, 9-1725, 9-1726, 9-1810, 9-1811, 9-1919, 9-1920, 9-1921 and 9-2019, and amendments thereto, shall constitute and may be cited as the state banking code.
History: L. 2000, ch. 106, § 5; L. 2015, ch. 38, § 21; July 1.
§§ 9-543 through 9-549 Reserved
§ 9-550 Certificate of existence and authority
(a) For any deposit account, loan account or other banking relationship hereinafter referred to as "account," that is opened by one or more persons acting or purporting to act for or on behalf of an entity with any financial institution transacting business in this state, such person may provide the financial institution with a certificate to provide evidence of the existence of the entity and the authority of the person to act for or on behalf of the entity with respect to the account.
(b) The certificate of existence and authority shall be an affidavit executed by such person and shall include the following, as applicable:
(1) The name and mailing address of the entity;
(2) the type of entity and the state, country or other governmental authority, under which laws, the entity was formed;
(3) the organization date of the entity;
(4) the name, mailing address and office or other position held by the person executing the certificate; and
(5) a statement that the board of directors, managers, members, general partners or other governing body of the entity opening the account has duly taken all action legally required to open the account in the name of the entity and the name, office or other position of the person who has been duly authorized to engage in transactions with respect to the account, including any limitation that may exist upon the authority of such person to bind the entity and any other matters concerning the manner in which such person may deal with the account.
(c) If a financial institution accepts a certificate of existence and authority pursuant to this section, the financial institution may open and administer the account in accordance with the information set forth therein and shall not be liable for so doing, even if any such information is inaccurate, unless the financial institution has actual knowledge of such inaccuracy or knowledge sufficient to cause a reasonably prudent person to doubt the accuracy of such information.
(d) Nothing in this section shall be construed to prohibit a financial institution from requesting additional information or requiring other agreements in order to establish an account for an entity, including, without limitation, a resolution, certificate of good standing, request for a taxpayer identification number, entity agreements or documents or parts thereof evidencing the existence of the entity or the authority of the person executing the certificate, and an indemnification that is acceptable to the financial institution. No party may infer that the financial institution relying on the certificate of existence has knowledge of the terms of the entity's documentation solely because it holds a copy of all or a part of the entity's documentation.
(e) As used in this section:
(1) "Entity" means any government or governmental subdivision or agency, any domestic or foreign corporation, limited liability company, general partnership, limited liability partnership, joint venture, cooperative, association or other legal entity, whether operated for profit or not-for-profit; and
(2) "financial institution" means any federal- or state-chartered commercial bank, savings and loan association or savings bank.
(f) This section shall be a part of and supplemental to the state banking code.
History: L. 2018, ch. 75, § 6; L. 2019, ch. 25, § 1; July 1.
§ 9-551 Applicability of act
(a) K.S.A. 2025 Supp. 9-551 through 9-554, and amendments thereto, shall be known and may be cited as the Kansas financial institutions information security act.
(b) The purpose of the Kansas financial institutions information security act is to establish information security standards for any covered entity consistent with 16 C.F.R. § 314, as in effect on July 1, 2023.
(c) The Kansas financial institutions information security act applies to the handling of customer information by the following covered entities: (1) Credit services organizations, as defined in K.S.A. 50-1117, and amendments thereto; (2) mortgage companies, as defined in K.S.A. 9-2201, and amendments thereto; (3) supervised lenders, as defined in K.S.A. 16a-1-301, and amendments thereto; (4) financial institutions engaging in money transmission, as defined in K.S.A. 9-508, and amendments thereto; (5) trust companies, as defined in K.S.A. 9-701, and amendments thereto; and (6) technology-enabled fiduciary financial institutions, as defined in K.S.A. 9-2301, and amendments thereto.
(d) The commissioner may adopt all rules and regulations necessary to govern and administer the provisions of the Kansas financial institutions information security act.
(e) The Kansas financial institutions information security act shall be a part of and supplemental to chapter 9 of the Kansas Statutes Annotated, and amendments thereto.
History: L. 2023, ch. 54, § 1; April 27.
§ 9-552 Definitions
As used in the Kansas financial institutions information security act:
(a) "Commissioner" means the state bank commissioner or the commissioner's designee.
(b) "Covered entity" means each person, applicant, registrant or licensee subject to regulation by the office of the state bank commissioner that is not directly regulated by a federal banking agency.
(c) "Customer information" means any record containing nonpublic personal information about a customer of a covered entity, whether in paper, electronic or other form, that is handled or maintained by or on behalf of the covered entity or its affiliates.
History: L. 2023, ch. 54, § 2; April 27.
§ 9-553 Information security requirements
A covered entity shall:
(a) Set forth standards for developing, implementing and maintaining reasonable safeguards to protect the security, confidentiality and integrity of customer information pursuant to 16 C.F.R. § 314, as in effect on July 1, 2023;
(b) develop and organize its information security program into one or more readily accessible parts; and
(c) maintain its information security program as part of the covered entity's books and records in accordance with the record retention requirements of such covered entity.
History: L. 2023, ch. 54, § 3; April 27.
§ 9-554 Powers and duties of the commissioner; enforcement and review
(a) The Kansas financial institutions information security act shall be implemented, administered and enforced by the commissioner.
(b) (1) The commissioner may conduct:
(A) Routine examinations of the operations of a covered entity; or
(B) investigations of the operations of the covered entity if the commissioner has reason to believe that the covered entity has been engaged or is engaging in any conduct in violation of the Kansas financial institutions information security act.
(2) In furtherance of an investigation or examination, or while enforcing the provisions of the Kansas financial institutions information security act, the commissioner may take such action that is necessary and appropriate, including, but not limited to, the following:
(A) Issue subpoenas and seek enforcement thereof in a court of competent jurisdiction;
(B) assess fines or civil penalties on a covered entity not to exceed $5,000 per violation and assess costs of the investigation, examination or enforcement action;
(C) censure a covered entity if such covered entity is registered or licensed;
(D) enter into a memorandum of understanding or consent order with a covered entity;
(E) issue a summary order to a covered entity;
(F) revoke, suspend or refuse to renew the registration or licensure of a covered entity;
(G) order a covered entity to cease and desist from engaging in any conduct in violation of the Kansas financial institutions information security act or file for an injunction to prohibit the covered entity from continuing such conduct; or
(H) issue emergency orders if necessary to prevent harm to consumers.
(c) Any enforcement action required or requested under the Kansas financial institutions information security act shall be conducted in accordance with the Kansas administrative procedure act, K.S.A. 77-501 et seq., and amendments thereto.
(d) Any enforcement action required or requested under the Kansas financial institutions information security act shall be subject to review in accordance with the Kansas judicial review act, K.S.A. 77-601 et seq., and amendments thereto.
History: L. 2023, ch. 54, § 4; April 27.
§ 9-555 Citation of act; definitions
(a) K.S.A. 2025 Supp. 9-555 through 9-596, and amendments thereto, shall be known and may be cited as the Kansas money transmission act.
(b) As used in the Kansas money transmission act:
(1) "Act" means the Kansas money transmission act.
(2) "Acting in concert" means persons knowingly acting together with a common goal of jointly acquiring control of a licensee whether or not pursuant to an express agreement.
(3) "Applicant in control of a licensee" means a person or a person in a group of persons acting in concert that is in control of, or apply to acquire control of, a licensee pursuant to K.S.A. 2025 Supp. 9-571, and amendments thereto.
(4) "Authorized delegate" means a person designated by a licensee to engage in money transmission on behalf of the licensee.
(5) "Average daily money transmission liability" means the amount of the licensee's outstanding money transmission obligations in Kansas at the end of each day in a given period of time added together and divided by the total number of days in the given period of time. For any licensee required to calculate "average daily money transmission liability" pursuant to this act, the given period of time shall be the calendar quarters ending March 31, June 30, September 30 and December 31.
(6) "Closed loop stored value" means stored value that is redeemable by the issuer only for goods or services provided by the issuer or the issuer's affiliates or franchisees of the issuer or the franchisees's affiliates, except to the extent required by applicable law to be redeemable in cash for its cash value.
(7) "Commissioner" means the state bank commissioner, or a person designated by the state bank commissioner to enforce this act.
(8) "Control" means the power to:
(A) Vote directly or indirectly at least 25% of the outstanding voting shares or voting interests of a licensee or person in control of a licensee;
(B) elect or appoint a majority of key individuals or executive officers, managers, directors, trustees or other persons exercising managerial authority of a person in control of a licensee; or
(C) exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee.
(9) "Eligible rating" means a credit rating from any of the three highest rating categories provided by an eligible rating service. Each rating category may include rating category modifiers such as plus or minus for Standard & Poor or the equivalent for any other eligible rating service. "Eligible rating" shall be determined as follows:
(A) Long-term credit ratings shall be deemed eligible if the rating is equal to A- or higher by Standard & Poor or the equivalent from any other eligible rating service.
(B) Short-term credit ratings are deemed eligible if the rating is equal to or higher than A-2 or SP-2 by Standard & Poor or the equivalent from any other eligible rating service. If ratings differ among eligible rating services, the highest rating shall apply when determining whether a security bears an eligible rating.
(10) "Eligible rating service" means any nationally recognized statistical rating organization that has been registered by the securities and exchange commission or any organization designated by the commissioner through order or rules and regulations as an eligible rating service.
(11) "Federally insured depository financial institution" means a bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank or industrial loan company organized under the laws of the United States or any state of the United States, when such bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank or industrial loan company has federally insured deposits.
(12) "In Kansas" means the:
(A) Physical location of a person who is requesting a transaction in person in the state of Kansas; or
(B) person's residential address or the principal place of business for a person requesting a transaction electronically or by telephone if such residential address or principal place of business is in the state of Kansas.
(13) "Individual" means a natural person.
(14) "Key individual" means any individual ultimately responsible for establishing or directing policies and procedures of the licensee, including, but not limited to, an executive officer, manager, director or trustee.
(15) "Licensee" means a person licensed under this act.
(16) "Material litigation" means litigation, that according to United States generally accepted accounting principles, is significant to a person's financial health and would be a required disclosure in the person's annual audited financial statements, report to shareholders or similar records.
(17) "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. "Money" includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.
(18) "Monetary value" means a medium of exchange, whether or not redeemable in money.
(19) (A) "Money transmission" means any of the following:
(i) Selling or issuing payment instruments to a person located in Kansas;
(ii) selling or issuing stored value to a person located in Kansas;
(iii) receiving money for transmission from a person located in Kansas; or
(iv) payroll processing services.
(B) "Money transmission" does not include the provision of solely online or telecommunications services or network access.
(20) "Money service business accredited state" means a state agency that is accredited by the conference of state bank supervisors and money transmitter regulators association for money transmission licensing and supervision.
(21) "Multistate licensing process" means any agreement entered into by state regulators relating to coordinated processing of applications for money transmission licenses, applications for the acquisition of control of a licensee, control determinations or notice and information requirements for a change of key individuals.
(22) "Nationwide multistate licensing system and registry" means a licensing system developed by the conference of state bank supervisors and the American association of residential mortgage regulators and owned and operated by the state regulatory registry, limited liability company or any successor or affiliated entity for the licensing and registration of persons in financial services industries.
(23) (A) "Outstanding money transmission obligation" means:
(i) Any payment instrument or stored value issued or sold by the licensee to a person located in the United States or reported as sold by an authorized delegate of the licensee to a person that is located in the United States that has not yet been paid or refunded by or for the licensee or escheated in accordance with applicable abandoned property laws; or
(ii) any money received for transmission by the licensee or an authorized delegate in the United States from a person located in the United States that has not been received by the payee or refunded to the sender or escheated in accordance with applicable abandoned property laws.
(B) "In the United States" includes a person in any state, territory or possession of the United States, the District of Columbia, the commonwealth of Puerto Rico or a United States military installation that is located in a foreign country.
(24) "Passive investor" means a person that:
(A) Does not have the power to elect a majority of key individuals or executive officers, managers, directors, trustees or other persons exercising managerial authority of a person in control of a licensee;
(B) is not employed by and does not have any managerial duties of the licensee or person in control of a licensee; or
(C) does not have the power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee; and
(D) (i) either attests to subparagraphs (A), (B) and (C) in a form and in a manner prescribed by the commissioner; or
(ii) commits to the passivity characteristics of subparagraphs (A), (B) and (C) in a written document.
(25) (A) "Payment instrument" means a written or electronic check, draft, money order, traveler's check or other written or electronic instrument for the transmission or payment of money or monetary value, regardless of negotiability.
(B) "Payment instrument" does not include stored value or any instrument that is:
(i) Redeemable by the issuer only for goods or services provided by the issuer or the issuer's affiliate or franchisees of the issuer or the franchisees' affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value; or
(ii) not sold to the public but issued and distributed as part of a loyalty, rewards or promotional program.
(26) "Payroll processing services" means the receipt of money for transmission pursuant to a contract with a person to deliver wages or salaries, make payment of payroll taxes to state and federal agencies, make payments relating to employee benefit plans or make distributions of other authorized deductions from wages or salaries. "Payroll processing services" does not include an employer performing payroll processing services on the employer's own behalf or on behalf of an affiliate.
(27) "Person" means any individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation or other corporate entity identified or recognized by the commissioner.
(28) "Receiving money for transmission" or "money received for transmission" means the receipt of money or monetary value in the United States for transmission within or outside the United States by electronic or other means.
(29) "Stored value" means monetary value representing a claim against the issuer evidenced by an electronic or digital record and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. "Stored value" includes, but is not limited to, prepaid access as defined by 31 C.F.R. § 1010.100. "Stored value" does not include a payment instrument or closed loop stored value or stored value not sold to the public but issued and distributed as part of a loyalty, rewards or promotional program.
(30) "Tangible net worth" means the aggregate assets of a licensee excluding all intangible assets, less liabilities, as determined in accordance with United States generally accepted accounting principles.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 1; L. 2025, ch. 98, § 2; May 1.
§ 9-556 Inapplicability of act to certain entities and persons
(a) This act does not apply to:
(1) An operator of a payment system to the extent that such operator provides processing, clearing or settlement services between persons exempted under this subsection or licensees in connection with wire transfers, credit card transactions, debit card transactions, stored value transactions, automated clearing house transfers or similar funds transfers.
(2) A person appointed as an agent of a payee to collect and process a payment from a payor to the payee for goods or services other than money transmission provided to the payor by the payee if:
(A) A written agreement exists between the payee and the agent directing the agent to collect and process payments from payors on the payee's behalf;
(B) the payee holds the agent out to the public as accepting payments for goods or services on the payee's behalf; and
(C) payment for the goods and services is treated as received by the payee upon receipt by the agent so that the payor's obligation is extinguished and there is no risk of loss to the payor if the agent fails to remit the funds to the payee.
(3) A person that acts as an intermediary by processing payments between an entity that has directly incurred an outstanding money transmission obligation to a sender and the sender's designated recipient, if the entity:
(A) Is properly licensed or exempt from licensing requirements under this act;
(B) provides a receipt, electronic record or other written confirmation to the sender identifying the entity as the provider of money transmission in the transaction; and
(C) bears sole responsibility to satisfy the outstanding money transmission obligation to the sender, including the obligation to make the sender whole in connection with any failure to transmit the funds to the sender's designated recipient.
(4) The United States government and any agency, bureau, department, office or instrumentality, corporate or otherwise, thereof, including any official, employee or agent of any such entity.
(5) Money transmission by the United States postal service or by an agent of the United States postal service.
(6) Any state office or officer, department, board, commission, bureau, division, authority, agency or institution of this state, including any political subdivision thereof, and any county, city or other municipality.
(7) A federally insured depository financial institution, bank holding company, office of an international banking corporation, foreign bank that establishes a federal branch pursuant to 12 U.S.C. § 3102, a corporation organized pursuant to 12 U.S.C. §§ 1861 through 1867 or a corporation organized under 12 U.S.C. §§ 611 through 633.
(8) Electronic funds transfer of governmental benefits for a federal, state, county or governmental agency by a contractor on behalf of the United States or a department, agency or instrumentality thereof or on behalf of a state or governmental subdivision, agency or instrumentality thereof.
(9) A board of trade designated as a contract market under 7 U.S.C. §§ 1 through 25 or a person that in the ordinary course of business provides clearance and settlement services for a board of trade to the extent of the board of trade's operation as or for such a board.
(10) A futures commission merchant registered under federal commodities law to the extent of the registrant's operation as such a futures commission merchant.
(11) A person registered as a securities broker-dealer under federal or state securities law to the extent of such registrant's operation as such a securities broker-dealer.
(12) An individual employed by a licensee, authorized delegate or any person exempted from the licensing requirements of the act when acting within the scope of employment and under the supervision of the licensee, authorized delegate or exempted person as an employee and not as an independent contractor.
(13) A person expressly appointed as a third-party service provider to or agent of an entity exempt under paragraph (a)(6) solely to the extent that:
(A) Such service provider or agent is engaging in money transmission on behalf of and pursuant to a written agreement with the exempt entity that sets forth the specific functions that the service provider or agent is to perform; and
(B) the exempt entity assumes all risk of loss and all legal responsibility for satisfying the outstanding money transmission obligations owed to purchasers and holders of the outstanding money transmission obligations upon receipt of the purchaser's or holder's money or monetary value by the service provider or agent.
(14) A person engaging in the practice of law, bookkeeping, accounting, real estate sales or brokerage.
(15) A person appointed as an agent of a payor for purposes of providing payroll processing services for which such agent would otherwise need to be licensed if:
(A) There is a written agreement between the payor and the agent that directs the agent to provide payroll processing services on the payor's behalf;
(B) the payor holds the agent out to employees and other payees as providing payroll processing services on the payor's behalf; and
(C) the payor's obligation to a payee, including an employee or any other party entitled to receive funds via the payroll processing services provided by the agent, is not extinguished if such agent fails to remit such funds to the payee.
(16) A person exempt by any rules or regulations adopted or by an order issued if the commissioner finds such exemption to be in the public interest and that the regulation of such person is not necessary for the purposes of this act.
(b) The commissioner may require that any person claiming to be exempt from licensing pursuant to this section provide information and documentation to the commissioner demonstrating that such person qualifies for any claimed exemption.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 2; July 1.
§ 9-557 Powers of the commissioner; rules and regulations
(a) To carry out the purposes of this act, the commissioner may:
(1) Enter into agreements or relationships with other government officials or federal and state regulatory agencies and regulatory associations to improve efficiencies and reduce regulatory burden by standardizing methods or procedures and sharing resources, records or related information obtained under this act;
(2) use, hire, contract or employ analytical systems, methods or software to examine or investigate any person subject to this act;
(3) accept from other state or federal government agencies or officials, licensing, examination or investigation reports made by such other state or federal government agencies or officials; and
(4) accept audit reports made by an independent certified public accountant or other qualified third-party auditor for an applicant or licensee and incorporate the audit report in any report of examination or investigation.
(b) The commissioner shall have the broad administrative authority to administer, interpret and enforce this act, promulgate rules and regulations necessary to implement this act and set proportionate and equitable fees and costs associated with applications, examinations, investigations and other actions required to provide sufficient funds to meet the budget requirements of administering and enforcing the act for each fiscal year and to achieve the purposes of this act.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 3; July 1.
§ 9-558 Confidentiality of information, exceptions
(a) (1) Except as otherwise provided in subsection (b), all information or reports obtained by the commissioner from an applicant, licensee or authorized delegate and all information contained in or related to an examination, investigation, operating report or condition report prepared by, on behalf of or for the use of the commissioner or financial statements, balance sheets or authorized delegate information, are confidential and are not subject to disclosure under the Kansas open records act, K.S.A. 45-215 et seq., and amendments thereto.
(2) The provisions of this subsection providing for the confidentiality of public records shall expire on July 1, 2030, unless the legislature reviews and reenacts such provisions in accordance with K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.
(b) The commissioner may disclose information not otherwise subject to disclosure under subsection (a) to representatives of state or federal agencies who promise in a record that such representatives will maintain the confidentiality of the information or where the commissioner finds that the release is reasonably necessary for the protection and interest of the public in accordance with the Kansas open records act.
(c) The following information contained in the records of the office of the state bank commissioner that is not confidential and may be made available to the public:
(1) The name, business address, telephone number and unique identifier of a licensee;
(2) the business address of a licensee's registered agent for service;
(3) the name, business address and telephone number of all authorized delegates;
(4) the terms of or a copy of any bond filed by a licensee, provided that confidential information, including, but not limited to, prices and fees for such bond is redacted; or
(5) copies of any orders of the office of the state bank commissioner relating to any violation of this act or regulations implementing this act.
(d) This section shall not be construed to prohibit the commissioner from disclosing to the public a list of all licensees or the aggregated financial or transactional data concerning those licensees.
(e) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 4; July 1.
§ 9-559 Examinations; access to records; costs incurred
(a) The commissioner may conduct an examination or investigation of a licensee or authorized delegate or otherwise take independent action authorized by this act or by any rules and regulations adopted or an order issued under this act as reasonably necessary or appropriate to administer and enforce this act, regulations implementing this act and other applicable federal law. The commissioner may:
(1) Conduct an examination on-site or off-site as the commissioner may reasonably require;
(2) conduct an examination in conjunction with an examination conducted by representatives of other state agencies, agencies of another state or the federal government;
(3) accept the examination report of another state agency or an agency of another state or the federal government or a report prepared by an independent accounting firm, which, on being accepted, is considered for all purposes as an official report of the commissioner; and
(4) summon and examine under oath or subpoena a key individual or employee of a licensee or authorized delegate and require such individual or employee to produce records regarding any matter related to the condition and business of the licensee or authorized delegate.
(b) A licensee or authorized delegate shall provide the commissioner with full and complete access to all records the commissioner may reasonably require to conduct a complete examination. The records shall be provided at the location and in the format specified by the commissioner. The commissioner may utilize multistate record production standards and examination procedures when such standards will reasonably achieve the requirements of this section.
(c) Unless otherwise directed by the commissioner, a licensee shall pay all costs reasonably incurred in connection with an examination of the licensee or the licensee's authorized delegates.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 5; July 1.
§ 9-560 Commissioner authorized to participate in multistate supervisory processes
(a) To administer and enforce the provisions of this act and minimize the regulatory burden, the commissioner is hereby authorized to participate in multistate supervisory processes established between states and coordinated through the conference of state bank supervisors, money transmitter regulators associations and affiliates and successors thereof for all licensees that hold licenses in Kansas or other states. As a participant in such established multistate supervisory processes, the commissioner may:
(1) Cooperate, coordinate and share information with other state and federal regulators in accordance with K.S.A. 2025 Supp. 9-559, and amendments thereto;
(2) enter into written cooperation, coordination or information-sharing contracts or agreements with organizations, the membership of which is made up of state or federal governmental agencies; and
(3) cooperate, coordinate and share information with organizations, the membership of which is made up of state or federal governmental agencies, if the organizations agree in writing to maintain the confidentiality and security of the shared information in accordance with K.S.A. 2025 Supp. 9-558, and amendments thereto.
(b) The commissioner shall not waive, and nothing in this section shall constitute a waiver of, the commissioner's authority to conduct an examination or investigation or otherwise take independent action authorized by this act or rules and regulations adopted or an order issued under this act to enforce compliance with applicable state or federal law.
(c) A joint examination or investigation or acceptance of an examination or investigation report shall not be construed to waive an examination assessment provided for in this act.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 6; July 1.
§ 9-561 Federal law controls when inconsistent with this act; interpretive guidance provided by commissioner
(a) If the jurisdiction of state money transmission is conditioned on federal law, any inconsistencies between a provision of this act and such federal law governing money transmission shall be governed by the applicable federal law to the extent of such inconsistency.
(b) If there are any inconsistencies between this act and any federal law that governs pursuant to subsection (a), the commissioner may provide interpretive guidance that identifies the:
(1) Inconsistency; and
(2) appropriate means of compliance with federal law.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 7; July 1.
§ 9-562 License required to provide money transmission, exceptions
(a) A person may not engage in the business of money transmission or advertise, solicit or hold itself out as providing money transmission unless the person is licensed under this act.
(b) Subsection (a) shall not apply to a person that is:
(1) An authorized delegate of a person licensed under this act acting within the scope of authority conferred by a written contract with the licensee; or
(2) exempt pursuant to K.S.A. 2025 Supp. 9-556, and amendments thereto, and does not engage in money transmission outside the scope of such exemption.
(c) A license issued pursuant to K.S.A. 2025 Supp. 9-567, and amendments thereto, shall not be transferable or assignable.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 8; July 1.
§ 9-563 Commissioner authorized to establish consistent licensing practices with other states and utilize the nationwide multistate licensing system and registry
(a) To establish consistent licensing practices between Kansas and other states, the commissioner is hereby authorized to:
(1) Implement all licensing provisions of this act in a manner consistent with other states that have adopted this act or multistate licensing processes; and
(2) participate in nationwide protocols for licensing cooperation and coordination among state regulators, if such protocols are consistent with this act.
(b) The commissioner is authorized to establish relationships or contracts with the national multistate licensing system and registry or other entities designated by the national multistate licensing system and registry to:
(1) Collect and maintain records;
(2) coordinate multistate licensing processes and supervision processes;
(3) process fees; and
(4) facilitate communication between the commissioner and licensees or other persons subject to this act.
(c) The commissioner may utilize the nationwide multistate licensing system and registry for all aspects of licensing in accordance with this act, including, but not limited to, license applications, applications for acquisitions of control, surety bonds, reporting, criminal history background checks, credit checks, fee processing and examinations.
(d) The commissioner may utilize nationwide multistate licensing system and registry forms, processes and functionalities in accordance with this act. If the nationwide multistate licensing system and registry does not provide functionality, forms or processes for the provision of this act, the commissioner is authorized to implement the requirements in a manner that facilitates uniformity regarding the licensing, supervision, reporting and regulation of licensees that are licensed in multiple jurisdictions.
(e) The commissioner may establish new requirements or waive or modify, in whole or in part, any or all of the existing requirements as reasonably necessary to participate in the nationwide multistate licensing system and registry through the adoption of any rules and regulations adopted or an order issued or the issuance of an order.
(f) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 9; July 1.
§ 9-564 License application; requirements; fee
(a) Applicants for a license shall submit a completed application in a form and manner as prescribed by the commissioner. Each such application shall contain content as set forth by rules and regulations, instruction or procedure of the commissioner and may be changed or updated by the commissioner in accordance with applicable law to carry out the purposes of this act and maintain consistency with nationwide multistate licensing system and registry licensing standards and practices. The application shall state or contain, as applicable:
(1) The legal name and any fictitious or trade name used by the applicant in conducting business and the residential and business addresses of the applicant;
(2) a list of any criminal convictions of the applicant and any material litigation in which the applicant was involved in the 10-year period immediately preceding the submission of the application;
(3) a description of any money transmission services previously provided by the applicant and the money transmission services the applicant seeks to provide in Kansas;
(4) a list of the applicant's proposed authorized delegates and the locations in Kansas where the applicant and the applicant's authorized delegates propose to engage in money transmission;
(5) a list of all other states where the applicant is licensed to engage in money transmission and any license revocations, suspensions or other disciplinary action taken against the applicant in other states;
(6) information concerning any bankruptcy or receivership proceedings affecting the licensee or a person in control of a licensee;
(7) a sample form of the contract for authorized delegates, if applicable;
(8) a sample form of the payment instrument or stored value, as applicable;
(9) the name and address of any federally insured depository financial institution through which the applicant plans to conduct money transmission; and
(10) any other information the commissioner or the nationwide multistate licensing system and registry reasonably requires regarding the applicant.
(b) If an applicant is a corporation, limited liability company, partnership or other legal entity, the applicant shall also provide:
(1) The date of the applicant's incorporation or formation and state or country of incorporation or formation;
(2) a certificate of good standing from the state or country where the applicant is incorporated or formed, if applicable;
(3) a brief description of the business structure or organization of the applicant, including any parents or subsidiaries of the applicant and whether any such parents or subsidiaries are publicly traded;
(4) the legal name, any fictitious or trade name, all business and residential addresses and the employment, as applicable, for the 10-year period immediately preceding the submission of the application for each key individual and person in control of the applicant;
(5) for any person in control of the applicant, a list of any felony convictions and for the 10-year period immediately preceding the submission of the application, a list of any criminal misdemeanor convictions of a crime of dishonesty, fraud or deceit and any material litigation in which the person involved is in control of an applicant that is not an individual;
(6) a copy of the applicant's audited financial statements for the most recent fiscal year and for the two-year period immediately preceding the most recent fiscal year or, if acceptable to the commissioner, certified unaudited financial statements for the most recent fiscal year or other period acceptable to the commissioner;
(7) a certified copy of the applicant's unaudited financial statements for the most recent fiscal quarter;
(8) if the applicant is a publicly traded corporation, a copy of the most recent report filed with the securities and exchange commission pursuant to 15 U.S.C. § 78m;
(9) if the applicant is a wholly owned subsidiary of:
(A) A corporation publicly traded in the United States, a copy of the parent corporation's audited financial statements for the most recent fiscal year or a copy of the parent corporation's most recent financial report filed with the securities and exchange commission pursuant to 15 U.S.C. § 78m; or
(B) a corporation publicly traded outside the United States, a copy of documentation similar to the requirements of paragraph (A) filed with the regulator of the parent corporation's domicile outside the United States;
(10) the name and address of the applicant's registered agent in Kansas; and
(11) any other information that the commissioner reasonably requires regarding the applicant.
(c) The commissioner shall set a nonrefundable new application fee each year pursuant to K.S.A. 2025 Supp. 9-557(b), and amendments thereto.
(d) The commissioner may waive one or more requirements of subsections (a) or (b) or permit an applicant to submit other information in lieu of the required information.
(e) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 10; July 1.
§ 9-565 Items to be provided with license application; criminal history record check and fingerprinting; investigative background report
(a) As a part of any original application, any individual in control of a licensee, any applicant in control of a licensee and each key individual shall provide the commissioner with the following items through the nationwide multistate licensing system and registry:
(1) (A) The office of the state bank commissioner may require an applicant in control of a licensee, a licensee or a key individual to be fingerprinted and submit to a state and national criminal history record check in accordance with K.S.A. 2025 Supp. 22-4714, and amendments thereto.
(B) Any individual who currently resides and has continuously resided outside of the United States for the past 10 years shall not be required to comply with this subsection; and
(2) a description of the individual's personal history and experience provided in a form and manner prescribed by the commissioner to obtain the following:
(A) An independent credit report from a consumer reporting agency. This requirement shall be waived if the individual does not have a social security number;
(B) information related to any criminal convictions or pending charges; and
(C) information related to any regulatory or administrative action and any civil litigation involving claims of fraud, misrepresentation, conversion, mismanagement of funds, breach of fiduciary duty or breach of contract.
(b) (1) If the individual has resided outside of the United States at any time during the 10-year period immediately preceding the individual's application, the individual shall also provide an investigative background report prepared by an independent search firm.
(2) At a minimum, the search firm shall:
(A) Demonstrate that it has sufficient knowledge and resources and that such firm employs accepted and reasonable methodologies to conduct the research of the background report; and
(B) not be affiliated with or have an interest with the individual it is researching.
(3) The investigative background report shall be provided in English and, at a minimum, shall contain the following:
(A) A comprehensive credit report or any equivalent information obtained or generated by the independent search firm to accomplish such report, including a search of the court data in the countries, provinces, states, cities, towns and contiguous areas where the individual resided and worked if such report is available in the individual's current jurisdiction of residency;
(B) criminal records information for the 10-year period immediately preceding the individual's application, including, but not limited to, felonies, misdemeanors or similar convictions for violations of law in the countries, provinces, states, cities, towns and contiguous areas where the individual resided and worked;
(C) employment history;
(D) media history including an electronic search of national and local publications, wire services and business applications; and
(E) financial services-related regulatory history, including, but not limited to, money transmission, securities, banking, insurance and mortgage-related industries.
(c) Any information required by this section may be used by the commissioner in making an official determination of the qualifications and fitness of the person in control or who seeks to gain control of the licensee.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 11; L. 2025, ch. 98, § 3; May 1.
§ 9-566 Controlling influence, presumption
(a) A person is presumed to exercise a controlling influence when such person holds the power to vote, directly or indirectly, at least 10% of the outstanding voting shares or voting interests of a licensee or person in control of a licensee.
(b) A person presumed to exercise a controlling influence pursuant to this section may rebut the presumption of control if the person is a passive investor.
(c) For purposes of determining the percentage of a person controlled by any individual, the individual's interest shall be aggregated with the interest of any other immediate family member, including the individual's spouse, parents, children, siblings, mothers-in-law and fathers-in-law, sons-in-law and daughters-in-law, brothers-in-law and sisters-in-law and any other person who shares such individual's home.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 12; July 1.
§ 9-567 Application; completeness; approval or denial by the commissioner
(a) (1) When an application for an original license under this act appears to include all the items and addresses all of the matters that are required, the application shall be deemed complete, and the commissioner shall promptly notify the applicant of the date the application is deemed complete. The commissioner shall approve or deny the application within 120 days after the completion date.
(2) If the application has not been approved or denied within 120 days after the completion date:
(A) The application shall be considered approved; and
(B) the license shall take effect as of the first business day after expiration of the 120-day period.
(3) The commissioner may extend the application period for good cause.
(b) A determination by the commissioner that an application is complete and accepted for processing means that the application, on its face, appears to include all of the items, including the criminal history background check response from the Kansas bureau of investigation and that such application addresses all of the matters that are required. A determination of completion by the commissioner shall not be deemed to be an assessment of the substance of the application or of the sufficiency of the information provided.
(c) When an application is filed and considered complete under this section, the commissioner shall investigate the applicant's financial condition and responsibility, financial and business experience, character and general fitness. The commissioner may conduct an on-site investigation of the applicant at the applicant's expense. The commissioner shall issue a license to an applicant under this section if the commissioner finds that the following conditions have been fulfilled:
(1) The applicant has complied with K.S.A. 2025 Supp. 9-564 and 9-565, and amendments thereto; and
(2) the financial condition and responsibility, financial and business experience, competence, character and general fitness of the applicant and key individuals and persons in control of the applicant indicate that it is in the interest of the public to permit the applicant to engage in money transmission.
(d) If an applicant avails itself or is otherwise subject to a multistate licensing process:
(1) The commissioner is hereby authorized to accept the investigation results of a lead investigative state to satisfy the requirements of subsection (c) if such lead investigative state has sufficient staffing, expertise and minimum standards; or
(2) if Kansas is the lead investigative state, the commissioner is hereby authorized to investigate the applicant pursuant to subsection (c) utilizing the timeframes established by agreement through the multistate licensing process. No such timeframes shall be considered noncompliant with the application period in subsection (a)(1).
(e) The commissioner shall issue a formal written notice of the denial of a license application within 14 days of the decision to deny the application. The commissioner shall state in the notice of denial the specific reasons for the denial of the application. An applicant whose application is denied by the commissioner under this subsection may appeal within 14 days of receiving the notice and request a hearing in accordance with the Kansas administrative procedure act, K.S.A. 77-501 et seq., and amendments thereto.
(f) The initial license term shall begin on the day the application is approved. The license shall expire on December 31 of the year in which the license term began, unless the initial license date is between November 1 and December 31, in which case the initial license term shall run through December 31 of the following year.
(g) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 13; July 1.
§ 9-568 License; renewal; fee
(a) (1) A license issued under this act shall be renewed annually.
(2) An annual renewal fee set by the commissioner shall be paid not more than 60 days before the license expiration.
(3) The renewal term shall be for a period of one year and shall begin on January 1 of each year after the initial license term and shall expire on December 31 of the year the renewal term begins.
(b) A licensee shall submit a complete renewal report with the renewal fee, in a form and manner determined by the commissioner. The renewal report shall contain a description of each material change in information submitted by the licensee in the licensee's original license application that has not been reported to the commissioner.
(c) Renewal applications received within 30 days of the expiration of the license and incomplete applications as of 30 days prior to the expiration of the license shall be subject to a late fee set by the commissioner.
(d) The commissioner may grant an extension of the renewal date for good cause.
(e) The commissioner is hereby authorized to utilize the nationwide multistate licensing system and registry to process license renewals, if such utilization satisfies the requirements of this section.
(f) Renewal applications submitted between November 1, 2024 and December 31, 2024, considered complete pursuant to K.S.A. 9-509, and amendments thereto, shall be considered complete under this section.
(g) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 14; July 1.
§ 9-569 License; suspension or revocation by the commissioner
(a) If a licensee does not continue to meet the qualifications or satisfy the requirements of an applicant for a new money transmission license, the commissioner may suspend or revoke the licensee's license in accordance with the procedures established by this act or other applicable state law for such suspension or revocation.
(b) An applicant for a money transmission license shall demonstrate that such applicant meets or will meet and a money transmission licensee shall at all times meet, the requirements of K.S.A. 2025 Supp. 9-586, 9-587 and 9-588, and amendments thereto.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 15; July 1.
§ 9-570 Application for licensure; complete or abandoned, when
(a) The commissioner shall have the discretion to determine the completeness of any application submitted pursuant to this act. In making such a determination, the commissioner shall consider the applicant's compliance with the requirements of the act and any other facts and circumstances that the commissioner deems appropriate.
(b) If an applicant fails to complete the application for a new license or for a change of control of a license within 60 days after the commissioner provides written notice of the incomplete application, the application will be deemed abandoned and the application fee shall be nonrefundable. An applicant whose application is abandoned under this section may reapply to obtain a new license.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 16; July 1.
§ 9-571 Change of control of license; application; approval or denial by the commissioner
(a) When any person or group of persons acting in concert are seeking to acquire control of a licensee, the licensee shall obtain the written approval of the commissioner prior to the change of control. An individual is not deemed to acquire control of a licensee and is not subject to this section when that individual becomes a key individual in the ordinary course of business.
(b) A person or group of persons acting in concert that seeks to acquire control of a licensee in cooperation with such licensee shall submit an application in the form and manner prescribed by the commissioner. Such application shall be accompanied by a nonrefundable fee set by the commissioner.
(c) Upon request, the commissioner may permit a licensee, the person or group of persons acting in concert to submit some or all information required by the commissioner pursuant to subsection (b) without using the nationwide multistate licensing system and registry.
(d) The application required by subsection (b) shall include all information required by K.S.A. 2025 Supp. 9-565, and amendments thereto, for any new key individuals who have not previously completed the requirements of K.S.A. 2025 Supp. 9-565, and amendments thereto, for a licensee.
(e) (1) When an application for acquisition of control under this section appears to include all the items and addresses all of the matters that are required, the application shall be deemed complete and the commissioner shall promptly notify the applicant of the date on which the application was so deemed, and the commissioner shall approve or deny the application within 60 days after the completion date.
(2) If the application is not approved or denied within 60 days after the completion date:
(A) The application shall be deemed approved; and
(B) the person or group of persons acting in concert shall not be prohibited from acquiring control.
(3) The commissioner may extend the application period for good cause.
(f) A determination by the commissioner that an application is complete and is accepted for processing means only that the application, on its face, appears to include all of the items and addresses all of the matters that are required. A determination of completion by the commissioner shall not be deemed to be an assessment of the substance of the application or of the sufficiency of the information provided.
(g) When an application is filed and considered complete under subsection (e), the commissioner shall investigate the financial condition and responsibility, financial and business experience, character and general fitness of the person or group of persons acting in concert who seek to acquire control. The commissioner shall approve an acquisition of control pursuant to this section if the commissioner finds that all of the following conditions have been fulfilled:
(1) The requirements of subsections (b) and (d) have been met, as applicable; and
(2) the financial condition and responsibility, financial and business experience, competence, character and general fitness of the person or group of persons acting in concert seeking to acquire control and the key individuals and persons that would be in control of the licensee after the acquisition of control indicate that it is in the interest of the public to permit the person or group of persons acting in concert to control the licensee.
(h) If an applicant avails itself or is otherwise subject to a multistate licensing process:
(1) The commissioner shall be authorized to accept the investigation results of a lead investigative state for the purposes of subsection (g) if the lead investigative state has sufficient staffing, expertise and minimum standards; or
(2) if Kansas is a lead investigative state, the commissioner shall be authorized to investigate the applicant pursuant to subsection (g) and the timeframes established by agreement through the multistate licensing process.
(i) The commissioner shall issue a formal written notice of the denial of an application to acquire control within 30 days of the decision to deny the application. The commissioner shall state in the notice of denial the specific reasons for the denial of the application. An applicant whose application is denied by the commissioner under this subsection may appeal within 14 days and request a hearing in accordance with the Kansas administrative procedure act, K.S.A. 77-501 et seq., and amendments thereto.
(j) The requirements of subsections (a) and (b) shall not apply to any of the following:
(1) A person that acts as a proxy for the sole purpose of voting at a designated meeting of the shareholders or holders of voting shares or voting interests of a licensee or a person in control of a licensee;
(2) a person that acquires control of a licensee by devise or descent;
(3) a person that acquires control of a licensee as a personal representative, custodian, guardian, conservator or trustee or as an officer appointed by a court of competent jurisdiction or by operation of law;
(4) a person that is exempt under subsection (l);
(5) a person that the commissioner determines is not subject to subsection (a) based on the public interest;
(6) a public offering of securities of a licensee or a person in control of a licensee; or
(7) an internal reorganization of a person in control of the licensee if the ultimate person in control of the licensee remains the same.
(k) Persons meeting the requirements of subsections (j)(2), (j)(3), (j)(4), (j)(6) or (j)(7) in cooperation with the licensee shall notify the commissioner within 15 days after the acquisition of control.
(l) (1) The requirements of subsections (a) and (b) shall not apply to a person that has complied with and received approval to engage in money transmission under this act or was identified as a person in control in a prior application filed with and approved by the commissioner or by a money service business-accredited state pursuant to a multistate licensing process, if:
(A) The person has not had a license revoked or suspended or controlled a licensee that has had a license revoked or suspended while the person was in control of the licensee in the previous five years;
(B) the person is a licensee, such person is well managed and has received at least a satisfactory rating for compliance at such person's most recent examination by an money service business accredited state if such rating was given;
(C) the licensee to be acquired is expected to meet the requirements of K.S.A. 2025 Supp. 9-586, 9-587 and 9-588, and amendments thereto, after the acquisition of control is completed. If the person acquiring control is a licensee, such licensee shall also be expected to meet the requirements of K.S.A. 2025 Supp. 9-586, 9-587 and 9-588, and amendments thereto, after the acquisition of control is completed;
(D) the licensee to be acquired shall not implement any material changes to such licensee's business plan as a result of the acquisition of control. If the person acquiring control is a licensee, such licensee shall not implement any material changes to such licensee's business plan as a result of the acquisition of control; and
(E) the person provides notice of the acquisition in cooperation with the licensee and attests to the provisions of this subsection in a form and manner prescribed by the commissioner.
(2) If the notice is not disapproved within 30 days after the date on which the notice was determined to be complete, the notice shall be deemed approved.
(m) Before filing an application for approval to acquire control of a licensee, a person may request in writing a determination from the commissioner as to whether such person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the commissioner determines that the person would not be a person in control of a licensee, the person and the proposed transaction shall not be subject to the requirements of subsections (a) and (b).
(n) If a multistate licensing process includes a determination pursuant to subsection (m) and an applicant avails itself or is otherwise subject to the multistate licensing process:
(1) The commissioner is hereby authorized to accept the control determination of a lead investigative state with sufficient staffing, expertise and minimum standards for the purpose of subsection (m); or
(2) if Kansas is a lead investigative state, the commissioner is hereby authorized to investigate the applicant pursuant to subsection (m) and the timeframes established by agreement through the multistate licensing process.
(o) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 17; July 1.
§ 9-572 Adding or replacing a key individual by licensee; requirements
(a) A licensee adding or replacing a key individual shall provide:
(1) Notice in the manner prescribed by the commissioner within 15 days after the effective date of the appointment of the new key individual; and
(2) information as required by K.S.A. 2025 Supp. 9-564, and amendments thereto, within 45 days of the effective date of the appointment of the new key individual.
(b) Within 90 days of the date on which the notice provided pursuant to subsection (a) was determined to be complete, the commissioner may issue a notice of disapproval of a key individual if the competence, experience, character or integrity of the individual would not be in the best interests of the public or the customers of the licensee to permit the individual to be a key individual of such licensee.
(c) A notice of disapproval shall state the basis for disapproval and shall be sent to the licensee and the disapproved individual. A licensee may appeal a notice of disapproval pursuant to the Kansas administrative procedure act, K.S.A. 77-501 et seq., and amendments thereto, within 14 days.
(d) If the notice provided pursuant to subsection (a) is not disapproved within 90 days after the date when the notice was determined to be complete, the key individual shall be deemed approved.
(e) If a multistate licensing process includes a key individual notice review and disapproval process pursuant to this section and the licensee avails itself or is otherwise subject to the multistate licensing process:
(1) The commissioner is hereby authorized to accept the determination of another state if the investigating state has sufficient staffing, expertise and minimum standards for the purpose of this section; or
(2) if Kansas is a lead investigative state, the commissioner is authorized to investigate the applicant pursuant to subsection (b) and the timeframes established by agreement through the multistate licensing process.
(f) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 18; July 1.
§ 9-573 Report of condition; information included
(a) Every licensee shall submit a report of condition within 45 days of the end of the calendar quarter or within any extended time as the commissioner may prescribe.
(b) The report of condition shall include:
(1) Financial information at the licensee level;
(2) nationwide and state-specific money transmission transaction information in every jurisdiction in the United States where the licensee is licensed to engage in money transmission;
(3) the permissible investments report;
(4) transaction destination country reporting for money received for transmission, if applicable; and
(5) any other information the commissioner reasonably requires regarding the licensee.
(c) The commissioner may utilize the nationwide multistate licensing system and registry for the submission of the report required by subsection (a) and is authorized to change or update as necessary the requirements of this section to carry out the purposes of this act and maintain consistency with nationwide multistate licensing system and registry reporting.
(d) The information required by subsection (b)(4) shall only be included in a report of condition submitted within 45 days of the end of the fourth calendar quarter.
(e) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 19; July 1.
§ 9-574 Audited financial statement; requirements
(a) Within 90 days after the end of each fiscal year or within any extended time as the commissioner may prescribe through rules and regulations, every licensee shall file with the commissioner:
(1) An audited financial statement of the licensee for the fiscal year prepared in accordance with United States generally accepted accounting principles; and
(2) any other information as the commissioner may reasonably require.
(b) The audited financial statements shall be prepared by an independent certified public accountant or independent public accountant who has been deemed satisfactory by the commissioner.
(c) The audited financial statements shall include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant in a form and manner determined by the commissioner. If the certificate or opinion is qualified, the commissioner may order the licensee to take any action as the commissioner may find necessary to enable the independent certified public accountant or independent public accountant to remove the qualification.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 20; July 1.
§ 9-575 Authorized delegate report; information included
(a) Each licensee shall submit a report of authorized delegates within 45 days of the end of each calendar quarter. The commissioner is authorized to utilize the nationwide multistate licensing system and registry for the submission of the report required by this subsection if such utilization is consistent with the requirements of this section.
(b) The authorized delegate report shall include, at a minimum, each authorized delegate's:
(1) Company legal name;
(2) taxpayer employer identification number;
(3) principal provider identifier;
(4) physical address;
(5) mailing address;
(6) any business conducted in other states;
(7) any fictitious or trade name;
(8) contact person's name, phone number and email;
(9) start date as the licensee's authorized delegate;
(10) end date acting as the licensee's authorized delegate, if applicable; and
(11) any other information the commissioner reasonably requires regarding the authorized delegate.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 21; July 1.
§ 9-576 Report required upon occurrence of certain administrative or legal proceedings
(a) A licensee shall file a report with the commissioner within one business day after the licensee has reason to know of the:
(1) Filing of a bankruptcy or reorganization petition by or against the licensee;
(2) filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for the licensee's dissolution or reorganization or the making of a general assignment for the benefit of the licensee's creditors; or
(3) commencement of a proceeding to revoke or suspend the licensee's license in a state or country where the licensee engages in business or is licensed.
(b) A licensee shall file a report with the commissioner within three business days after the licensee has reason to know of a felony conviction of:
(1) The licensee or a key individual or person in control of the licensee; or
(2) an authorized delegate.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 22; July 1.
§ 9-577 Federal reporting requirements
(a) A licensee and an authorized delegate shall file all reports required by federal currency reporting, recordkeeping and suspicious activity reporting requirements as set forth in federal and state laws pertaining to money laundering. The timely filing of a complete and accurate report required under this section with the appropriate federal agency is deemed compliant with the requirements of this section.
(b) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 23; July 1.
§ 9-578 Records retention; open inspection by the commissioner
(a) Every licensee shall maintain the following records for at least three years:
(1) A record of each outstanding money transmission obligation sold;
(2) a general ledger posted at least monthly containing all assets, liability, capital, income and expense accounts;
(3) bank statements and bank reconciliation records;
(4) records of all outstanding money transmission obligations;
(5) records of each outstanding money transmission obligation paid within the three-year period the records are maintained;
(6) a list of the last known names and addresses of all the licensee's authorized delegates; and
(7) any other records the commissioner reasonably requires in rules and regulations.
(b) Records specified in subsection (a) may be maintained:
(1) In any form of record; and
(2) outside this state, if such records are made accessible to the commissioner on seven business days' notice.
(c) All records maintained by the licensee as required in this section are open to inspection by the commissioner pursuant to K.S.A. 2025 Supp. 9-559(a), and amendments thereto.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 24; July 1.
§ 9-579 Authorized delegate; requirements and limitations
(a) As used in this section, "remit" means to make direct payments of money to a licensee or the licensee's representative authorized to receive money or to deposit money in a bank in an account specified by the licensee.
(b) Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee's authorized delegate, the licensee shall:
(1) Adopt and update as necessary all written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law;
(2) enter into a written contract that complies with subsection (d); and
(3) conduct a reasonable risk-based background investigation sufficient for the licensee to determine if the authorized delegate has complied and will likely comply with applicable state and federal law.
(c) An authorized delegate shall comply with this act.
(d) The written contract required by subsection (b) shall be signed by the licensee and the authorized delegate and, at a minimum, shall:
(1) Appoint the person signing the contract as the licensee's authorized delegate with the authority to conduct money transmission on behalf of the licensee;
(2) set forth the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of each party;
(3) require the authorized delegate to agree to fully comply with all applicable state and federal laws and rules and regulations pertaining to money transmission;
(4) require the authorized delegate to remit and handle money and any monetary value in accordance with the terms of the contract between the licensee and the authorized delegate;
(5) impose a trust on money and any monetary value net of fees received for money transmission for the benefit of the licensee;
(6) require the authorized delegate to prepare and maintain records as required by this act or rules and regulations adopted pursuant to this act or as reasonably required by the commissioner;
(7) acknowledge that the authorized delegate consents to examination or investigation by the commissioner;
(8) state that the licensee is subject to regulation by the commissioner and, as part of such regulation, the commissioner may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation; and
(9) acknowledge receipt of the written policies and procedures required under subsection (b).
(e) Within five business days after the suspension, revocation, surrender or expiration of a licensee's license, the licensee shall provide documentation to the commissioner that the licensee has notified all applicable authorized delegates of the licensee whose names are in a record filed with the commissioner of the suspension, revocation, surrender or expiration of a license. Upon suspension, revocation, surrender or expiration of a license, all applicable authorized delegates shall immediately cease to provide money transmission as an authorized delegate of the licensee.
(f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission. If an authorized delegate commingles any funds received from money transmission with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property shall be considered held in trust in favor of the licensee in an amount equal to the amount of money net of fees received from money transmission.
(g) No authorized delegate shall use a subdelegate to conduct money transmission on behalf of a licensee.
(h) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 25; July 1.
§ 9-580 Liability when conducting money transmission on behalf of an unlicensed person
(a) No person shall engage in the business of money transmission on behalf of a person who is not licensed or exempt from licensing under this act. If a person engages in such activity, such person shall be deemed to have provided money transmission to the same extent that such person were a licensee and shall be jointly and severally liable with the unlicensed or nonexempt person.
(b) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 26; July 1.
§ 9-581 Forwarding moneys received for transmission, excption; failure to forward
(a) Every licensee shall forward all moneys received for transmission in accordance with the terms of the agreement between the licensee and the sender unless the licensee reasonably believes or has a reasonable basis to believe that the sender may be a victim of fraud or that a crime or violation of law or any rules and regulations has occurred, is occurring or may occur.
(b) If a licensee fails to forward money received for transmission in accordance with this section, the licensee shall respond to inquiries by the sender with the reason for the failure unless providing a response would violate a state or federal law or rules and regulations.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 27; July 1.
§ 9-582 Refunds; requirements
(a) This section does not apply to moneys received for transmission:
(1) Subject to 12 C.F.R. §§ 1005.30 through 1005.36; or
(2) pursuant to a written agreement between the licensee and payee to process payments for goods or services provided by the payee.
(b) Within 10 days of receipt of the sender's written request for a refund of all money received for transmission, the licensee shall refund such money to the sender, unless:
(1) The money has been forwarded within 10 days of the date when the money was received for transmission;
(2) instructions have been given committing an equivalent amount of money to the person designated by the sender within 10 days of the date when the money was received for transmission;
(3) the agreement between the licensee and the sender instructs the licensee to forward the money after 10 days of the date when the money was received for transmission. If funds have not yet been forwarded in accordance with the terms of the agreement between the licensee and the sender, the licensee shall issue a refund in accordance with this section; or
(4) the refund is requested for a transaction that the licensee has not completed based on a reasonable belief or a reasonable basis to believe that a crime or violation of law, rules and regulations has occurred, is occurring or may occur.
(c) The refund request shall not be construed to enable the licensee to identify the:
(1) Sender's name and address or telephone number; or
(2) particular transaction to be refunded if the sender has multiple outstanding transactions.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 28; July 1.
§ 9-583 Receipts for money received for transmission; contents
(a) This section shall not apply to:
(1) Money received for transmission subject to 12 C.F.R. §§ 1005.30 through 1005.36;
(2) money received for transmission that is not primarily for personal, family or household purposes;
(3) money received for transmission pursuant to a written agreement between the licensee and payee to process payments for goods or services provided by the payee; or
(4) payroll processing services.
(b) As used in this section, "receipt" means a paper or electronic receipt.
(c) (1) For a transaction conducted in person, the receipt may be provided electronically if the sender requests or agrees to receive an electronic receipt.
(2) For a transaction conducted electronically or by phone, a receipt may be provided electronically. All electronic receipts shall be provided in a retainable form.
(d) (1) Every licensee or the licensee's authorized delegate shall provide the sender a receipt for money received for transmission.
(2) The receipt shall contain the:
(A) Name of the sender;
(B) name of the designated recipient;
(C) date of the transaction;
(D) unique transaction or identification number;
(E) name of the licensee, the licensee's nationwide multistate licensing system and registry unique identification number, the licensee's business address and the licensee's customer service telephone number;
(F) amount of the transaction in United States dollars;
(G) fee charged, if any, by the licensee to the sender for the transaction; and
(H) taxes collected, if any, by the licensee from the sender for the transaction.
(3) The receipt required by this section shall be written in English and in the language principally used by the licensee or authorized delegate to advertise, solicit or negotiate, either orally or in writing, for a transaction conducted in person, electronically or by phone, if other than English.
(e) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 29; July 1.
§ 9-584 Statement regarding questions or complaints required
(a) Every licensee or authorized delegate shall include on a receipt or disclose on the licensee's website or mobile application the name of the office of the state bank commissioner and a statement that the licensee's Kansas customers can contact the office of the state bank commissioner with questions or complaints about the licensee's money transmission services.
(b) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 30; July 1.
§ 9-585 Licensee providing payroll processing services; requirements
(a) A licensee that provides payroll processing services shall:
(1) Issue reports to clients detailing client payroll obligations in advance of the payroll funds being deducted from an account; and
(2) make available worker paystubs or an equivalent statement to workers.
(b) This section shall not apply to a licensee providing payroll processing services where the licensee's client designates the intended recipients to the licensee and is responsible for providing the disclosures.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 31; July 1.
§ 9-586 Net worth requirements of licensee; exemption by the commissioner
(a) Every licensee shall maintain at all times a tangible net worth of:
(1) The greater of $100,000 or 3% of such licensee's total assets up to $100,000,000;
(2) 2% of such licensee's additional assets of $100,000,000 to $1,000,000,000; and
(3) 0.5% of such licensee's additional assets of over $1,000,000,000.
(b) The licensee's tangible net worth shall be demonstrated at initial application by the applicant's most recent audited or unaudited financial statements pursuant to K.S.A. 2025 Supp. 9-564, and amendments thereto.
(c) Notwithstanding the provisions of this section, the commissioner shall have the authority to exempt any applicant or licensee, in part or in whole, from the requirements of this section.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 32; July 1.
§ 9-587 Surety bond or other required security
(a) An applicant for a money transmission license shall provide and a licensee at all times shall maintain security consisting of a surety bond in a form satisfactory to the commissioner or, with the commissioner's approval, a deposit instead of a bond in accordance with this section.
(b) The amount of the required security shall be:
(1) The greater of $200,000 or an amount equal to 100% of the licensee's average daily money transmission liability in Kansas calculated for the most recently completed three-month period, up to a maximum of $1,000,000; or
(2) $200,000, if the licensee's tangible net worth exceeds 10% of total assets.
(c) A licensee that maintains a bond in the maximum amount provided for in subsection (b) shall not be required to calculate its average daily money transmission liability in Kansas for purposes of this section.
(d) A licensee may exceed the maximum required bond amount pursuant to K.S.A. 2025 Supp. 9-589, and amendments thereto.
(e) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 33; July 1.
§ 9-588 Permissible investments; trust required
(a) A licensee shall maintain permissible investments that have a market value computed in accordance with United States generally accepted accounting principles of not less than the aggregate amount of the total of the licensee's outstanding money transmission obligations.
(b) Except for the permissible investments described in K.S.A. 2025 Supp. 9-589, and amendments thereto, the commissioner may by rules and regulations or order limit the extent to which a specific investment maintained by a licensee within a class of permissible investments may be considered a permissible investment, if the specific investment represents undue risk to customers not reflected in the market value of investments.
(c) Permissible investments, even if commingled with other assets of the licensee, shall be held in trust for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations in the event of insolvency, the filing of a petition by or against the licensee under 11 U.S.C. §§ 101 through 110 for bankruptcy or reorganization, the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for such licensee's dissolution or reorganization or in the event of an action by a creditor against the licensee who is not a beneficiary of this statutory trust. No permissible investments impressed with a trust pursuant to this subsection shall be subject to attachment, levy of execution or sequestration by order of any court, except for a beneficiary of this statutory trust.
(d) Upon the establishment of a statutory trust in accordance with subsection (c) or when any funds are drawn on a letter of credit pursuant to K.S.A. 2025 Supp. 9-589, and amendments thereto, the commissioner shall notify the applicable regulator of each state where the licensee is licensed to engage in money transmission, if any, of the establishment of the trust or the funds drawn on the letter of credit, as applicable. Notice shall be deemed satisfied if performed pursuant to a multistate agreement or through the nationwide multistate licensing system and registry. Funds drawn on a letter of credit and any other permissible investments held in trust for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations shall be deemed held in trust for the benefit of such purchasers and holders on a pro rata and equitable basis in accordance with statutes pursuant to which permissible investments are required to be held in Kansas and other states, as applicable. Any statutory trust established under this section shall be terminated upon extinguishment of all of the licensee's outstanding money transmission obligations.
(e) The commissioner by rules and regulations or by order may allow other types of investments that the commissioner determines are of sufficient liquidity and quality to be a permissible investment. The commissioner is hereby authorized to participate in efforts with other state regulators to determine which other types of investments are of sufficient liquidity and quality to be a permissible investment.
(f) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 34; July 1.
§ 9-589 Permissible investments
(a) The following investments are permissible under this section:
(1) Cash, including demand deposits, savings deposits and funds in accounts held for the benefit of the licensee's customers in a federally insured depository financial institution and cash equivalents including automated clearing house items in transit to the licensee and automated clearing house items or international wires in transit to a payee, cash in transit via armored car, cash in smart safes, cash in licensee-owned locations, debit card or credit card-funded transmission receivables owed by any bank or money market mutual funds rated AAA by Standard & Poor or the equivalent from any eligible rating service;
(2) certificates of deposit or senior debt obligations of a federally insured depository institution;
(3) an obligation of the United States or a commission, agency or instrumentality thereof, an obligation that is guaranteed fully as to principal and interest by the United States or an obligation of a state or a governmental subdivision, agency or instrumentality thereof;
(4) (A) the full drawable amount of an irrevocable standby letter of credit for which the stated beneficiary is the commissioner that stipulates that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds up to the letter of credit amount within seven days of presentation of the items required by subparagraph (D);
(B) the letter of credit shall:
(i) Be issued by a federally insured depository financial institution, a foreign bank that is authorized under federal law to maintain a federal agency or federal branch office in a state or states or a foreign bank that is authorized under state law to maintain a branch in a state that:
(a) Bears an eligible rating or whose parent company bears an eligible rating; and
(b) is regulated, supervised and examined by United States federal or state authorities having regulatory authority over banks, credit unions and trust companies;
(ii) be irrevocable, unconditional and indicate that such letter of credit is not subject to any condition or qualifications outside of such letter of credit;
(iii) contain no references to any other agreements, documents or entities or otherwise provide for a security interest in the licensee; and
(iv) contain an issue date and expiration date and expressly provide for automatic extension, without a written amendment, for an additional period of one year from the present or each future expiration date unless the issuer of the letter of credit notifies the commissioner in writing by certified or registered mail or courier mail or other receipted means at least 60 days prior to any expiration date, that the irrevocable letter of credit will not be extended;
(C) if any notice of expiration or non-extension of a letter of credit is issued under clause (a)(4)(B)(iv), the licensee shall be required to demonstrate to the satisfaction of the commissioner, 15 days prior to expiration, that the licensee maintains and shall maintain permissible investments in accordance with K.S.A. 2025 Supp. 9-590(a), and amendments thereto, upon the expiration of the letter of credit. If the licensee is not able to do so, the commissioner may draw on the letter of credit in an amount up to the amount necessary to meet the licensee's requirements to maintain permissible investments in accordance with K.S.A. 2025 Supp. 9-588(a), and amendments thereto. Any such draw shall be offset against the licensee's outstanding money transmission obligations. The drawn funds shall be held in trust by the commissioner or the commissioner's designated agent, to the extent authorized by law, as agent for the benefit of the purchasers and holders of the licensee's outstanding money transmission obligations;
(D) the letter of credit shall provide that the issuer of such letter of credit shall honor, at sight, a presentation made of the following documents by the beneficiary to the issuer on or prior to the expiration date of the letter of credit:
(i) The original letter of credit, including any amendments; and
(ii) a written statement from the beneficiary stating that any of the following events have occurred:
(a) The filing of a bankruptcy or reorganization petition by or against the licensee;
(b) the filing of a petition by or against the licensee for receivership or the commencement of any other judicial or administrative proceeding for such licensee's dissolution or reorganization;
(c) the seizure of assets of a licensee by a commissioner pursuant to an emergency order issued in accordance with applicable law, on the basis of an action, violation or condition that has caused or is likely to cause the insolvency of the licensee; or
(d) the beneficiary has received notice of expiration or non-extension of a letter of credit and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain permissible investments in accordance with K.S.A. 2025 Supp. 9-590(a), and amendments thereto, upon the expiration or non-extension of the letter of credit;
(E) the commissioner may designate an agent to serve on the commissioner's behalf as beneficiary to a letter of credit if the agent and letter of credit meet requirements established by the commissioner. The commissioner's agent may serve as agent for multiple licensing authorities for a single irrevocable letter of credit if the proceeds of the drawable amount for the purposes of subsection (a)(4) are assigned to the commissioner; and
(F) the commissioner is hereby authorized to participate in multistate processes designed to facilitate the issuance and administration of letters of credit, including, but not limited to, services provided by the nationwide multistate licensing system and registry and state regulatory registry, LLC; and
(5) 100% of the surety bond provided for under K.S.A. 2025 Supp. 9-587, and amendments thereto, that exceeds the average daily money transmission liability in Kansas.
(b) (1) Unless permitted by the commissioner by rules and regulations adopted or by order issued to exceed the limit as set forth herein, the following investments are permissible under K.S.A. 2025 Supp. 9-589, and amendments thereto, to the extent specified:
(A) Receivables payable to a licensee from the licensee's authorized delegates in the ordinary course of business that are less than seven days old up to 50% of the aggregate value of the licensee's total permissible investments; and
(B) of the receivables permissible under subparagraph (A), receivables payable to a licensee from a single authorized delegate in the ordinary course of business may not exceed 10% of the aggregate value of the licensee's total permissible investments.
(2) The following investments are permissible up to 20% per category and up to 50% combined of the aggregate value of the licensee's total permissible investments:
(A) A short-term investment of up to six months, bearing an eligible rating;
(B) commercial paper bearing an eligible rating;
(C) a bill, note, bond or debenture bearing an eligible rating;
(D) United States tri-party repurchase agreements collateralized at 100% or more with United States government or agency securities, municipal bonds or other securities bearing an eligible rating;
(E) money market mutual funds rated less than AAA and equal to or higher than A- by Standard & Poor or the equivalent from any other eligible rating service; and
(F) a mutual fund or other investment fund composed solely and exclusively of one or more permissible investments listed in subsection (a)(1) through (3).
(3) Cash, including demand deposits, savings deposits and funds in such accounts held for the benefit of the licensee's customers, at foreign depository institutions are permissible up to 10% of the aggregate value of the licensee's total permissible investments if the licensee has received a satisfactory rating in the licensee's most recent examination and the foreign depository institution:
(A) Has an eligible rating;
(B) is registered under the foreign account tax compliance act;
(C) is not located in any country subject to sanctions from the office of foreign asset control; and
(D) is not located in a high-risk or non-cooperative jurisdiction as designated by the financial action task force.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 35; July 1.
§ 9-590 Suspension or revocation of license, reasons or circumstances therefor; notice and hearing
(a) The commissioner may, after notice and an opportunity for a hearing conducted in accordance with the Kansas administrative procedure act, K.S.A. 77-501 et seq., and amendments thereto, suspend or revoke a license or order a licensee to revoke the designation of an authorized delegate if:
(1) The licensee violates this act or any rules and regulations adopted or an order issued under this act;
(2) the licensee does not cooperate with an examination or investigation by the commissioner;
(3) the licensee engages in fraud, intentional misrepresentation or gross negligence;
(4) an authorized delegate is convicted of a violation of a state or federal anti-money laundering statute or violates any rules or regulations adopted or an order issued under this act, as a result of the licensee's willful misconduct or willful blindness;
(5) the competence, experience, character or general fitness of the licensee, authorized delegate, person in control of a licensee, key individual or responsible person of the authorized delegate indicates that it is not in the public interest to permit the person to provide money transmission;
(6) the licensee engages in an unsafe or unsound practice as determined by the commissioner pursuant to subsection (b);
(7) the licensee is insolvent, suspends payment of the licensee's obligations or makes a general assignment for the benefit of the licensee's creditors;
(8) the licensee does not remove an authorized delegate after the commissioner issues and serves upon the licensee a final order that includes a finding that the authorized delegate has violated this act;
(9) a fact or condition exists that, if it had existed when the licensee applied for a license, would have been grounds for denying the application;
(10) the licensee's net worth becomes inadequate and the licensee, after 10 days, fails to take steps to remedy the deficiency;
(11) the licensee demonstrated a pattern of failing to promptly pay obligations;
(12) the licensee applied for adjudication, reorganization or other relief under bankruptcy; or
(13) the licensee lied or made false or misleading statements to any material fact or omitted any material fact.
(b) In determining whether a licensee is engaging in an unsafe or unsound practice, the commissioner may consider the size and condition of the licensee's money transmission, the magnitude of the loss, the gravity of the violation of this act and the previous conduct of the person involved.
(c) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 36; July 1.
§ 9-591 Suspension or revocation of the designation of an authorized delegate, reasons or circumstances therefor
(a) The commissioner may issue an order suspending or revoking the designation of an authorized delegate, if the commissioner finds that the:
(1) Authorized delegate violated this act or any rules and regulations adopted or an order issued under this act;
(2) authorized delegate did not cooperate with an examination or investigation by the commissioner;
(3) authorized delegate engaged in fraud, intentional misrepresentation or gross negligence;
(4) authorized delegate is convicted of a violation of a state or federal anti-money laundering statute;
(5) the competence, experience, character or general fitness of the authorized delegate or a person in control of the authorized delegate indicates that it is not in the public interest to permit the authorized delegate to provide money transmission; or
(6) the authorized delegate is engaging in an unsafe or unsound practice as determined by the commissioner pursuant to subsection (b).
(b) In determining whether an authorized delegate is engaging in an unsafe or unsound practice, the commissioner may consider the size and condition of the authorized delegate's provision of money transmission, the magnitude of the loss, the gravity of the violation of this act or any rules and regulations adopted or an order issued under this act and the previous conduct of the authorized delegate.
(c) An authorized delegate may apply for relief from a suspension or revocation of designation as an authorized delegate according to procedures prescribed by the commissioner in rules and regulations.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 37; July 1.
§ 9-592 Issuance of cease and desist order by commissioner
(a) If the commissioner determines that a violation of this act or of any rules and regulations adopted or an order issued under this act by a licensee, a person required to be licensed or authorized delegate is likely to cause immediate and irreparable harm to the licensee, the licensee's customers or the public as a result of the violation or cause insolvency or significant dissipation of assets of the licensee, the commissioner may issue an order requiring the licensee or authorized delegate to cease and desist from the violation. The order shall become effective upon service of the order on the licensee or authorized delegate.
(b) The commissioner may issue an order against a licensee to cease and desist from providing money transmission through an authorized delegate that is the subject of a separate order by the commissioner.
(c) An order to cease and desist shall remain effective and enforceable pending the completion of an administrative proceeding pursuant to the Kansas administrative procedure act, K.S.A. 77-501 et seq., and amendments thereto.
(d) An order to cease and desist shall be considered a final order unless the licensee or authorized delegate requests a hearing within 14 days after the cease and desist order is issued.
(e) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 38; July 1.
§ 9-593 Consent order
(a) The commissioner may enter into a consent order at any time with a person to resolve a matter arising under this act or any rules and regulations adopted or order issued under this act. A consent order shall be signed by the person to whom such consent order is issued or by the person's authorized representative and shall indicate agreement with the terms contained in the order. A consent order may provide that such consent order does not constitute an admission by a person that this act or rules and regulations adopted or an order issued under this act has been violated.
(b) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 39; July 1.
§ 9-594 Criminal penalities for violations of the act
(a) Any person that intentionally makes a false statement, misrepresentation or false certification in a record filed or required to be maintained under this act or that intentionally makes a false entry or omits a material entry in such a record is guilty of a severity level 9, nonperson felony.
(b) Any person that knowingly engages in an activity for which a license is required under this act without being licensed under this act and who receives more than $500 in compensation within a 30-day period from this activity is guilty of a severity level 9, nonperson felony.
(c) Any person that knowingly engages in an activity for which a license is required under this act without being licensed under this act and who receives not more than $500 in compensation within a 30-day period from this activity is guilty of a class A nonperson misdemeanor.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 40; July 1.
§ 9-595 Enforcement powers of the commissioner under a summary or consent order; informal agreements; confidentiality; fines
(a) As part of any summary order or consent order, the commissioner may:
(1) Assess a fine against any person who violates this act or any rules and regulations adopted hereunder in an amount not to exceed $5,000 per violation. The commissioner may designate any fine collected pursuant to this section be used for consumer education;
(2) assess the agency's operating costs and expenses for investigating and enforcing this act;
(3) require the person to pay restitution for any loss arising from the violation or requiring the person to reimburse any profits arising from the violation;
(4) prohibit the person from future application for licensure pursuant to the act; and
(5) require such affirmative action as determined by the commissioner to carry out the purposes of this act.
(b) (1) The commissioner may enter into an informal agreement at any time with a person to resolve a matter arising under this act, rules and regulations adopted hereunder or an order issued pursuant to this act.
(2) Any informal agreement authorized by this subsection shall be considered confidential examination material. The adoption of an informal agreement authorized by this subsection shall not be:
(A) Subject to the provisions of K.S.A. 77-501 et seq., and amendments thereto, or K.S.A. 77-601 et seq., and amendments thereto;
(B) considered an order or other agency action;
(C) subject to the Kansas open records act, K.S.A. 45-215 et seq., and amendments thereto; or
(D) discovery or be admissible in evidence in any private civil action.
(3) The provisions of this subsection providing for the confidentiality of public records shall expire on July 1, 2030, unless the legislature reviews and reenacts such provisions in accordance with the Kansas open records act, K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.
(c) Through an examination finding, the commissioner may:
(1) Assess a fine against any licensee who violates this act or rules and regulations adopted thereto, in an amount not to exceed $5,000 per violation. The commissioner may designate any fine collected pursuant to this section be used for consumer education; or
(2) require the licensee to pay restitution for any loss arising from the violation or require the person to reimburse any profits arising from the violation.
(d) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 41; July 1.
§ 9-596 Severability of act
(a) The provisions of this act are severable. If any portion of the act is declared unconstitutional or invalid, or the application of any portion of the act to any person or circumstance is held unconstitutional or invalid, the invalidity shall not affect other portions of the act that can be given effect without the invalid portion or application, and the applicability of such other portions of the act to any person or circumstance shall remain valid and enforceable.
(b) This section shall take effect on and after January 1, 2025.
History: L. 2024, ch. 64, § 42; July 1.
Article 6 Federal Deposit Insurance
§§ 9-601, 9-602 Repealed
History: L. 1937, ch. 76, §§ 1, 3; Repealed, L. 1947, ch. 102, § 143; June 30.
§§ 9-603 through 9-605 Repealed
History: L. 1937, ch. 76, §§ 4–6; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-606 Repealed
History: L. 1937, ch. 76, § 7; Repealed, L. 1947, ch. 102, § 143; June 30.
§ 9-607 Repealed
History: L. 1937, ch. 76, § 8; Repealed, L. 1947, ch. 102, § 143; June 30.
Article 7 Banking Code; Definitions
§ 9-701 Definitions
Unless otherwise clearly indicated by the context, the following words when used in the state banking code, for the purposes of the state banking code, shall have the meanings respectively ascribed to them in this section:
(a) "Bank or state bank" means a bank, savings and loan association or savings bank incorporated under the laws of Kansas.
(b) "Business of banking" means receiving or accepting money on deposit, and may include the performance of related activities that are not exclusive to banks, including paying drafts or checks, lending money or any other activity authorized by applicable law. "Business of banking" shall not include any activity conducted by a student bank.
(c) "Trust company" means a trust company incorporated under the laws of Kansas and which does not accept deposits.
(d) "Commissioner" means the Kansas state bank commissioner.
(e) "Executive officer" means a person who participates or has authority to participate, other than in the capacity of a director, in major policymaking functions of the bank or trust company, whether or not the officer has an official title, the title designates the officer as an assistant or the officer is serving without salary or other compensation. The chairperson of the board, the president, every vice president, the cashier, the secretary and the treasurer of a company or bank are considered executive officers.
(1) A bank may, by resolution of the board of directors or by the bylaws of the bank or trust company, exempt an officer from participation, other than in the capacity of a director, in major policymaking functions of the bank or trust company if the officer does not actually participate therein.
(2) The commissioner may make the determination that a person is an executive officer if the commissioner determines that the criteria are met despite the existence of a resolution allowed pursuant to this subsection.
(f) "Demand deposit" means a deposit that:
(1) (A) Is payable on demand;
(B) is issued with an original maturity or required notice period of less than seven days;
(C) represents funds for which the depository institution does not reserve the right to require at least seven days' written notice of an intended withdrawal; or
(D) represents funds for which the depository institution does reserve the right to require at least seven days' written notice of an intended withdrawal; and
(2) is not also a negotiable order of withdraw account.
(3) "Demand deposit" does not include "time deposits" or "savings deposits" as defined in this section.
(g) "Time deposit," also known as a certificate of deposit, means a deposit that the depositor does not have a right and is not permitted to make withdrawals from within six days after the date of deposit unless the deposit is subject to an early withdrawal penalty of at least seven days' simple interest on amounts withdrawn within the first six days after deposit. A time deposit from which partial early withdrawals are permitted must impose additional early withdrawal penalties for at least seven days' simple interest on amounts withdrawn within six days after each partial withdrawal. If such additional early withdrawal penalties are not contractually imposed, the account ceases to be a time deposit, but may become a savings deposit if the account meets the requirements for a savings deposit.
(h) "Savings deposit" means a deposit or account with respect to which the depositor is not required by the deposit contract, but may at any time, be required by the depository institution to give written notice of an intended withdrawal not less than seven days before such withdrawal is made and that is not payable on a specified date or at the expiration of a specified time after the date of deposit.
(i) "Public moneys" means all moneys coming into the custody of the United States government or any board, commission or agency thereof, and also shall mean all moneys coming into the custody of any officer of any municipal or quasi-municipal or public corporation, the state or any political subdivision thereof, pursuant to any provision of law authorizing any such official to collect or receive the same.
(j) "Municipal corporation" means any city incorporated under the laws of Kansas.
(k) "Quasi-municipal corporation" means any county, township, school district, drainage district, rural water district or any other governmental subdivision in the state of Kansas having authority to receive or hold moneys or funds.
(l) "Certificate of authority" means a certificate signed and sealed by the commissioner evidencing the authority of a bank or trust company to transact a general banking or trust business as provided by law.
(m) "Trust business" means engaging in, or holding out to the public as willing to engage in, the business of acting as a fiduciary for hire, except that no accountant, attorney, credit union, insurance broker, insurance company, investment adviser, real estate broker or sales agent, savings and loan association, savings bank, securities broker or dealer, real estate title insurance company or real estate escrow company shall be deemed to be engaged in a trust company business with respect to fiduciary services customarily performed by those persons or entities for compensation as a traditional incident to their regular business activities.
(n) "Community and economic development entity" means an entity that makes investments or conducts activities that primarily benefit low-income and moderate-income individuals, low-income and moderate-income areas, or other areas targeted by a governmental entity for redevelopment, or would receive consideration as "qualified investments" under the community reinvestment act pub. L. 95-128, title VIII, 91 stat. 1147, 12 U.S.C. § 2901 et seq., and any state tax credit equity fund established pursuant to K.S.A. 74-8904, and amendments thereto.
(o) "Depository institution" means any state bank, national banking association, state savings and loan or federal savings association, without regard to the state where the institution is chartered or the state in which the institution's main office is located.
(p) "Student bank" means any nonprofit program offered by a high school accredited by the state board of education, where deposits are received, checks are paid or money is lent for limited in-school purposes.
(q) "Stock bank" means a bank that has an ownership structure represented by stock.
(r) "Mutual bank" means a bank that does not have an ownership structure represented by stock.
(s) "Savings and loan association" or "savings bank" means a bank that is required to have qualified thrift investments that equal or exceed 65% of its portfolio assets, and its qualified thrift investments are required to equal or exceed 65% of its assets on a monthly average basis in nine out of every 12 months. For purposes of this subsection, "portfolio assets" and "qualified thrift investments" have the same meanings as in 12 U.S.C. § 1467a, as amended.
History: L. 1947, ch. 102, § 1; L. 1970, ch. 61, § 1; L. 1975, ch. 45, § 1; L. 1976, ch. 54, § 1; L. 1981, ch. 49, § 1; L. 1983, ch. 46, § 1; L. 1987, ch. 54, § 1; L. 1989, ch. 48, § 11; L. 1993, ch. 31, § 1; L. 1994, ch. 202, § 2; L. 1995, ch. 79, § 13; L. 1995, ch. 250, § 1; L. 2015, ch. 38, § 22; L. 2016, ch. 54, § 3; L. 2018, ch. 75, § 7; July 1.
§ 9-702 Repealed
History: L. 1947, ch. 102, § 2; L. 1972, ch. 57, § 5; L. 1995, ch. 31, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-703 Repealed
History: L. 1947, ch. 102, § 3; Repealed, L. 2015, ch. 38, § 151; July 1.
Article 8 Banking Code; Organization
§ 9-801 Incorporation; application; criteria for approval of application
(a) No bank or trust company shall be organized or incorporated under the laws of this state nor transact either a banking business or a trust business in this state, until the application for such bank's or trust company's incorporation and application for certificate of authority has been submitted to and approved by the state banking board. The form for making any such application shall be prescribed by the state banking board and any application made to the state banking board shall contain such information as the state banking board shall require.
(b) No private bank shall engage in the banking business in this state.
(c) The state banking board shall not accept an application unless:
(1) The bank or trust company is organized by five or more persons who shall also be stockholders of the proposed bank or trust company or parent company of the proposed bank or trust company;
(2) at least five of the organizers are residents of the state of Kansas and at least those five sign and acknowledge the articles of incorporation;
(3) the name selected for a bank is different from that of any other bank: (A) Doing business in the same city or town; and
(B) within a 15-mile radius of the proposed location;
(4) the name selected for the trust company is different or substantially dissimilar from any other trust company doing business in this state; and
(5) the articles of incorporation contain the names and addresses of the bank's or the trust company's stockholders and the amount of common stock subscribed by each. The articles of incorporation may contain such other provisions as are consistent with the general corporation code.
(d) Any bank or trust company may request an exemption from the commissioner from the provisions of subsections (c)(3) and (c)(4).
(e) If the state banking board shall determine any of the following factors unfavorably to the applicants, the application may be denied:
(1) The financial standing, general business experience and character of the organizers and incorporators;
(2) the character, qualifications and experience of the officers of the proposed bank or trust company;
(3) the public need for the proposed bank or trust company in the community wherein it is proposed to locate the same and whether existing banks or trust companies are meeting such need;
(4) the prospects for success of the proposed bank or trust company; and
(5) any other criteria the state banking board may require.
(f) The state banking board shall not make membership in any federal government agency a condition precedent to the granting of the authority to do business.
(g) The state banking board may require fingerprinting of any officer, director, incorporator or any other person of the proposed trust company related to the application deemed necessary by the state banking board. Such fingerprints may be submitted to the Kansas bureau of investigation and the federal bureau of investigation for a state and national criminal history record check. The fingerprints shall be used to identify the person and to determine whether the person has a record of arrests and convictions in this state or other jurisdictions. The state banking board may use information obtained from fingerprinting and the criminal history for purposes of verifying the identification of the person and in the official determination of the qualifications and fitness of the persons associated with the applicant trust company to be issued a charter. Whenever the state banking board requires fingerprinting, any associated costs shall be paid by the applicant or the parties to the application.
(h) Any final action of the state banking board approving or disapproving an application shall be subject to review in accordance with the Kansas judicial review act.
(i) If upon the dissolution, insolvency or appointment of a receiver of any bank, trust company, national bank association, savings and loan association, savings bank or credit union, the commissioner is of the opinion that by reason of the loss of services in the community, an emergency exists which may result in serious inconvenience or losses to the depositors or the public interest in the community, the commissioner may accept and approve an application for incorporation and an application for authority to do business from applicants for the organization and establishment of a successor bank or trust company.
History: L. 1947, ch. 102, § 4; L. 1975, ch. 44, § 5; L. 1977, ch. 45, § 1; L. 1985, ch. 56, § 1; L. 1989, ch. 48, § 12; L. 2015, ch. 38, § 23; L. 2016, ch. 54, § 4; July 1.
§ 9-802 Date of existence; transaction of business before authorization
(a) The existence of any bank or trust company as a corporation shall date from the filing of the bank's or trust company's articles of incorporation with the Kansas secretary of state's office from which time such bank or trust company shall have and may exercise the incidental powers conferred by law upon corporations, except that no bank or trust company shall transact any business except the election of officers, the taking and approving of official bonds, the receipts of payment upon stock subscriptions and other business incidental to their organization, until such bank or trust company has secured the approval of the state banking board and the authorization of the commissioner to commence business.
(b) The full amount of the common stock including the surplus and undivided profits as required by the Kansas banking code shall be subscribed before the articles of incorporation are filed with the Kansas secretary of state's office.
History: L. 1947, ch. 102, § 5; L. 1989, ch. 48, § 13; L. 2015, ch. 38, § 24; L. 2016, ch. 54, § 5; July 1.
§ 9-803 Renewal and extension of corporation; lapse in authority or existence
(a) Any bank or trust company with articles of incorporation that have lapsed, or hereafter shall lapse, may renew and extend the bank's corporate existence or the trust company's corporate existence in the manner provided by law and upon payment of the requisite fees.
(b) The acts of any bank or trust company with articles of incorporation that have lapsed or terminated by the expiration of time and such bank's or trust company's corporate existence is renewed and extended are hereby legalized and declared to be valid in the same manner and to the same effect as though the banks and trust companies had been duly authorized at all times since their organization.
History: L. 1947, ch. 102, § 6; L. 2015, ch. 38, § 25; L. 2016, ch. 54, § 6; L. 2021, ch. 78, § 1; July 1.
§ 9-804 Certificate of authority; examination; issuance
(a) Upon approval of an application to organize a bank or trust company with the state banking board, such board shall cause to be made by and through the commissioner, a careful examination and investigation concerning:
(1) The amount of moneys paid in for capital, surplus and undivided profits, the persons that paid and the amount of capital stock owned in good faith by each stockholder;
(2) whether such bank or trust company has complied with the applicable provisions of law; and
(3) any other criteria the commissioner may require.
(b) When the capital of any bank or trust company shall have been paid in, the president or cashier shall transmit to the commissioner a verified statement showing the names and addresses of all stockholders, the amount of stock each subscribed and the amount paid in by each.
(c) If the commissioner finds, after examination and investigation, that the bank or trust company has been organized as provided by law, has complied with the provisions of law and has secured the preliminary approval of the commissioner, if required by K.S.A.
9-801(i), and amendments thereto, or upon the approval of the state banking board, the commissioner shall issue a certificate showing that such bank or trust company has been organized and capital has been paid in as required by law, and that the bank or trust company is authorized to transact a general banking or trust business as provided by law.
History: L. 1947, ch. 102, § 7; L. 1977, ch. 45, § 2; L. 1989, ch. 48, § 14; L. 2015, ch. 38, § 26; L. 2016, ch. 54, § 7; July 1.
§ 9-805 Repealed
History: L. 1947, ch. 102, § 8; L. 1975, ch. 44, § 6; L. 2006, ch. 89, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-806 Failure to engage in business; abandonement or expiration of application; reapplication required
(a) If the applicant fails to complete any application under the state banking code within 60 days after being notified that the application is incomplete, such application shall be considered abandoned and the application fee shall not be refunded. An applicant whose application is abandoned under this section may reapply at any time.
(b) Except as provided by subsection (c), the bank or trust company shall engage in the activity requiring an application and approval by the commissioner or state banking board within 18 months from the date of approval. If the bank or trust company fails to engage in the activity within 18 months from the date of the approval, the application shall be deemed expired and a new application, application fee and approval is required. The provisions of this subsection do not apply to applications approved under K.S.A. 9-1601, and amendments thereto.
(c) Any newly organized bank or trust company that did not begin business within 120 days after a certificate of authority has been issued to such bank or trust company by the commissioner shall not engage in the banking business or the business of a trust company without again obtaining a certificate of authority from the commissioner.
(d) The commissioner may extend the deadline under subsection (b) or (c):
(1) Indefinitely, if approval from another state or federal regulator is necessary for the bank or trust company to engage in the activity; or
(2) up to 180 days for good cause.
(e) The state banking board may designate the commissioner to determine the completeness of any application requiring state banking board approval or deem as expired any state banking board approved application.
History: L. 1947, ch. 102, § 9; L. 2015, ch. 38, § 27; L. 2024, ch. 64, § 60; July 1.
§ 9-807 Repealed
History: L. 1947, ch. 102, § 10; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-808 Stockholder vote for conversion to state bank or state trust company; application to commissioner; investigation; capital and name; stock for stock or property; powers continued; assets transferred; same entity; divesture of unauthorized assets and liabilities
(a) Any national bank, federal savings association or federal savings bank organized under the laws of the United States and located in this state may become a state bank or state trust company upon the affirmative vote of not less than 2/3 of the institution's outstanding voting stock or voting interests of members. Any national bank, federal savings association or federal savings bank desiring to become a state bank or state trust company shall apply to the commissioner for permission to convert to a state bank or state trust company and:
(1) Shall submit a transcript of the minutes of the meeting of the institution's stockholders or voting interests of members showing approval of the proposed conversion;
(2) the name selected for the bank shall not be the name of any other state bank:
(A) Doing business in the same city or town; or
(B) within a 15-mile radius of the location of the converted institution;
(3) the name selected for the trust company shall be different or substantially dissimilar from any other trust company doing business in the state. The name shall be accepted or rejected by the commissioner, although any state bank or state trust company may request exemption from the commissioner from this paragraph; and
(4) provide any other information required in the application form prescribed by the commissioner.
(b) A federal savings association or federal savings bank operating in a mutual form and seeking to become a stock bank must also convert to a stock form prior to converting to a state bank and shall submit appropriate documentation to the commissioner to show that the appropriate federal regulator has approved such mutual to stock conversion.
(c) Upon receipt of each of the items required by this section the commissioner shall make or cause to be made such investigation as the commissioner deems necessary to determine whether:
(1) All state and federal requirements for a conversion have been satisfied;
(2) the conversion or the financial condition of the bank or trust company will not adversely affect the interests of the depositors;
(3) the resulting state bank or state trust company will have an adequate capital structure in accordance with K.S.A.
9-901a et seq., and amendments thereto; and
(4) the competence, experience or integrity of the proposed management personnel indicates that approving the conversion would be in the interest of the depositors of the bank or trust company and in the interest of the public.
(d) If the commissioner determines each of the matters in subsection (c) favorably, the conversion shall be approved, and the commissioner shall issue a certificate of authority. Upon issuance of a certificate of authority, the articles of incorporation, duly executed as required by the Kansas corporate code, shall be filed with the Kansas secretary of state's office.
(e) In any conversion authorized by this section, the resulting state bank or state trust company by operation of law shall continue all trust functions being exercised by the national bank, federal savings association or federal savings bank and shall be substituted for the national bank, federal savings association or federal savings bank and shall have the right to exercise trust or fiduciary powers created by any instrument designating the national bank, federal savings association or federal savings bank, even though such instruments are not yet effective.
(f) In any conversion authorized by this section, the resulting state bank or state trust company shall succeed by operation of law without any conveyance or transfer by the act of the national bank, federal savings association or federal savings bank to all the actual or potential assets, real property, tangible personal property, intangible personal property, rights, franchises and interests, including those in a fiduciary capacity of the national bank, federal savings association or federal savings bank and shall be subject to all of the liabilities of the national bank, federal savings association or federal savings bank.
(g) In any conversion authorized by this section the corporate existence of the national bank, federal savings association or federal savings bank shall be continued in the resulting state bank or state trust company, and the resulting state bank or state trust company shall be deemed to be the identical corporate entity as the national bank, federal savings association or federal savings bank.
(h) Within a reasonable time after the effective date of the conversion, the resulting state bank or state trust company shall divest all assets and liabilities that do not conform to state banking laws and rules and regulations. The length of this transition period shall be determined by the commissioner.
History: L. 1947, ch. 102, § 11; L. 1994, ch. 192, § 2; L. 2000, ch. 106, § 2; L. 2015, ch. 38, § 28; L. 2016, ch. 54, § 8; L. 2018, ch. 75, § 8; L. 2019, ch. 25, § 2; L. 2021, ch. 78, § 2; July 1.
§ 9-809 Stockholder vote for conversion to national bank; copy of application to commissioner
(a) Any state bank or state trust company may convert to a national bank, federal savings and loan association or federal savings bank upon the affirmative vote of not less than
2/3
of the bank's outstanding voting stock or members.
(b) The state bank or state trust company shall provide a copy of the application submitted to the comptroller of currency to the commissioner within 10 days after the date the state bank or state trust company applies for approval to convert to a national banking association, federal savings and loan association or federal savings bank from the office of the comptroller of the currency.
(c) The state bank or state trust company shall provide to the commissioner written notice of approval by the comptroller of currency to convert to a national bank, federal savings and loan association or federal savings bank within 10 days of receiving the approval.
(d) Within 15 days following the issuance of a charter certificate to the bank or trust company by the comptroller, the state bank or state trust company shall surrender its state certificate of authority or charter and shall certify in writing that notice of the conversion has been given to the Kansas secretary of state's office.
History: L. 1947, ch. 102, § 12; L. 1995, ch. 19, § 1; L. 2015, ch. 38, § 29; L. 2016, ch. 54, § 9; L. 2018, ch. 75, § 9; L. 2021, ch. 78, § 3; July 1.
§ 9-810 Repealed
History: L. 1947, ch. 102, § 13; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-811 Prohibition against nonbank banks; exceptions
No financial institution with deposits insured by the federal deposit insurance corporation shall conduct business in this state unless such institution: (a) Has the legal right to accept deposits that the depositor has the legal right to withdraw on demand and to engage in the business of making commercial loans; or (b) is a national bank which engages only in credit card operations, does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others, does not accept any savings or time deposits of less than $100,000, maintains only one office that accepts deposits and does not engage in the business of making commercial loans.
History: L. 1985, ch. 84, § 1; L. 1991, ch. 46, § 2; L. 2015, ch. 38, § 30; L. 2016, ch. 54, § 10; July 1.
§ 9-812 Bank change of name; approval required
(a) No bank or trust company shall change its name until such name change has been submitted to and approved by the commissioner.
(b) The commissioner shall not approve the name selected for the bank if it is the name of any other bank: (1) Doing business in the same city or town; or
(2) within a 15-mile radius of any bank or branch bank.
(c) The commissioner shall not approve the name selected for the trust company if it is the same or substantially similar name of any other trust company doing business in the state of Kansas.
(d) Any bank or trust company may request exemption from the commissioner from subsection (b) or (c).
(e) Upon approval of such name change, the bank or trust company must notify and make the necessary filings as may be required by the Kansas secretary of state's office.
(f) Any bank or trust company authorized to do business pursuant to the state banking code may use a name other than the name approved by the commissioner, provided:
(1) The bank or trust company must notify the commissioner, and the commissioner must approve, any use of a name other than the name approved by the commissioner;
(2) the bank's or trust company's actual name is prominently displayed adjacent to any other name displayed; and
(3) the bank or trust company continues to use the name approved by the commissioner in all legally enforceable documents and memoranda.
History: L. 1986, ch. 53, § 1; L. 2001, ch. 87, § 1; L. 2015, ch. 38, § 31; L. 2016, ch. 54, § 11; July 1.
§ 9-813 Repealed
History: L. 1991, ch. 47, § 3; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-814 Change of place of business; application and approval process
(a) No bank or trust company organized under the laws of this state shall change the bank's or trust company's place of business, from one city or town to another or from one location to another within the same city or town, without prior approval. Any such bank or trust company desiring to change the bank's or trust company's place of business shall file written application with the office of the state bank commissioner in such form and containing such information the commissioner shall require. Notice of the proposed relocation shall be published in a newspaper of general circulation in the county where the main bank or trust company is currently located and in the county to which the bank or trust company proposes to relocate. The notice shall be in the form prescribed by the commissioner and at a minimum shall contain the name and address of the applicant bank or trust company, the address of the proposed new location and a solicitation for written comments. The notice shall be published on the same day for two consecutive weeks and provide for a comment period of not less than 10 calendar days after the date of the second publication. The applicant shall provide proof of publication to the commissioner.
(b) The commissioner shall examine and investigate the application. The commissioner shall approve the application if it is found that:
(1) There is a reasonable probability of usefulness and success of the bank or trust company in the proposed location;
(2) the applicant bank's or trust company's financial history and condition is sound; and
(3) the name selected for the bank is different from that of any other bank:
(A) Doing business in the same city or town; and
(B) within a 15-mile radius of the proposed location; and
(4) the name selected for a trust company is different or substantially dissimilar from any other trust company doing business in this state.
(c) Any bank or trust company may request an exemption from the commissioner from the provisions of subsection (b)(3) or (b)(4).
(d) If the commissioner denies an application, the applicant shall have the right to a hearing before the state banking board to be conducted in accordance with the Kansas administrative procedure act. Any action of the state banking board pursuant to this section is subject to review in accordance with the Kansas judicial review act.
(e) Upon approval of such place of business change, the bank or trust company must notify and make the necessary filings as may be required by the secretary of state's office.
History: L. 2015, ch. 38, § 9; L. 2016, ch. 54, § 12; July 1.
§ 9-815 Expenses of examination or investigation; payment; disposition of moneys received
(a) Any applicant making application under article 8 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, shall pay to the commissioner a fee in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the state banking board, commissioner or other designees in the examination and investigation of the application.
(b) The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A.
75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner, or designee, in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
(c) Any members of the state banking board who make such an examination or investigation shall be paid the sum of $35 per diem for the time the members actually are engaged in performing duties as members of the state banking board and shall be compensated from such funds all the actual and necessary expenses incurred in the performance of the members' duties.
History: L. 2015, ch. 38, § 10; L. 2016, ch. 54, § 13; July 1.
§ 9-816 Bankers' bank; application for organization
(a) As used in this section, "bankers' bank" means a state bank which is owned exclusively, except to the extent directors' qualifying shares are required by law, by other state banks, federally chartered banks or a one-bank holding company and is organized to engage exclusively in providing services for other state banks or federally chartered banks and the banks' officers, directors and employees.
(b) The state banking board may approve the application for the organization of a state bankers' bank under the provisions of K.S.A.
9-801 et seq., and amendments thereto.
History: L. 2015, ch. 38, § 11; L. 2016, ch. 54, § 14; July 1.
§ 9-817 Mutual banks; deposits and related powers
(a) Subject to the terms of its articles of incorporation and bylaws, and rules and regulations of the commissioner, a mutual bank may:
(1) Raise funds through deposit, share or other accounts, including demand deposit accounts, hereafter referred to as "accounts"; and
(2) issue passbooks, certificates or other evidence of accounts.
(b) No mutual bank shall permit any overdraft, including an intra-day overdraft, on behalf of an affiliate, or incur any overdraft in its account at a federal reserve bank or federal home loan bank on behalf of an affiliate.
(c) A mutual bank may require no less than a 14-day notice prior to payment of savings accounts, if the articles of incorporation or bylaws of the bank or the rules and regulations of the commissioner so provide.
(d) If a mutual bank does not pay all withdrawals in full, subject to the right of the bank, where applicable, to require notice, the payment of withdrawals from accounts shall be subject to the provisions prescribed by the bank's articles of incorporation or bylaws or the rules and regulations of the commissioner. Except as authorized in writing by the commissioner, any mutual bank that fails to make full payment of any withdrawal when due shall be deemed to be in an unsafe or unsound condition.
(e) A depositor of a mutual bank shall be a voting member and shall have such ownership interest in the bank as may be provided in the articles of incorporation and bylaws of the bank.
(f) The articles of incorporation and the bylaws of a mutual bank may provide that all borrowers from the bank are members and, if so, shall provide for their rights and privileges.
(g) All savings accounts and demand accounts shall have the same priority upon liquidation.
(h) This section shall be a part of and supplemental to the state banking code.
History: L. 2018, ch. 75, § 1; July 1.
Article 9 Banking Code; Capital Stock and Structure
§ 9-901 Repealed
History: L. 1947, ch. 102, § 14; L. 1961, ch. 62, § 1; Repealed, L. 1975, ch. 44, § 43; July 1.
§ 9-901a Capital requirements
(a) For purposes of this section:
(1) "Capital" means: (A) For a stock bank or trust company, the total of the aggregate par value of a bank's or trust company's outstanding shares of capital stock, its surplus and its undivided profits; and (B) for a mutual bank, the total of the funds pledged by its members and its undivided profits;
(2) "equity capital" means the total of common stock, preferred stock, surplus and undivided profits less intangibles; and
(3) "total assets" means the total of all tangible bank assets as reported on the daily balance sheet of the bank.
(b) (1) For stock banks organized on or after July 1, 2015, the minimum capital of a stock bank at the time of organization shall be the greater of $3,000,000 or an amount equal to 8% of the proposed bank's estimated deposits five years after its organization. The capital shall be divided with 60% of the amount as the aggregate par value of outstanding shares of capital stock, 30% as surplus and 10% as undivided profits.
(2) For trust companies organized on or after July 1, 2015, the minimum capital shall at all times be $500,000. The capital shall be divided with 60% of the amount as the aggregate par value of outstanding shares of capital stock, 30% as surplus and 10% as undivided profits.
(3) For mutual banks organized on or after July 1, 2018, the founding members of the bank must pledge funds at the time of organization the greater of $3,000,000 or an amount equal to 8% of the proposed bank's estimated deposits five years after its organization.
(4) The state banking board may require that a bank or trust company have capital in excess of the amounts specified in this subsection if the state banking board determines that excess capital is necessary based on the character and qualifications of the proposed board of directors and the nature of the business of the bank or trust company.
(c) The minimum capital of a bank or trust company organized pursuant to K.S.A. 9-801(j), and amendments thereto, shall be determined by the commissioner, provided that the successor bank has obtained deposit insurance from the federal deposit insurance corporation or any successor.
(d) All banks shall maintain a capital ratio of at least 5% of equity capital to total assets at all times.
(e) Any bank that relocates its main office from one city to another pursuant to K.S.A. 9-814, and amendments thereto, shall have equity capital equal to the greater of $3,000,000 or 8% of its estimated deposits five years after the relocation.
(1) The commissioner, in the commissioner's discretion, may approve a relocation with a smaller equity capital amount if the bank can show that the circumstances surrounding the relocation warrant consideration of a lesser amount and the safety of depositors would not be impacted by requiring a lesser amount.
(2) If the main office relocation is part of an interchange of the main office with a branch location that has been in operation for at least one year, this equity capital requirement shall not apply.
(f) Any national bank, federal savings association or federal savings bank which converts its charter to a state bank pursuant to K.S.A. 9-808, and amendments thereto, shall have a minimum capital ratio of 5% of equity capital to total assets at the time of its conversion. The capital division requirements of subsection (b) shall not apply.
(g) The commissioner may require that a bank or trust company have capital in excess of the amounts specified in subsections (b) through (d) if the commissioner determines that excess capital is necessary based on the character and qualifications of the proposed board of directors and nature of the business of the bank or trust company.
(h) Any bank that fails to meet the minimum capital ratio of 5% of equity capital to total assets required by this section shall notify the commissioner within three business days. Upon notice, the commissioner may require the bank to submit a written plan for restoring capital approved by the commissioner.
History: L. 1975, ch. 44, § 7; L. 1976, ch. 55, § 1; L. 1986, ch. 55, § 2; L. 1987, ch. 54, § 2; L. 1989, ch. 48, § 15; L. 2015, ch. 38, § 32; L. 2016, ch. 54, § 15; L. 2018, ch. 75, § 10; July 1.
§ 9-901b Expired
History: L. 1986, ch. 54, § 1; L. 1988, ch. 58, § 1; Expired, January 1, 1995.
§ 9-902 Par value of stock
(a) The common and preferred stock of any stock bank or trust company hereafter created shall be divided into shares of $1 each, or any whole number multiple thereof. All subscriptions to such stock shall be paid in cash and any bank or trust company may change the par value of its shares to conform with this section.
(b) Any stock bank or trust company may reduce the number of shares of common stock and replace the shares of common stock with a like amount of shares of preferred stock, as long as the total dollar amount of capital stock is not changed. In lieu of reducing the number of shares of common stock, the stock bank may reduce the par value of the common stock and issue preferred stock with a par value that is equal to the amount of the reduction in the par value of the common stock. When the preferred stock is retired, the par value of the common shares shall be restored.
(c) The requirements for a capital reduction pursuant to K.S.A. 9-904, and amendments thereto, and the requirements for new issue of preferred stock pursuant to K.S.A. 9-908, and amendments thereto, shall not apply to the circumstance described in this section.
History: L. 1947, ch. 102, § 15; L. 1965, ch. 74, § 1; L. 1969, ch. 60, § 1; L. 1989, ch. 48, § 16; L. 2015, ch. 38, § 33; L. 2016, ch. 54, § 16; L. 2018, ch. 75, § 11; July 1.
§ 9-903 Transfer of stock; report to commissioner
(a) The shares of stock of any stock bank or trust company shall be deemed personal property and shall be transferred on the books of the bank or trust company in such manner as the bylaws thereof may direct.
(b) No transfer of stock shall be valid against the issuing stock bank or trust company so long as the registered owner thereof shall be liable as principal debtor, surety or otherwise to the stock bank or trust company on a matured, charged off or forgiven obligation. No dividend, interest or profit shall be paid on such stock so long as the registered owner thereof is indebted to the bank or trust company on a matured, charged off or forgiven obligation. All such dividends or profits shall be retained by the stock bank or trust company and applied to the discharge of any such obligations.
(c) No stock shall be transferred on the books of any bank or trust company when the bank or trust company is in a failing condition, or when its capital stock is impaired, except upon approval of the commissioner.
(d) The president or other chief executive officer of a bank or trust company shall report to the commissioner within 10 days of the transfer of shares of stock on the books of the bank or trust company if there is a transfer of:
(1) Shares of stock that results in the direct or indirect ownership by a stockholder or an affiliated group of stockholders of 10% or more of the outstanding stock of the bank or trust company; or
(2) additional shares of stock to stockholders or an affiliated group of stockholders who own 10% or more of the outstanding stock of a bank or trust company.
(e) If there is a transfer of shares of stock that results in the direct or indirect ownership by a stockholder or an affiliate group of stockholders of 25% or more of the outstanding stock of the bank or trust company, a change of control shall be filed pursuant to K.S.A. 9-1719 et seq., and amendments thereto.
History: L. 1947, ch. 102, § 16; L. 1975, ch. 44, § 8; L. 1988, ch. 59, § 1; L. 1989, ch. 48, § 17; L. 1996, ch. 175, § 11; L. 2015, ch. 38, § 34; L. 2016, ch. 54, § 17; L. 2018, ch. 75, § 12; July 1.
§ 9-904 Reduction of capital stock, when
(a) With prior approval of the commissioner, a stock bank or trust company may reduce the amount of its capital stock account. No such reduction shall be approved unless the commissioner finds that:
(1) The proposed reduction is necessary to provide greater operational flexibility to an adequately capitalized, well-managed institution;
(2) the proposed reduction does not result in or is not in furtherance of a reduction in the institution's capital to an amount below the amount required by K.S.A. 9-901*, and amendments thereto;
(3) the proposed reduction is not intended to delay, prevent or be in lieu of capital stock impairment or a stockholder's assessment pursuant to K.S.A. 9-906, and amendments thereto;
(4) the proposed reduction poses no significant risk to the financial stability, safety or soundness of the institution;
(5) the bank's or trust company's surplus account will be increased in an amount equal to the amount of the proposed reduction in the capital stock account, unless a waiver is granted by the commissioner; and
(6) a resolution approving the reduction has been adopted by the stockholders representing 2/3 of the voting stock of the bank or trust company.
(b) Upon completion of the reduction, the stock bank or trust company shall file with the commissioner a list of its stockholders and the amount of stock held by each.
(c) Whenever the capital stock of any stock bank or trust company shall be reduced as herein provided, every stockholder, owner or holder of any stock certificate shall surrender the same for cancellation and shall be entitled to receive a new certificate for such person's proportion of the new stock. No dividends shall be paid to any such stockholder until the old certificate is surrendered.
History: L. 1947, ch. 102, § 17; L. 1989, ch. 48, § 18; L. 1996, ch. 175, § 12; L. 2001, ch. 87, § 2; L. 2015, ch. 38, § 35; L. 2016, ch. 54, § 18; L. 2018, ch. 75, § 13; July 1.
§ 9-905 Increase of capital stock
The capital stock of any stock bank or trust company may be increased. The president and cashier shall forward a verified statement to the commissioner showing the amount of the increase, paid in full, the names and addresses of the subscribers and the amount subscribed by each.
History: L. 1947, ch. 102, § 18; L. 1989, ch. 48, § 19; L. 2015, ch. 38, § 36; L. 2018, ch. 75, § 14; July 1.
§ 9-906 Restoration of impaired capital
(a) Whenever it shall appear that the capital stock of any stock bank or trust company is impaired, the commissioner shall notify the stock bank or trust company to restore the capital stock within 90 days of receipt of such notice.
(b) For purposes of this section, "impairment" means that charges or losses to the bank or trust company's capital accounts have been sufficient to eliminate all of the bank or trust company's allowance for loan and lease loss, undivided profits, surplus fund and any other capital reserves and has brought the book amount of the capital stock below the par value of the capital stock.
(c) Within 15 days of receipt of the impairment notice from the commissioner, the board of directors of the bank or trust company shall levy an assessment on the common stockholders sufficient to restore the capital stock.
(d) A bank or trust company may reduce its capital stock to the extent of the impairment, if such reduction is conducted pursuant to the requirements of K.S.A. 9-904, and amendments thereto.
History: L. 1947, ch. 102, § 19; L. 1987, ch. 54, § 3; L. 2015, ch. 38, § 37; L. 2016, ch. 54, § 19; L. 2018, ch. 75, § 15; July 1.
§ 9-907 Delinquent stockholders; public or private sale of stock
(a) Whenever any stockholder of a stock bank or trust company or an assignee of such stockholder, fails to pay any assessment as required by K.S.A. 9-906, and amendments thereto, the directors of the bank or trust company may sell the stock of such delinquent stockholder, or so much of the stock as necessary, to satisfy the assessment and any related incidental expenses within 120 days of the bank or trust company's receipt of impairment notice.
(b) The sale of stock of a delinquent stockholder may be either public or private. The bank or trust company may sell the stock to any person paying the highest price, however, the price shall not be less than the amount due upon the stock, including any incidental expenses. If the stock is sold at private sale and the price offered by any non-stockholder does not exceed the highest bid of any stockholder, then such stock shall be sold to the stockholder. If the stock is sold at a public sale, then notice of the public sale shall be published on the same day for two consecutive weeks, in a newspaper of general circulation in the city or county where the bank or trust company is located.
(c) Any excess moneys realized from the sale of the stock shall be paid to the delinquent stockholder, unless the stockholder is indebted to the bank or trust company. If the stockholder has debt, then the excess may be retained by the bank or trust company as an offset against the debt.
(d) If no purchaser can be found for the stock at the public or private sale, the stock shall be forfeited to the bank or trust company to be disposed of as the board of directors shall determine within six months from the date of the public or private sale. If the stock cannot be disposed of within six months, the bank or trust company may request permission from the commissioner for additional time to dispose of the stock.
History: L. 1947, ch. 102, § 20; L. 1987, ch. 54, § 4; L. 2015, ch. 38, § 38; L. 2016, ch. 54, § 20; L. 2018, ch. 75, § 16; July 1.
§ 9-908 Preferred stock
(a) Upon the affirmative vote of 2/3 of the voting shares of the common stock of a stock bank or trust company, and with the prior approval of the commissioner, a stock bank or trust company may issue preferred stock of one or more classes. The stockholders shall have a meeting to vote on the issuance of preferred stock. Notice of this meeting shall be given to all stockholders at least five days in advance of the date of the meeting by registered or certified mail, or electronically pursuant to the uniform electronic transactions act, K.S.A. 16-1601 et seq., and amendments thereto.
(b) No preferred stock shall be retired unless the common stock shall be increased in an amount equal to the amount of the preferred stock retired. All preferred stock shall be retired consistent with safety to the depositors.
History: L. 1947, ch. 102, § 21; L. 1975, ch. 44, § 9; L. 1989, ch. 48, § 20; L. 2001, ch. 87, § 3; L. 2015, ch. 38, § 39; L. 2018, ch. 75, § 17; L. 2019, ch. 25, § 3; July 1.
§ 9-909 Preferred stock; rights and immunities of holders
The holders of preferred stock shall not be liable for assessments to restore any impairment in the capital stock of a bank or trust company.
No dividends shall be declared or paid on common stock until all cumulative dividends, if any, on the preferred stock shall have been paid. If the bank or trust company is dissolved or placed in liquidation no payments shall be made to the holders of common stock until the holders of the preferred stock are first paid in full for any sums due upon the preferred stock.
History: L. 1947, ch. 102, § 22; L. 1975, ch. 44, § 10; L. 1989, ch. 48, § 21; L. 1993, ch. 14, § 1; L. 2015, ch. 38, § 40; July 1.
§ 9-910 Dividends from capital stock prohibited; how current dividends paid
No dividends shall be paid from the capital stock account of a stock bank or trust company. The current dividends of any stock bank or trust company or of any mutual bank shall be paid from undivided profits after deducting losses. These losses are determined by using generally accepted accounting principles at the time of making the dividend.
History: L. 1947, ch. 102, § 23; L. 1989, ch. 48, § 22; L. 1990, ch. 55, § 1; L. 2015, ch. 38, § 41; L. 2018, ch. 75, § 18; July 1.
§ 9-911 Declarations of dividends
(a) The directors of any stock bank or trust company or of any mutual bank may declare cash dividends only from undivided profits. For a stock bank, before paying this dividend, the directors shall ensure that the surplus fund equals or exceeds the capital stock account. If the surplus fund is less than the capital stock account, the directors shall transfer 25% of the net profits of the bank or trust company, since the last preceding dividend from undivided profits to the surplus fund, except no additional transfers shall be required once the surplus fund equals the capital stock account.
(b) The directors of any bank or trust company may not declare or pay an asset dividend, other than cash dividends allowed pursuant to subsection (a), without prior approval from the commissioner.
History: L. 1947, ch. 102, § 24; L. 1989, ch. 48, § 23; L. 2015, ch. 38, § 42; L. 2018, ch. 75, § 19; July 1.
§ 9-912 Surplus account; stock dividends from reduction
(a) Any losses sustained by a bank or trust company in excess of its undivided profits may be charged to its surplus fund.
(b) Any stock bank or trust company, after receiving approval from the commissioner, may declare a stock dividend from its surplus fund, but no dividend shall reduce the surplus fund to an amount less than 30% of the resulting total capital.
(c) Any bank or trust company may reduce its surplus account with permission of the commissioner.
History: L. 1947, ch. 102, § 25; L. 1975, ch. 44, § 11; L. 1989, ch. 48, § 24; L. 2001, ch. 87, § 4; L. 2015, ch. 38, § 43; L. 2018, ch. 75, § 20; July 1.
Article 10 Banking Code; Reserves
§ 9-1001 Repealed
History: L. 1947, ch. 102, § 26; L. 1973, ch. 43, § 1; L. 1981, ch. 50, § 1; L. 1984, ch. 48, § 3; Repealed, L. 2001, ch. 87, § 16; July 1.
§§ 9-1002 through 9-1004 Repealed
History: L. 1947, ch. 102, §§ 27–29; Repealed, L. 1984, ch. 48, § 16; July 1.
Article 11 Banking Code; Powers
§ 9-1101 General powers
(a) Any bank hereby is authorized to exercise by its board of directors or duly authorized officers or agents, subject to law, the following powers:
(1) To receive and to pay interest on deposits. The commissioner, with approval of the state banking board, may by rules and regulations fix maximum rates of interest to be paid on deposit accounts other than accounts for public moneys;
(2) to buy, sell, discount or negotiate domestic currency, gold, silver, foreign currency, bullion, commercial paper, bills of exchange, notes and bonds. Foreign currency shall not be bought, sold, discounted or negotiated for investment purposes;
(3) to make all types of loans, subject to the loan limitations contained in the state banking code;
(4) (A) to buy and sell:
(i) Bonds, securities or other evidences of indebtedness, including temporary notes, of the United States of America;
(ii) bonds, securities or other evidences of indebtedness, including temporary notes, fully guaranteed, directly or indirectly, by the United States of America; or
(iii) general obligation bonds of any state of the United States of America or any municipality or quasi-municipality thereof.
(B) No bank shall invest in bonds, securities or other evidences of indebtedness in excess of 15% of capital stock paid in and unimpaired and the unimpaired surplus fund of such bank if:
(i) The direct and overlapping indebtedness of such municipality or quasi-municipality is in excess of 10% of its market value, excluding therefrom all valuations on intangibles and homestead exemption valuation; or
(ii) any bond, security, or evidence of indebtedness of any such municipality or quasi-municipality that has been in default in the payment of principal or interest within 10 years prior to the time that any bank acquires any such bonds, security or evidence of indebtedness;
(5) to buy and sell investment securities which are evidences of indebtedness limited to buying and selling without recourse marketable obligations evidencing indebtedness of any state or federal agency, including revenue bonds issued pursuant to K.S.A. 76-6a15, and amendments thereto, or the state armory board in the form of bonds, notes or debentures or both. The total amount of such investment securities of any one obligor or maker held by such bank shall at no time exceed 25% of the capital stock, surplus, undivided profits, 100% of the allowance for loan and lease loss, capital notes and debentures and reserve for contingencies of such bank, except that this limit shall not apply to obligations of the United States government or any agency thereof;
(6) to buy and sell investment securities which are evidences of indebtedness limited to buying and selling without recourse marketable obligations evidencing indebtedness of any person, copartnership, association or corporation. The total amount of such investment securities of any one obligor or maker held by such bank shall at no time exceed 25% of the capital stock surplus, undivided profits, 100% of the allowance for loan and lease loss, capital notes and debentures and reserve for contingencies of such bank;
(7) to subscribe to, buy, hold and sell stock of:
(A) The federal national mortgage association in accordance with the national housing act;
(B) the federal home loan mortgage corporation in accordance with the federal home loan mortgage corporation act;
(C) the federal agricultural mortgage corporation, provided no bank's investment in such corporation shall exceed 5% of the bank's capital stock, surplus and undivided profits; and
(D) a federal home loan bank. Any bank may also become a member of a federal home loan bank;
(8) to subscribe to, buy and own stock in one or more small business investment companies in Kansas as otherwise authorized by federal law, except that in no event shall any bank acquire shares in any small business investment company if, upon the acquisition, the aggregate amount of shares in small business investment companies then held by the bank would exceed 5% of the bank's capital and surplus;
(9) to subscribe to, buy and own stock in any agricultural credit corporation or livestock loan company, or its affiliate, organized pursuant to the provisions of the laws of the United States providing for the information and operation of agricultural credit corporations and livestock loan companies, in an amount not exceeding either the undivided profits or 10% of the capital stock and surplus and undivided profits from such bank, whichever is greater;
(10) to buy, hold and sell any type of investment securities not enumerated in this section with approval of the commissioner and upon such conditions and under such regulations as are prescribed by the state banking board;
(11) to act as escrow agent;
(12) to subscribe to, acquire, hold and dispose of stock of a corporation the purpose of which is to acquire, hold and dispose of loans secured by real estate mortgages, and to acquire, hold and dispose of the debentures and capital notes of such corporation. No bank's investment in such stock, debentures and capital notes shall exceed 2% of its capital stock, surplus and undivided profits;
(13) to purchase and sell securities and stock without recourse solely upon the order, and for the account, of customers;
(14) to subscribe to, acquire, hold and dispose of any class of stock, debentures and capital notes of MABSCO agricultural services, inc. or any similar corporation the purpose of which is to acquire, hold and dispose of agricultural loans originated by Kansas banks. No bank's investment in such stock, debentures and capital notes shall exceed 2% of its capital stock, surplus and undivided profits;
(15) to engage in financial future contracts on United States government and agency securities subject to such rules and regulations as the commissioner may prescribe pursuant to K.S.A. 9-1713, and amendments thereto, to promote safe and sound banking practices;
(16) to subscribe to, buy and own stock in a bankers' bank organized under the laws of the United States, this state or any other state, or a one bank holding company which owns or controls such a bankers' bank, except no bank's investment in such stock shall exceed 10% of its capital stock, surplus and undivided profits;
(17) to buy, hold and sell shares of an open-end investment company in a manner consistent with the parameters outlined by the office of the comptroller of the currency in banking circular 220, as such circular was issued on November 21, 1986;
(18) subject to the prior approval of the commissioner and subject to such rules and regulations as are adopted by the commissioner pursuant to K.S.A. 9-1713, and amendments thereto, to promote safe and sound banking practices, a bank may establish a subsidiary which engages in the following securities activities:
(A) Selling or distributing stocks, bonds, debentures, notes, mutual funds and other securities;
(B) issuing and underwriting municipal bonds;
(C) organizing, sponsoring and operating mutual funds; or
(D) acting as a securities broker-dealer;
(19) to subscribe to, buy and own stock in an insurance company incorporated prior to 1910, under the laws of Kansas, with corporate headquarters in this state, which only provides insurance to financial institutions. The investment in such stock shall not exceed 2% of the bank's capital stock, surplus and undivided profits;
(20) to purchase and hold an interest in life insurance policies and, to the extent applicable, to purchase and hold an annuity in a manner consistent with the parameters outlined in the interagency statement of the purchase and risk management of life insurance, issued by the office of the comptroller of the currency, the board of governors of the federal reserve system, the federal deposit insurance corporation and the office of the thrift supervision on December 7, 2004; and set out in the respective agencies' issuances, including the federal deposit insurance corporation financial institution letter 127-2004, effective December 7, 2004, subject to the following limitations:
(A) The cash surrender value of any life insurance policy or policies underwritten by any one life insurance company shall not at any time exceed 15% of the total of the bank's capital stock, surplus, undivided profits, 100% of the allowance for loan and lease losses, capital notes and debentures and reserve for contingencies, unless the bank has obtained the prior approval of the commissioner;
(B) the cash surrender value of life insurance policies, in the aggregate from all companies, cannot at any time exceed 25% of the total of the bank's capital stock, surplus, undivided profits, 100% of the allowance for loan and lease losses, capital notes and debentures and reserve for contingencies, unless the bank has obtained the prior approval of the state bank commissioner;
(C) the limitations set forth in subparagraphs (A) and (B) shall not apply to any life insurance policy in place prior to July 1, 1993; and
(D) for the purposes of subsections (a)(20)(A) and (a)(20)(B), intangibles, such as goodwill, shall not be included in the calculation of capital;
(21) act as an agent and receive deposits, renew time deposits, close loans, service loans and receive payments on loans and other obligations for any company which is a subsidiary, as defined in K.S.A. 9-519, and amendments thereto, of the bank holding company which owns the bank. Nothing in this subsection shall authorize a bank to conduct activities as an agent which the bank or the subsidiary would be prohibited from conducting as a principal under any applicable federal or state law. Any bank which enters or terminates any agreement pursuant to this subsection shall within 30 days of the effective date of the agreement or termination provide written notification to the commissioner which details all parties involved and services to be performed or terminated;
(22) to make loans to the bank's stockholders or the bank's controlling holding company stockholders on the security of the shares of the bank or the bank's controlling bank holding company, but loans on the security of the shares of the bank may occur only if the bank would have extended credit to such stockholder on exactly the same terms without the bank shares pledged as collateral;
(23) to make investments in and loans to community and economic development entities as defined in K.S.A. 9-701, and amendments thereto, subject to the limitations prescribed by community reinvestment act pub. l. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.;
(24) to participate in a school savings deposit program authorized under K.S.A. 9-1138, and amendments thereto;
(25) with prior approval of the commissioner, to control or hold an interest in a financial subsidiary.
(A) The financial subsidiary may engage in one or more of the following activities:
(i) Lending, exchanging, transferring, investing for others or safeguarding money or securities;
(ii) acting as agent or broker for purposes of insuring, guaranteeing or indemnifying against loss, harm, damage, illness, disability, death or providing annuities as agent or broker subject to the requirements of chapter 40 of the Kansas Statutes Annotated, and amendments thereto;
(iii) issuing or selling instruments representing interests in pools or assets permissible for a bank to hold directly;
(iv) operating a travel agency; and
(v) activities that are financial in nature as determined by the commissioner.
(B) Such activities do not include:
(i) Insuring, guaranteeing or indemnifying against loss, harm, damage, illness, disability, death or providing or issuing annuities the income of which is subject to tax treatment under 26 U.S.C. § 72;
(ii) real estate development or real estate investment, except as otherwise expressly authorized by Kansas law; or
(iii) any activity permitted for financial holding companies under 12 U.S.C. § 1843(k)(4)(H) and (I).
(C) As used in subsection (a)(25), "control" means:
(i) Directly or indirectly owning, controlling or having power to vote 25% or more of any class of the voting shares of a financial subsidiary;
(ii) controlling in any manner the election of a majority of the directors or trustees of the financial subsidiary; or
(iii) otherwise directly or indirectly exercising a controlling influence over the management or policies of the financial subsidiary, as determined by the commissioner;
(26) to maintain and operate a postal substation on banking premises, in accordance with the rules and regulations of the United States postal service. The bank may advertise the services of the substation for the purpose of attracting customers to the bank and receive income therefrom. The bank shall keep the books and records of the substation separate from the records of other banking operations;
(27) with prior approval of the commissioner, to invest in foreign bonds an amount not to exceed 1% of the bank's capital stock and surplus as long as such bonds comply with the form and definition of investment securities;
(28) to act as an agent for any credit life, health and accident insurance, sometimes referred to as credit life and disability insurance, and mortgage life and disability insurance in connection with extensions of credit and only as a source of protection for such extension of credit;
(29) to act as agent for any fire, life or other insurance company authorized to do business in this state at any approved office of the bank which is located in any place the population does not exceed 5,000 inhabitants. Such insurance may be sold to existing and potential customers of the bank regardless of the geographic location of the customers;
(30) to become a stockholder and member of the federal reserve bank of the federal reserve district where such bank is located;
(31) with prior approval of the commissioner, to acquire the stock of, or establish and operate a subsidiary to acquire the stock of, another insured depository institution or the holding company of the insured depository institution provided such acquisition is incidental to a reorganization otherwise authorized by the law of this state and which occurs nearly simultaneously with such acquisition;
(32) with prior approval of the commissioner, to establish and operate a subsidiary for the purpose of owning, holding and managing all or part of the bank's securities portfolio provided the parent bank owns 100% of the stock of the subsidiary and the subsidiary shall not own, hold or manage securities for any party other than the parent bank. The subsidiary shall be subject to:
(A) All banking laws and rules and regulations applicable to the parent bank unless otherwise provided;
(B) consolidation with the parent bank of pertinent book figures for the purpose of applying all applicable statutory limitations including, but not limited to, capital requirements, owning and holding real estate and legal lending limitations;
(C) examination and supervision by the commissioner, the cost and responsibility of which will be attributable to the parent bank; and
(D) any additional terms or conditions required by the commissioner to address any legal or safety and soundness concerns;
(33) with prior approval of the commissioner, to establish or acquire operating subsidiaries for the purpose of engaging in any activity which is part or incidental to the business of banking as long as the parent bank owns at least 50% of the stock of the subsidiary. The subsidiary shall be subject to:
(A) All banking laws and regulations applicable to the parent bank unless otherwise provided;
(B) consolidation with the parent bank of pertinent book figures for the purpose of applying all applicable statutory limitations including, but not limited to, capital requirements, owning and holding real estate and legal lending limitations;
(C) examination and supervision by the commissioner the cost and responsibility of which will be attributable to the parent bank; and
(D) any additional terms or conditions required by the commissioner to address any legal or safety and soundness concerns;
(34) to invest in, without limitation, obligations of or obligations which are insured as to principal and interest by or evidences of indebtedness that are fully collateralized by obligations of the federal home loan banks, the federal national mortgage association, the government national mortgage association, the federal home loan mortgage corporation, the student loan marketing association and the federal farm credit banks;
(35) any bank or trust company may invest in bonds or notes secured by mortgages which in turn are insured or upon which there is a commitment to insure by the federal housing administration, or any successor thereto, in debentures issued by the federal housing administration or any successor, and in obligations of national mortgage associations; and
(36) to buy tax credits for certain historic structure rehabilitation expenditures pursuant to K.S.A. 79-32,211, and amendments thereto. The total amount of such tax credits held by a bank shall at no time exceed 25% of the capital stock, surplus, undivided profits, 100% of the allowance for loan and lease loss, capital notes and debentures and reserve for contingencies of such bank.
(b) Any bank hereby is authorized to exercise by the bank's board of directors or duly authorized officers or agents, subject to approval by the commissioner, any incidental power necessary to carry on the business of banking.
History: L. 1947, ch. 102, § 30; L. 1949, ch. 110, § 1; L. 1955, ch. 64, § 1; L. 1957, ch. 70, § 1; L. 1957, ch. 71, § 1; L. 1959, ch. 58, § 1; L. 1961, ch. 63, § 1; L. 1965, ch. 75, § 1; L. 1967, ch. 69, § 1; L. 1969, ch. 61, § 1; L. 1971, ch. 32, § 1; L. 1973, ch. 44, § 1; L. 1973, ch. 45, § 1; L. 1975, ch. 44, § 12; L. 1982, ch. 50, § 1; L. 1983, ch. 46, § 2; L. 1984, ch. 49, § 1; L. 1984, ch. 48, § 4; L. 1985, ch. 56, § 2; L. 1985, ch. 57, § 1; L. 1986, ch. 332, § 9; L. 1987, ch. 54, § 5; L. 1988, ch. 59, § 2; L. 1988, ch. 60, § 1; L. 1988, ch. 61, § 1; L. 1988, ch. 62, § 1; L. 1991, ch. 47, § 2; L. 1993, ch. 31, § 2; L. 1994, ch. 202, § 1; L. 1995, ch. 19, § 4; L. 1995, ch. 250, § 2; L. 1997, ch. 180, § 10; L. 2001, ch. 87, § 5; L. 2003, ch. 57, § 1; L. 2004, ch. 8, § 1; L. 2010, ch. 29, § 1; L. 2015, ch. 38, § 44; L. 2016, ch. 54, § 21; L. 2017, ch. 52, § 1; L. 2018, ch. 75, § 21; July 1.
§ 9-1101a Issuance of capital notes or debentures, when; limitations
Upon approval of the stockholders owning ⅔ of the voting stock of the bank, the bank may issue convertible or nonconvertible capital notes or debentures in such amounts and under such terms and conditions as shall be approved by the commissioner, except that the principal amount of capital notes or debentures outstanding at any time shall not exceed an amount equal to 100% of the bank's paid-in capital stock plus 50% of the amount of its unimpaired surplus fund. Capital notes or debentures which are by their terms expressly subordinated to the prior payment in full of all deposit liabilities of the bank shall be considered as part of the unimpaired capital funds of the bank for purpose of the computation of the bank's loan limit.
History: L. 1965, ch. 83, § 1; L. 2001, ch. 87, § 6; L. 2015, ch. 38, § 45; July 1.
§ 9-1101b Repealed
History: L. 1969, ch. 61, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1102 Holding of real estate; limitations
(a) Any bank or trust company may own, purchase, lease, hold, encumber or convey real property, including any building or buildings necessary for the bank's or trust company's accommodation in the transaction of its business. Real property shall be disposed of or charged off the bank's or trust company's books not later than seven years after the real property's intended use for bank or trust purposes ends. Before the end of the holding period, a bank or trust company may request authorization from the commissioner to hold the real property for an additional year. No bank or trust company shall be granted more than three requests for additional time to hold any one parcel of real property.
(b) Any bank or trust company may own, purchase, lease, hold, encumber or convey certain personal property necessary for the bank's or trust company's accommodation in the transaction of such bank's or trust company's business.
(c) The insurable tangible property of a bank or trust company shall be insured against loss.
(d) Any bank may own all or part of the stock in a single trust company or safe deposit company organized under the laws of the state of Kansas.
(e) Any bank may own all of the stock in a corporation or limited liability company organized under the laws of the state of Kansas, owning real estate, all or a part of which is occupied or to be occupied by the bank or trust company.
(f) A bank's or trust company's total investment or ownership at all times in any one or more of the following shall not exceed 50% of the total of capital stock, surplus, undivided profits, 100% of the allowance for loan and lease loss, capital notes and debentures and reserve for contingencies. For purposes of this subsection, intangibles, such as goodwill, shall not be included in the calculation of capital. Any such excess shall be removed from the bank's or trust company's books unless approval is granted by the commissioner:
(1) The book value of real estate plus all encumbrances thereon;
(2) the book value of furniture and fixtures;
(3) the book value of stock in a safe deposit company;
(4) the book value of stock in a trust company; or
(5) the book value of stock in a corporation organized under the laws of this state owning real estate occupied by the bank or trust company and advances to such corporation acquired or made after July 1, 1973, except that any real estate not necessary for the accommodation of the bank's or trust company's business shall be disposed of or charged off its books according to subsection (a).
(g) Any bank or trust company may acquire or purchase real estate in satisfaction of any debts due such bank or trust company, and may purchase real estate at judicial sales, subject to the following:
(1) No bank or trust company shall bid at any judicial sale a larger amount than is necessary to protect its debts and costs.
(2) No real estate or interest in oil and gas leasehold acquired in the satisfaction of debts or upon judicial sales shall be carried as a book asset of the bank or trust company for more than 10 years.
(3) At the termination of the 10 years such real estate shall be charged off. The commissioner may grant an extension not to exceed four years, if in the commissioner's judgment, carrying the real estate as an asset for such extended period will be to the advantage of the bank or trust company. Any such extensions issued shall be reviewed by the commissioner on an annual basis.
(h) No bank or trust company may buy and sell real estate as a business.
(i) A bank may hold or sell any personal property coming into ownership of the bank in the collection of debts. All such property, except legal investments, shall be sold within one year of acquisition, provided a commercially reasonable sale can occur. If a commercially reasonable sale cannot occur within one year, the commissioner may authorize a bank to carry such property as a book asset for a longer period. The bank shall not carry such property as a nonbook asset.
(j) The time periods for holding real estate or other property shall begin when:
(1) The bank has received title or deed to the property;
(2) the property is in a redemption period following the bank's purchase at a judicial sale; or
(3) the bank has actual control of the property.
(k) With prior notification to the commissioner, any bank may operate a wholly owned subsidiary corporation or limited liability company which holds and manages property acquired through debt previously contracted. The subsidiary shall be subject to:
(1) All banking laws and rules and regulations applicable to the parent bank unless otherwise provided;
(2) consolidation with the parent bank of pertinent book figures for the purpose of applying all applicable statutory limitations including, but not limited to, capital requirements, owning and holding real estate and legal lending limitations;
(3) examination and supervision by the commissioner, the cost and responsibility of which will be attributable to the parent bank; and
(4) any additional terms or conditions required by the commissioner to address any legal or safety and soundness concerns.
(l) (1) With prior approval of the commissioner, any bank may exchange such bank's participation interest in real estate acquired or purchased in satisfaction of any debts previously contracted for an interest in a corporation or limited liability company which will manage, market and dispose of the real property. Prior to the exchange, the bank's directors must:
(A) Find and document that the exchange is in the best interest of the bank and would improve the ability of the bank to recover, or otherwise limit, the bank's loss on real estate acquired through debts previously contracted;
(B) certify that the bank's loss exposure is limited, as a legal and accounting matter, and that the bank does not have open-ended liability for the obligations of the corporation or limited liability company;
(C) certify that the corporation or limited liability company agrees to be subject to the supervision and examination by the commissioner; and
(D) ensure that the corporation or limited liability company complies with this section and K.A.R. 17-11-17, including obtaining a current appraisal of the real estate.
(2) A bank may not further exchange the bank's interest in the corporation or limited liability company for an interest in any other real or personal property.
History: L. 1947, ch. 102, § 31; L. 1971, ch. 32, § 2; L. 1973, ch. 45, § 2; L. 1975, ch. 44, § 13; L. 1977, ch. 46, § 1; L. 1986, ch. 56, § 1; L. 1987, ch. 54, § 6; L. 1988, ch. 61, § 2; L. 1989, ch. 48, § 25; L. 1990, ch. 56, § 1; L. 1994, ch. 78, § 1; L. 2000, ch. 45, § 1; L. 2015, ch. 38, § 46; L. 2016, ch. 54, § 22; L. 2017, ch. 52, § 2; July 1.
§ 9-1103 Repealed
History: L. 1947, ch. 102, § 32; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1104 Limitation on loans and borrowing; determination of limits; compliance with section; definitions
(a)
Definitions.
As used in this section:
(1) "Borrower" means an individual, sole proprietorship, partnership, joint venture, association, trust, estate, business trust, corporation, limited liability company, not-for-profit corporation, state government of the United States or a United States government unit or agency, instrumentality or political subdivision thereof or any similar entity or organization.
(2) "Capital" means the total of capital stock, surplus, undivided profits, 100% of the allowance for loan and lease loss, capital notes and debentures and reserve for contingencies. Intangibles, such as goodwill, shall not be included in the definition of capital when determining lending limits.
(3) "Loan" means:
(A) A bank's direct or indirect advance of funds to or on behalf of a borrower based on an obligation of the borrower to repay the funds;
(B) a contractual commitment to advance funds;
(C) an overdraft;
(D) loans that have been charged off the bank's books in whole or in part, unless the loan is unenforceable by reason of:
(i) Discharge in bankruptcy;
(ii) expiration of the statute of limitations;
(iii) judicial decision; or
(iv) the bank's forgiveness of the debt;
(E) any credit exposure to a borrower arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction or securities borrowing transaction between a bank and that borrower.
(4) "Derivative transaction" means any transaction that is a contract, agreement, swap, warrant, note or option that is based in whole, or in part, on the value of any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices or other assets.
(b)
General lending limit rule.
Subject to the provisions in subsections (d), (e) and (f), loans to one borrower, including any bank officer or employee, shall not exceed 25% of a bank's capital.
(c)
Calculation of the lending limit.
(1) The bank's lending limit shall be calculated on the date the loan or written commitment is made. The renewal or refinancing of a loan shall not constitute a new lending limit calculation date unless new funds are advanced.
(2) If the bank's lending limit increases subsequent to the origination date, a bank may use the current lending limit to determine compliance when advancing funds. An advance of funds includes the lending of money or the repurchase of any portion of a participation.
(3) If the bank's lending limit decreases subsequent to the origination date, a bank is not prohibited from advancing on a prior commitment that was legal on the date the commitment was made.
(d)
Exemptions.
(1) Overnight federal funds.
(2) That portion of a loan which is continuously secured on a dollar for dollar basis by any of the following will be exempt from any lending limit:
(A) A guaranty, commitment or agreement to take over or to purchase, made by any federal reserve bank or by any department, bureau, board, commission, agency or establishment of the United States of America, including any corporation wholly owned, directly or indirectly by the United States;
(B) a perfected interest in a segregated deposit account in the lending bank. In the case of a deposit which may be withdrawn in whole or in part, the bank shall establish written internal procedures to prevent the release of the deposit;
(C) a bonded warehouse receipt issued to the borrower by some other person;
(D) treasury bills, certificates of indebtedness or bonds or notes of, or fully guaranteed by, the United States of America or instrumentalities or agencies thereof;
(E) general obligation bonds or notes of the state of Kansas or any other state in the United States of America;
(F) general obligation bonds or notes of any Kansas municipality or quasi-municipality; or
(G) a perfected interest in a repurchase agreement of United States government securities with the lending bank.
(e)
Special rules.
(1) The total liability of any borrower may exceed the general 25% limit by up to an additional 10% of the bank's capital. To qualify for this expanded limit:
(A) The bank shall have as collateral a recorded first lien or liens on real estate securing a portion of the borrower's total liability equal to at least the amount by which the total liability exceeds the 25% limit;
(B) the appraised value of the real estate shall equal at least twice the amount by which the borrower's total liability exceeds the 25% limit; and
(C) a portion of the borrower's total liability, equal to at least the amount by which the total liability exceeds the 25% limit, shall amortize within 20 years by regularly scheduled installment payments.
(2) That portion of any loan endorsed or guaranteed by a borrower will not be added to that borrower's liability until the endorsed or guaranteed loan is past due 10 days.
(3) If the total liability of any shareholder owning 25% or more of any class of voting shares, officers or directors will exceed $50,000, prior approval from the bank's board of directors shall be noted in the minutes.
(4) To the extent time deposits are insured by the federal deposit insurance corporation, such deposits purchased by a bank from another financial institution shall not be considered a loan to that financial institution and shall not be subject to the bank's lending limit.
(5) Third-party paper purchased by the bank will not be considered a loan to the seller unless and until the bank has the right under the agreement to require the seller to repurchase the paper.
(f)
Combination rules.
(1)
General rule.
Loans to one borrower will be attributed to another borrower and the borrowers' total liability will be combined:
(A) When proceeds of a loan are to be used for the direct benefit of the other borrower, to the extent of the proceeds so used; or
(B) when a common enterprise is deemed to exist between the borrowers.
(2)
Direct benefit.
The proceeds of a loan to a borrower will be deemed to be used for the direct benefit of another person and will be attributed to the other person when the proceeds, or assets purchased with the proceeds, are transferred to another person, other than in a bona fide arm's length transaction where the proceeds are used to acquire property, goods or services.
(3)
Common enterprise.
A common enterprise will be deemed to exist and loans to separate borrowers will be aggregated:
(A) When the expected source of repayment for each loan or extension of credit is the same for each borrower and neither borrower has another source of income from which the loan, together with the borrower's other obligations, may be fully repaid;
(B) when both of the following circumstances are present:
(i) Loans are made to borrowers that are related directly or indirectly through common control, including where one borrower is directly or indirectly controlled by another borrower. Common control means to own, control or have the power to vote 25% or more of any class of voting securities or voting interests or to control, in any manner, the election of a majority of the directors or to have the power to exercise a controlling influence over the management or policies of another person; and
(ii) substantial financial interdependence exists between or among the borrowers. Substantial financial interdependence is deemed to exist when 50% or more of one borrower's gross receipts or gross expenditures, on an annual basis, are derived from transactions with the other borrower. Gross receipts and expenditures include gross revenues, expenses, intercompany loans, dividends, capital contributions and similar receipts or payments; or
(C) when separate persons borrow from a bank to acquire a business enterprise of which those borrowers will own more than 50% of the voting securities or voting interests, in which case a common enterprise is deemed to exist between the borrowers for purposes of combining the acquisition loan.
(D) An employer will not be treated as a source of repayment for purposes of determining a common enterprise because of wages and salaries paid to an employee.
(4)
Special rules for loans to a corporate group.
(A) Loans by a bank to a borrower and the borrower's subsidiaries shall not, in the aggregate, exceed 50% of the bank's capital. At no time shall loans to any one borrower or to any one subsidiary exceed the general lending limit of 25%, except as allowed by other provisions of this section. For purposes of this paragraph, a corporation or a limited liability company is a subsidiary of a borrower if the borrower owns or beneficially owns directly or indirectly more than 50% of the voting securities or voting interests of the corporation or company.
(B) Loans to a borrower and a borrower's subsidiaries that do not meet the test contained in subsection (f)(4)(A) will not be combined unless either the direct benefit or the common enterprise test is met.
(5)
Special rules for loans to partnerships, joint ventures and associations.
(A) As used in this paragraph, the term "partnership" shall include a partnership, joint venture or association. The term partner shall include a partner in a partnership or a member in a joint venture or association.
(B)
General partner.
Loans to a partnership are considered to be loans to a partner if, by the terms of the partnership agreement, that partner is held generally liable for debts or actions of the partnership.
(C)
Limited partner.
If the liability of a partner is limited by the terms of the partnership agreement, the amount of the partnership debt attributable to the partner is in direct proportion to that partner's limited partnership liability.
(D) Notwithstanding the provisions of subsections (f)(5)(B) and (f)(5)(C), if by the terms of the loan agreement the liability of any partner is different than delineated in the partnership agreement, for the purpose of attributing debt to the partner, the loan agreement shall control.
(E) Loans to a partner are not attributed to the partnership unless either the direct benefit or the common enterprise test is met.
(F) Loans to one partner are not attributed to other partners unless either the direct benefit or common enterprise test is met.
(G) When a loan is made to a partner to purchase an interest in a partnership, both the direct benefit and common enterprise tests are deemed to be met, and the loan is attributed to the partnership.
(6) Notwithstanding the provisions of this subsection, the commissioner may determine, based upon an evaluation of the facts and circumstances of a particular transaction, that a loan to one borrower may be attributed to another borrower.
(g) The commissioner may order a bank to correct any loan not in compliance with this section within 60 days. A violation of this section shall be deemed corrected if that portion of the borrower's liability which created the violation could be legally advanced under current lending limits.
History: L. 1947, ch. 102, § 33; L. 1949, ch. 110, § 2; L. 1951, ch. 120, § 1; L. 1975, ch. 44, § 14; L. 1976, ch. 56, § 1; L. 1982, ch. 51, § 1; L. 1983, ch. 47, § 1; L. 1986, ch. 56, § 2; L. 1989, ch. 49, § 1; L. 1990, ch. 57, § 1; L. 1994, ch. 50, § 1; L. 1995, ch. 34, § 1; L. 1996, ch. 171, § 1; L. 1997, ch. 180, § 11; L. 2012, ch. 94, § 1; L. 2015, ch. 38, § 47; L. 2016, ch. 54, § 23; L. 2017, ch. 52, § 3; July 1.
§ 9-1105 Repealed
History: L. 1947, ch. 102, § 34; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1106 Repealed
History: L. 1947, ch. 102, § 35; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1107 Temporary borrowing by bank; limitation; exceptions
(a) Any bank may borrow an amount not to exceed 100% of the bank's capital stock and surplus for temporary purposes. The commissioner may authorize borrowing in excess of such limitation.
(b) Any bank may borrow without limitation upon legal investment securities and rediscount and endorse in good faith any of the bank's negotiable notes without limitation.
(c) Any bank may borrow without limitation for purposes of investing in bonds issued pursuant to K.S.A. 12-5219 et seq., and amendments thereto.
History: L. 1947, ch. 102, § 36; L. 1975, ch. 44, § 15; L. 1981, ch. 51, § 1; L. 2015, ch. 38, § 48; July 1.
§ 9-1108 Repealed
History: L. 1947, ch. 102, § 37; L. 1996, ch. 175, § 14; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1109 Repealed
History: L. 1947, ch. 102, § 38; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1110 Repealed
History: L. 1947, ch. 102, § 39; L. 1951, ch. 120, § 2; L. 1996, ch. 175, § 15; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1111 Branch banking; remote service units
(a) (1) The general business of every bank shall be transacted at the place of business specified in the bank's certificate of authority and at one or more branch banks established and operated as provided in this section. It shall be unlawful for any bank to establish and operate any branch bank or relocate an existing branch bank except as hereinafter provided. Notwithstanding the provisions of this section, any location where a depository institution, as defined by K.S.A. 9-701, and amendments thereto, receives deposits, renews time deposits, closes loans, services loans or receives payments on loans or other obligations, as agent, for a bank pursuant to K.S.A. 9-1101(a)(25), and amendments thereto, or other applicable state or federal law, or is authorized to open accounts or receive deposits under K.S.A. 9-1101(a)(28), and amendments thereto, shall not be deemed to be a branch bank.
(2) For the purposes of this section, the term "branch bank" means any office, agency or other place of business located within this state, other than the place of business specified in the bank's certificate of authority where deposits are received, checks paid, money lent or trust authority exercised, if approval has been granted by the commissioner pursuant to K.S.A. 9-1601, and amendments thereto.
(b) To establish a new branch bank or relocate an existing branch bank:
(1) A bank incorporated under the laws of this state may establish and operate one or more branch banks or relocate an existing branch bank, anywhere within this state after first applying for and obtaining the commissioner's approval;
(2) the application shall include the nature of the banking business to be conducted at the proposed branch bank, the primary geographical area to be served by the proposed branch bank, the personnel and office facilities to be provided at the proposed branch bank and other information the commissioner may require;
(3) the application shall include the name selected for the proposed branch bank. The name selected for the proposed branch bank shall not be the name of any other bank or branch bank:
(A) Doing business in the same city or town; or
(B) within a 15-mile radius of the proposed location, nor shall the name selected be required to contain the name of the applicant bank. If the name selected for the proposed branch bank does not contain the name of the applicant bank, the branch bank shall provide in the public lobby of such branch bank, a public notice that it is a branch bank of the applicant bank. Any bank may request exemption from the commissioner from the provisions of this paragraph;
(4) the application shall include proof of publication of notice that the applicant bank intends to file or has filed an application to establish a branch bank or relocate an existing branch bank. The notice shall be published in a newspaper of general circulation in the county where the applicant bank proposes to locate the branch bank. The notice shall be in the form prescribed by the commissioner and, at a minimum, shall contain the name and address of the applicant bank, the location of the proposed branch and a solicitation for written comments. The notice shall be published on the same day for two consecutive weeks and provide for a comment period of not less than 10 days after the date of the second publication;
(5) upon receipt of the application, and following expiration of the comment period, the commissioner may hold a hearing in the county where the applicant bank seeks to operate the branch bank. The applicant shall publish notice of the time, date and place of such hearing in a newspaper of general circulation in the county where the applicant bank proposes to locate the branch bank within not less than 10 nor more than 30 days prior to the date of the hearing, and proof of publication shall be filed with the commissioner. At any such hearing, all interested persons shall be allowed to present written and oral evidence to the commissioner, or the commissioner's designee, in support of or in opposition to the branch bank. Upon completion of a transcript of the testimony given at any such hearing, the transcript shall be filed in the office of the commissioner;
(6) if the commissioner determines a public hearing is not warranted, the commissioner shall approve or disapprove the application within 15 days after receipt of a complete application but not prior to the end of the comment period. If a public hearing is held, the commissioner shall approve or disapprove the application within 60 days after consideration of the complete application and the evidence gathered during the commissioner's investigation. The period for consideration of the application may be extended if the commissioner determines that the application presents a significant supervisory concern. The new branch or relocation shall only be granted if the commissioner finds that:
(A) There is a reasonable probability of usefulness and success of the proposed branch bank; and
(B) the applicant bank's financial history and condition is sound;
(7) within 15 days after any final action of the commissioner approving or disapproving an application, the applicant, or any adversely affected or aggrieved person that provided written comments during the specified comment period, may request a hearing with the state banking board. Upon receipt of a timely request, the state banking board shall conduct a hearing in accordance with the provisions of the Kansas administrative procedure act. Any decision of the state banking board is subject to review in accordance with the Kansas judicial review act.
(c) Upon the request of any bank proposing to relocate an existing branch less than one mile from the existing location, the commissioner may exempt such bank from the requirements of this section.
(d) Any branch bank lawfully established and operating on the effective date of this act may continue to be operated by the bank then operating the branch bank and by any successor bank.
(e) Any bank location that has been established and is being maintained by a bank at the time of the bank's merger into or consolidation with another bank or at the time the bank's assets are purchased and the bank's liabilities are assumed by another bank may continue to be operated by the surviving, resulting or purchasing and assuming bank.
(f) Any state bank or national banking association may provide and engage in banking transactions by means of remote service units wherever located. Remote service units shall not be considered to be branch banks. Any banking transaction affected by use of a remote service unit shall be deemed to be transacted at a bank and not at a remote service unit.
(g) As a condition to the operation and use of any remote service unit in this state, a state bank or national banking association, each hereinafter referred to as a bank, that desires to operate or enable its customers to utilize a remote service unit shall agree that such remote service unit will be available for use by customers of any other bank or banks upon the request of such bank or banks to share the use of the remote service unit and the agreement of such bank or banks to share all costs, including a reasonable return on capital expenditures incurred in connection with the remote service unit's development, installation and operation. The owner of the remote service unit, whether a bank or any other person, shall make the remote service unit available for use by other banks and their customers on a nondiscriminatory basis, conditioned upon payment of a reasonable proportion of all costs, including a reasonable return on capital expenditures incurred in connection with the development, installation and operation of the remote service unit. Notwithstanding the foregoing provisions of this subsection, a remote service unit located on the property owned or leased by the bank where the principal place of business of a bank, or branch bank of a bank, is located need not be made available for use by any other bank or banks or customers of any other bank or banks.
(h) For purposes of this section, "remote service unit" means an electronic information processing device, including associated equipment, structures and systems, through or by means of which information relating to financial services rendered to the public is stored and transmitted to a bank and that, for activation and account access, is dependent upon the use of a machine-readable instrument in the possession and control of the holder of an account with a bank or activated by a person upon verifiable personal identification. "Remote service unit" includes online computer terminals that may be equipped with a telephone or televideo device that allows contact with bank personnel and offline automated cash dispensing machines and automated teller machines. Withdrawals by means of offline systems shall not exceed $300 per transaction and shall be restricted to individual, not corporate or commercial, accounts.
(i) Upon providing notice to the commissioner, any state bank may conduct loan production activity at locations other than the place of business specified in the bank's certificate of authority or approved branch banks.
(1) Loan production activity shall consist of the following:
(A) Soliciting, assembling or processing of credit information and loan applications;
(B) approval of loan applications; or
(C) loan closing activities, such as the execution of promissory notes and deeds of trust.
(2) No customer shall be allowed to take actual receipt of the loan funds.
(j) Upon providing notice to the commissioner, any state bank may conduct deposit production activity at locations other than the place of business specified in the bank's certificate of authority or approved branch banks provided there is no acceptance of actual deposits in person or by drop box.
(k) Upon providing notice to the commissioner, any state bank may provide any of the following at a location other than the place of business specified in the bank's certificate of authority without becoming a branch bank:
(1) Operate safe deposit boxes;
(2) sell travelers checks and saving bonds; and
(3) operate check-cashing services if no actual account withdrawal occurs;
(l) any bank or trust company closing a branch bank, loan production office, deposit production office or other location shall provide notice to the commissioner.
History: L. 1947, ch. 102, § 40; L. 1957, ch. 72, § 1; L. 1967, ch. 70, § 1; L. 1973, ch. 46, § 1; L. 1975, ch. 43, § 1; L. 1975, ch. 44, § 16; L. 1978, ch. 45, § 2; L. 1984, ch. 49, § 2; L. 1984, ch. 50, § 1; L. 1984, ch. 48, § 5; L. 1986, ch. 57, § 8; L. 1986, ch. 58, § 1; L. 1987, ch. 53, § 1; L. 1990, ch. 58, § 1; L. 1992, ch. 61, § 1; L. 1994, ch. 51, § 5; L. 1995, ch. 79, § 15; L. 1997, ch. 180, § 12; L. 2001, ch. 87, § 7; L. 2010, ch. 17, § 26; L. 2015, ch. 38, § 49; L. 2016, ch. 54, § 24; L. 2025, ch. 78, § 2; July 1.
§ 9-1111a Repealed
History: L. 1973, ch. 46, § 2; L. 1986, ch. 57, § 9; L. 1987, ch. 53, § 2; Repealed, L. 1990, ch. 58, § 2; February 15.
§ 9-1111b Applications for branch banks; examinations and investigation fee; disposition and use of fees
A bank making application to the commissioner for approval of a branch bank shall pay to the commissioner a fee, in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all amounts received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used only to pay the expenses of the board, commissioner or other designees in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
History: L. 1973, ch. 46, § 3; L. 1975, ch. 44, § 17; L. 1986, ch. 57, § 10; L. 1987, ch. 53, § 3; L. 1992, ch. 62, § 3; L. 2001, ch. 5, § 41; L. 2001, ch. 167, § 1; L. 2015, ch. 38, § 50; July 1.
§ 9-1111c Repealed
History: L. 1973, ch. 46, § 4; L. 1987, ch. 53, § 4; L. 1988, ch. 356, § 37; Repealed, L. 1990, ch. 58, § 2; February 15.
§ 9-1111d Repealed
History: L. 1975, ch. 43, § 2; L. 1987, ch. 55, § 1; L. 1994, ch. 58, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1112 Unlawful transactions
(a) No bank or trust company shall buy, sell or trade tangible property as a business or invest in the stock of another bank or corporation, except as specifically authorized.
(b) Unless prior approval of the commissioner is granted, no bank or trust company shall sell, give or purchase any instrument, contract, security or other asset or asset dividend to or from:
(1) Any employee or to an employee's related interest;
(2) any director or to a director's related interest;
(3) the parent company; or
(4) a subsidiary of the parent company.
This paragraph shall not apply to assignment of loans and related security agreements to or from a subsidiary of the bank's parent company.
(c) No bank shall acquire or make a loan on the bank's own shares of stock, or the stock of the bank's parent company or a subsidiary of the bank's parent company, except as otherwise specifically authorized.
(d) No bank shall give any preference to any depositor either by pledging any of the bank's assets as collateral security or in any other manner, except:
(1) As provided under the provisions of K.S.A.
9-1603, and amendments thereto; and
(2) the deposit of public moneys and funds in the custody of the federal court or any of the court's officers may be secured as elsewhere provided in the state banking code or as required by the federal court.
History: L. 1947, ch. 102, § 41; L. 1975, ch. 44, § 18; L. 1981, ch. 52, § 1; L. 1985, ch. 56, § 3; L. 1988, ch. 61, § 3; L. 1990, ch. 59, § 1; L. 1993, ch. 31, § 3; L. 2001, ch. 36, § 1; L. 2015, ch. 38, § 51; L. 2016, ch. 54, § 25; July 1.
§ 9-1113 Repealed
History: L. 1947, ch. 102, § 42; L. 1981, ch. 53, § 1; L. 1989, ch. 48, § 26; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1114 Board of directors of bank or trust company; membership; meetings; notification to commissioner, when
(a) The business of any bank or trust company shall be managed and controlled by such bank's or trust company's board of directors.
(b) The board shall consist of not fewer than five nor more than 25 members who shall be elected by the stockholders at any regular annual meeting that shall be held on the date specified in the bank's or trust company's bylaws. A majority of the directors shall be residents of this state. Minutes shall be made of each stockholders' meeting of a bank or trust company. The minutes shall show any action taken by the stockholders, including the election of all directors.
(c) If, for any reason, the meeting cannot be held on the date specified in the bylaws, the meeting shall be held on a subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by the shareholders representing 2/3 of the shares.
(d) In all cases, at least 10 days' notice of the date for the annual meeting shall be given by first-class mail to the shareholders.
(e) Any newly created directorship shall be approved and elected by the shareholders in the manner provided in the general corporation code. A special meeting of the shareholders may be convened at any time for such purpose.
(f) Any vacancy in the board of directors may be filled by the board of directors in the manner provided in the general corporation code.
(g) Any director of any bank or trust company who becomes indebted to such bank or trust company on any judgment or whose indebtedness is charged off or forgiven shall forfeit such person's position as director.
(h) Within 15 days after the annual meeting, the president or cashier of every bank and every trust company shall submit to the commissioner a certified list of stockholders and the number of shares owned by each. This list of stockholders shall be kept and maintained in the bank's or trust company's main office and shall be subject to inspection by all stockholders during the business hours of the bank or trust company. The commissioner may require the list to be filed using an electronic means.
(i) Each director shall take and subscribe an oath to administer the affairs of such bank or trust company diligently and honestly and to not knowingly or willfully permit any of the laws relating to banks or trust companies to be violated. A copy of each oath shall be retained by the bank or trust company in the bank's or trust company's records for review by the commissioner's staff during the next examination. Each bank and trust company shall file an oath with the commissioner within 15 days of the election of any officer or director. The commissioner may require the oath to be filed using an electronic means.
(j) Each bank and trust company shall notify the commissioner of any newly appointed chief executive officer, president or directors prior to the commencement of any such individual's duties, including in such bank's or trust company's report a statement of the past and current business and professional affiliations of the new chief executive officer, president or directors. Each bank and trust company shall notify the commissioner of any chief executive officer, president or director that is voluntarily or involuntarily relieved from the position duties within five business days.
History: L. 1947, ch. 102, § 43; L. 1957, ch. 73, § 1; L. 1959, ch. 59, § 1; L. 1975, ch. 44, § 19; L. 1976, ch. 57, § 1; L. 1983, ch. 46, § 3; L. 1989, ch. 48, § 27; L. 1997, ch. 59, § 1; L. 2000, ch. 106, § 4; L. 2002, ch. 7, § 1; L. 2015, ch. 38, § 52; L. 2016, ch. 54, § 26; L. 2017, ch. 52, § 4; L. 2025, ch. 78, § 3; July 1.
§ 9-1115 Officers of bank or trust company; election; term; bond; forfeiture of office
(a) The board of directors may elect a chairperson and shall elect a president from its members and shall elect one or more vice-presidents, a secretary and a cashier. The office of president and cashier shall not be filled by the same person. Such officers shall hold their offices for a term of not to exceed one year and until their successors are elected and qualified.
(b) The board of directors shall require all officers and employees having the care or handling of the funds of the bank or trust company to give a good and sufficient bond to be executed by an approved corporate surety authorized to do business in this state. The amount and form of the bond shall be approved by the board of directors of the bank or trust company. The costs of such bonds shall be paid by the bank or trust company. Proof of current bond coverage shall be provided to the commissioner.
(c) Any officer of any bank or trust company who shall become indebted to such bank or trust company on any judgment or whose indebtedness is charged off or forgiven shall forfeit the office and the board of directors shall fill the vacancy.
History: L. 1947, ch. 102, § 44; L. 1961, ch. 64, § 1; L. 1973, ch. 47, § 1; L. 1989, ch. 48, § 28; L. 1992, ch. 33, § 1; L. 1996, ch. 31, § 1; July 1.
§ 9-1116 Meetings of board; examination of records, funds and securities; minutes
(a) The board of directors shall hold at least four regular meetings each year, at least one of which shall be held during each calendar quarter. Minutes shall be made of each directors' meeting of a bank or trust company and shall show any action taken by the directors.
(b) In addition to other actions the board may take, the board shall take the following actions and note the same in the minutes:
(1) Election of all officers, showing their titles and salaries;
(2) approval of all regular employee compensation;
(3) prior approval of all bonuses to elected officers and employees, if provided;
(4) approval of all loans, including overdrafts. The board may establish a committee with authority to approve loans. The board shall approve a report from the committee summarizing all loans made since the board's last meeting;
(5) review and approval of the directors' examination or audit required under K.S.A. 9-1116, and amendments thereto;
(6) annual approval of all bank policies;
(7) review of all state and federal regulatory examination reports received since the board's last meeting;
(8) annual approval of fidelity bond and bank casualty insurance;
(9) approval of bank income and expenses and securities transactions;
(10) review and ratification of any committee reports; and
(11) approval of dividends and a review that the dividends are in compliance with K.S.A. 9-910, and amendments thereto.
(c) In addition, the board of directors or an auditor selected by the board shall make a thorough examination of the books, records, funds and securities held by the bank or trust company at each of the quarterly meetings and the result of such examination shall be recorded in detail. If the board selects an auditor, the auditor's findings shall be reported directly to the board. In lieu of the required four quarterly examinations, the board of directors may accept one annual audit by a certified public accountant or an independent auditor approved by the commissioner.
History: L. 1947, ch. 102, § 45; L. 1967, ch. 71, § 1; L. 1970, ch. 62, § 1; L. 1975, ch. 44, § 20; L. 1983, ch. 46, § 4; L. 1989, ch. 48, § 29; L. 2015, ch. 38, § 53; July 1.
§ 9-1117 Repealed
History: L. 1947, ch. 102, § 46; L. 1972, ch. 33, § 1; L. 1979, ch. 44, § 1; L. 1982, ch. 50, § 2; L. 1989, ch. 48, § 30; L. 1993, ch. 189, § 1; Repealed, L. 1997, ch. 59, § 4; July 1.
§ 9-1118 Repealed
History: L. 1947, ch. 102, § 47; L. 1972, ch. 34, § 1; L. 1975, ch. 44, § 21; L. 1979, ch. 44, § 2; L. 1982, ch. 50, § 3; L. 1989, ch. 48, § 31; L. 1997, ch. 59, § 2; L. 2006, ch. 89, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1119 Certified checks, drafts or orders
No officer or employee of any bank shall certify any check, draft or order drawn upon the bank unless the maker or drawer of the instrument has moneys or funds equal to the amount of the check, draft or order on deposit with such bank at the time the check, draft or order is certified. Any check, draft or order so certified by any duly authorized officer or employee of any bank shall be shown immediately upon the books of the bank.
History: L. 1947, ch. 102, § 48; L. 1989, ch. 48, § 32; L. 2015, ch. 38, § 54; July 1.
§ 9-1120 Repealed
History: L. 1947, ch. 102, § 49; Repealed, L. 1975, ch. 44, § 43; July 1.
§ 9-1121 Reproduction of records and papers; evidence
Any bank or trust company or savings and loan associations may cause any or all records, files, instruments, documents, or papers of any kind at any time in its custody, possession, or files to be reproduced by a nonerasable optical image reproduction provided that additions, deletions or changes to the original document are not permitted by the technology, or a photostatic, microfilm, microcard, miniature photographic or other photographic process. Any reproduction so made shall have the same force and effect as the original thereof, and shall be admitted in evidence before any court or governmental commission, bureau, agency, or department equally with the original, and without the necessity of proving inability to produce the original thereof.
History: L. 1951, ch. 124, § 1; L. 1995, ch. 20, § 1; July 1.
§ 9-1122 Closing of banks; business hours; emergencies
(a) As used in this section:
(1) "Officers" means the person or persons designated by the board of directors of a bank or trust company to act for the bank or trust company in carrying out the provisions of this act or, in the absence of any such designation or of the officer or officers so designated, the president or any other officer currently in charge of the bank or trust company;
(2) "office" means any place at which a bank transacts business; and
(3) "emergency" means any condition or occurrence which may interfere physically with the conduct of normal business operations at the offices of a bank or trust company or which poses an imminent or existing threat to the safety or security of persons or property, or both. An emergency may arise as a result of and any one or more of the following, but is not limited to, fire, flood, earthquake, hurricane, tornado, wind, rain or snow storm, labor strike by bank or trust company employees, power failure, transportation failure, interruption of communications facilities, shortage of fuel, housing, food, transportation or labor, robbery or attempted robbery, actual or threatened enemy attack, epidemic or other catastrophe, riot, civil commotion and other acts of lawlessness or violence, actual or threatened.
(b) A bank or trust company may remain closed on any one business day of every week or may make a permanent change in the bank's or trust company's hours of business. The bank or trust company shall post the resolution in a conspicuous place at the main office and all branch locations of the bank or trust company at least 15 days in advance of any closing or change in business hours. If the business day designated in any resolution regarding closing is a legal public holiday, the bank or trust company may close on the business day preceding or following the legal public holiday.
(c) The officers of a bank or trust company may close the bank's or trust company's offices on any day or days designated by proclamation of the president of the United States or the governor or legislature of this state, as a day or days of mourning, rejoicing or other special observance and on such other day or days of local or special observance in the reasonable and proper exercise of their discretion the officers feel the bank or trust company should observe. If the bank or trust company is closed pursuant to this subsection, the bank or trust company shall give reasonable notice of the closing by posting a notice in a conspicuous place at the main office and all branch locations of the bank or trust company and through any other means the bank or trust company deems appropriate, including publication in a newspaper of general circulation in the community, if time allows.
(d) Whenever the officers of a bank or trust company are of the opinion that an emergency exists, or is impending, which affects, or may affect, a bank's or trust company's offices, the officers shall have the authority, in the reasonable and proper exercise of the officers' discretion, to determine not to open such offices on any business or banking day or, if having opened, to close such offices during the continuation of such emergency. The officers shall notify the commissioner of the emergency, the closing, the duration and the subsequent reopening within 48 hours of any such event, if practical. In no case shall such offices remain closed for more than 48 consecutive hours, excluding other legal holidays, without requesting and obtaining the approval of the commissioner.
(e) Every day on which any bank or trust company shall remain closed pursuant to this section shall be deemed a holiday for all of the purposes of chapter 84 of the Kansas Statutes Annotated, and amendments thereto, and with respect to any bank or trust company business of any character. No bank or trust company shall be required to permit access to the bank's or trust company's safe, deposit vault or vaults on any such day. Where the terms of a contract requires the payment of money or the performance of a condition on any such day by, through, with or at any bank or trust company, then the payment may be made or condition performed on the next business day with the same force and effect as if made or performed in accordance with the terms of the contract. No liability or loss of rights of any kind shall result from the delay.
(f) The posting of the notice provided for in this section shall be notice to everyone of the closing or change in hours of the bank or trust company, and thereafter no liability shall be incurred by the bank or trust company by reason of closing or changing the bank hours pursuant to this section.
(g) The provisions of this section shall be construed and applied as being in addition to, and not in substitution for, or limitation of, any other law of this state or of the United States, authorizing the closing of a bank or trust company or excusing the delay by a bank or trust company in the performance of the bank's or trust company's duties and obligations because of emergencies or conditions beyond the bank's or trust company's control or otherwise.
History: L. 1951, ch. 125, § 1; L. 1971, ch. 33, § 1; L. 1996, ch. 175, § 13; L. 2015, ch. 38, § 55; L. 2016, ch. 54, § 27; July 1.
§ 9-1123 Bank service corporations; definitions
For the purposes of K.S.A. 9-1124 through 9-1127c, and amendments thereto:
(a) The term "bank service company" means a corporation or limited liability company organized to perform services authorized by this act, all of the capital stock of which is owned by one or more state or national banks at least one of which is a state bank subject to examination by the bank commissioner.
(b) The term "invest" includes any advance of funds to a bank service company, whether by the purchase of stock, the making of a loan or otherwise, except a payment for rent earned, goods sold and delivered or services rendered prior to the making of such payment.
(c) The term "depository institution" means a state or national bank, savings and loan association, savings bank or credit union.
History: L. 1963, ch. 64, § 1; L. 1984, ch. 48, § 10; L. 1989, ch. 48, § 33; L. 2015, ch. 38, § 56; July 1.
§ 9-1124 Same; investment by banks; limitations
No limitation or prohibition otherwise imposed by any provision of state law exclusively relating to banks shall prevent any state bank or banks from investing not more than 10% of the paid-in and unimpaired capital and unimpaired surplus in a bank service company. No bank shall invest more than 5% of the bank's total assets in bank service companies.
History: L. 1963, ch. 64, § 2; L. 1984, ch. 48, § 11; L. 2015, ch. 38, § 57; L. 2016, ch. 54, § 28; July 1.
§ 9-1125 Same; unreasonable discrimination in providing services prohibited; exceptions
No bank service company shall unreasonably discriminate in the provision of any services authorized under K.S.A. 9-1124 through 9-1127c, and amendments thereto, to any depository institution that does not own stock in the service company on the basis of the fact that the nonstockholding institution is in competition with an institution that owns stock in the bank service company, except:
(a) It shall not be considered unreasonable discrimination for a bank service company to provide services to a nonstockholding institution only at a price that fully reflects all of the costs of offering those services, including the cost of capital and a reasonable return thereon; and
(b) a bank service company may refuse to provide services to a nonstockholding institution if comparable services are available from another source at competitive overall costs or if the providing of services would be beyond the practical capacity of the service company. In any action or proceeding to enforce the duty imposed by this section, or for damages for the breach thereof, the burden shall be upon the bank service company to show such availability or practical capacity.
History: L. 1963, ch. 64, § 3; L. 1984, ch. 48, § 12; L. 2015, ch. 38, § 58; July 1.
§§ 9-1126, 9-1127 Repealed
History: L. 1963, ch. 64, §§ 4, 5; Repealed, L. 1984, ch. 48, § 16; July 1.
§ 9-1127a Same; services which may be performed for depository institutions
Without regard to the provisions of K.S.A. 9-1127b and 9-1127c, and amendments thereto, a state bank may invest in a bank service company that performs, and a bank service company may perform, the following services only for depository institutions:
(a) Check and deposit sorting and posting, computation and posting of interest and other credits and charges;
(b) preparation and mailing of checks, statements, notices and similar items; or
(c) any other clerical, bookkeeping, accounting, statistical or similar functions performed for a depository institution.
History: L. 1984, ch. 48, § 6; L. 2015, ch. 38, § 59; July 1.
§ 9-1127b Same; services which may be provided by corporations; restrictions
(a) A bank service company may provide to any person any service authorized by this section, except that a bank service company shall not take deposits.
(b) Except with the prior approval of the commissioner, a bank service company shall not perform the services authorized by this section in any state other than this state and all shareholders of a bank service company shall be located in this state.
(c) A bank service company in which a state bank is a shareholder shall perform only those services that such state bank shareholder is authorized to perform under the law of this state and shall perform such services only at locations in this state in which such bank shareholder could be authorized to perform such services.
(d) A bank service company in which a national bank is a shareholder shall perform only those services that such national bank shareholder is authorized to perform under federal law and shall perform such services only at locations in this state at which such national bank shareholder could be authorized to perform such services.
(e) A bank service company that has both national bank and state bank shareholders shall perform only those services that may lawfully be performed by both the bank service company's national bank shareholder or shareholders under federal law and the bank service company's state bank shareholder or shareholders under the law of this state and shall perform such services only at locations in this state at which both the bank service company's state bank and national bank shareholders could be authorized to perform such services.
(f) Notwithstanding the other provisions of this section or any other provision of law, other than the provisions of federal branching law and the branching law of this state regulating the geographic location of banks to the extent that those laws are applicable to an activity authorized by this subsection, a bank service company may perform at any geographic location any service, other than deposit taking, that the board of governors of the federal reserve system has determined, by regulation, to be permissible for a bank holding company under section 4(c)(8) of the federal bank holding company act.
History: L. 1984, ch. 48, § 7; L. 2001, ch. 87, § 9; L. 2015, ch. 38, § 60; July 1.
§ 9-1127c Same; investments in corporations performing certain services under K.S.A. 9-1127b; approval required
(a) No state bank shall invest in the capital stock of a bank service company that performs any service under K.S.A. 9-1127b(c), (d) or (e), and amendments thereto, without the prior approval of the commissioner.
(b) No state bank shall invest in the capital stock of a bank service company that performs any service under authority of K.S.A.
9-1127b(f), and amendments thereto, and no bank service company shall perform any activity under K.S.A.
9-1127b(f), and amendments thereto, without the prior approval of the commissioner.
(c) In determining whether to approve or deny any application for prior approval under K.S.A.
9-1124 through 9-1127c, and amendments thereto, the commissioner is authorized to consider the financial and managerial resources and future prospects of the bank or banks and bank service company involved, including the financial capability of the bank to make a proposed investment under this act, and possible adverse affects* such as undue concentration of resources, unfair or decreased competition, conflicts of interest or unsafe or unsound banking practices.
(d) In the event the commissioner fails to act on any application under this section within 90 days of the submission of a complete application, the application shall be deemed approved.
History: L. 1984, ch. 48, § 8; L. 2001, ch. 87, § 10; L. 2015, ch. 38, § 61; L. 2016, ch. 54, § 29; July 1.
§ 9-1127d Same; services performed for bank or subsidiary or affiliate; regulation and examination by commissioner; rules and regulations
(a) Whenever a bank, or any subsidiary or affiliate of such bank that is subject to examination by the state bank commissioner, causes to be performed for itself, by contract or otherwise, any services authorized under this act on or off its premises:
(1) Such performance shall be subject to regulation and examination by the state bank commissioner to the same extent as if such services were being performed by the bank itself on its own premises; and
(2) the bank shall notify the state bank commissioner of the existence of the service relationship within 30 days after the making of such service contract or the performance of the service, whichever occurs first.
(b) The state bank commissioner, with the approval of the state banking board, is authorized to adopt such rules and regulations as may be necessary to administer and carry out the purpose of this act and to prevent evasions thereof.
History: L. 1984, ch. 48, § 9; L. 2001, ch. 87, § 11; July 1.
§ 9-1127e Same; investments by savings and loan associations and savings banks
(a) No savings and loan association or savings bank may make any investment under this section if the association's aggregate outstanding investment in a service corporation would exceed 3% of the association's assets. Not less than 1/2 of the investment permitted under this section that exceeds 1% of the association's assets shall be used primarily for community, inner city, and community-development purposes.
(b) This section shall be a part of and supplemental to the state banking code.
History: L. 2018, ch. 75, § 2; July 1.
§ 9-1127f Same; new activities with savings and loan associations; prior approval required
(a) A savings and loan association shall apply to the commissioner for approval at least 30 days prior to acquiring, establishing or commencing new activity with an existing service corporation and shall not engage in activity with the service corporation without the commissioner's approval. The application shall include:
(1) A complete description of the saving* and loan association's investment in the service corporation;
(2) the proposed activities of the service corporation;
(3) the organizational structure and management of the service corporation;
(4) the relationship between the savings and loan association and the service corporation; and
(5) any other information that the commissioner deems necessary to describe the proposal.
(b) A service corporation shall:
(1) Be operated in a manner that demonstrates to the public that it maintains a separate corporate identity from the applicant; and
(2) not commingle business transactions, accounts and records with a savings and loan association.
(c) In considering an application, the commissioner may:
(1) Limit a savings and loan association's investment in a service corporation; or
(2) refuse to permit any activity of a service corporation for supervisory, legal or safety and soundness reasons.
(d) This section shall be a part of and supplemental to the state banking code.
History: L. 2018, ch. 75, § 3; July 1.
§ 9-1127g Same; permitted activities
(a) A service corporation may engage in any activity that a savings and loan association may conduct directly.
(b) A service corporation shall be subject to the commissioner's supervision as the savings and loan association would be if it had conducted the activity itself.
(c) If a service corporation fails to meet any of the requirements of this section, the savings and loan association shall notify the commissioner. If the service corporation is unable to comply with the requirements of this section within 90 days of its initial failure to meet such requirements, the savings and loan association shall dispose of its investment in the service corporation.
(d) After a savings and loan association has received approval from the commissioner, a service corporation may engage in the following:
(1) Business activities, when such activities are limited to financial documents, financial clients or are generally financially related to:
(A) Accounting or internal or other auditing;
(B) advertising, market research and other marketing;
(C) clerical;
(D) consulting;
(E) courier;
(F) data processing;
(G) data storage facilities operation and related services;
(H) personnel benefit program development or administration;
(I) printing and selling forms that require magnetic ink character recognition (MICR) encoding;
(J) purchasing and distribution of office supplies, furniture and equipment;
(K) relocation of personnel;
(L) research studies and surveys;
(M) software development and systems integration; and
(N) remote service unit operation, leasing, ownership or establishment;
(2) credit-related activities:
(A) Abstracting;
(B) acquiring and leasing personal property;
(C) appraising;
(D) collections;
(E) credit analysis;
(F) check or credit card guaranty and verification;
(G) acting as an escrow agent or trustee, under deeds of trust, including executing and delivery of conveyances, reconveyances and transfers of title; and
(H) loan inspection;
(3) consumer services activities:
(A) Financial advice or consulting;
(B) foreign currency exchange;
(C) home ownership counseling;
(D) income tax return preparation;
(E) providing postal services;
(F) sales of stored value instruments;
(G) welfare benefit distribution;
(H) check printing and related services; and
(I) remote service unit operation, leasing, ownership or establishment;
(4) real estate-related service activities:
(A) Acquiring real estate for:
(i) Prompt development or subdivision;
(ii) construction of improvements;
(iii) resale or leasing to others for such construction of improvements; or
(iv) use as manufactured home sites, in accordance with a prudent program of property development;
(B) acquiring improved real estate or manufactured homes to be held for:
(i) Rental or resale;
(ii) remodeling, renovating or demolishing and rebuilding for resale or rental; or
(iii) offices and related facilities of a stockholder of the service corporation;
(C) maintaining and managing real estate; and
(D) real estate brokerage for property owned by a savings and loan association or savings bank that owns capital stock of the service corporation or in which the service corporation otherwise invests;
(5) securities, liquidity management and coin purchase activities:
(A) Execution of transactions in securities on an agency or riskless principal basis solely upon the order and for the account of customers or the provision of investment advice. The service corporation must register with the securities and exchange commission and office of the securities commissioner, as required by applicable state and federal law and rules and regulations;
(B) liquidity management;
(C) issuing notes, bonds, debentures or other obligations of securities; and
(D) purchase or sale of coins issued by the United States treasury;
(6) investments in:
(A) Tax-exempt bonds used to finance residential real property for family units;
(B) tax-exempt obligations of public housing agencies used to finance housing projects with rental assistance subsidies;
(C) small business investment companies and new market venture capital companies licensed by the United States small business administration;
(D) rural business investment companies licensed by the U.S. department of agriculture; and
(E) savings accounts of an investing savings and loan association;
(7) community and economic development or public welfare investment activities that are permissible under federal law;
(8) establishing or acquiring a corporation that is recognized by the internal revenue service as organized for charitable purposes under 26 U.S.C. § 501(c)(3) of the internal revenue code and making a reasonable contribution to capitalize it, provided that the corporation engages exclusively in activities designed to promote the well-being of communities in which the owners of the service corporation operate;
(9) acting as an agent for or engaging in activities conducted on behalf of a customer, other than on an as-principal basis; and
(10) any activity reasonably incident to those listed in this subsection if the service corporation engages in those activities.
(e) This section shall be a part of and supplemental to the state banking code.
History: L. 2018, ch. 75, § 4; July 1.
§ 9-1127h Savings and loan service corporations; definitions
As used in K.S.A. 9-1127e through 9-1127h, and amendments thereto:
(a) "Invest" means any investment in the capital stock, obligations or other securities, and any advance of funds to a service corporation, including the purchase of stock, the making of a loan or other such advance of funds. "Invest" does not include a payment for rent earned, goods sold and delivered or services rendered prior to the making of such payment.
(b) "Savings and loan service corporation" or "service corporation" means a corporation or limited liability company organized under the laws of Kansas. The entirety of the capital stock of a savings and loan service corporation shall be available for purchase only by Kansas-chartered savings and loan associations, Kansas-chartered savings banks and federally chartered savings and loan associations with home offices in Kansas. Kansas-chartered and federally chartered savings and loan associations and Kansas-chartered and federally chartered savings banks investing in a savings and loan service corporation shall designate the savings and loan service corporation as a service corporation.
(c) This section shall be a part of and supplemental to the state banking code.
History: L. 2018, ch. 75, § 5; July 1.
§ 9-1128 Deposits by banks or trust companies acting as fiduciaries or custodians for fiduciaries of certain securities guaranteed by the United States or agencies thereof; rules and regulations; records of ownership; certifications of deposit
Notwithstanding any other provision of law, any bank or trust company when acting as fiduciary, and any bank or trust company when holding securities as custodian for a fiduciary, is authorized to deposit, or arrange for the deposit, with the federal reserve bank in its district of any securities the principal and interest of which the United States or any department, agency or instrumentality thereof has agreed to pay, or has guaranteed payment, to be credited to one or more accounts on the books of said federal reserve bank in the name of such bank or trust company, to be designated fiduciary or safekeeping accounts, to which account other similar securities may be credited. A bank or trust company so depositing securities with a federal reserve bank shall be subject to such rules and regulations with respect to the making and maintenance of such deposit as, in the case of a state bank incorporated under the laws of this state, the state bank commissioner, and, in the case of national banking associations, the comptroller of the currency, may from time to time adopt and promulgate. Any such rules and regulations of the state bank commissioner shall be adopted and promulgated in the manner provided by K.S.A. 9-1713, and amendments thereto. The records of such bank or trust company shall at all times show the ownership of the securities held in such account. Ownership of, and other interests in, the securities credited to such account may be transferred by entries on the books of said federal reserve bank without physical delivery of any securities. A bank or trust company acting as custodian for a fiduciary shall, on demand by the fiduciary, certify in writing to the fiduciary the securities so deposited by such bank or trust company with such federal reserve bank for the account of such fiduciary. A fiduciary shall, on demand by any party to its accounting or on demand by the attorney for such party, certify in writing to such party the securities deposited by such fiduciary with such federal reserve bank for its account as such fiduciary.
History: L. 1974, ch. 43, § 1; July 1.
§ 9-1129 Same; application of act
This act shall apply to all banks and trust companies acting as fiduciaries, and as custodians for fiduciaries, on the effective date of this act or which thereafter may so act regardless of the date of the instrument or court order by which they are appointed.
History: L. 1974, ch. 43, § 2; July 1.
§ 9-1130 Retention of books and records; rules and regulations; destruction; photographic reproduction; electronic recordation; confidentiality of records unaffected
(a) Every bank and trust company shall retain such bank's and trust company's business records for such periods as are or may be prescribed by or in accordance with the provisions of this section.
(b) Each bank and trust company shall retain permanently such bank's or trust company's:
(1) Minute books of the stockholders and directors;
(2) capital stock ledger and capital stock certificate ledger or stubs;
(3) general ledger or the record kept in lieu thereof;
(4) daily statements of condition; and
(5) all records which the commissioner shall, in accordance with the provisions of this section, require to be retained permanently.
(c) All other records of a bank or trust company shall be retained for such periods as the commissioner shall prescribe, in accordance with the provisions of this section.
(d) The commissioner shall, in accordance with the provisions of K.S.A.
9-1713, and amendments thereto, adopt and promulgate rules and regulations classifying all records kept by banks and trust companies, prescribing the period for which records of each class shall be retained, and requiring to be kept such record of destruction of records as the commissioner deems advisable. Such periods may be permanent or for a term of years. Prior to the adoption, amendment or revocation of such rules and regulations the commissioner shall consider:
(1) Actions and administrative proceedings in which the production of bank or trust company records might be necessary or desirable;
(2) state and federal statutes of limitation applicable to such actions or proceedings;
(3) the availability of information contained in bank and trust company records from other sources; and
(4) such other matters as the commissioner shall deem pertinent to the interest of customers and shareholders of banks and trust companies and of the people of this state having such records available.
(e) Any bank or trust company may destroy any record which has been retained for the period prescribed, in accordance with the terms of this section for retention of records of such bank's or trust company's class, and shall, after destroying such record, thereafter be under no duty to produce such record.
(f) In lieu of retention of the original records with the exception of the document or documents creating the fiduciary relationship, any bank or trust company may cause any, or all, of such bank's or trust company's records, and records at any time in the custody of such bank or trust company, including those held by it as a fiduciary, to be photographed or otherwise reproduced to permanent form. Any such photograph or reproduction shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.
(g) Any bank or trust company may cause any, or all, transactions, information and data occurring in the regular course of such bank's or trust company's operations to be recorded and maintained by electronic means. When the electronic records of such transactions, information and data are converted to writing, such writings shall constitute the original records of such transactions, information and data and shall have the force and effect thereof.
(h) To the extent that the provisions of this section are not in contravention of any statute of the United States or regulations promulgated thereunder, the provisions of this section shall apply to all banks and trust companies doing business in this state.
(i) Nothing in this section shall be construed to affect any duty of a bank or trust company to preserve the confidentiality of their records.
History: L. 1975, ch. 44, § 3; L. 2015, ch. 38, § 62; L. 2016, ch. 54, § 30; July 1.
§ 9-1131 Repurchase agreements with pooled money investment board
Each state bank, national bank and trust company located and doing business within the state of Kansas is hereby authorized to enter into repurchase agreements with the pooled money investment board under any statute authorizing the board to enter into such agreements.
History: L. 1982, ch. 339, § 1; April 29.
§ 9-1132 Personal liability of officers and directors, exceptions
Except for persons who are executive officers, an officer or director of a bank or national banking association shall have no personal liability to the bank, association or the bank's or association's stockholders for monetary damages for breach of duty as an officer or director, except that such liability shall not be eliminated for:
(a) Any breach of the officer's or director's duty of loyalty to the bank, association or the bank's or association's stockholders;
(b) acts or omissions which constitute willful or gross and wanton negligent breach of the officer's or director's duty of care;
(c) acts in violation of K.S.A. 9-910, 9-911 or 9-912, and amendments thereto; or
(d) any transaction from which the officer or director derived an improper personal benefit.
History: L. 1993, ch. 288, § 1; L. 2015, ch. 38, § 63; July 1.
§ 9-1133 Liability of officers and directors; actions; certain provisions applicable
The provisions of K.S.A. 17-2268 and 17-5831, and amendments thereto, apply to an action brought against a director or officer of an insured depository institution, regardless of whether the action was filed before, on, or after May 20, 1993, unless the action was finally adjudicated before May 20, 1993. The provisions of this section shall not apply to executive officers as defined in K.S.A. 9-701 and 17-2268 and 17-5831, and amendments thereto.
History: L. 1994, ch. 334, § 1; L. 2015, ch. 38, § 64; July 1.
§ 9-1134 Liability of officers and directors; severability
If any provision of K.S.A. 9-1132 or 9-1133, or 17-2268 and 17-5831 and amendments thereto or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of such statutes which can be given effect without the invalid provision or application, and to this end the provisions of such statutes are declared to be severable.
History: L. 1994, ch. 334, § 2; May 19.
§ 9-1135 Repealed
History: L. 1994, ch. 51, § 4; L. 2001, ch. 5, § 42; L. 2010, ch. 17, § 27; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1136 Powers; authority to lease certain personal property; definitions
In addition to powers and limitations conferred or imposed on any bank by K.S.A. 9-1101, and amendments thereto, any bank is hereby authorized to exercise by its board of directors or duly authorized officers or agents, subject to law, all such powers including incidental powers as shall be necessary or convenient to do what is authorized by this section:
(a) (1) A bank may become the legal or beneficial owner of tangible personal property for the purpose of leasing such property;
(2) to obtain an assignment of a lessor's interest in a lease of such property; or
(3) to incur obligations incidental to its position as the legal or beneficial owner and lessor of the leased property;
so long as each lease entered into by the bank is a net, full-payout lease.
(b) A bank may acquire specific property to be leased only after the bank has entered into either:
(1) A legally binding written agreement to lease the property on terms which comply with this section; or
(2) a legally binding written agreement which indemnifies the bank against loss in connection with its acquisition of the property.
(c) In the event of the lessee's default, early termination of a lease or at the expiration of the lease, the bank's interest in the property shall be liquidated or re-leased in accordance with this section as soon as practicable, but in no case shall the off-lease property be carried on the bank's books for a period exceeding one year.
(d) Each lease financing transaction entered into by the bank pursuant to this section shall be considered a loan for the purposes of applying all legal lending limitations and prior approval requirements contained in K.S.A. 9-1104, and amendments thereto.
(e) For purposes of this section:
(1) (A) "Net lease" means a lease under which the bank will not, directly or indirectly, provide or be obligated to provide for:
(i) The servicing, repair or maintenance of the leased property during the lease term;
(ii) the purchasing of parts and accessories for the leased property, except that improvements and additions to the leased property may be leased to the lessee upon such lessee's request in accordance with the full-payout requirements of this section;
(iii) the loan of replacement or substitute property while the leased property is being serviced;
(iv) the purchasing of insurance for the lessee, except where the lessee has failed to discharge a contractual obligation to purchase or maintain insurance; or
(v) the renewal of any license, registration or filing for the property unless such action by the bank is necessary to protect the bank's interest as an owner or financier of the property;
(B) if, in good faith, a bank believes there has been an unanticipated change in conditions which threaten its financial position by significantly increasing its exposure to loss, the provisions of (e)(1)(A) shall not prevent the bank:
(i) As the owner and lessor under a net, full-payout lease, from taking reasonable and appropriate action to salvage or protect the value of the property of its interest arising under the lease;
(ii) as the assignee of a lessor's interest in a lease, from becoming the owner and lessor of the leased property pursuant to its contractual right, or from taking any reasonable and appropriate action to salvage or protect the value of the property or its interest arising under the lease; or
(iii) from including any provisions in a lease, or from making any additional agreements, to protect its financial position or investment in the circumstances set forth in provisions (i) or (ii).
(2) (A) "Full-payout lease" means a lease from which the lessor can reasonably expect to realize a return of its full investment in the leased property, plus the estimated cost of financing the property over the term of the lease, from rentals, estimated tax benefits and the estimated residual value of the property at the expiration of the initial term of the lease.
(B) Except as provided in subsection (f), the estimated residual value of the property shall not exceed 25% of the original cost of the property to the lessor unless the estimated residual value is guaranteed by a manufacturer, a lessee or a third party not an affiliate of the bank and the bank properly documents that the guarantor has the resources to meet the guarantee. In all cases both the estimated residual value of the property and that portion of the estimated residual value relied upon by the lessor to satisfy the requirements of a full-payout lease must be reasonable in light of the nature of the leased property and all relevant circumstances so that realization of the bank's full investment plus the cost of financing the property depends primarily on the creditworthiness of the lessee and of any guarantor of the residual value, and not on the residual market value of the leased property.
(f) Notwithstanding the limit on residual value contained in (e)(2)(B), the bank may enter into lease financing transactions in which the residual value relied upon for realization of a return of its full investment plus costs of financing exceeds 25% of the original cost of the property provided:
(1) The lease financing transaction conforms with all other requirements of this section;
(2) the lease financing transaction has a term in excess of 90 days;
(3) the records relating to lease financing transactions entered into pursuant to this provision are clearly segregated and specifically identified to distinguish them from the records relating to lease financing transactions entered into pursuant to the other provisions; and
(4) the aggregate book value of all tangible personal property held for lease pursuant to this subsection does not exceed 10% of the consolidated assets of the bank.
(g) This section shall not apply to any leases executed by a bank prior to the effective date of this act. Any lease which was entered into in good faith prior to the effective date of this act that does not comply with the provisions of this section may be renewed only if there is a binding agreement in the expiring lease which requires the bank to renew the lease at the lessee's option, and the bank cannot otherwise reasonably or properly avoid its commitment to renew. Except for those leases renewed pursuant to such a binding agreement, any prior lease renewed after the effective date of this act shall be included for purposes of determining compliance with the legal lending limitations contained in K.S.A. 9-1104, and amendments thereto, and subsection (d).
History: L. 1995, ch. 19, § 3; March 9.
§ 9-1137 Compliance review committees; functions; confidentiality of certain documents; definitions; exceptions
(a) For the purposes of this section:
(1) "Bank" means a state chartered or federally chartered bank, trust company or bank holding company as defined in K.S.A.
9-519, and amendments thereto, located in this state;
(2) "compliance review committee" means:
(A) An audit, loan review or compliance committee appointed by the board of directors of a bank that functions to evaluate and seeks to improve loan underwriting standards, asset quality, financial reporting to federal or state regulatory agencies or compliance with federal or state statutory or regulatory requirements; or
(B) any other person to the extent the person acts in an investigatory capacity at the direction of a compliance review committee;
(3) "compliance review documents" means documents prepared for or created by a compliance review committee;
(4) "loan review committee" means a person or group of persons who, on behalf of a bank, reviews loans held by the institution for the purpose of assessing the credit quality of the loans, compliance with the institution's loan policies and compliance with applicable laws and regulations; or
(5) "person" means an individual, group of individuals, board, committee, partnership, firm, association, corporation or other entity.
(b) Except as provided in subsection (c):
(1) Compliance review documents are confidential and are not discoverable or admissible in evidence in any civil action arising out of matters evaluated by the compliance review committee; and
(2) compliance review documents delivered to a federal or state governmental agency remain confidential and are not discoverable or admissible in evidence in any civil action arising out of matters evaluated by the compliance review committee.
(c) Subsection (b) does not apply to any information required by statute or rules and regulations to be maintained by or provided to a governmental agency while the information is in the possession of the governmental agency to the extent applicable law expressly authorizes disclosure of such information.
(d) This section may not be construed to limit the discovery or admissibility in any civil action of any documents that are not compliance review documents.
History: L. 1995, ch. 35, § 1; L. 2015, ch. 38, § 65; L. 2016, ch. 54, § 31; July 1.
§ 9-1138 School savings deposit program; requirements; definitions
(a) As used in this section:
(1) "Accredited school" means any school operated by a public school district organized under the laws of this state and any nonpublic school accredited by the state board of education.
(2) "Board" means the board of education of a school district and the governing authority of an accredited nonpublic school.
(b) In order to encourage savings among school children, a bank may enter into a written agreement with a board of an accredited elementary or secondary school to establish a school savings deposit program. Such program shall be limited to the opening of accounts and the periodic collection, by bank employees or school personnel, of deposits from school children for deposit in such bank accounts.
(c) No such program shall be implemented until the executed agreement and any information deemed necessary has been submitted to the commissioner. If the commissioner determines the agreement and proposed program primarily promote educational objectives and the purpose of this section, the commissioner shall provide the bank with written approval to implement the program.
(d) Any bank participating in such school savings deposit program shall have the bank's main or branch office located in the same county as the participating school, or if no bank in the county wants to participate in such program, then banks in any contiguous county may participate.
History: L. 1997, ch. 180, § 9; L. 2015, ch. 38, § 66; July 1.
§ 9-1139 Repealed
History: L. 2007, ch. 78, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1140 Prohibiting branch banks in certain locations
(a) No bank shall establish or maintain a branch in this state on the premises or property of an affiliate if the affiliate engages in commercial activities.
(b) As used in this section:
(1) "Affiliate" means any company that controls, is controlled by, or is under common control with another company.
(2) "Bank" shall have the meaning stated in 12 U.S.C. § 1813(a)(1).
(3) "Branch" means any office, other than the place of business specified in the bank's certificate of authority, at which deposits are received, checks paid, money lent or trust authority exercised, if approval has been granted by the appropriate federal or state supervisory agency.
(4) "Commercial activities" means activities in which a bank holding company, a financial holding company, a national bank or a national bank financial subsidiary may not engage under federal or state law.
(5) "Control" means the power directly or indirectly to direct the management or policies of a bank or to vote 25% or more of any class of voting shares of a bank.
History: L. 2007, ch. 78, § 2; L. 2015, ch. 38, § 67; July 1.
§ 9-1141 Securing deposits for federally recognized Indian tribe
Banks are hereby authorized to give security for the safekeeping and prompt payment of funds deposited by any federally recognized Indian tribe.
History: L. 2015, ch. 38, § 13; July 1.
§ 9-1142 Savings promotion; requirements; rules and regulations
(a) A bank, savings bank, savings and loan association or credit union may conduct a savings promotion in which promotion participants deposit money into a savings account or other savings program in order to obtain entries and participate in the promotion, provided that the bank, savings bank, savings and loan association or credit union:
(1) Conducts the promotion in a manner so as to ensure that each entry has an equal chance of winning the designated prize;
(2) fully discloses the terms and conditions of the promotion to each of its account holders;
(3) maintains records sufficient to facilitate an audit of the promotion;
(4) ensures that only account holders 18 years of age and older are permitted to participate in the promotion;
(5) does not require any consideration; and
(6) offers an interest rate and charges fees on any promotion-qualifying account that are approximately the same as those on a comparable account that does not qualify for the promotion.
(b) (1) The state bank commissioner is authorized to promulgate rules and regulations as necessary to effectuate the provisions of this section pertaining to banks, savings banks and savings and loan associations. Such rules and regulations shall be promulgated by July 1, 2017.
(2) The credit union administrator is authorized to promulgate rules and regulations as necessary to effectuate the provisions of this section pertaining to credit unions. Such rules and regulations shall be promulgated by July 1, 2017.
(3) The state bank commissioner and credit union administrator shall collaborate in order to promulgate rules and regulations affecting account holders that are consistent, other than the type of institution to which they apply.
History: L. 2016, ch. 54, § 65; July 1.
Article 12 Banking Code; Transactions
§ 9-1201 Application
All of the provisions contained within article 12 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, shall extend and apply to any national or state chartered bank that has a main office or branch in this state.
History: L. 1947, ch. 102, § 50; L. 1975, ch. 44, § 22; L. 1989, ch. 48, § 34; L. 2015, ch. 38, § 68; July 1.
§§ 9-1202, 9-1203 Repealed
History: L. 1947, ch. 102, §§ 51, 52; Repealed, L. 1965, ch. 564, § 416; January 1, 1966.
§ 9-1204 Methods to withdraw deposits; deposits of minors; safe deposit box lease
(a) Any person, regardless of age, may become a depositor in any bank and shall be subject to the same duties and liabilities respecting such person's deposits. Whenever a deposit is accepted by any bank in the name of any person, regardless of age, the deposit may be withdrawn by the depositor by any of the following methods:
(1) Check or other instrument in writing. The check or other instrument in writing constitutes a receipt or acquittance if the check or other instrument in writing is signed by the depositor and constitutes a valid release and discharge to the bank for all payments made; or
(2) electronic means through:
(A) Preauthorized direct withdrawal;
(B) an automatic teller machine;
(C) a debit card;
(D) a transfer by telephone;
(E) a network, including the internet; or
(F) any electronic terminal, computer, magnetic tape or other electronic means.
(b) Any bank that accepts deposits from minors 16 years of age or older in the custody of the secretary for children and families, a federally recognized Indian tribe in this state or the secretary of corrections shall not require a cosigner or the funds to be deposited with the consent of the custodian. Such minor shall be responsible for banking costs or penalties associated with such deposits. The secretary, or their designee, or any foster or biological parent shall not be responsible for banking costs or penalties associated with such deposits.
(c) Any person, regardless of age, individually or with others may enter into an agreement with a bank for the lease of a safe deposit box and shall be bound by the terms of such agreement.
(d) This section shall not be construed to affect the rights, liabilities or responsibilities of participants in an electronic fund transfer under the federal electronic fund transfer act, 15 U.S.C. § 1693 et seq., as in effect on July 1, 2024, and shall not affect the legal relationship between a minor and any person other than the bank.
History: L. 1947, ch. 102, § 53; L. 2015, ch. 38, § 69; L. 2024, ch. 64, § 61; July 1.
§ 9-1205 Joint accounts
Deposits may be made in the names of two or more persons, including minors, and funds on deposit may be paid to any or all of the joint owners under the terms of the deposit contract. Payment to a joint owner in accordance with the terms of the deposit contract shall be valid and sufficient release and discharge to the bank for any payment so made.
History: L. 1947, ch. 102, § 54; L. 2015, ch. 38, § 70; July 1.
§ 9-1206 Set off
Any bank shall have the right to set off any obligation or claim which it has, when the same is matured against any depositor.
History: L. 1947, ch. 102, § 55; June 30.
§ 9-1207 Adverse claim to deposit
An adverse claim to a bank deposit does not need to be paid out by the bank, unless and until either the:
(a) Person making the claim supplies indemnity deemed adequate by the bank; or
(b) bank is served with process or order issued by a court of competent jurisdiction in an action in which the adverse claimant and the person or persons nominally entitled to the deposit are parties.
History: L. 1947, ch. 102, § 56; L. 1965, ch. 564, § 400; L. 2015, ch. 38, § 71; July 1.
§ 9-1208 Repealed
History: L. 1947, ch. 102, § 57; Repealed, L. 1965, ch. 564, § 416; January 1, 1966.
§ 9-1209 Repealed
History: L. 1947, ch. 102, § 58; Repealed, L. 1965, ch. 564, § 416; January 1, 1966.
§ 9-1210 Repealed
History: L. 1949, ch. 111, § 1; Repealed, L. 1965, ch. 564, § 416; January 1, 1966.
§ 9-1211 Repealed
History: L. 1949, ch. 111, § 2; L. 1953, ch. 53, § 1; Repealed, L. 1965, ch. 564, § 416; January 1, 1966.
§ 9-1212 Repealed
History: L. 1949, ch. 111, § 3; Repealed, L. 1965, ch. 564, § 416; January 1, 1966.
§ 9-1213 Payment of drafts of failed or closed banks
When any drawee bank shall be presented with a draft drawn on the drawee bank in the usual course of business by a drawer bank that has failed or been closed by operation of law or legal action, the drawee bank shall accept and pay such draft regardless of having received notice, constructive or otherwise, of the failure or closing of the drawer bank if the:
(a) Draft was issued prior to the failure or closing of the drawer bank;
(b) drawee bank has, on deposit to the credit of the failed or closed drawer bank, sufficient funds to pay the draft; and
(c) drawee bank has received proof that the draft represents payment of cash letters covering checks that had been charged to the individual accounts of the failed or closed drawer bank prior to the failure or closing of the drawer bank.
History: L. 1955, ch. 66, § 1; L. 2015, ch. 38, § 72; L. 2016, ch. 54, § 32; July 1.
§ 9-1214 Payment of drafts of failed or closed banks; release from liability
Any drawee bank paying a draft under the circumstances set out in K.S.A. 9-1213, and amendments thereto, shall be released from any further liability thereon, and shall be fully protected and held harmless from any claim made by the receiver or other liquidating agent of the failed or closed drawer bank for sums representing payments made on the draft.
History: L. 1955, ch. 66, § 2; L. 2015, ch. 38, § 73; July 1.
§ 9-1215 Payable on death accounts
(a) Subject to the provisions of this section, an individual owner of an account may enter into a written contract with any bank located in this state that provides that at the time of the owner's death, the balance of the owner's legal share of the account shall be paid to one or more beneficiaries. If a beneficiary has predeceased the owner, that beneficiary's share shall be divided equally among the remaining beneficiaries unless the contract provides otherwise.
(b) If any beneficiary is a minor at the time funds become payable to the beneficiary pursuant to this section, the bank shall pay out in accordance with K.S.A. 59-30,193, and amendments thereto.
(c) During the owner's lifetime, the owner has the right to both withdraw funds on deposit in the account in the manner provided in the contract, in whole or in part, as though no beneficiary has been named, and to change the designation of beneficiary. No change in the designation of the beneficiary shall be valid unless executed in the form and manner prescribed by the bank and delivered to the bank prior to the death of the owner.
(d) The interest of the beneficiary shall not vest until the death of the owner. Vesting of the beneficiary's interest is subject to the following if, prior to the owner's death or payment to the beneficiary, the bank has received written notice:
(1) From the department for children and families of a claim pursuant to K.S.A. 39-709, and amendments thereto, the balance of the owner's share shall be paid to the department for children and families to the extent of medical assistance expended on the deceased owner, with the beneficiary then receiving the balance of the owner's share, if any remains; or
(2) of the owner's surviving spouse's intent to claim an elective share under K.S.A. 59-6a214, and amendments thereto, the balance of the owner's share shall be paid to the court having jurisdiction as provided in K.S.A. 59-6a214, and amendments thereto, to the extent of the owner's surviving spouse's elective share, with the beneficiary then receiving the balance of the owner's share, if any remains.
(e) Transfers pursuant to this section shall not be considered testamentary or be invalidated due to nonconformity with the provisions of chapter 59 of the Kansas Statutes Annotated, and amendments thereto.
(f) Payment by the bank of the owner's deposit account pursuant to the provisions of this section shall release and discharge the bank from further liability for the payment.
(g) For the purposes of this section:
(1) The balance of the owner's deposit account or the balance of the owner's legal share of a deposit account shall be construed to not include any portion of the account which under the law of joint tenancy is the property of another joint tenant of the account upon the death of the owner; and
(2) where multiple owners exist, such owners will be presumed to own equal shares of the deposit account unless the deposit contract with the bank specifies a different percentage of ownership for the owners.
History: L. 1979, ch. 177, § 1; L. 1980, ch. 166, § 2; L. 1982, ch. 104, § 1; L. 1984, ch. 51, § 1; L. 1989, ch. 48, § 35; L. 1992, ch. 150, § 1; L. 2002, ch. 114, § 47; L. 2015, ch. 38, § 74; L. 2025, ch. 40, § 136; January 1, 2026.
§ 9-1216 Repealed
History: L. 1979, ch. 177, § 2; L. 1984, ch. 51, § 2; L. 1989, ch. 48, § 36; L. 1992, ch. 150, § 2; L. 2002, ch. 114, § 48; L. 2014, ch. 115, § 4; L. 2015 ch. 42, § 2; Repealed, L. 2015, ch. 100, § 17; July 1.
Article 13 Banking Code; Deposit Insurance and Bonds
§ 9-1301 Deposit insurance; surety bond
Every bank operating under the provisions of the state banking code and authorized to receive deposits of money shall insure the deposits of each depositor with the federal deposit insurance corporation, or its successor. State banks may purchase surety bond coverage for the purpose of insuring deposits in excess of the federal deposit insurance corporation's coverage limit.
History: L. 1947, ch. 102, § 59; L. 1959, ch. 60, § 1; L. 1975, ch. 45, § 2; L. 1981, ch. 54, § 1; L. 1981, ch. 324, § 6; L. 1988, ch. 356, § 38; L. 1989, ch. 48, § 37; L. 2015, ch. 38, § 75; July 1.
§ 9-1301a Repealed
History: L. 1975, ch. 45, § 3; L. 1988, ch. 356, § 39; L. 1989, ch. 48, § 38; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1302 Subrogation upon payment by insurer of deposits
When the federal deposit insurance corporation or its successor or other insurer insuring the deposits of any bank shall pay, or make available for payment, the insured deposit liabilities of any bank the insurance company shall be and become subrogated to the extent of its payments, by operation of law, to all rights of each owner of a claim for deposit against such closed bank to the extent now or hereafter necessary to enable the federal deposit insurance corporation, or its successor or such other insurer, under law to make insurance payments available to depositors of closed insured banks.
History: L. 1947, ch. 102, § 60; L. 1975, ch. 45, § 4; L. 1989, ch. 48, § 39; July 1.
§ 9-1303 Repealed
History: L. 1947, ch. 102, § 61; L. 1975, ch. 44, § 23; L. 1975, ch. 45, § 5; L. 1985, ch. 56, § 4; L. 1987, ch. 54, § 7; L. 1995, ch. 17, § 1; L. 2001, ch. 35, § 1; L. 2005, ch. 19, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1304 Closed banks may borrow from or sell to federal insurance corporation
(a) Upon the approval of the commissioner, the receiver or liquidator or the board of directors of any bank which may be closed because of the bank's inability to meet the demands of its depositors may borrow from the federal deposit insurance corporation or its successor, and pledge any part or all of the bank's assets as security.
(b) The assets, or any portion thereof, of any bank which may close because of the bank's inability to meet the demands of its depositors may be sold to the federal deposit insurance corporation or its successor upon such terms and conditions as the commissioner shall approve. Nothing contained in this section shall limit the power of any bank, the commissioner or receiver or liquidator thereof to pledge or sell any assets in accordance with other provisions of the state banking code and existing laws.
History: L. 1947, ch. 102, § 62; L. 1989, ch. 48, § 40; L. 2015, ch. 38, § 76; L. 2016, ch. 54, § 33; July 1.
Article 14 Banking Code; Deposit of Public Moneys
§ 9-1401 Designation of depositories for public funds; duty of public officers; agreements
(a) The governing body of any municipal corporation or quasi-municipal corporation shall designate by official action recorded upon the governing body's minutes the banks, savings and loan associations and savings banks which shall serve as depositories of the governing body's funds and the officer and official having the custody of such funds shall not deposit such funds other than at such designated banks, savings and loan associations and savings banks. The banks, savings and loan associations and savings banks which have main or branch offices in the county or counties in which all or part of such municipal corporation or quasi-municipal corporation is located shall be designated as such official depositories if the municipal or quasi-municipal corporation can obtain satisfactory security therefor.
(b) Every officer or person depositing public funds shall deposit all such public funds coming into the officer's or person's possession in their name and official title as such officer. If the governing body of the municipal corporation or quasi-municipal corporation fails to designate an official depository or depositories, the officer thereof having custody of the governing body's funds shall deposit such funds with one or more banks, savings and loan associations or savings banks which have main or branch offices in the county or counties in which all or part of such municipal corporation or quasi-municipal corporation is located if satisfactory security can be obtained therefor. If the officer having custody is unable to obtain satisfactory security at a depository within the county or counties where the governing body is located, then the officer may deposit funds elsewhere. If the governing body's funds are deposited elsewhere, the officer shall serve notice in writing on the governing body showing the names and locations of the banks, savings and loan associations and savings banks where the funds are deposited, and upon so doing the officer having custody of the funds shall not be liable for the loss of any portion thereof except for official misconduct or for the misappropriation of such funds by such officer.
(c) If eligible banks, savings and loan associations or savings banks under subsections* (a) or (b) cannot or will not provide an acceptable bid, which shall include services, for the depositing of public funds under this section, then banks, savings and loan associations or savings banks which have main or branch offices in an adjoining county to the county in which all or part of such municipal or quasi-municipal corporation is located may receive deposits of such municipal corporation or quasi-municipal corporation, if such banks, savings and loan associations or savings banks have been designated as official depositories under subsection (a) and the municipal corporation or quasi-municipal corporation can obtain satisfactory security therefor.
(d) The depository bank, savings and loan association or savings bank and any agent, trustee, wholly owned subsidiary or affiliate having identical ownership granting a security interest shall enter into a written agreement with the municipal corporation or quasi-municipal corporation which so designates the bank as a depository for the municipal corporation or quasi-municipal corporation's public moneys.
(1) The agreement shall secure the public moneys of the municipal corporation or quasi-municipal corporation by granting a security interest in securities held by the depository bank, savings and loan association or savings bank and any agent, trustee, wholly owned subsidiary or affiliate having identical ownership pursuant to K.S.A.
9-1402, and amendments thereto.
(2) The depository bank, savings and loan association or savings bank and any agent, trustee, wholly owned subsidiary or affiliate having identical ownership shall perfect the security interest causing control to be given to the municipal corporation or quasi-municipal corporation in accordance with the Kansas uniform commercial code.
(3) The security agreement shall be in writing, executed by all parties thereto, maintained as part of the parties' official records, and except for the municipal corporations or quasi-municipal corporations, approved by the boards of directors or loan committees, which approvals shall be reflected in the minutes of the boards or committees.
History: L. 1947, ch. 102, § 63; L. 1957, ch. 74, § 2; L. 1967, ch. 447, § 30; L. 1972, ch. 35, § 1; L. 1982, ch. 52, § 1; L. 1983, ch. 47, § 2; L. 1986, ch. 76, § 1; L. 1989, ch. 48, § 41; L. 1997, ch. 180, § 3; L. 2006, ch. 57, § 1; L. 2015, ch. 38, § 77; L. 2016, ch. 54, § 34; July 1.
§ 9-1402 Securing the deposits of public funds
(a) Before any deposit of public moneys or funds shall be made by any governmental unit of the state of Kansas with any bank, savings and loan association or savings bank, such governmental unit shall obtain security for such deposit in one of the following manners prescribed by this section.
(b) Such bank, savings and loan association or savings bank may give a corporate surety bond of some surety corporation authorized to do business in this state. Such bond shall be in an amount equal to the public moneys or funds on deposit at any given time less the amount of such public moneys or funds that is insured by the federal deposit insurance corporation or its successor and such bond shall be conditioned that such deposit shall be paid promptly on the order of the governmental unit making such deposits.
(c) Such bank, savings and loan association or savings bank may deposit, maintain, pledge, assign and grant a security interest in, or cause its agent, trustee, wholly owned subsidiary or affiliate having identical ownership to deposit, maintain, pledge, assign and grant a security interest in, for the benefit of the governing body of the governmental unit in the manner provided in this section, securities, security entitlements, financial assets and securities accounts owned by the depository institution directly or indirectly through the institution's agent or trustee holding securities on the institution's behalf, or owned by the depository institutions wholly owned subsidiary or by such affiliate, the market value of which is equal to 100% of the total deposits at any given time, and such securities, security entitlements, financial assets and securities accounts, may be accepted or rejected by the governing body of the governmental unit and shall consist of the following and security entitlements thereto:
(1) Direct obligations of, or obligations that are insured as to principal and interest by, the United States of America or any agency thereof and obligations, including, but not limited to, letters of credit and securities of United States-sponsored corporations that under federal law may be accepted as security for public funds;
(2) bonds of any governmental unit of the state of Kansas that have been refunded in advance of the bonds' maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of direct obligations of, or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States of America;
(3) bonds of the state of Kansas;
(4) general obligation bonds of any governmental unit of the state of Kansas;
(5) revenue bonds of any governmental unit of the state of Kansas if approved by the commissioner;
(6) temporary notes of any governmental unit of the state of Kansas that are general obligations of the governmental unit issuing such temporary notes;
(7) warrants of any governmental unit of the state of Kansas the issuance of which is authorized by the state board of tax appeals and that are payable from the proceeds of a mandatory tax levy;
(8) bonds of either a Kansas not-for-profit corporation or of a local housing authority that are rated at least Aa by Moody's investors service or AA by Standard & Poor's corp.;
(9) bonds issued pursuant to K.S.A. 12-1740 et seq., and amendments thereto, that are rated at least MIG-1 or Aa by Moody's investors service or AA by Standard & Poor's corp.;
(10) notes of a Kansas not-for-profit corporation that are issued to provide only the interim funds for a mortgage loan that is insured by the federal housing administration;
(11) bonds issued pursuant to K.S.A. 74-8901 through 74-8916, and amendments thereto;
(12) bonds issued pursuant to K.S.A. 68-2319 through 68-2330, and amendments thereto;
(13) commercial paper that does not exceed 270 days to maturity and has received one of the two highest commercial paper credit ratings by a nationally recognized investment rating firm; or
(14) (A) negotiable promissory notes together with first lien mortgages on one to four family residential real estate located in Kansas securing payment of such notes when such notes or mortgages:
(i) Are underwritten by the federal national mortgage association, the federal home loan mortgage corporation, the federal housing administration or the veterans administration standards;
(ii) have been in existence with the same borrower for at least two years and with no history of any installment being unpaid for 30 days or more; and
(iii) are valued at not to exceed 50% of the lesser of the following three values: Outstanding mortgage balance, current appraised value of the real estate or discounted present value based upon current federal national mortgage association or government national mortgage association interest rates quoted for conventional, federal housing administration or veterans administration mortgage loans.
(B) Securities under subparagraph (A) shall be taken at their value for not more than 50% of the security required under the provisions of this section.
(C) Securities under subparagraph (A) shall be withdrawn immediately from the collateral pool if any installment is unpaid for 30 days or more.
(D) A status report on all such loans shall be provided to the investing governmental entity by the financial institution on a quarterly basis.
(d) Such bank, savings and loan association or savings bank shall secure the deposit of public moneys of one or more governmental units through the public moneys pooled method pursuant to K.S.A. 2025 Supp. 9-1410, and amendments thereto, for the benefit of the governmental unit having public moneys with such bank, savings and loan association or savings bank as provided in K.S.A. 2025 Supp. 9-1410, and amendments thereto.
(e) No such bank, savings and loan association or savings bank may deposit and maintain for the benefit of the governing body of a governmental unit of the state of Kansas, any securities that consist of:
(1) Bonds secured by revenues of a utility that has been in operation for less than three years; or
(2) bonds issued under K.S.A. 12-1740 et seq., and amendments thereto, unless such bonds have been refunded in advance of their maturity as provided in subsection (c) or such bonds are rated at least Aa by Moody's investors service or AA by Standard & Poor's corp.
(f) Any applicant requesting approval of a revenue bond pursuant to subsection (c)(5) shall pay to the commissioner a fee in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all amounts received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
(g) For purposes of this section, "governmental unit" means the state or any county, municipality or other political subdivision of the state.
History: L. 1947, ch. 102, § 64; L. 1965, ch. 76, § 1; L. 1968, ch. 236, § 1; L. 1970, ch. 63, § 1; L. 1973, ch. 48, § 1; L. 1976, ch. 79, § 1; L. 1978, ch. 45, § 1; L. 1980, ch. 47, § 1; L. 1982, ch. 52, § 2; L. 1983, ch. 49, § 17; L. 1983, ch. 47, § 3; L. 1983, ch. 49, § 18; L. 1985, ch. 58, § 1; L. 1985, ch. 58, § 2; L. 1986, ch. 76, § 2; L. 1986, ch. 76, § 3; L. 1987, ch. 56, § 1; L. 1989, ch. 48, § 42; L. 1989, ch. 209, § 18; L. 1992, ch. 146, § 25; L. 1994, ch. 74, § 1; L. 1997, ch. 180, § 4; L. 2008, ch. 109, § 22; L. 2014, ch. 141, § 16; L. 2015, ch. 38, § 78; L. 2016, ch. 54, § 35; L. 2025, ch. 41, § 6; July 1.
§ 9-1402a Repealed
History: L. 1947, ch. 102, § 64; L. 1965, ch. 76, § 1; L. 1968, ch. 236, § 1; L. 1970, ch. 63, § 1; L. 1973, ch. 48, § 1; L. 1976, ch. 79, § 1; L. 1978, ch. 45, § 1; L. 1980, ch. 47, § 1; L. 1982, ch. 52, § 2; L. 1983, ch. 49, § 17; L. 1983, ch. 47, § 3; L. 1983, ch. 49, § 18; L. 1985, ch. 58, § 1; L. 1985, ch. 58, § 2; L. 1986, ch. 76, § 2; L. 1986, ch. 76, § 3; L. 1987, ch. 57, § 17; Repealed, L. 1989, ch. 209, § 65; July 1.
§ 9-1403 Securities for deposits of public funds; exemption during peak deposits
(a) During the periods of peak deposits occurring at tax paying time and tax distributing time and continuing for a period of not to exceed 60 continuous days at any given time and not to exceed 120 days in any calendar year the amount of security for the deposits of municipal corporations or quasi-municipal corporations as required under K.S.A. 9-1402, and amendments thereto, may be reduced by up to 50% of the amount on deposit during the peak period.
(b) If the custodian of the funds of each municipal corporation or quasi-municipal corporation together with an officer of the depository bank, savings and loan association or savings bank agree to reduce the amount of security as provided in subsection (a), then the parties shall enter into an agreement which designates in writing the beginning and end of each such period, and a copy thereof, fully executed, shall be kept on file in the office of the governing body of such municipal corporation or quasi-municipal corporation and in the files of such bank, savings and loan association or savings bank.
History: L. 1947, ch. 102, § 65; L. 1982, ch. 52, § 3; L. 1983, ch. 47, § 4; L. 1986, ch. 76, § 4; L. 1989, ch. 48, § 43; L. 1997, ch. 180, § 5; L. 2015, ch. 38, § 79; July 1.
§ 9-1404 Repealed
History: L. 1947, ch. 102, § 66; Repealed, L. 1967, ch. 447, § 31; June 1.
§ 9-1405 Deposit of securities, security entitlements and financial assets in securities account; written custodial agreement; receipt
(a) All bonds and securities given by any bank, savings and loan association or savings bank to secure public moneys of the United States or any board, commission or agency thereof, shall be deposited as required by the United States government or any designated federal agencies.
(b) All securities, security entitlements and financial assets securing the deposits of any municipal corporation or quasi-municipal corporation shall be deposited as described in subsection (c) or (d) or in a securities account with one of the following custodial banks or trust companies:
(1) A Kansas state bank;
(2) a Kansas national bank;
(3) a state bank organized in another state and which has a branch office in this state;
(4) a trust company incorporated under the laws of this state or another state; or
(5) the federal home loan bank of Topeka.
(c) Securities, security entitlements and financial assets securing the deposits of any municipal corporation or quasi-municipal corporation may be deposited with the state treasurer pursuant to a written custodial agreement and a receipt issued with one copy going to the municipal corporation or quasi-municipal corporation making the public deposit and one copy going to the bank, savings and loan association or savings bank which has secured such public deposits. The receipt shall identify the securities, security entitlements and financial assets which are subject to a security interest to secure payment of the deposits of the municipal corporation or quasi-municipal corporation.
(d) Securities, security entitlements and financial assets securing the deposits of any municipal corporation or quasi-municipal corporation may be deposited with the federal reserve bank of Kansas City to be there held in such manner, under regulations and operating letters of the federal reserve bank of Kansas City, as to secure payment of the deposits of the municipal corporation or quasi-municipal corporation in the depository institution.
(e) This section shall not prohibit any custodial bank or trust company from depositing securities, security entitlements and financial assets in the custodial bank or trust company's account if:
(1) The custodial bank or trust company's account is located at a bank or trust company organized under the laws of any state, the United States or any centralized securities depository wherever located within the United States; and
(2) the custodial bank or trust company issues a receipt which identifies the securities, security entitlements and financial assets on deposit at the custodial bank or trust company.
(f) No securities, security entitlements and financial assets securing public deposits shall be deposited in any custodial bank or trust company which has the following commonalities with the depository bank, savings and loan association or savings bank:
(1) Direct or indirect ownership by any parent corporation;
(2) common controlling shareholders;
(3) common majority of the board of directors; or
(4) common directors with the ability to control or influence directly or indirectly the acts or policies of the depository bank, savings and loan association or savings bank securing such public deposits.
(g) When securities, security entitlements and financial assets are deposited with the state treasurer as authorized by this section, the state treasurer shall make a charge for such service which is equivalent to the reasonable and customary charge made therefor.
(h) The custodial agreement shall be in writing, executed by all parties thereto, maintained as part of the parties' official records, and except for the municipal corporations* or quasi-municipal corporation, approved by the boards of directors or loan committees, which approvals shall be reflected in the minutes of the boards or committees.
(i) A bank, savings and loan association or savings bank which fails to pay any deposit of public moneys of any municipal or quasi-municipal corporation according to the terms of the security agreement shall immediately take action to enable bonds and securities pledged to secure the deposit to be sold to satisfy the bank's or association's obligation to the municipal or quasi-municipal corporation.
History: L. 1947, ch. 102, § 67; L. 1975, ch. 44, § 24; L. 1976, ch. 58, § 1; L. 1982, ch. 52, § 4; L. 1983, ch. 47, § 5; L. 1985, ch. 58, § 4; L. 1986, ch. 76, § 5; L. 1989, ch. 48, § 44; L. 1990, ch. 60, § 1; L. 1993, ch. 207, § 1; L. 1994, ch. 105, § 1; L. 1997, ch. 180, § 6; L. 2015, ch. 38, § 80; L. 2016, ch. 54, § 36; July 1.
§ 9-1406 Exemption from liability for loss by official depository
No public officer nor the sureties upon such officer's bond shall be liable for any loss sustained by the failure or default of any designated depository or depositories after a deposit or deposits have been made in an officially designated bank, savings and loan association or savings bank as provided in this act. This exemption from liability shall apply even though other statutes shall require the furnishing of a bond or other securities by the designated depositories of public moneys. This exemption shall also apply whenever a public officer, municipal corporation or quasi-municipal corporation has acted in good faith to comply with the provisions of this act.
History: L. 1947, ch. 102, § 68; L. 1983, ch. 47, § 6; L. 1986, ch. 76, § 6; L. 1989, ch. 48, § 45; L. 1997, ch. 180, § 7; L. 2000, ch. 71, § 1; July 1.
§ 9-1407 Exemption of security for insured portion of public deposits; reciprocal deposit programs
(a) That portion of any deposit of public moneys or funds which is insured by the federal deposit insurance corporation, or its successor, need not be secured as provided in article 14 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto.
(b) Public moneys or funds deposited by a municipal corporation or quasi-municipal corporation in a selected bank, savings and loan association or savings bank which are part of a reciprocal deposit program shall not be treated as securities and need not be secured as provided in article 14 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, if the:
(1) Bank, savings and loan association or savings bank receives reciprocal deposits from other participating institutions located in the United States in an amount equal to the amount of funds deposited by the municipal corporation or quasi-municipal corporation; and
(2) total cumulative amount of each deposit does not exceed the maximum deposit insurance amount for one depositor at one financial institution as determined by the federal deposit insurance corporation.
History: L. 1947, ch. 102, § 69; L. 1982, ch. 52, § 5; L. 1997, ch. 180, § 8; L. 2009, ch. 49, § 1; L. 2015, ch. 38, § 81; July 1.
§ 9-1408 Definitions
As used in article 14 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto:
(a) "Branch" means any office within this state or another state, other than the main office, that is approved as a branch by a federal or state supervisory agency and at which deposits are received, checks paid or money lent. Branch does not include an automated teller machine, remote service unit or similar device, a loan production office or a deposit production office;
(b) "centralized securities depository" means a clearing agency registered with the securities and exchange commission which provides safekeeping and book-entry settlement services to the agency's participants;
(c) "government unit" means any state, county, municipality or other political subdivision thereof;
(d) "Kansas national bank" means a federally chartered bank which has a main office or branch located in this state;
(e) "Kansas state bank" means a Kansas state chartered bank;
(f) "main office" means the place of business specified in the articles of association, certificate of authority or similar document where the business of the institution is carried on and which is not a branch;
(g) "municipal corporation" or "quasi-municipal corporation" includes each investing governmental unit under K.S.A.
12-1675, and amendments thereto;
(h) "savings and loan association" means any savings and loan association incorporated under the laws of this state or any other state or organized under the laws of the United States and which has a main or branch office in this state;
(i) "savings bank" means any savings bank organized under the laws of the United States and which has a main or branch office in this state; and
(j) "securities," "security entitlements," "financial assets," "securities account," "security agreement," "security interest," "perfection" and "control" shall have the meanings given such terms under the Kansas uniform commercial code.
History: L. 1997, ch. 180, § 2; L. 2006, ch. 57, § 2; L. 2015, ch. 38, § 82; L. 2016, ch. 54, § 37; July 1.
§ 9-1409 Securing deposits of public moneys of out-of-state governmental units; when
A Kansas state bank may pledge any of the bank's assets as collateral or otherwise secure the deposits of public money for governmental units located in another state where the Kansas state bank has a branch location, so long as such security is given in accordance with the laws of that state.
History: L. 2015, ch. 38, § 1; July 1.
§ 9-1410 Public moneys pooled method of investment; requirements, conditions and limitations; duties of the state treasurer and administrator; rules and regulations; statements; required reports; failure to meet statutory requirements; fines and sanctions
(a) For purposes of K.S.A. 2025 Supp. 9-1410 through 9-1412, and amendments thereto:
(1) "Administrator" means the treasurer or the treasurer's designee.
(2) "Governmental unit" means the state or any county, municipality or other political subdivision thereof.
(3) "Public moneys" means the same as defined in K.S.A. 9-701, and amendments thereto.
(4) "Public moneys pooled method" or "pool of securities" means shares of investment companies registered under the federal investment company act of 1940 when the investment companies' assets are limited to obligations that are eligible for investment by the bank, savings and loan association or savings bank and limited by their prospectuses to owning securities enumerated in K.S.A. 9-1402(c), and amendments thereto.
(5) "Treasurer" means the state treasurer.
(b) A bank, savings and loan association or savings bank designated as a public depositary shall secure the deposit of public moneys in excess of the amount insured or guaranteed by the federal deposit insurance corporation pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto, by the public moneys pooled method. A bank, savings and loan association or savings bank designated as a public depositary shall secure the deposits of one or more governmental units by depositing, pledging or granting a security interest in a pool of securities to secure the repayment of all public moneys deposited in such bank, savings and loan association or savings bank by such governmental units and not otherwise secured pursuant to law, if at all times the aggregate market value on such pool of securities so deposited, pledged or in which a security interest is granted is equal to at least 102% of the amount on deposit that is in excess of the amount so insured or guaranteed. Each such bank, savings and loan association or savings bank shall carry on such bank's or association's accounting records a general ledger or other appropriate accounting of the total amount of all public moneys to be secured by the pool of securities as determined at the opening of each business day and the aggregate market value of the pool of securities deposited, pledged or in which a security interest is granted to secure such public moneys.
(c) The treasurer may serve as the administrator with respect to a public moneys pooled method or may designate a bank, savings and loan association, savings bank, trust company or other qualified firm, corporation or association that is authorized to transact business in this state to serve as the administrator. The administrator shall not accept public deposits from a governmental unit while administering the public moneys pooled method pursuant to this section. The administrator shall submit a formal conflict of interest document in a manner prescribed by the treasurer. Expenses of such administrator shall be paid by the office of the state treasurer.
(d) The administrator shall be tasked with assessing and managing the sufficiency of the public moneys pooled method, including, but not limited to, the compliance by a bank, savings and loan association or savings bank that the aggregate market value of the pool of securities of such bank, savings and loan association or savings bank is an amount of not less than 102% of the total amount of public moneys or public funds less the portion of such public moneys or funds insured or guaranteed by the federal deposit insurance corporation and pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto. To fulfill the duties of K.S.A. 2025 Supp. 9-1410 through 9-1412, and amendments thereto, the treasurer may adopt rules and regulations to administer and implement the provisions of K.S.A. 2025 Supp. 9-1410 through 9-1412, and amendments thereto, including, but not limited to, rules and regulations to assess and manage the sufficiency of the public moneys pooled method.
(e) A bank, savings and loan association or savings bank in which public moneys or public funds are deposited may at any time substitute, exchange or release securities deposited if such substitution, exchange or release does not reduce the aggregate market value of the pool of securities to an amount that is less than 102% of the total amount of public moneys or public funds less the portion of such public moneys or funds insured or guaranteed by the federal deposit insurance corporation and pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto. Such bank, savings and loan association or savings bank shall notify the administrator if additional collateral is required to be pledged due to an increase in deposits placed by the governmental unit. Such bank, savings and loan association or savings bank shall notify the administrator if such bank, savings and loan association or savings bank desires to release collateral due to a reduction in governmental unit deposits.
(f) Each bank, savings and loan association or savings bank that satisfies its requirement to secure the deposit of public moneys or public funds in excess of the amount insured or guaranteed by the federal deposit insurance corporation by depositing, pledging or granting a security interest in a single pool of securities, or any combination thereof, shall, on or before the 10th day of each month, render to the administrator a statement showing as of the last business day of the previous month the:
(1) Amount of public moneys or public funds deposited in such bank, savings and loan association or savings bank that is not insured or guaranteed by the federal deposit insurance corporation by:
(A) Each governmental unit separately; and
(B) all governmental units in the aggregate;
(2) aggregate market value of the pool of securities; and
(3) name, phone number and email address of a representative of each governmental unit represented in the pool.
(g) Not later than 20 days after the deadline for receiving the statement required under subsection (f), the administrator shall provide a report to each governmental unit listed in such statement reflecting:
(1) The amount of public moneys or public funds deposited in such bank, savings and loan association or savings bank by each governmental unit as of the last business day of the previous month that is not insured or guaranteed by the federal deposit insurance corporation and that is secured pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto; and
(2) the aggregate market value of the pool of securities deposited as of the last business day of the previous month. Such report shall clearly notify the governmental unit if the value of the securities did not meet the statutory requirement.
(h) If the administrator at any time determines that the value of the securities does not meet the statutory requirement, the administrator shall send notice to the bank, savings and loan association or savings bank allowing such bank, savings and loan association or savings bank up to five business days to adjust the securities to meet the statutory requirement. If such bank, savings and loan association or savings bank does not meet the statutory requirement within the required timeframe, such bank, savings and loan association or savings bank shall be subject to a fine and potential sanctions issued by the administrator pursuant to rules and regulations adopted by the treasurer.
(i) The public moneys pooled method shall not be utilized by any bank, savings and loan association or savings bank unless the treasurer establishes a public moneys pooled method in accordance with this section or designates an administrator pursuant to subsection (c).
(j) This section shall take effect on and after January 1, 2026.
History: L. 2025, ch. 41, § 1; July 1.
§ 9-1411 Duties of administrator in the event of a default; liquidation of securities; delegation to federal deposit insurance agency
(a) When the administrator determines that a bank, savings and loan association or savings bank has experienced a default, the administrator shall:
(1) Ascertain the aggregate amounts of public moneys secured pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto, and deposited in the defaulting bank, savings and loan association or savings bank, as disclosed by the records of such bank, savings and loan association or savings bank. The administrator shall determine for each governmental unit for which public moneys are deposited in the defaulting bank, savings and loan association or savings bank the accounts and amount of federal deposit insurance or guarantee that is available for each account. The administrator shall then determine for each such governmental unit the amount of public moneys not insured or guaranteed by the federal deposit insurance corporation and the amount of public moneys secured by a pool of securities pledged. Upon completion of such determination, the administrator shall provide each such governmental unit with a statement that reports the amount of public moneys deposited by such governmental unit in the defaulting bank, savings and loan association or savings bank, the amount of public moneys that may be insured or guaranteed by the federal deposit insurance corporation and the amount of public moneys secured by a pool of securities, or any combination thereof, pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto. Each such governmental unit shall verify the information in such report with such governmental unit's records within 10 business days after receiving the report and information from the administrator; and
(2) shall repay each governmental unit for the public moneys not insured or guaranteed by the federal deposit insurance corporation deposited in the defaulting bank, savings and loan association or savings bank by the governmental unit upon receipt of a verified report from such governmental unit. The administrator may liquidate the securities pledged for immediate distribution if the defaulting bank, savings and loan association or savings bank is to be liquidated or if, for any other reason, the administrator determines that public moneys are not likely to be promptly paid upon demand. In the event that the amount of the deposit guaranty bond or the proceeds of the securities held by the administrator after liquidation is insufficient to cover all public moneys not insured or guaranteed by the federal deposit insurance corporation for all governmental units served by the administrator, the administrator shall pay out to each governmental unit available amounts pro rata in accordance with the respective public moneys not insured or guaranteed by the federal deposit insurance corporation for each such governmental unit.
(b) Any liquidation occurring under the provisions of this section shall conform to the procedures established in this section. In the event that a federal deposit insurance agency is appointed and acts as a liquidator or receiver of any bank, savings and loan association or savings bank under state or federal law, the duties under this section that are specified to be performed by the administrator in the event of default may be delegated to and performed by such federal deposit insurance agency.
(c) This section shall take effect on and after January 1, 2026.
History: L. 2025, ch. 41, § 2; July 1.
§ 9-1412 Reports required by a bank, savings and loan association or savings bank and the administrator upon request of a governmental unit
(a) A bank, savings and loan association or savings bank, upon the request of a governmental unit, shall report as of the date of such request the amount of public moneys deposited in such bank, savings and loan association or savings bank that is not insured or guaranteed by the federal deposit insurance corporation by:
(1) The governmental unit making the request; and
(2) the total amount for all other governmental units secured pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto, and the aggregate market value of the pool of securities deposited, pledged or in which a security interest has been granted to secure public moneys held by the bank, savings and loan association or savings bank, including those public moneys deposited by the governmental unit.
Such report shall be made on or before the date that the governmental unit specifies.
(b) The administrator, upon the request of a governmental unit, shall report as of the date of such request the aggregate market value of the pool of securities deposited, pledged or in which a security interest has been granted by the bank, savings and loan association or savings bank and provide an itemized list of the securities in such pool. The governmental unit shall specify the date on which such report shall be made by such qualified trustee.
(c) This section shall take effect on and after January 1, 2026.
History: L. 2025, ch. 41, § 3; July 1.
Article 15 Banking Code; Safe Deposit Box Rental
§ 9-1501 Authority to keep and maintain safe deposit boxes
Any bank, trust company or safe deposit corporation may maintain safe deposit boxes and rent the same for consideration. The bank, trust company or safe deposit corporation shall prescribe the hours of entry into its safe deposit vault and may also retain and require the use of a preparation or guard key for the protection of the bank, trust company or deposit corporation and the user of such box.
History: L. 1947, ch. 102, § 70; L. 2015, ch. 38, § 83; July 1.
§ 9-1502 Legal relationship between renter and bank
The relationship between any such bank, trust company or safe deposit company having and maintaining safe deposit boxes for public use and the user or users of such boxes shall be that of lessor and lessee, respectively. In the absence of a written contract to the contrary, the lessee shall be deemed by law to be in possession of such box and the contents thereof. The lessor shall not be charged with knowledge of the contents of any such box. The lessor may limit its liability to the lessee by provisions contained within a lease agreement, but the lessor shall be liable for the acts of its officers and employees for failure to exercise ordinary care.
History: L. 1947, ch. 102, § 71; L. 2015, ch. 38, § 84; July 1.
§ 9-1503 Joint tenancy of safe deposit box; liability
Joint tenancy in and to a safe deposit box may be created by contract, with two or more persons named as lessees. The terms of the contract may provide that any one or more of the lessees, or the survivor or survivors of such lessee or lessees, shall have access and entry to the safe deposit box and the right to remove the contents from such box whether the other lessee or lessees be living, incompetent or dead. If the contents are removed as provided by the contract, the lessor shall not be liable for the removal of the contents.
History: L. 1947, ch. 102, § 72; L. 2015, ch. 38, § 85; July 1.
§ 9-1504 Death of lessee or lessees in joint tenancy; opening of box; disposition of contents
(a) In the event the sole lessee or all lessees in joint tenancy named in the lease agreement covering a safe deposit box rental shall die, the safe deposit box may be opened, forcibly if necessary, at any time thereafter, in the presence of persons holding a legal or beneficial interest relating to the lessee, by two employees of the lessor, one of whom shall be an officer of the lessor. The contents shall be disposed of as follows:
(1) Instruments of a testamentary nature may be removed by the named executor. If no executor is named or if the named executor fails to act within 60 days after the date of death of the lessee, such employees may remove all instruments of a testamentary nature and deposit the same with the district court.
(2) The employees in their discretion may deliver life insurance policies therein contained to the beneficiaries named in such policies, and any deed to a cemetery lot and any burial instructions found therein to the appropriate parties.
(3) Any and all other contents of such box so opened shall be kept and retained by the bank, trust company or safe deposit company and shall be delivered only to the parties legally entitled to the same.
(b) In the event no person claims to be interested in the contents of such box within 60 days after the death of the lessee, the lessor may open the box by forcible entry and remove all instruments of a testamentary nature and deposit the same with the district court, subject to payment of rentals, expenses and repairs. Any and all other contents of such box so opened shall be kept and retained by the bank or trust company and shall be delivered only to the parties legally entitled to the same.
History: L. 1947, ch. 102, § 73; L. 1975, ch. 44, § 25; L. 1976, ch. 145, § 35; L. 1994, ch. 192, § 1; L. 1997, ch. 7, § 1; L. 2015, ch. 38, § 86; L. 2016, ch. 54, § 38; July 1.
§ 9-1505 Lessor to give information to public authority
Upon the death of any lessee of a safe deposit box and upon the request of the district court or the county clerk or the director of taxation for the state of Kansas, the lessor shall disclose whether a designated person was the lessee of a safe deposit box at the time of death.
History: L. 1947, ch. 102, § 74; L. 1976, ch. 145, § 36; L. 2015, ch. 38, § 87; July 1.
§ 9-1506 Default of lessee; notice; disposition of contents
(a) The lessor shall have a lien upon the contents of any safe deposit box for the rental thereon.
(b) The lessor may, after giving not less than 60 days' written notice to the lessee of such lessor's intention to enter the box, remove the contents and sell the same for the payment of rent due or other expenses incurred by the bank in keeping the contents, open the box forcibly and remove the contents in the presence of two of the lessor's employees, one of whom shall be an officer, when:
(1) The lessee has not paid the rent within 30 days after the same is due; or
(2) the lessee has failed to surrender possession of any box within 30 days from the date of the termination of the lease.
(c) The lessor shall retain such contents for at least 90 days after opening the box. The lessor then may sell any part or all of the contents at public sale pursuant to the requirements for a commercially reasonable sale under article 9 of the Kansas uniform commercial code and retain from the proceeds of sale the rent due, the costs of opening and repairing the box, the costs of sale and any other amounts due to the lessor.
(d) Any article, item or document without apparent market value may be destroyed after two years from the date of giving or mailing the required notice.
(e) Any notice required by this section shall be delivered either personally or by registered or certified mail, or electronically pursuant to the uniform electronic transactions act, K.S.A. 16-1601 et seq., and amendments thereto, delivered to the latest address shown on the safe deposit records of the lessor.
History: L. 1947, ch. 102, § 75; L. 1975, ch. 44, § 26; L. 2015, ch. 38, § 88; L. 2016, ch. 54, § 39; L. 2019, ch. 25, § 4; July 1.
§ 9-1507 Repealed
History: L. 1947, ch. 102, § 76; L. 1975, ch. 44, § 27; Repealed, L. 2015, ch. 38, § 151; July 1.
Article 16 Banking Code; Trust Authority
§ 9-1601 Application and authority to act as trust company; exemptions
(a) Any bank, upon the affirmative vote of at least 2/3 of the voting stock, may apply to the commissioner for approval to conduct trust business. If approval is granted by the commissioner, a special permit shall be issued and the bank shall be authorized, subject to such conditions as the commissioner may require, to exercise all powers necessary or incidental to carrying on a trust business and also may exercise the following powers to:
(1) Receive for safekeeping personal property of every description;
(2) accept and execute any trust agreement and perform any trustee duties as required by such trust agreement;
(3) act as agent, trustee, executor, administrator, registrar of stocks and bonds, conservator, assignee, receiver, custodian, corporate trustee or attorney-in-fact in any agreed-upon capacity;
(4) accept and execute all trusts and to perform any fiduciary duties as may be committed or transferred to the bank by order, judgment or decree of any court of record of competent jurisdiction;
(5) act as executor or trustee under the last will and testament, or as administrator, with or without the will annexed to the letters of administration, of the estate of any deceased person;
(6) be a conservator for any minor, incapacitated person or trustee for any convict under the appointment of any court of competent jurisdiction;
(7) receive money in trust for investment in real or personal property of every kind and nature and to reinvest the proceeds thereof;
(8) act as either an originating trustee or as a contracting trustee pursuant to K.S.A.
9-2107, and amendments thereto;
(9) buy and sell foreign or domestic exchange, gold, silver, coin or bullion;
(10) act in any fiduciary capacity and to perform any act as a fiduciary which trust companies incorporated under the laws of this state may perform under any provision of the banking or insurance laws of this state, including, without limitation, acting as a successor fiduciary to any trust company upon liquidation pursuant to K.S.A.
9-2107, and amendments thereto; and
(11) to perform or purchase trust services for or from a bank or service corporation through a trust service agency agreement provided the commissioner is notified 30 days after contracting for the service. Such notification shall include the trust services provided, the name of the servicer and the date the service will commence.
(b) (1) The commissioner has the discretion to grant or reject the application of any bank to acquire trust authority. In making such determination, the commissioner shall take into consideration:
(A) The reasonable probability of usefulness and success of the bank having trust authority;
(B) the financial history and condition of the bank and the character, qualifications and experience of the trust officers and personnel; and
(C) any other facts and circumstances that the commissioner deems appropriate.
(2) If the commissioner denies an application, the applicant shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act. Any final order of the commissioner pursuant to this section is subject to review in accordance with the Kansas judicial review act.
(c) (1) If the governing instrument limits investment of funds to deposit in time or savings deposits in the bank, any bank may act as trustee or custodian for any of the following without being issued a special permit:
(A) Individual retirement accounts established pursuant to 26 U.S.C. § 408;
(B) trusts established pursuant to 26 U.S.C. § 401; and
(C) medical savings accounts established pursuant to 26 U.S.C. § 220.
(2) If the governing instrument limits investment of funds to deposit in time, savings or demand deposits in the bank, any bank may act as a trustee or custodian for any health savings accounts established pursuant to 26 U.S.C. § 223, without being issued a special permit pursuant to subsection (a).
(d) Any state bank having been granted trust authority by the commissioner may add "and trust company" to its corporate name.
(e) A bank making application to the commissioner for approval to conduct trust business shall pay to the commissioner a fee, in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
History: L. 1947, ch. 102, § 77; L. 1965, ch. 77, § 1; L. 1967, ch. 72, § 2; L. 1975, ch. 44, § 28; L. 2005, ch. 20, § 1; L. 2005, ch. 133, § 2; L. 2015, ch. 38, § 89; L. 2016, ch. 54, § 40; July 1.
§ 9-1602 Revoking trust authority
(a) The commissioner may revoke trust authority for any bank or trust company upon finding a failure to adhere to sound fiduciary practices.
(b) If the commissioner revokes the trust authority of a bank, the bank shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act. Any final order of the commissioner pursuant to this section is subject to review in accordance with the Kansas judicial review act.
History: L. 1947, ch. 102, § 78; L. 1990, ch. 61, § 1; L. 2015, ch. 38, § 90; July 1.
§ 9-1603 Assets held in fiduciary capacity segregated; records; security of funds
(a) As soon as any bank shall exercise any trust authority, it shall segregate all assets held in any fiduciary capacity and shall keep a separate set of books and records showing in proper detail all fiduciary transactions. Such books and records shall at all times be subject to inspection and supervision of the commissioner.
(b) Funds held by such bank in trust that are awaiting investment or distribution, less the amount which is insured by the federal deposit insurance corporation, shall have United States bonds or other securities approved by the commissioner pledged to such funds in an equal sum.
History: L. 1947, ch. 102, § 79; L. 1963, ch. 63, § 1; L. 2015, ch. 38, § 91; July 1.
§ 9-1604 Liquidation, termination of trust business
Upon the affirmative vote of a majority of the outstanding voting stock, any bank having trust authority may terminate the bank's trust business. The termination of trust services shall be done in accordance with the Kansas uniform trust code and with the contracting trustee provisions of K.S.A. 9-2107, and amendments thereto. Any bank terminating the bank's trust business may surrender such bank's special permit for trust authority or be granted inactive status pursuant to K.S.A. 9-1703, and amendments thereto.
History: L. 1947, ch. 102, § 80; L. 1951, ch. 120, § 3; L. 1996, ch. 175, § 16; L. 2015, ch. 38, § 92; July 1.
§ 9-1605 Repealed
History: L. 1947, ch. 102, § 81; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1606 Repealed
History: L. 1947, ch. 102, § 82; L. 1965, ch. 77, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1607 Appointment of nominee when acting as fiduciary; records
(a) Any bank or trust company, when acting as a fiduciary or a co-fiduciary with others and with the consent of its co-fiduciary or co-fiduciaries, if any, that are hereby authorized to give such consent, may cause any investment held in any such capacity to be registered and held in the name of a nominee or nominees of such bank or trust company. Such bank or trust company shall be liable for the acts of any such nominee with respect to any investment so registered.
(b) The records of the bank or trust company shall at all times show the ownership of any investment registered and held in the name of a nominee, which investment shall be in the control of the bank or trust company and be kept separate and apart from the assets of the bank or trust company.
History: L. 1951, ch. 122, § 1; L. 2015, ch. 38, § 93; L. 2016, ch. 54, § 41; July 1.
§ 9-1608 Repealed
History: L. 1951, ch. 122, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1609 Fiduciary may establish collective investment funds
(a) Any bank or trust company authorized to act as fiduciary may establish collective investment funds for the purpose of furnishing investments to:
(1) Such bank or trust company as fiduciary;
(2) such bank or trust company and others, as co-fiduciaries;
(3) another state or national bank or trust company, as fiduciary, which is a subsidiary of the same bank holding company of which the bank or trust company is a subsidiary, as such terms are defined in K.S.A. 9-519, and amendments thereto; or
(4) another state or national bank or trust company with which the bank or trust company is affiliated through common control, as defined in K.S.A. 9-1612, and amendments thereto.
(b) Any bank or trust company authorized to act as fiduciary may, as such fiduciary or co-fiduciary, invest funds which it lawfully holds for investment in interests in such collective investment funds, if such investment is not prohibited by the instrument, judgment, decree or order creating such fiduciary relationship, and if, in the case of co-fiduciaries, the bank or trust company procures the consent of its co-fiduciaries to such investment.
History: L. 1951, ch. 123, § 1; L. 1986, ch. 56, § 3; L. 2015, ch. 38, § 94; L. 2016, ch. 54, § 42; L. 2018, ch. 4, § 1; July 1.
§ 9-1610 Repealed
History: L. 1951, ch. 123, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1611 Bank or trust company acting as fiduciary may deal in manner authorized by instrument with company having control of bank or trust company
Whenever the governing instrument of any trust authorizes a bank or trust company acting as fiduciary to engage in any of the following activities, such instrument shall also be deemed to authorize the bank or trust company to engage in the following activities, with any company which has or acquires control of such bank or trust company:
(a) Hold as a trust investment the bank's or trust company's own stock or obligations, or property acquired from the bank or trust company; or
(b) sell or transfer, by loan or otherwise, property held as fiduciary to the bank or trust company; or
(c) purchase for investment the stock or obligations of, or property from, the bank or trust company.
History: L. 1973, ch. 49, § 1; L. 2015, ch. 38, § 95; L. 2016, ch. 54, § 43; July 1.
§ 9-1612 Company having control over a bank or trust company defined
For the purposes of K.S.A. 9-1601 through 9-1611, and amendments thereto, any company has control over a bank or trust company if the company directly or indirectly, or acting through one or more persons:
(a) Owns, controls or has power to vote 25% or more of any class of voting securities of the bank or trust company;
(b) controls, in any manner, the election of a majority of the directors or trustees of the bank or trust company; or
(c) has the power to direct the management or policies of the bank or trust company.
History: L. 1973, ch. 49, § 2; L. 2015, ch. 38, § 96; July 1.
Article 17 Banking Code; Supervision; Commissioner
§ 9-1701 Examination of banks and trust companies; other reports
(a) The commissioner or the commissioner's staff shall visit each bank and trust company at least once every 18 months, and may visit any bank or trust company at any time the commissioner deems necessary for the purpose of making an examination or inquiry into the condition of the affairs of such bank or trust company. For such purpose, the commissioner and the commissioner's staff are authorized to administer oaths and to examine under oath the directors, officers, employees and agents of any bank or trust company.
(b) The results of any examination pursuant to this section shall be reduced to writing by the commissioner or the commissioner's staff. The commissioner shall provide to the board of directors of the bank or trust company a copy of the examination report. No person shall personally examine a bank or trust company if that person is a stockholder of, indebted to or otherwise financially interested in that bank or trust company.
(c) The examination team may conduct an exit review meeting with the board of directors of a bank or trust company following the examination of such bank or trust company as provided in subsection (a).
(d) The commissioner is hereby authorized to accept any examination report or any other report on a state bank or trust company made by the:
(1) Federal deposit insurance corporation or its successor;
(2) federal reserve bank; or
(3) consumer financial protection bureau.
History: L. 1947, ch. 102, § 87; L. 1965, ch. 78, § 1; L. 1975, ch. 44, § 29; L. 1976, ch. 59, § 1; L. 1984, ch. 48, § 13; L. 1991, ch. 47, § 1; L. 2015, ch. 38, § 97; July 1.
§ 9-1702 Examination of fiduciaries and affiliated organizations and their officers and employees
(a) The commissioner or the commissioner's staff is hereby authorized to examine the fiduciary affairs of any officer or employee of any bank or trust company when such officer or employee is serving in any fiduciary capacity that may affect the safety and soundness of such bank or trust company.
(b) The commissioner or the commissioner's staff is hereby authorized to examine any investment company, holding company, corporation or any other form of business entity which is affiliated with any bank or trust company to fully ascertain:
(1) The relationship between such bank or trust company and any such affiliate; and
(2) the effect of such relationship on the bank or trust company.
(c) For the purposes of this section, "affiliate" shall have the meaning ascribed to it in section 2 of the bank holding act of 1956, 12 U.S.C. § 1841.
History: L. 1947, ch. 102, § 88; L. 1975, ch. 44, § 30; L. 2005, ch. 6, § 1; L. 2015, ch. 38, § 98; July 1.
§ 9-1703 Examination and administrative expenses; annual assessment, due dates for payments, delinquency penalty; disposition of receipts; bank commissioner fee fund
(a) The expense of every regular examination, together with the expense of administering the banking and savings and loan laws, including salaries, travel expenses, supplies and equipment shall be paid by the banks and savings and loan associations of the state. Prior to the beginning of each fiscal year, the commissioner shall make an estimate of the expenses to be incurred by the department during such fiscal year. From this total amount, the commissioner shall deduct the estimated amount of the anticipated annual income to the fund from all sources other than bank and savings and loan association assessments. The commissioner shall allocate and assess the remainder to the banks and savings and loan associations in the state on the basis of their total assets, as reflected in the last March 31 report called for by the federal deposit insurance corporation under the provisions of section 7 of the federal deposit insurance act, 12 U.S.C. § 1817 or K.S.A. 17-5610, and amendments thereto, except that the annual assessment will not be less than $1,000 for any bank or savings and loan association.
(b) (1) The expense of every regular trust examination, together with the expense of administering trust laws, including salaries, travel expenses, supplies and equipment, shall be paid by the trust companies and trust departments of banks of this state. Prior to the beginning of each fiscal year, the commissioner shall make an estimate of the trust expenses to be incurred by the department during such fiscal year. The commissioner shall allocate and assess the trust departments in the state on the basis of their total fiduciary assets, as reflected in the last December 31 report called for by the federal deposit insurance corporation under the provisions of section 7 of the federal deposit insurance act, 12 U.S.C. § 1817 or K.S.A. 17-5610, and amendments thereto, except that the annual assessment shall not be less than $1,000 for any active trust department. The commissioner shall allocate and assess the trust companies in the state on the basis of their fiduciary assets as reflected in the last December 31 report filed with the commissioner pursuant to K.S.A. 9-1704, and amendments thereto, except that the annual assessment will not be less than $1,000 for any active trust company. A trust department or trust company which has no fiduciary assets, as reflected in the last December 31 report called for by the federal deposit insurance corporation under the provisions of section 7 of the federal deposit insurance act, 12 U.S.C. § 1817 or K.S.A. 17-5610, and amendments thereto, may be granted inactive status by the commissioner and the annual assessment shall not be more than $100 for the inactive trust department.
(2) No inactive trust department or trust company shall accept any fiduciary assets or exercise any part of or all of its trust authority until such time as it has applied for and received prior written approval of the commissioner to reactivate its trust authority.
(c) (1) A statement of each assessment made under the provisions of subsection (a) or (b) shall be sent by the commissioner on July 1 or the next business day thereafter, to each bank, savings and loan association, trust department and trust company that exists as a corporate entity with the secretary of state's office and is authorized by the commissioner to conduct banking, savings and loan or trust business. The assessment may be collected by the commissioner as needed and in such installment periods as the commissioner deems appropriate, but no more frequently than monthly. When the commissioner issues an invoice to collect the assessment, payment shall be due within 15 days of the date of the invoice. The commissioner may impose a penalty upon any bank, savings and loan association, trust department or trust company which fails to pay its annual assessment when it is 15 days or more past due. The penalty shall be assessed in the amount of $50 for each day the assessment is past due.
(2) The commissioner shall remit all moneys received from such examination fees to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury and credit 10% of each deposit to the state general fund with the balance transferred to the bank commissioner fee fund. All expenditures from the bank commissioner fee fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the commissioner or by a person or persons designated by the commissioner.
(d) The amount of expenses incurred and the cost of service performed on account of any bank, trust department or trust company or other corporation which are outside the normal expenses of an examination required under the provisions of K.S.A. 9-1701 or 17-5612, and amendments thereto, shall be charged to and paid by the bank, trust department, trust company or corporation for which such expenses were incurred or cost of services performed.
(e) As used in this section, "savings and loan association" means a Kansas state-chartered savings and loan association.
(f) (1) In the event a bank, savings and loan association or trust company is merged into, consolidated with or the assets and liabilities of which are purchased and assumed by another bank, savings and loan association or trust company between the preceding March 31 and June 30, for banks and savings and loan associations, or the preceding December 31 and June 30, for trust companies, the surviving or acquiring bank, savings and loan association or trust company is obligated to pay the assessment based on the value of the assets of all institutions involved with the merger, consolidation or assumption for the following fiscal year commencing July 1.
(2) In the event a bank, savings and loan association or trust company is merged into, consolidated with or the assets and liabilities of which are purchased and assumed by another bank, savings and loan association or trust company after July 1, the surviving entity shall be obligated to pay the unpaid portion of the assessment for the remainder of the fiscal year commencing July 1 which would have been due of the institution being merged, consolidated or assumed.
History: L. 1947, ch. 102, § 89; L. 1949, ch. 110, § 3; L. 1955, ch. 65, § 1; L. 1959, ch. 61, § 1; L. 1965, ch. 79, § 1; L. 1969, ch. 62, § 1; L. 1973, ch. 50, § 2; L. 1975, ch. 44, § 31; L. 1981, ch. 55, § 1; L. 1985, ch. 57, § 2; L. 1992, ch. 49, § 1; L. 1993, ch. 30, § 1; L. 1994, ch. 33, § 1; L. 1995, ch. 25, § 1; L. 1996, ch. 39, § 1; L. 2000, ch. 12, § 1; L. 2001, ch. 5, § 43; L. 2006, ch. 89, § 3; L. 2010, ch. 99, § 1; L. 2011, ch. 36, § 1; L. 2011, ch. 91, § 5; L. 2015, ch. 38, § 99; July 1.
§ 9-1704 Reports to commissioner; publication, when
(a) Each bank or trust company shall be required to make a report to the commissioner at any time upon the commissioner's request. Such reports shall be in a form and manner prescribed by the commissioner and shall be verified by the president, chief executive officer or cashier and attested to by at least three directors of the bank or trust company, none of whom shall have verified the report. The report shall show in detail the assets and liabilities of the bank or trust company at the close of business upon the date determined by the commissioner. The commissioner may require a copy of the report, or a portion thereof, to be published in a newspaper, published in or having a general circulation in the place where the bank or trust company is located, within 10 days after the report is forwarded to the commissioner. The expense of publication shall be paid by the bank or trust company.
(b) Each trust company shall report to the commissioner all assets held by the trust company in a fiduciary capacity as of December 31 of each year. The report shall be in the form and manner prescribed by the commissioner and shall be filed with the commissioner by January 30 of each year. The commissioner may require the report to be filed using an electronic means.
(c) Each trust department of a bank shall report to the commissioner all assets held by the trust department in a fiduciary capacity at any time upon the commissioner's request. The report shall be in the form prescribed by the commissioner. The commissioner may require the report to be filed using an electronic means.
(d) A request for information made pursuant to this section shall be made in writing and mailed to each bank and trust company. The request shall be deemed to be legal notice to each bank and trust company. The request may include the requirement for the filing of information by the bank or trust company using electronic means.
History: L. 1947, ch. 102, § 90; L. 1975, ch. 44, § 32; L. 1984, ch. 48, § 14; L. 1995, ch. 158, § 1; L. 2006, ch. 89, § 4; L. 2015, ch. 38, § 100; L. 2016, ch. 54, § 44; July 1.
§ 9-1705 Repealed
History: L. 1947, ch. 102, § 91; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1706 Repealed
History: L. 1947, ch. 102, § 92; L. 1975, ch. 44, § 33; L. 2006, ch. 89, § 5; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1707 Repealed
History: L. 1947, ch. 102, § 93; L. 1975, ch. 44, § 34; L. 2006, ch. 89, § 6; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1708 Refusal to be examined; remedy
No officer, director, employee or agent of any bank or trust company shall refuse the examination and inspection of the bank or trust company by the commissioner or in any manner obstruct or interfere with the examination and investigation of such bank or trust company or refuse to be examined under oath concerning any of the affairs of such bank or trust company. The commissioner may take such action as available pursuant to K.S.A. 9-1714, 9-1805, 9-1807 or 9-1809, and amendments thereto, to remedy any violation of the provisions of this section.
History: L. 1947, ch. 102, § 95; L. 2015, ch. 38, § 101; July 1.
§ 9-1709 Failure to respond to a lawful request of the commissioner
(a) No bank or trust company shall refuse or neglect for more than 60 days to comply with or respond to a written, lawful request of the commissioner. If the bank or trust company does not comply with or respond to any such request, the commissioner may issue an order notifying the bank or trust company that continued failure to comply with the request shall result in the forfeiture of the authority to transact business. Any bank or trust company receiving notice of such order shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act. Any final order of the commissioner is subject to review in accordance with the Kansas judicial review act.
(b) If any request or requirement made pursuant to an order issued under subsection (a) remains unsatisfied after a period of time as provided in the order, the commissioner shall appoint a receiver pursuant to article 19 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto. The order appointing the receiver shall not be subject to the Kansas administrative procedure act or the Kansas judicial review act.
(c) The commissioner may take such additional action as available pursuant to K.S.A. 9-1714, 9-1805, 9-1807 or 9-1809, and amendments thereto, to protect the depositors and creditors of the bank or trust company.
History: L. 1947, ch. 102, § 96; L. 1981, ch. 324, § 7; L. 2015, ch. 38, § 102; July 1.
§ 9-1710 Repealed
History: L. 1947, ch. 102, § 97; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1711 Repealed
History: L. 1947, ch. 102, § 98; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1712 Examination of records and investigative materials of commissioner, confidential; disclosure
(a) All information the state bank commissioner generates in making an investigation or examination of a state bank or trust company shall be confidential information.
(b) All confidential information shall be the property of the state of Kansas and shall not be disclosed except upon the written approval of the commissioner.
(c) Except for disclosure pursuant to subsection (e) and K.S.A.
9-2014, and amendments thereto, the commissioner shall give 10 days prior written notice to the affected bank or trust company of intent to disclose confidential information.
(d) Any bank or trust company receiving notice of the intent to disclose confidential information may object to the disclosure of the confidential information and shall be afforded the right to a hearing in accordance with the provisions of the Kansas administrative procedure act.
(e) (1) The commissioner may furnish to the federal deposit insurance corporation, or to any officer or examiner thereof, a copy of any or all examination reports made by the commissioner, or the commissioner's examiners, of any bank or trust company insured by such corporation. The commissioner may disclose to the federal deposit insurance corporation, or any official or examiner thereof, any and all information contained in the commissioner's office concerning the condition of any bank or trust company insured by such corporation.
(2) The commissioner may disclose any and all information contained in the commissioner's office concerning the condition of any bank or trust company to the:
(A) Federal reserve bank;
(B) office of the comptroller of currency;
(C) federal home loan bank;
(D) office of thrift supervision;
(E) financial crimes enforcement network; or
(F) consumer financial protection bureau.
(3) The commissioner may furnish to the state treasurer a copy of any or all examination information relating specifically to apparent violations of the uniform unclaimed property act, K.S.A.
58-3934 through
58-3978, and amendments thereto.
(4) To reduce the potential for duplicative and burdensome filings, examinations and other regulatory activities, the commissioner, by agreement, may establish an information sharing and exchange program with any regulatory agency of this state, another state or the United States concerning activities that are financial in nature, incidental to financial activities, or complementary to financial activities, as those terms are used in 15 U.S.C. § 6801 et seq. on the effective date of this act. Each agency that is party to such an agreement shall agree to maintain confidentiality of information that is confidential under applicable state or federal law and to take all reasonable steps to oppose any effort to secure disclosure of the information by such agency.
(5) Disclosure of information by or to the commissioner pursuant to this section shall not constitute a waiver of or otherwise affect or diminish a privilege to which the information is otherwise subject, whether or not the disclosure is governed by a confidentiality agreement. "Privilege" includes any work product, attorney-client or other privilege recognized under federal or state law.
(6) Nothing in this section shall be construed to limit the powers of the commissioner with reference to examinations and reports required by the state banking code.
(f) As used in this section, "information" means, but is not limited to, all documents, oral and written communication and all electronic data.
(g) Any person that violates this section, upon conviction, shall be guilty of a class C misdemeanor.
(h) The commissioner may provide any person with a letter of good standing upon request. Any person requesting a letter of good standing shall pay to the commissioner a fee in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in investigating and complying with the request. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A.
75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
History: L. 1947, ch. 102, § 99; L. 1987, ch. 54, § 8; L. 1990, ch. 62, § 1; L. 2015, ch. 38, § 103; L. 2016, ch. 54, § 45; July 1.
§ 9-1713 Adoption of rules and regulations; approval of board
Except as otherwise provided by law, in order to promote safe and sound practices for entities regulated by the commissioner, the commissioner shall promulgate such rules and regulations as shall be necessary to implement the provisions of K.S.A. 9-542, and amendments thereto, commonly known as the state banking code. All rules and regulations shall first be submitted to the state banking board for the state banking board's approval and upon approval shall be filed as provided by article 4 of chapter 77 of the Kansas Statutes Annotated, and amendments thereto.
History: L. 1965, ch. 81, § 1; L. 1984, ch. 48, § 15; L. 2000, ch. 106, § 3; L. 2003, ch. 57, § 2; L. 2015, ch. 38, § 104; July 1.
§ 9-1714 Appointment of special deputy bank commissioner
(a) Whenever the commissioner shall determine that the business of any bank or trust company is being conducted in an unlawful or unsound manner, the commissioner may appoint a special deputy bank commissioner who shall immediately take charge of the operation of such bank or trust company for the purpose of resolving any unlawful or unsound condition or operation.
(b) After appointment, the special deputy bank commissioner shall continue to serve under the direction of the commissioner for such period of time as may be deemed reasonable and necessary by the commissioner and, during such period, such special deputy bank commissioner's salary, which shall be determined by the commissioner, and expenses shall be borne by the bank or trust company under supervision.
(c) After such appointment, any such bank or trust company shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act. Any final order of the commissioner pursuant to this section is subject to review in accordance with the Kansas judicial review act.
History: L. 1965, ch. 82, § 1; L. 1975, ch. 44, § 35; L. 1988, ch. 356, § 40; L. 2001, ch. 87, § 12; L. 2015, ch. 38, § 105; July 1.
§ 9-1715 Special orders; procedures
(a) (1) Notwithstanding any provision of law to the contrary, the commissioner shall have the power to authorize any or all banks to engage in any activity in which any other bank, savings and loan association or a savings bank, organized under the laws of the United States, this state or any other state with deposits insured by the United States government is lawfully authorized to engage in at the time authority is granted.
(2) The commissioner shall have the power to authorize any or all Kansas trust companies, trust departments or both to engage in any trust-related activity in which any trust company or trust department, organized under the laws of the United States, this state or any other state, is lawfully authorized to engage in at the time authority is granted.
(b) (1) The commissioner shall exercise the power granted in subsection (a) by the issuance of a special order if the commissioner deems such action is reasonably required to: (A) Preserve and protect the welfare of a particular institution; or (B) preserve the welfare of all state banks or trust companies and to promote competitive equality of state and other insured depository institutions.
Such special order shall provide for the effective date thereof and upon and after such date shall be in full force and effect until amended or revoked by the commissioner. Promptly following issuance, the commissioner shall mail a copy of each special order to all state banks and trust companies and * shall be published in the Kansas register.
(c) The commissioner, at the time of issuing any special order pursuant to this section, shall prepare a written report, which shall include a description of the special order and a copy of the special order and submit the written report to:
(1) The president and the minority leader of the senate;
(2) the chairperson and ranking minority member of the senate standing committee on financial institutions and insurance;
(3) the speaker and the minority leader of the house of representatives;
(4) the chairperson and ranking minority member of the house of representatives standing committee on financial institutions; and
(5) the governor.
(d) Within two weeks of the beginning of each legislative session, the commissioner shall submit to the senate committee on financial institutions and insurance and the house of representatives committee on financial institutions, a written summary of each special order issued during the preceding year. Upon request of the chair of the senate standing committee on financial institutions and insurance or the chair of the house standing committee on financial institutions, the commissioner, or the commissioner's designee, shall appear before the committee to discuss any special order issued during the preceding year. If the committee desires information concerning the economic impact of any special order, the committee chair or ranking minority member may request assistance from the division of budget.
(e) The issuance of special orders under this section shall not be subject to the provisions of article 4 of chapter 77 of the Kansas Statutes Annotated, and amendments thereto.
(f) The powers contained in this section shall be in addition to any and all other powers granted to the commissioner.
History: L. 1967, ch. 74, § 1; L. 1975, ch. 44, § 36; L. 1980, ch. 48, § 1; L. 1986, ch. 57, § 11; L. 1995, ch. 74, § 1; L. 1999, ch. 12, § 1; L. 2000, ch. 19, § 1; L. 2001, ch. 33, § 1; L. 2015, ch. 38, § 106; L. 2016, ch. 54, § 46; July 1.
§ 9-1716 Powers of commissioner; order restricting declaration and payment of dividends
If the commissioner shall determine that the condition of any bank is such that dividends should not be declared and paid from capital or that such dividends should be declared and paid only subject to certain conditions, the commissioner shall render an order prohibiting or limiting the declaration and payment of dividends. Upon receiving notice of the order, the bank shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act. Any final order of the commissioner pursuant to this section is subject to review in accordance with the Kansas judicial review act.
History: L. 1975, ch. 44, § 2; L. 1988, ch. 356, § 41; L. 2015, ch. 38, § 107; July 1.
§ 9-1717 Prohibition against felon from serving as director, officer or employee
(a) Except with the written consent of the commissioner, no person shall serve as a director, officer or employee of a state bank or state trust company who has been convicted, or who is hereafter convicted, of any felony or any crime involving dishonesty or a breach of trust.
(b) Any state bank or state trust company that willfully violates subsection (a), shall be deemed guilty of a misdemeanor and upon conviction shall be punished by a fine of $1,000 for each day the violation continues.
History: L. 1984, ch. 48, § 1; L. 2015, ch. 38, § 108; L. 2021, ch. 78, § 4; July 1.
§ 9-1718 Repealed
History: L. 1984, ch. 48, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1719 Change of control; definitions
As used in K.S.A. 9-1719 to 9-1722, inclusive, and amendments thereto:
(a) "Applicant" means a person who has submitted a change of control application pursuant to K.S.A. 9-1721, and amendments thereto.
(b) "Control" means the power to:
(1) Vote 25% or more of any class of voting shares;
(2) direct, in any manner, the election of a majority of the directors; or
(3) direct or exercise a controlling influence over the management or policies.
(c) "Person" means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed in this subsection.
History: L. 1984, ch. 47, § 1; L. 1987, ch. 54, § 9; L. 2015, ch. 38, § 109; L. 2024, ch. 15, § 14; July 1.
§ 9-1720 Change of control; approval
(a) Except with the prior written approval of the commissioner, or as otherwise permitted by the state banking code, it shall be unlawful for:
(1) A person acting directly, indirectly or in concert with one or more persons, either directly or indirectly, to engage in any activity that may result or results in acquiring control of any bank, bank holding company as defined in K.S.A. 9-519, and amendments thereto, or trust company without notifying the commissioner at least 30 days prior to acquiring control. The commissioner may determine if an activity may result or results in a change of control under this paragraph;
(2) a bank to merge or consolidate with any bank or institution, or either directly or indirectly acquire the assets of, or assume the liability to pay any deposit made in any other bank or institution, referred to hereinafter as a merger transaction; or
(3) a trust company to merge or consolidate with any trust company, or either directly or indirectly acquire the assets of any other trust company, referred to hereinafter as a merger transaction.
(b) The board of directors of any privately held bank, bank holding company or trust company shall notify the commissioner of any change of control of the bank, bank holding company or trust company at least 30 days prior to the date the change of control becomes effective.
(c) A trust company may merge or consolidate with a trust company, with the prior written approval of the commissioner chartered by:
(1) The comptroller of the currency; or
(2) another state. An application filed pursuant to this subsection shall be subject to the provisions of K.S.A. 9-1721, 9-1722 and 9-1724, and amendments thereto.
History: L. 1984, ch. 47, § 2; L. 2015, ch. 38, § 110; L. 2016, ch. 54, § 47; L. 2018, ch. 4, § 2; March 8.
§ 9-1721 Application process; approval factors and criteria; time frame
(a) The person proposing to acquire control or a bank or trust company undertaking a merger transaction, hereinafter referred to as the applicant, shall file a complete application with the commissioner at least 60 days prior to the proposed change of control or merger transaction. If the commissioner does not act on the complete application within the 60-day time period and the applicant has received approval from all other applicable federal and state agencies, the application shall stand approved. The commissioner may, for any reason, extend the time period to act on an application for an additional 30 days. The time period to act on an application may be further extended if the commissioner determines that the applicant has not furnished all the information required under K.S.A. 9-1722, and amendments thereto, or that, in the commissioner's judgment, any material information submitted is substantially inaccurate. The commissioner may waive the 60-day prior notice requirement if the acquired bank or trust company is under a formal corrective action.
(b) Upon the filing of an application, the commissioner shall make an investigation of the applicant for the change of control or merger transaction. The commissioner may deny the application if the commissioner finds the:
(1) Proposed change of control or merger transaction would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking or trust services in any part of this state;
(2) financial condition of the applicant might jeopardize the financial stability of the bank or trust company or prejudice the interests of the depositors of a bank;
(3) competence, experience or integrity of the applicant or of any of the proposed management personnel of the bank or trust company or resulting bank or trust company indicates it would not be in the interest of the depositors of the bank, the clients of trust services, or in the interest of the public; or
(4) applicant neglects, fails or refuses to furnish the commissioner with all of the information required by the commissioner.
(c) Upon service of an order denying an application, the applicant shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act before the state banking board. Any final order of the commissioner pursuant to this section is subject to review in accordance with the Kansas judicial review act.
History: L. 1984, ch. 47, § 3; L. 1986, ch. 318, § 17; L. 1988, ch. 356, § 42; L. 2010, ch. 17, § 28; L. 2015, ch. 38, § 111; L. 2016, ch. 54, § 48; L. 2018, ch. 4, § 3; L. 2024, ch. 64, § 62; July 1.
§ 9-1722 Application requirements; fingerprinting; fees
(a) A change of control application filed pursuant to K.S.A. 9-1721, and amendments thereto, shall contain the following information:
(1) The identity, personal history, business background and experience of each person by or for whom the change of control is to be made, including the material business activities and affiliations during the past five years and a description of any material pending legal or administrative proceedings in which the person is a party and any criminal indictment or conviction of such person by a state or federal court;
(2) a statement of the assets and liabilities of each person by or for whom the change of control is to be made, along with any related statements of income and source and application of funds, as of a date not more than 90 days prior to the date of the application. Individuals who own 10% or more shares in a bank holding company, as defined in K.S.A. 9-519, and amendments thereto, shall file the financial information required by this paragraph;
(3) the terms and conditions of the proposed change of control and the manner in which such change of control is to be made;
(4) the identity, source and amount of the funds or other considerations used or to be used in making the change of control and, if any part of these funds or other considerations has been or is to be borrowed or otherwise obtained for such purpose, a description of the transaction, the names of the parties, and any arrangements, agreements or understandings with such persons;
(5) any plans or proposals which any applicant may have to liquidate the bank or trust company or to make any other major change in the bank's or trust company's business or corporate structure or management;
(6) the identification of any person employed, retained or to be compensated by any party or by any person on such person's behalf to make solicitations or recommendations to stockholders for the purpose of assisting in the change of control and a brief description of the terms of such employment, retainer or arrangement for compensation;
(7) copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed change of control;
(8) when applicable, the certified copies of the stockholder proceedings showing a majority of the outstanding voting stock was voted in favor of the change of control; and
(9) any additional relevant information in the form and manner prescribed by the commissioner.
(b) A merger transaction application filed pursuant to K.S.A. 9-1721, and amendments thereto, shall contain the following information:
(1) The structure, terms and conditions and financing arrangements of the proposed merger transaction;
(2) a complete and final copy of the merger transaction agreement;
(3) certified copies of the stockholder proceedings showing a majority of the outstanding voting stock of the banks or trust companies in the merger transaction was voted in favor of the merger transaction;
(4) a list of directors and senior executive officers of the resulting bank or trust company;
(5) one year pro forma statements of financial conditions and future prospects of the resulting bank or trust company, including capital positions;
(6) how the merger transaction will meet the convenience and needs of the community; and
(7) any other relevant information in the form and manner prescribed by the commissioner.
(c) With regard to any trust company which files a notice pursuant to this section, the commissioner may require fingerprinting of an applicant in accordance with K.S.A. 2025 Supp. 22-4714, and amendments thereto.
(d) The commissioner may accept an application filed with the federal reserve bank or federal deposit insurance corporation in lieu of an application filed pursuant to subsection (a). The commissioner may, in addition to such application, request additional relevant information.
(e) At the time of filing an application pursuant to K.S.A. 9-1721, and amendments thereto, or an application filed pursuant to subsection (d), the applicant shall pay to the commissioner a fee in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
History: L. 1984, ch. 47, § 4; L. 1986, ch. 55, § 3; L. 1992, ch. 62, § 4; L. 2012, ch. 161, § 12; L. 2015, ch. 38, § 112; L. 2016, ch. 54, § 49; L. 2024, ch. 15, § 15; July 1.
§ 9-1723 Repealed
History: L. 1984, ch. 47, § 5; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1724 Provisions of K.S.A. 9-1720 through 9-1724 not applicable to mergers resulting in a national bank; notice of such merger required; charter of bank or trust company that ceases existence deemed void, when
(a) The provisions of K.S.A. 9-1720 through 9-1724, and amendments thereto, shall not apply to the merger transaction of a bank or trust company when the surviving entity is a national banking association or other state or federally chartered financial institution or a trust company, except that the bank or trust company shall provide written notification to the commissioner of such a merger, consolidation or transfer of assets and liabilities at least 10 days prior to the consummation of any such transaction.
(b) Any bank or trust company that will cease to exist following the consummation of any approved merger transaction shall have its charter deemed void on the next business day immediately following the merger consummation date. Not more than 15 days following any merger transaction, any bank or trust company that will cease to exist shall surrender such bank's or trust company's state certificate of authority or charter and shall certify in writing that the proper instruments have been executed and filed in accordance with K.S.A. 17-6003, and amendments thereto.
(c) Notice of the merger transaction shall be published twice in a newspaper of general circulation in each city or county where the bank or trust company is located, or the newspaper nearest such city or county, and a certified copy of each notice shall be filed with the commissioner. The first publication shall be not later than five days after an application is filed. The second publication shall be on the 14th day after the date of the first publication or if the newspaper does not publish on the 14th day, then the date that is the closest to the 14th day. The notice shall be in the form prescribed by the commissioner and shall provide for a comment period of not less than 10 days after the date of the second publication.
History: L. 1984, ch. 47, § 6; L. 1987, ch. 54, § 10; L. 1992, ch. 62, § 5; L. 1993, ch. 156, § 1; L. 1994, ch. 28, § 1; L. 1995, ch. 19, § 2; L. 2015, ch. 38, § 113; L. 2016, ch. 54, § 50; L. 2025, ch. 78, § 4; July 1.
§ 9-1725 Powers of the commissioner during existence of an emergency
(a) Whenever the commissioner is of the opinion that an emergency, as defined by K.S.A. 9-1122, and amendments thereto, exists or is impending in this state which affects, or may affect, a particular bank, trust company, multiple banks or multiple trust companies, the commissioner may, by proclamation, temporarily close the particular institutions located in the affected area. The banks or trust companies so closed shall remain closed until the commissioner proclaims that the emergency has ended.
(b) The commissioner may approve a request for an emergency temporary closing and subsequent reopening of a particular bank or trust company by the officers of such bank or trust company pursuant to K.S.A. 9-1122, and amendments thereto.
(c) Whenever the commissioner is of the opinion that an emergency, as defined by K.S.A. 9-1122, and amendments thereto, affects, or may affect, a particular bank, branch bank, trust company or trust service office, the commissioner may approve a temporary relocation of the bank, branch bank, trust company or trust service office. The temporary relocation shall be as close as the commissioner determines is safely possible to the bank, branch bank, trust company or trust service office's approved place of business.
(d) Every day that any bank, branch bank, trust company, or trust service office thereof, remains closed pursuant to this section shall be deemed a holiday for all of the purposes of chapter 84 of the Kansas Statutes Annotated, and amendments thereto, and with respect to any banking business of any character. No bank, branch bank, trust company or trust service office shall be required to permit access to such bank's, branch bank's or trust company's safe deposit vault or vaults on any such day. If the terms of a contract require the payment of money or the performance of a condition on any such day by, through, with or at any bank, branch bank, trust company or trust service office, then the payment may be made or condition performed on the next business day with the same force and effect as if made or performed in accordance with the terms of the contract. No liability or loss of rights of any kind shall result from the delay.
(e) Any bank, branch bank, trust company or trust service office temporarily closed or relocated pursuant to this section shall post notice of such closing in a conspicuous place at each closed location. Such notice shall serve as official notification to everyone of the temporary closing or relocation of the bank, branch bank, trust company or trust service office and thereafter no liability shall be incurred by the bank or trust company by reason of the temporary closing or relocation pursuant to this section.
History: L. 2015, ch. 38, § 2; July 1.
§ 9-1726 Fees; rules and regulations
(a) Except as provided in subsection (b), at the time of filing any application described below, the applicant shall remit to the commissioner a nonrefundable fee in the amount of:
- (1) Bank or trust company charter $2,500
- (2) New branck bank 7500
- (3) Relocation of a branch bank or main office 7500
- (4) Merger, consolidation or transfer of assets and liabilities 1,000
- (5) Change of control:
- (A) General 1000
- (B) Bona fide gift of inheritance 500
- (C) Formation of one-bank holding company and associated exchange of stock 500
- (6) Conversion to state charter 500
- (7) Fiduciary activities:
- (A) Trust authority 500
- (B) Trust branch 500
- (C) Trust service office 500
- (D) Contracting trustee agreement 500
- (E) Out of state trust facility 500
- (8) Change of name 250
- (9) Revenue bond pledgibility 200
- (10) Leter of good standing 50
(b) The commissioner may adopt rules and regulations to change the amount of the fees established in subsection (a) to an amount not to exceed 150% of any such fee established in subsection (a).
(c) The commissioner may waive any fee established by this section.
(d) Any applicant may be required by the commissioner to pay any additional cost associated with any examination or investigation if the commissioner determines that an on-site examination of the financial institutions or trust companies that are parties to the application is necessary.
(e) Within two weeks of the beginning of each legislative session, the commissioner shall submit to the senate committee on ways and means, the appropriate senate budget subcommittee, the house of representatives committee on appropriations and the appropriate house of representatives budget committee, a written summary of any rules and regulations adopted to establish fees pursuant to subsection (b) during the preceding year.
(f) The commissioner may adopt rules and regulations necessary to administer the provisions of this section.
History: L. 2015, ch. 38, § 12; July 1.
Article 18 Banking Code; Supervision; Board
§ 9-1801 Repealed
History: L. 1947, ch. 102, § 103; L. 1977, ch. 45, § 3; L. 1980, ch. 49, § 1; L. 1989, ch. 48, § 46; L. 1990, ch. 54, § 1; L. 1993, ch. 7, § 2; L. 1994, ch. 51, § 6; L. 2001, ch. 87, § 13; L. 2012, ch. 161, § 13; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1802 Repealed
History: L. 1947, ch. 102, § 104; L. 1975, ch. 44, § 37; L. 1977, ch. 45, § 4; L. 1989, ch. 48, § 47; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1803 Repealed
History: L. 1947, ch. 102, § 105; L. 1971, ch. 34, § 1; L. 1973, ch. 51, § 1; L. 1975, ch. 44, § 38; L. 1992, ch. 62, § 6; L. 2001, ch. 5, § 44; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1804 Repealed
Revisor's Note: Section was also amended by L. 2001, ch. 5, § 45, but that version was repealed by L. 2001, ch. 167, § 16.
History: L. 1947, ch. 102, § 106; L. 1973, ch. 52, § 1; L. 1975, ch. 44, § 39; L. 1989, ch. 48, § 48; L. 1992, ch. 62, § 7; L. 2001, ch. 87, § 14; L. 2001, ch. 167, § 2; L. 2010, ch. 17, § 29; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1805 Removal of officer or director; hearing; judicial review
(a) If the state banking board finds that any current or former officer or director of any bank or trust company has been dishonest, reckless or incompetent in performing duties as such officer or director or willfully or continuously fails to observe any legally made order of the commissioner or the state banking board, the state banking board may take one or more of the following actions:
(1) Remove such officer or director; and
(2) prohibit such officer's or director's further participation in any manner in the conduct of the affairs of any state bank or trust company in Kansas.
(b) The officer or director shall have the right to a hearing before the state banking board to be conducted in accordance with the Kansas administrative procedure act. Any action of the state banking board pursuant to this section is subject to review in accordance with the Kansas judicial review act.
(c) If upon the conclusion of such hearing, the state banking board determines that the officer or director has been dishonest, reckless or incompetent in performing duties as such an officer or director or has willfully or continuously failed to comply with any legally made order of the commissioner or state banking board, the state banking board may order the officer or director to vacate the office and prohibit such officer's or director's further participation in the conduct of the affairs of any state bank or trust company in Kansas. The state banking board shall mail a copy of its removal order to the bank or trust company where such officer or director was serving.
History: L. 1947, ch. 102, § 107; L. 1975, ch. 44, § 40; L. 1976, ch. 145, § 37; L. 1986, ch. 318, § 18; L. 1988, ch. 356, § 43; L. 2005, ch. 29, § 1; L. 2010, ch. 17, § 30; L. 2015, ch. 38, § 114; July 1.
§ 9-1806 Repealed
History: L. 1947, ch. 102, § 108; L. 1949, ch. 110, § 4; L. 1965, ch. 80, § 1; L. 1988, ch. 356, § 44; L. 1989, ch. 48, § 49; Repealed, L. 2001, ch. 87, § 16; July 1.
§ 9-1807 Cease and desist orders; institution of proceedings by commissioner; hearing by board; issuance; temporary orders of commissioner
(a) If the commissioner finds that any bank or trust company is engaging, has engaged or is about to engage in an unsafe or unsound practice or if the commissioner finds that any bank or trust company is violating, has violated or is about to violate a law, rule and regulation or order of the commissioner or state banking board, the commissioner may issue and serve upon the bank or trust company a notice of charges. The notice of charges shall contain a statement of the facts that forms the basis for a proposed cease and desist order and shall state the time and place that a hearing will be held by the state banking board to determine whether an order to cease and desist therefrom should be issued by the state banking board against the bank or trust company. Such hearing shall be fixed for a date not earlier than 30 days nor later than 60 days after service of such notice and shall be held in accordance with the Kansas administrative procedure act.
(b) Unless the bank or trust company appears at the hearing, such bank or trust company shall be deemed to have consented to the issuance of the cease and desist order. In the event of such consent or if, upon the record made at any such hearing, the state banking board finds that any unsafe or unsound practice or violation specified in the notice of charges has been established, the state banking board may issue and serve upon the bank or trust company an order to cease and desist from any such practice or violation. Such order may require the bank or trust company and such bank's or trust company's directors, officers, employees or agents to cease and desist or to take affirmative action to correct the conditions resulting from any such practice or violation. A cease and desist order shall become effective at the time specified therein and shall remain effective and enforceable as provided therein, except to such extent as it is stayed, modified or terminated by the state banking board.
(c) Whenever the commissioner finds that a bank's or trust company's unsafe or unsound practice or violation, or the continuation thereof, is likely to cause insolvency, substantial dissipation of assets or earnings or is likely to seriously prejudice the interests of the bank's depositors or trust company's clients, the commissioner may issue a temporary order requiring the bank or trust company to cease and desist from any such practice or violation. The order shall contain a notice of charges with a statement of the facts that forms the basis for a proposed temporary cease and desist order. Such order shall be effective upon service on the bank or trust company and shall remain effective and enforceable pending the completion of the proceedings pursuant to such notice and until such time as the state banking board dismisses the charges specified in such notice or, if a cease and desist order is issued against the bank or trust company, until the effective date of any such order.
History: L. 1975, ch. 44, § 1; L. 2015, ch. 38, § 115; L. 2016, ch. 54, § 51; L. 2025, ch. 78, § 5; July 1.
§ 9-1808 Repealed
History: L. 1988, ch. 60, § 2; L. 1988, ch. 56, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1809 Civil penalties
(a) After providing a notice and an opportunity for a public hearing in accordance with the Kansas administrative procedure act, the commissioner may, with the approval of the state banking board, assess against and collect a civil money penalty from any bank or trust company that, or any executive officer, director, employee, agent, or other person participating in the conduct of the affairs of such bank or trust company who:
(1) Engages or participates in any unsafe or unsound practice in connection with a bank or trust company; or
(2) violates or knowingly permits any person to violate any of the provisions of:
(A) The state banking code;
(B) any rule or regulation promulgated pursuant to the state banking code; or
(C) any lawful order of the commissioner or the state banking board.
(b) The civil money penalty shall not exceed $1,000 per day for each day such violation continues. No civil money penalty shall be assessed for the same act or practice if another government agency has taken similar action against the bank, trust company or person to be assessed such civil money penalty. In determining the amount of the civil money penalty to be assessed, the commissioner shall consider:
(1) The good faith of the bank, trust company or person to be assessed with such civil money penalty;
(2) the gravity of the violation;
(3) any previous violations by the bank, trust company or person to be assessed with such civil money penalty;
(4) the nature and extent of any past violations; and
(5) such other matters as the commissioner may deem appropriate.
(c) Upon waiver by the respondent of the right to a public hearing concerning an assessment of a civil money penalty, the hearing or portions thereof may be closed to the public when concern arises about prompt withdrawal of moneys from or the safety and soundness of the bank or trust company.
(d) For the purposes of this section, a violation shall include, but is not limited to, any action, by any person alone or with another person, that causes, brings about, or results in the participation in, counseling of, or aiding or abetting of a violation.
(e) The commissioner, with approval of the state banking board, may modify or set aside any order assessing a civil money penalty. Any civil money penalty collected pursuant to this section shall be transmitted to the state treasurer, who shall credit it to the bank commissioner fee fund.
(f) Notwithstanding any other provision of law, no bank or trust company shall indemnify or insure any executive officer, director, employee, agent or person participating in the conduct of affairs of such bank or trust company against civil money penalties.
History: L. 2005, ch. 7, § 1; July 1.
§ 9-1810 Informal agreements with commissioner; when; confidentiality
(a) The commissioner may enter into any informal agreement with any bank or trust company for a plan of action to address possible safety or soundness concerns, violations of law or any weakness displayed by the bank or trust company if the commissioner determines that the bank or trust company displays:
(1) Possible safety and soundness concerns or is violating, has violated or is about to violate any law, rule and regulation or order of the commissioner or the state banking board resulting in a less than satisfactory condition, but not to a degree requiring formal administrative action; or
(2) any weakness that if not properly addressed and corrected would reasonably be expected to result in future safety and soundness concerns, violations of applicable laws, rules and regulations and further deterioration in the condition of the bank or trust company.
(b) The adoption of an informal agreement authorized by this section shall not be subject to the provisions of K.S.A. 77-501 et seq., and amendments thereto, or K.S.A. 77-601 et seq., and amendments thereto. Any informal agreement authorized by this section shall not be considered an order or other agency action and shall be considered confidential examination material pursuant to K.S.A. 9-1712, and amendments thereto.
History: L. 2015, ch. 38, § 3; L. 2020, ch. 12, § 1; July 1.
§ 9-1811 Consent orders; when
The commissioner may enter into a consent order at any time with a bank, trust company, any executive officer, director, employee, agent or other person to resolve a matter arising under the state banking code, rules and regulations adopted thereto or an order issued pursuant to the state banking code.
History: L. 2015, ch. 38, § 4; July 1.
Article 19 Banking Code; Dissolution; Insolvency
§ 9-1901 Dissolution
Any corporation that is not insolvent or critically undercapitalized and otherwise transacting business under the state banking code may be dissolved by its board of directors in accordance with K.S.A. 17-6801 et seq., and amendments thereto, provided the bank has completed a liquidation to the satisfaction of the commissioner pursuant to K.S.A. 9-1919, and amendments thereto.
History: L. 1947, ch. 102, § 109; L. 2015, ch. 38, § 116; July 1.
§ 9-1902 Definition of insolvency
A bank or trust company shall be deemed to be insolvent when: (a) The actual cash market value of a bank's or trust company's assets is insufficient to pay such bank's or trust company's creditor liabilities, except that for this purpose unconditional evidence of indebtedness of the United States of America may be valued, at the discretion of the commissioner, at par or cost whichever is the lesser; or (b) the bank or trust company is unable to meet the demands of its creditors in the usual and customary manner.
History: L. 1947, ch. 102, § 110; L. 1980, ch. 49, § 2; L. 2015, ch. 38, § 117; L. 2016, ch. 54, § 52; July 1.
§ 9-1902a Critical undercapitalization
A bank or trust company is critically undercapitalized when the ratio of its capital to total assets is equal to or less than 2.0%. For the purposes of this section, capital shall be the total of the institution's common stock, surplus, undivided profits, capital reserves, noncumulative perpetual preferred stock and outstanding cumulative perpetual preferred stock, including related surplus, but intangibles, such as goodwill, shall not be included in the capital calculation.
History: L. 1993, ch. 7, § 1; L. 2015, ch. 38, § 118; July 1.
§ 9-1903 Undercapitalized and insolvent banks and trust companies; commissioner to take charge, when
If it shall appear upon the examination of any bank or trust company or from any report made to the commissioner that any bank or trust company is:
(a) Critically undercapitalized, the commissioner may:
(1) Enter an informal memorandum pursuant to K.S.A. 9-1810, and amendments thereto, to notify the bank or trust company of the unsafe and unsound condition and require the bank or trust company to correct the condition within the time prescribed by the commissioner; or
(2) take charge of such bank or trust company and all of its property and assets. In taking charge of a critically undercapitalized bank or trust company, the commissioner may:
(A) Appoint a special deputy commissioner to take charge temporarily of the affairs of the bank or trust company; or
(B) appoint a receiver if it shall appear at any time that the bank or trust company cannot sufficiently recapitalize, resume business or liquidate the bank's or trust company's indebtedness to the satisfaction of the depositors and creditors of such bank or trust company.
(b) Insolvent, the commissioner shall take charge of the bank or trust company and all property and assets of such bank or trust company. In taking charge of an insolvent bank or trust company, the commissioner shall:
(1) Appoint a special deputy commissioner to take charge temporarily of the affairs of the bank or trust company; or
(2) appoint a receiver if it shall appear at any time that the bank or trust company cannot sufficiently recapitalize, resume business or liquidate its indebtedness to the satisfaction of the depositors and creditors of such bank or trust company.
History: L. 1947, ch. 102, § 111; L. 1993, ch. 7, § 3; L. 2015, ch. 38, § 119; July 1.
§ 9-1904 Repealed
History: L. 1947, ch. 102, § 112; L. 1976, ch. 58, § 2; L. 1993, ch. 7, § 4; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1905 Receiver for insolvent and undercapitalized bank or trust company
(a) In the event the commissioner appoints a receiver for any bank or trust company, the commissioner shall appoint:
(1) The federal deposit insurance corporation; or
(2) any individual, partnership, association, limited liability company, corporation or any other business entity which shall have accounting, regulatory, legal or other relevant experience in the field of banking or trust as shall be determined by the commissioner.
(b) Any receiver other than the federal deposit insurance corporation shall give such bond as the commissioner deems proper and immediately file in the district court of the county where the bank or trust company is located for liquidation, disposition and dissolution pursuant to the state banking code, the Kansas general corporation code, and as may be ordered by the court.
(1) The receiver shall be entitled to reasonable compensation subject to the approval of the district court.
(2) Upon written application made within 30 days after the filing in district court, the court may appoint as receiver any person that the holders of more than 60% in amount of the claims against such bank or trust company shall agree upon in writing. The creditors so agreeing may also agree upon the compensation and charges to be paid such receiver. Each receiver so appointed shall make a complete report to the commissioner covering the receiver's acts and proceedings as such.
(c) The bank or trust company shall have the right to petition for review of the commissioner's order taking charge, appointment of a special deputy or appointment of a receiver. Such review shall not be subject to the provisions of K.S.A.
77-501 et seq., and amendments thereto. A petition for review shall be filed within 10 days of the commissioner's action. Notwithstanding any provision of law to the contrary, or by order of the court, review shall proceed as expeditiously as possible pursuant to the provisions of K.S.A.
77-601 et seq., and amendments thereto. Notwithstanding any provision of law to the contrary, the decision of the district court may be appealed only to the supreme court of Kansas. The time within which an appeal may be taken shall be 10 days from final disposition of the district court.
History: L. 1947, ch. 102, § 113; L. 1993, ch. 7, § 5; L. 2015, ch. 38, § 120; L. 2016, ch. 54, § 53; July 1.
§ 9-1906 Receiver to take charge of assets; order of payment
(a) A receiver appointed pursuant to K.S.A. 9-1905, and amendments thereto, other than the federal deposit insurance corporation, shall take charge of any bank or trust company and all of the bank's or trust company's assets and property, and liquidate the affairs and business thereof for the benefit of the depositors, creditors and stockholders of the bank or trust company. The receiver may sell all the property of the bank or trust company upon such terms as the district court of the county where the bank or trust company is located shall approve. The receiver shall pay over all moneys received to the creditors and depositors of such bank or trust company.
(b) In distributing assets of the bank or trust company in payment of its liabilities, the order of payment, in the event its assets are insufficient to pay in full all of its liabilities, shall be by category as follows:
(1) The costs and expenses of the receivership and real and personal property taxes assessed against the bank or trust company pursuant to applicable law;
(2) claims which are secured or given priority by applicable law;
(3) claims of unsecured depositors;
(4) all other claims exclusive of claims on capital notes and debentures; and
(5) claims on capital notes and debentures.
Should the assets be insufficient for the payment in full of all claims within a category, such claims shall be paid in the order provided by other applicable law or, in the absence of such applicable law, pro rata.
History: L. 1947, ch. 102, § 114; L. 1985, ch. 59, § 1; L. 1988, ch. 63, § 1; L. 1993, ch. 7, § 6; L. 2015, ch. 38, § 121; L. 2016, ch. 54, § 54; July 1.
§ 9-1907 Powers of federal deposit insurance corporation or its successor
The federal deposit insurance corporation or any successor, hereby is authorized and empowered to be and act without bond as receiver of any bank, the deposits in which are to any extent insured by such corporation. If the federal deposit insurance corporation, or any successor, accepts the appointment, then the federal deposit insurance corporation, or any successor, shall succeed to all the rights, titles, powers and privileges of the bank and of any stockholder, member, account holder, depositor, officer or director of the bank with respect to the bank.
History: L. 1947, ch. 102, § 115; L. 1989, ch. 48, § 50; L. 1993, ch. 7, § 7; L. 2015, ch. 38, § 122; L. 2016, ch. 54, § 55; July 1.
§ 9-1908 Title to all assets to vest in insurance corporation
Whenever the federal deposit insurance corporation, or any successor, shall accept the appointment as receiver for any bank the possession of and title to all of the assets, business and property of every kind of such bank shall pass to and vest in the federal deposit insurance corporation, or any successor, as receiver without the execution of any instruments of assignment, endorsement, transfer or conveyance.
History: L. 1947, ch. 102, § 116; L. 1989, ch. 48, § 51; L. 2015, ch. 38, § 123; L. 2016, ch. 54, § 56; July 1.
§ 9-1909 Claims to be filed within one year
All claims of depositors and other creditors must be filed with the receiver within one year after the date of the receiver's appointment, and if any claim is not filed, then the claim shall be barred from participation in the estate and assets of any such bank or trust company.
History: L. 1947, ch. 102, § 117; L. 2015, ch. 38, § 124; L. 2016, ch. 54, § 57; July 1.
§ 9-1910 Surrender control to commissioner
Upon the affirmative vote of
2/3
of the outstanding voting stock, the shareholders of a bank or trust company may transfer all of the bank's or trust company's assets and property of whatever nature and any rights thereto to the possession and control of the commissioner and waive any right to the Kansas administrative procedure act, the Kansas judicial review act or any other lawful right to challenge the commissioner's authority without the execution of any instruments of assignment, endorsement, transfer or conveyance. Such action shall operate as a bar to any attachment proceedings.
History: L. 1947, ch. 102, § 118; L. 2015, ch. 38, § 125; L. 2016, ch. 54, § 58; July 1.
§ 9-1911 Receiver may borrow money
The receiver of any insolvent bank or trust company may borrow money and pledge the assets of such insolvent bank or trust company but only upon prior written approval of the commissioner.
History: L. 1947, ch. 102, § 119; June 30.
§ 9-1912 Repealed
History: L. 1947, ch. 102, § 120; L. 1986, ch. 59, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1913 Repealed
History: L. 1947, ch. 102, § 121; Repealed, L. 1986, ch. 59, § 3; April 24.
§ 9-1914 Repealed
History: L. 1947, ch. 102, § 122; L. 1978, ch. 347, § 2; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1914a Repealed
History: L. 1961, ch. 65, § 1; L. 1980, ch. 50, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-1915 Deposits or debts while insolvent; liability
It shall be unlawful for the president, director, managing officer, cashier or any other officer of any bank to agree to accept deposits, in an amount that would create an excess above the federal deposit insurance corporation insured deposit amount, after such person has knowledge of the fact that such bank is insolvent or in failing circumstances. It hereby is made the duty of every such officer or managing officer to examine into the affairs of every such bank and know its condition if possible. Upon failure to discharge such duty such person shall be held to have had knowledge of the insolvency of such bank or that the bank was in failing circumstances, for the purposes of this section. Every person that violates the provisions of this section shall be responsible individually for such deposits so received, except that any director or officer who may have paid more than such person's share of the liabilities mentioned in this section shall have the proper remedy at law against such other persons as shall not have paid their full share of such liabilities.
History: L. 1947, ch. 102, § 123; L. 1989, ch. 48, § 52; L. 2015, ch. 38, § 126; L. 2016, ch. 54, § 59; July 1.
§ 9-1916 Same; action to enforce liability; evidence
In all actions brought for the recovery of any deposits received, in an amount that would create an excess above the federal deposit insurance corporation insured deposit amount, while any bank was insolvent or in failing circumstances, all officers, agents, and directors of such bank may be joined as defendants or proceeded against severally. The fact that any bank was insolvent or in failing circumstances at the time of the reception of the deposit shall be prima facie evidence of such knowledge in accepting the deposit on the part of such officer, agent or director so charged therewith. This liability may be enforced by and against executors and administrators of any deceased officer, director or agent.
History: L. 1947, ch. 102, § 124; L. 1989, ch. 48, § 53; L. 2015, ch. 38, § 127; July 1.
§ 9-1917 Undelivered funds due creditors, depositors and shareholders of defunct bank or trust company; duties of commissioner and state treasurer; undistributed assets of defunct institutions fund
On and after July 1, 1972, and in every case occurring heretofore and hereafter, in which funds due to creditors, depositors and shareholders on liquidation of institutions under the jurisdiction of the state bank commissioner under K.S.A. 9-1901 et seq., and amendments thereto, are undelivered, they shall, together with accrued interest, if any, be paid to the state bank commissioner, who shall remit all such payments to the state treasurer, in accordance with the provisions of K.S.A. 75-4215, and amendments thereto, and credit such individual creditors, depositors or shareholders account in the undistributed assets of defunct institution fund ledger. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the undistributed assets of defunct institutions fund which is hereby created. Such fund shall be used only for refunds and payments of amounts due creditors, depositors and shareholders on claims filed with and approved by the state bank commissioner. Any balance remaining in the fund from any single defunct institution five years, during which time no person entitled thereto shall have appeared to claim such funds, shall be transferred by the state bank commissioner to the state general fund and appropriate entries made in the individual creditors, depositors or shareholders record, showing the date and disposition of the funds and shall further recite that they were transferred by reason of this statute of limitation.
History: L. 1972, ch. 36, § 1; L. 2001, ch. 5, § 46; July 1.
§ 9-1918 Escheat and disposition of certain property in custody of commissioner; escheat
Whenever the state bank commissioner shall determine that property or assets held in the commissioner's custody and received as a result of the liquidation of any institution under the jurisdiction of the commissioner has remained in the commissioner's custody for a period of more than 10 years, and no claim has been filed during such period by any creditor, depositor or shareholder of such institution, such property shall escheat to the state. The commissioner shall notify the director of purchases of the property or assets so held and the director of purchases shall authorize and provide for the sales of such property or assets in the manner provided by law for the sale of obsolete or unused property of the state. All proceeds from the sale of any such property or assets shall be remitted to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the state general fund and appropriate entries made in the records of the state bank commissioner showing the disposition of the property or assets, the amount received therefor and the disposition thereof.
History: L. 1976, ch. 361, § 1; L. 2001, ch. 5, § 47; July 1.
§ 9-1919 Voluntary liquidation
(a) Upon the affirmative vote of a majority of the outstanding voting stock and approval of a liquidation plan by the commissioner, any bank may liquidate by paying in full all of the bank's depositors and creditors. Any bank desiring to voluntarily liquidate shall file a plan for liquidation with the commissioner.
(b) The commissioner may examine the bank or compel the bank to file reports with the commissioner during the time the bank is being liquidated. If the commissioner finds at any time during the liquidation period that the bank is not adhering to the approved liquidation plan, the commissioner may take action as authorized by article 18 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto. If the commissioner finds that any deviation from the liquidation plan may be harmful to the depositors and creditors of the institution, the commissioner may appoint a receiver in accordance with procedures provided in article 19 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto.
(c) Upon the completion of the liquidation, the bank shall immediately surrender the bank's certificate of authority to transact a banking business, remove all advertising signs, and notify and make the necessary filings with the secretary of state. The commissioner shall make a final examination to determine that all depositors and creditors have been paid before any distribution is made to stockholders.
History: L. 2015, ch. 38, § 5; July 1.
§ 9-1920 Borrowing by liquidating bank
Upon the approval of the commissioner, the board of directors of any bank in the process of voluntary liquidation may borrow an amount not in excess of 100% of the bank's total deposit liabilities and may pledge the bank's assets.
History: L. 2015, ch. 38, § 6; July 1.
§ 9-1921 Sale of bank's assets as part of liquidation
As part of the liquidation plan as approved by the commissioner, any bank, for the purpose of liquidation, may sell all or any part of the bank's assets to any other bank, either state or national, and may receive in payment cash or its equivalent, shares of stock in the purchasing bank, or both.
History: L. 2015, ch. 38, § 7; July 1.
Article 20 Banking Code; Crimes and Punishments
§ 9-2001 Failing to perform duty; penalty
Every officer, employee, director or agent of any bank or trust company who shall neglect to perform any duty required by the state banking code, or who shall fail to conform to any lawful requirement made by the commissioner, upon conviction shall be guilty of a class A, nonperson misdemeanor.
History: L. 1947, ch. 102, § 125; L. 1989, ch. 48, § 54; L. 2015, ch. 38, § 128; July 1.
§ 9-2002 Making false report, statement or entry in the books; penalty
Every officer, director, agent or employee of any bank or trust company doing business in the state of Kansas who willfully and knowingly subscribes to or makes any false report or any false statement or entry in the books of such bank or trust company, or knowingly subscribes or exhibits any false writing, paper or electronic equivalent, with the intent to deceive any person as to the condition of such bank or trust company, upon conviction shall be guilty of a severity level 8, nonperson felony.
History: L. 1947, ch. 102, § 126; L. 1989, ch. 48, § 55; L. 1994, ch. 291, § 4; L. 2015, ch. 38, § 129; July 1.
§ 9-2003 Repealed
History: L. 1947, ch. 102, § 127; L. 1989, ch. 48, § 56; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-2004 Swear or affirm falsely as perjury; penalty
Every officer, director, agent or employee of a bank or trust company required by the state banking code to take an oath or affirmation, who shall willfully swear or affirm falsely, shall be guilty of perjury, and upon conviction shall be punished as provided by K.S.A. 21-5903, and amendments thereto.
History: L. 1947, ch. 102, § 128; L. 1989, ch. 48, § 57; L. 1994, ch. 291, § 5; L. 2011, ch. 30, § 99; L. 2015, ch. 38, § 130; July 1.
§ 9-2005 Neglect of commissioner or deputy; penalty
Any bank commissioner or deputy bank commissioner who shall willfully neglect to perform any duty provided for by the state banking code, or who shall knowingly and willfully permit the violation of any of the provisions of the state banking code for a period of 90 days by any bank or trust company doing business under the state banking code, or who shall knowingly or willfully make any false statement concerning any bank or trust company or who shall be guilty of any misconduct or corruption in office, upon conviction shall be deemed guilty of a class A, nonperson misdemeanor and shall be removed from office by the governor.
History: L. 1947, ch. 102, § 129; L. 2015, ch. 38, § 131; July 1.
§ 9-2006 Receiving deposits after authority revoked; penalty
Any officer, director, employee or agent of any bank whose authority to transact a banking business has been revoked pursuant to the provisions of the state banking code, who shall receive or cause to be received any deposit of whatever nature after such revocation, upon conviction shall be guilty of a severity level 8, nonperson felony.
History: L. 1947, ch. 102, § 130; L. 2015, ch. 38, § 132; July 1.
§ 9-2007 Violations by receiver; penalties
Any receiver of an insolvent bank or trust company, other than the federal deposit insurance corporation, or any successor, that fails to comply with the provisions of the state banking code, upon conviction shall be guilty of a class A, nonperson misdemeanor.
History: L. 1947, ch. 102, § 131; L. 1986, ch. 59, § 2; L. 1989, ch. 48, § 58; L. 2015, ch. 38, § 133; L. 2016, ch. 54, § 60; July 1.
§ 9-2008 Certified checks, drafts or orders in excess of amount on deposit
It shall be unlawful for any officer, director, employee or agent of any bank doing business pursuant to the provisions of the state banking code to certify any check, draft or order drawn upon the bank unless the person, firm or corporation drawing such check, draft or order has on deposit with the bank, at the time such check, draft or order is certified, an amount of money equal to the amount specified in such check, draft or order. Any check, draft or order so certified by the authorized officer, director, employee or agent shall be a good and valid obligation against such bank. Any officer, director, employee or agent of any bank violating the provisions of this section, upon conviction shall be deemed guilty of a class A, nonperson misdemeanor.
History: L. 1947, ch. 102, § 132; L. 2015, ch. 38, § 134; July 1.
§ 9-2009 Repealed
History: L. 1947, ch. 102, § 133; L. 1975, ch. 44, § 41; L. 1989, ch. 48, § 59; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-2010 Insolvent bank receiving deposits; penalty
No bank shall accept or receive on deposit, with or without interest, any money, bank bills or notes or United States treasury notes, gold or silver certificates or currency or other notes, bills, checks or drafts, when such bank is insolvent. Any officer, director, employee or agent of any bank, who shall knowingly violate the provisions of this section or be accessory to or permit or connive at the receiving or accepting on deposit of any such deposit, upon conviction shall be guilty of a severity level 8, nonperson felony.
History: L. 1947, ch. 102, § 134; L. 1990, ch. 309, § 5; L. 2015, ch. 38, § 135; July 1.
§ 9-2011 Unlawfully engaging in the banking or trust company business; authorization of commissioner required before engaging in the banking or trust business; criminal penalty
(a) It shall be unlawful for any individual, firm or corporation to advertise, publish or otherwise promulgate that such individual, firm or corporation is engaged in the banking business without first having obtained authority from the commissioner, unless its deposits are federally insured and either chartered in Kansas, another state or the federal government.
(b) It shall be unlawful for any individual, firm or corporation to advertise, publish or otherwise communicate that such individual, firm or corporation is engaged in the trust business without first having obtained authority from the commissioner, unless the entity is a federally insured bank or credit union and has authorization from another state or the federal government to engage in trust business in Kansas.
(c) Any such individual or member of any such firm or officer of any such corporation violating this section, upon conviction, shall be guilty of a class A, nonperson misdemeanor.
History: L. 1947, ch. 102, § 135; L. 1989, ch. 48, § 60; L. 1994, ch. 51, § 7; L. 2015, ch. 38, § 136; L. 2016, ch. 54, § 61; L. 2025, ch. 78, § 6; July 1.
§ 9-2012 Intent to injure or defraud; penalty
(a) It shall be unlawful for any shareholder, director, officer, employee or agent of any bank or trust company, with the intent to injure, defraud or deceive a bank or trust company, any agent appointed to examine the affairs of such bank or trust company, the commissioner or the commissioner's staff or any other person to:
(1) Issue or put forth any certificate of deposit, draw any draft or bill of exchange, make any acceptance, assign any note, bond, draft or bill of exchange; or
(2) to make use of the name of the bank or trust company in any manner.
(b) It shall be unlawful for any person to aid or abet any shareholder, director, officer, employee or agent in violation of this section. Any person violating the provisions of this section, upon conviction shall be guilty of a severity level 7, nonperson felony.
History: L. 1947, ch. 102, § 136; L. 1989, ch. 48, § 61; L. 1994, ch. 291, § 6; L. 2015, ch. 38, § 137; July 1.
§ 9-2013 Unlawful to offer or solicit anything of value; penalty
(a) Except as provided in subsection (c), it shall be unlawful for: (1) Any person or corporation to give, offer or promise anything of value to any person, with the intent to influence or reward an officer, director, employee, agent or attorney of any state bank or trust company in connection with any business or transaction of such bank or trust company; or
(2) any shareholder, officer, director, employee, agent or attorney of any state bank or trust company to solicit or demand for the benefit of any person or to accept or agree to accept anything of value from any person intending to influence or reward in connection with any business or transaction of such bank or trust company.
(b) Any person or corporation violating the provisions of subsection (a), upon conviction, shall be guilty of a class A, nonperson misdemeanor.
(c) This section shall not apply to bona fide salary, wages, fees or other compensation paid or expenses paid or reimbursed in the ordinary course of business.
History: L. 1947, ch. 102, § 137; L. 1992, ch. 136, § 1; L. 2015, ch. 38, § 138; July 1.
§ 9-2014 Violation of act; commissioner or deputy to inform county or district attorney
It shall be the duty of the commissioner to inform the county or district attorney of the county in which the bank or trust company is located of any violation of any of the provisions of the state banking code, which constitute a misdemeanor or felony, by the shareholders, officers, directors, agents or employees of any bank or trust company, which shall come to the notice of the commissioner.
History: L. 1947, ch. 102, § 138; L. 1987, ch. 54, § 11; L. 1989, ch. 48, § 62; L. 2015, ch. 38, § 139; July 1.
§ 9-2015 Repealed
History: L. 1947, ch. 102, § 139; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-2016 Unlawfully transacting banking or trust business; penalty
It shall be unlawful to transact a banking business or trust business without having first received a certificate from the commissioner. Any person violating the provisions of this section, either individually or as an interested party, in any association or corporation upon conviction shall be guilty of a class B, nonperson misdemeanor.
History: L. 1947, ch. 102, § 140; L. 1989, ch. 48, § 63; L. 2015, ch. 38, § 140; July 1.
§ 9-2017 Repealed
History: L. 1947, ch. 102, § 141; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-2018 Severability
If any provision of the state banking code, or the application thereof, to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the state banking code that can be given effect without the invalid provision or application, and to this end the provisions of the state banking code are declared to be severable.
History: L. 1947, ch. 102, § 142; L. 2015, ch. 38, § 141; July 1.
§ 9-2019 Unlawful to obstruct examination; penalty
It shall be unlawful for any director, officer, employee or agent of a bank or trust company to alter, destroy, shred, mutilate, conceal, cover up or falsify any record with the intent to impede, obstruct, impair or influence any examination, investigation or proceeding by the commissioner. Any director, officer, employee or agent of a bank or trust company who violates this section, upon conviction shall be guilty of a severity level 8, nonperson felony.
History: L. 2015, ch. 38, § 8; July 1.
Article 21 Trust Companies
§ 9-2101 Repealed
History:
L. 1989, ch. 48, § 1; L. 2015, ch. 38, § 142; Repealed, L. 2025, ch. 78, § 10; July 1.
History: 9-2101.
§ 9-2102 Applicability of act
All trust companies, regardless of when incorporated, shall be organized and governed pursuant to the state banking code.
History: L. 1989, ch. 48, § 2; L. 2015, ch. 38, § 143; July 1.
§ 9-2103 Powers of trust companies; limited purpose trust companies
(a) A trust company may exercise all powers necessary or incidental to carrying on a trust business, including, without limitation, all powers conferred upon a business corporation by the Kansas corporation code of 1972, and also may exercise the following powers:
(1) To receive for safekeeping personal property of every description;
(2) to accept and execute any trust agreement and perform any trustee duties as required by such trust agreement;
(3) to act as agent, trustee, executor, administrator, registrar of stocks and bonds, conservator, assignee, receiver, custodian, corporate trustee or attorney in fact in any agreed upon capacity;
(4) to accept and execute all trusts and to perform any fiduciary duties as may be committed or transferred to it by order, judgment or decree of any court of record of competent jurisdiction;
(5) to act as executor or trustee under the last will and testament, or as administrator, with or without the will annexed to the letters of administration, of the estate of any deceased person;
(6) to be a conservator for any minor, incapacitated person or trustee for any convict under the appointment of any court of competent jurisdiction;
(7) to receive money in trust for investment in real or personal property of every kind and nature and to reinvest the proceeds thereof;
(8) to act in any fiduciary capacity and to perform any act as a fiduciary which a Kansas state bank may perform under any provision of the banking or insurance laws of this state, including, without limitation, acting as a successor fiduciary to any bank upon liquidation of its trust department through the transfer of its fiduciary assets pursuant to K.S.A. 9-1604, and amendments thereto, which liquidation may be effected in the manner provided in K.S.A. 9-2107, and amendments thereto, or otherwise;
(9) to act as either an originating trustee or as a contracting trustee pursuant to K.S.A. 9-2107, and amendments thereto;
(10) to exercise any other power expressly conferred upon trust companies by any other provision of the laws of this state;
(11) to buy and sell foreign or domestic exchange, gold, silver, coin or bullion; and
(12) to perform or purchase trust services for, or from, a bank or service corporation through a trust service agency agreement, provided that the commissioner is notified 30 days after contracting for the service and such notification includes the trust services provided, the name of the servicer and the date the service will commence.
(b) Pursuant to K.S.A. 9-1713, and amendments thereto, the commissioner may adopt rules and regulations clarifying any of the above enumerated powers and duties extended to trust companies.
(c) A trust company may be formed for a limited purpose to exercise any one or more of the enumerated powers in subsection (a). The articles of incorporation of such a trust company shall contain a list of the specific powers that the trust company chooses and is authorized to exercise.
History: L. 1989, ch. 48, § 3; L. 1990, ch. 60, § 2; L. 1993, ch. 81, § 4; L. 1994, ch. 51, § 8; L. 2001, ch. 27, § 1; L. 2015, ch. 38, § 144; July 1.
§ 9-2104 Liability of holder of stock in a trust company
(a) No executor, administrator, conservator or trustee holding trust company stock shall be personally subject to any liability as stockholders in such trust company.
(b) No person holding trust company stock as collateral security shall be personally subject to any liability as stockholders in such trust company.
(c) The person owning the stock or the person pledging such stock shall be deemed the person liable as a stockholder in the trust company.
(d) Any executor, administrator, conservator or trustee holding trust company stock shall be liable in the normal course of acting and carrying out the fiduciary duties of an executor, administrator, conservator or trustee.
(e) (1) Any executor, administrator, conservator or trustee holding shares of stock may vote as a shareholder.
(2) Any person that has pledged such person's stock as collateral security may represent the same at all meetings and may vote accordingly as a shareholder.
History: L. 1989, ch. 48, § 4; L. 2015, ch. 38, § 145; L. 2016, ch. 54, § 62; July 1.
§ 9-2105 Repealed
History: L. 1989, ch. 48, § 5; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-2106 Repealed
History: L. 1989, ch. 48, § 6; L. 2002, ch. 8, § 1; Repealed, L. 2015, ch. 38, § 151; July 1.
§ 9-2107 Authority for the contracting for trust services; definitions; notice filing; authority of commissioner; fees; examination; branches
(a) As used in this section:
(1) "Contracting trustee" means any trust company, as defined in K.S.A. 9-701, and amendments thereto, any bank that has been granted trust authority by the commissioner under K.S.A. 9-1601, and amendments thereto, any national bank chartered to do business in Kansas that has been granted trust authority by the comptroller of the currency under 12 U.S.C. § 92a, any bank that has been granted trust authority or any trust company, regardless of where such bank or trust company is located, that is controlled, as defined in K.S.A. 9-1612, and amendments thereto, by the same bank holding company as any trust company, state bank or national bank chartered to do business in Kansas, that accepts or succeeds to any fiduciary responsibility as provided in this section;
(2) "originating trustee" means any trust company, bank, national banking association, savings and loan association or savings bank that has trust powers and places or transfers any fiduciary responsibility to a contracting trustee as provided in this section; and
(3) "financial institution" means any bank, national banking association, savings and loan association or savings bank that has its principal place of business in this state but that does not have trust powers.
(b) Any contracting trustee and any originating trustee may enter into an agreement by which the contracting trustee, without any further authorization of any kind, succeeds and is substituted for the originating trustee as to all fiduciary powers, rights, duties, privileges and liabilities with respect to all accounts that the originating trustee serves in any fiduciary capacity, except as may be provided otherwise in the agreement. Notwithstanding the provisions of this section, either the contracting trustee or the originating trustee shall have its principal place of business in this state.
(c) Unless the agreement expressly provides otherwise, upon the effective date of the substitution:
(1) The contracting trustee shall be deemed to be named as the fiduciary in all writings, including, without limitation, trust agreements, wills and court orders that pertain to the affected fiduciary accounts; and
(2) the originating trustee is absolved from all fiduciary duties and obligations arising from such writings and shall discontinue the exercise of any fiduciary duties with respect to such writings, except that the originating trustee is not absolved or discharged from any duty to account required by K.S.A. 59-1709, and amendments thereto, or any other applicable statute, rule of law, rules and regulations or court order, nor shall the originating trustee be absolved from any breach of fiduciary duty or obligation occurring prior to the effective date of the agreement.
(d) The agreement may authorize the contracting trustee:
(1) To establish a trust service desk at any office of the originating trustee at which the contracting trustee may conduct any trust business and any business incidental thereto and which the contracting trustee may otherwise conduct at its principal place of business; and
(2) to engage the originating trustee as the agent of the contracting trustee, on a disclosed basis to customers, for the purposes of providing administrative, advertising and safekeeping services incident to the fiduciary services provided by the contracting trustee.
(e) Any contracting trustee may enter into an agreement with a financial institution providing that the contracting trustee may establish a trust service desk as authorized by subsection (d) in the offices of such financial institution and that such financial institution, on a disclosed basis to customers, may act as the agent of contracting trustee for purposes of providing administrative services and advertising incident to the fiduciary services to be performed by the contracting trustee.
(f) No activity authorized by subsections (b) through (e) shall be conducted by any contracting trustee, originating trustee or financial institution until an application for such authority has been submitted to and approved by the commissioner. The application shall be in the form and contain the information required by the commissioner and shall, at a minimum, include certified copies of the following documents:
(1) The agreement;
(2) all other required regulatory approvals; and
(3) a certification by the parties to the agreement that written notice of the proposed substitution was sent by first-class mail to each co-fiduciary, each surviving settlor of a trust, each ward of a guardianship, each person that has sole or shared power to remove the originating trustee as fiduciary and each adult beneficiary currently receiving or entitled to receive a distribution of principle or income from a fiduciary account affected by the agreement and that such notice was sent to each such person's address as shown in the originating trustee's records. An unintentional failure to give such notice shall not impair the validity or effect of any such agreement, except that an intentional failure to give such notice shall render the agreement null and void as to the party not receiving the notice of substitution.
(g) If the originating trustee or financial institution is transferring more than 50% of the financial institution's total fiduciary accounts, the commissioner shall require the following certified copies in addition to the requirements described in subsection (f):
(1) The written action taken by the board of directors of the originating trustee or financial institution approving the agreement; and
(2) proof of publication of notice that the applicant intends to file or has filed an application pursuant to this section. The notice shall be published in a newspaper of general circulation in the county where the principal office of the originating trustee or financial institution is located. The notice shall be in the form prescribed by the commissioner and shall contain the name of the applicant contracting trustee and the originating trustee and a solicitation for written comments. The notice shall be published on the same day and every day thereafter for two consecutive weeks and provide for a comment period of not less than 10 days after the date of the second publication.
(h) A contracting trustee making application to the commissioner for approval of any agreement pursuant to this section shall pay to the commissioner a fee, in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner, or designee, in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
(i) Upon the filing of a complete application with the commissioner, the commissioner shall make or cause to be made, a careful examination and investigation of the proposed agreement. If the commissioner finds any of the following matters unfavorably, the commissioner may deny the application:
(1) The reasonable probability of usefulness and success of the contracting trustee; and
(2) the financial history and condition of the contracting trustee including the character, qualifications and experience of the officers employed by the contracting trustee.
(j) The commissioner shall render approval or disapproval of the application within 90 days of receiving a complete application.
(k) Upon service of an order denying an application, the applicant shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act before the state banking board. Any final order of the commissioner pursuant to this section is subject to review in accordance with the Kansas judicial review act.
(l) When the commissioner determines that any contracting trustee domiciled in this state has entered into a contracting agreement in violation of the laws governing the operation of such contracting trustee, the commissioner may take such action as available under K.S.A. 9-1714, 9-1805, 9-1807 or 9-1809, and amendments thereto, to remedy such violation.
(m) Any party entitled to receive a notice under subsection (f)(3) may file a petition in the court having jurisdiction over the fiduciary relationship, or if none, in the district court in the county where the originating trustee has its principal office, seeking to remove any contracting trustee substituted or about to be substituted as fiduciary pursuant to this section. Unless the contracting trustee files a written consent to its removal or a written declination to act subsequent to the filing of the petition, the court, upon notice and hearing, shall determine the best interest of the petitioner and all other parties concerned and shall fashion such relief as the court deems appropriate in the circumstances, including the awarding of reasonable attorney fees. The right to file a petition under this subsection shall be in addition to any other rights to remove the fiduciary provided by any other statute or regulation or by the writing creating the fiduciary relationship. If the removal of the fiduciary is prompted solely as a result of the contracting agreement, any reasonable cost associated with such removal and transfer shall be paid by the originating trustee or financial institution entering into the agreement.
History: L. 1989, ch. 48, § 7; L. 1990, ch. 60, § 3; L. 1993, ch. 30, § 2; L. 1994, ch. 51, § 1; L. 1994, ch. 294, § 1; L. 1999, ch. 18, § 1; L. 2001, ch. 5, § 48; L. 2010, ch. 17, § 31; L. 2015, ch. 38, § 146; L. 2016, ch. 54, § 63; L. 2024, ch. 64, § 63; L. 2025, ch. 78, § 7; July 1.
§ 9-2108 Trust service office; establishment or relocation; application; exemptions
It is unlawful for any trust company to establish or operate a trust service office or relocate an existing trust service office except as provided herein.
(a) As used in this section: "Trust service office" means any office, agency or other place of business located within this state, other than the place of business specified in the trust company's certificate of authority, at which the powers granted to trust companies under K.S.A. 9-2103, and amendments thereto, are exercised. For the purposes of this section, any activity in compliance with K.S.A. 9-2107, and amendments thereto, does not constitute a trust service office.
(b) After first applying for and obtaining the approval of the commissioner under this section, one or more trust service offices may be established or operated in any city within this state by a trust company incorporated under the laws of this state.
(c) An application to establish or operate a trust service office or to relocate an existing trust service office shall be in the form and manner prescribed by the commissioner and provide the following documents:
(1) A certified copy of the written action taken by the board of directors of the trust company approving the establishment or operation of the proposed trust service office or the proposed relocation of the trust service office;
(2) all other required regulatory approvals;
(3) proof of publication of notice that the applicant intends to file or has filed an application pursuant to this section. The notice shall be published in a newspaper of general circulation where the proposed trust service office is to be located. The notice shall be in the form prescribed by the commissioner and shall contain the name of the applicant, the location of the proposed trust service office and a solicitation for written comments. The notice shall be published on the same day and every day thereafter for two consecutive weeks and provide for a comment period of not less than 10 days after the date of the second publication; and
(4) the application shall include the name selected for the proposed trust service office. The name selected for the proposed trust service office shall not be the same or substantially similar to the name of any other trust company or trust service office doing business in the state of Kansas, nor shall the name selected be required to contain the name of the applicant trust company. If the name selected for the proposed trust service office does not contain the name of the applicant trust company, the trust service office shall provide in the public lobby of such trust service office a public notice that it is a trust service office of the applicant trust company. Any trust company may request an exemption from the commissioner from the provisions of this subsection.
(d) A trust company making application to the commissioner for approval of a trust service office under this section shall pay to the commissioner a fee, in an amount established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner or designee in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
(e) Upon the request of any trust company proposing to relocate an existing trust service office to less than 10 miles from the trust company's existing location, the commissioner may exempt such trust company from the requirements of this section. If an exemption is provided under this subsection, each trust company shall document the written action taken by the board of directors of the trust company approving the proposed relocation of the trust service office and all other required regulatory approvals.
(f) Upon the filing of a complete application with the commissioner, the commissioner shall make or cause to be made, a careful examination and investigation. If the commissioner finds any of the following matters unfavorably, the commissioner may deny the application:
(1) The reasonable probability of usefulness and success of the proposed trust service office; and
(2) the applicant trust company's financial history and condition including the character, qualifications and experience of the officers employed by the trust company.
(g) Upon service of an order denying an application, the applicant shall have the right to a hearing to be conducted in accordance with the Kansas administrative procedure act before the state banking board. Any final order of the state banking board pursuant to this section is subject to review in accordance with the Kansas judicial review act.
(h) When the commissioner determines that a trust company domiciled in this state has established or is operating a trust service office in violation of the laws governing the operation of such trust company, the commissioner may take such action as available under K.S.A. 9-1714, 9-1805, 9-1807 or 9-1809, and amendments thereto, to remedy such violation.
History: L. 1993, ch. 81, § 1; L. 1994, ch. 51, § 2; L. 2001, ch. 5, § 49; L. 2010, ch. 17, § 32; L. 2015, ch. 38, § 147; L. 2016, ch. 54, § 64; L. 2025, ch. 78, § 8; July 1.
§§ 9-2109, 9-2110 Repealed
History: L. 1993, ch. 81, §§ 2, 3; Repealed, L. 1994, ch. 51, § 9; April 7.
§ 9-2111 Prohibiting out-of-state entity to establish or operate trust facility; exceptions; requirements to do business
(a) Except as provided in K.S.A. 9-2107, and amendments thereto, no trust company, trust department of a bank, corporation or other business entity with a home office located outside of Kansas shall establish or operate a trust facility within the state of Kansas, unless the laws of the state where the home office of the nonresident trust company, trust department of a bank, corporation or other business entity is located authorize a Kansas-chartered trust company, trust department of a bank, corporation or other business entity to establish or operate a trust facility within that state. The commissioner may require any nonresident trust company to meet the greater of the requirements stated under the banking code or the laws of the nonresident trust company's home state required for a Kansas trust company to do business in the nonresident trust company's home state.
(b) Before any nonresident trust company, trust department of a bank, corporation or other business entity establishes a trust facility in Kansas, a copy of the application submitted to the home state and proof that the home state authorizes a Kansas-chartered trust company, trust department of a bank, corporation or other business entity to establish or operate a trust facility within that state shall be filed by the applicant with the commissioner.
(c) No Kansas trust company shall establish an out-of-state trust facility until an application has been filed with the commissioner and approval has been received. An application filed pursuant to this section shall be subject to the provisions in K.S.A. 9-2108, and amendments thereto.
(d) No Kansas bank with a trust department shall establish an out-of-state trust facility until an application has been filed with the commissioner and approval has been received. An application filed pursuant to this section shall be subject to the provisions in K.S.A. 9-1111, and amendments thereto.
(e) As used in this section, "trust facility" means any office, agency, desk or other place of business where business is conducted.
(f) Any Kansas trust company or Kansas bank making application to the commissioner pursuant to subsection (c) or (d) shall pay to the commissioner a fee to be established pursuant to K.S.A. 9-1726, and amendments thereto, to defray the expenses of the commissioner in the examination and investigation of the application. The commissioner shall remit all moneys received under this section to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the bank investigation fund. The moneys in the bank investigation fund shall be used to pay the expenses of the commissioner in the examination and investigation of such applications and any unused balance shall be transferred to the bank commissioner fee fund.
History: L. 1994, ch. 51, § 3; L. 1994, ch. 294, § 2; L. 2012, ch. 94, § 2; L. 2015, ch. 38, § 148; L. 2017, ch. 24, § 1; L. 2025, ch. 78, § 9; July 1.
Article 22 Mortgage Business
§ 9-2201 Definitions
As used in this act:
(a) "Act" means the Kansas mortgage business act.
(b) "Amount financed" means the net amount of credit provided to the consumer or on the consumer's behalf. The amount financed shall be calculated as provided in rules and regulations adopted by the commissioner pursuant to K.S.A. 9-2209, and amendments thereto.
(c) "Annual percentage rate" shall have the same meaning, be interpreted in the same manner and be calculated using the same methodology as prescribed by 15 U.S.C. § 1606.
(d) "Applicant" means a person who has submitted an application for a license to engage in mortgage business or a person who has submitted an application for registration to conduct mortgage business in this state as a loan originator.
(e) "Appraised value" means, with respect to any real estate at any time:
(1) The total appraised value of the real estate, as reflected in the most recent records of the tax assessor of the county in which the real estate is located;
(2) the fair market value of the real estate, as reflected in a written appraisal of the real estate performed by a Kansas licensed or certified appraiser within the past 12 months; or
(3) in the case of a nonpurchase-money real estate transaction, the estimated market value as determined through a method acceptable to the commissioner. In determining the acceptability of the method, the commissioner shall consider the reliability and impartiality of the method under the circumstances. The commissioner may consider industry standards or customs. A method shall not be acceptable if the resulting value is predetermined or when the fee to be paid to the method provider is contingent upon the property valuation reached or upon the consequences resulting from the property valuation reached.
(f) "Balloon payment" means any required payment that is more than twice as large as the average of all earlier scheduled payments.
(g) "Branch office" means a place of business, other than a principal place of business, where the mortgage company maintains a physical location for the purpose of conducting mortgage business with the public.
(h) "Closed-end covered transaction" means the same as in 12 C.F.R. 1026.2(a)(10).
(i) "Closing costs" means:
(1) The actual fees paid to a public official or agency of the state or federal government for filing, recording or releasing any instrument relating to the debt; and
(2) bona fide and reasonable expenses incurred by the mortgage company in connection with the making, closing, disbursing, extending, readjusting or renewing the debt that are payable to third parties not related to the mortgage company. Reasonable fees for an appraisal made by the mortgage company or related party are permissible.
(j) (1) "Code mortgage rate" means the greater of:
(A) 12%; or
(B) the sum of:
(i) The required net yield published by the federal national mortgage association for 60-day mandatory delivery whole-loan commitments for 30-year fixed-rate mortgages with actual remittance on the first day for which the required net yield was published in the previous month; and
(ii) 5%.
(2) If the reference rate referred to in clause (i)(1)(B)(i)* is discontinued, becomes impractical to use, or is otherwise not readily ascertainable for any reason, the commissioner may designate a comparable replacement reference rate and, upon publishing notice of the same, such replacement reference rate shall become the reference rate referred to in clause (i)(1)(B)(i)*. The secretary of state shall publish notice of the code mortgage rate not later than the second issue of the Kansas register published each month.
(k) "Commissioner" means the state bank commissioner or designee, who shall be the deputy commissioner of the consumer and mortgage lending division of the office of the state bank commissioner.
(l) "Consumer" means an individual to whom credit is offered or granted under this act.
(m) "Covered transaction" means a mortgage loan that:
(1) Is a subordinate mortgage;
(2) has a loan-to-value ratio at the time when made that exceeds 100%, except for any loan guaranteed by a federal government agency of the United States; or
(3) in the case of K.S.A. 2025 Supp. 9-2231, and amendments thereto, the annual percentage rate of the loan exceeds the code mortgage rate.
(n) "Finance charge" means all charges payable directly or indirectly by the consumer and imposed directly or indirectly by the mortgage company as an incident to or as a condition of the extension of credit. The finance charge shall be calculated as provided in rules and regulations adopted by the commissioner pursuant to K.S.A. 9-2209, and amendments thereto.
(o) "Individual" means a human being.
(p) "Insufficient payment method" means any instrument as defined in K.S.A. 84-3-104, and amendments thereto, drawn on any financial institution for the payment of money and delivered in payment, in whole or in part, of preexisting indebtedness of the drawer or maker, which is refused payment by the drawee because the drawer or maker does not have sufficient funds in or credits with the drawee to pay the amount of the instrument upon presentation.
(q) "Installment" means a periodic payment required or permitted by agreement in connection with a covered transaction.
(r) "License" means a license issued by the commissioner to engage in mortgage business as a mortgage company.
(s) "Licensed mortgage company" means a mortgage company that has been licensed as required by this act.
(t) "Licensee" means a person who is licensed by the commissioner as a mortgage company.
(u) "Loan originator" means an individual:
(1) Who engages in mortgage business on behalf of a single mortgage company;
(2) whose conduct of mortgage business is the responsibility of the licensee;
(3) who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan for compensation or gain or in the expectation of compensation or gain; and
(4) whose job responsibilities include contact with borrowers during the loan origination process, which can include soliciting, negotiating, acquiring, arranging or making mortgage loans for others, obtaining personal or financial information, assisting with the preparation of mortgage loan applications or other documents, quoting loan rates or terms or providing required disclosures. It does not include any individual engaged solely as a loan processor or underwriter.
(v) "Loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction and subject to the supervision and instruction of a person registered or exempt from registration under this act.
(1) For purposes of this subsection, the term "clerical or support duties" may include subsequent to the receipt of a mortgage loan application:
(A) The receipt, collection, distribution and analysis of information common for the processing or underwriting of a residential mortgage loan; and
(B) communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms or counseling consumers about residential mortgage loan rates or terms.
(2) An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information including the use of business cards, stationery, brochures, signs, rate lists or other promotional items, that such individual can or will perform any of the activities of a loan originator.
(w) "Loan-to-value ratio" means a fraction expressed as a percentage at any time:
(1) The numerator of which is the aggregate unpaid principal balance of all loans secured by a mortgage; and
(2) the denominator of which is the appraised value of the real estate.
(x) "Mortgage business" means engaging in, or holding out to the public as willing to engage in, for compensation or gain, or in the expectation of compensation or gain, directly or indirectly, the business of making, originating, servicing, soliciting, placing, negotiating, acquiring, selling, arranging for others, or holding the rights to or offering to solicit, place, negotiate, acquire, sell or arrange for others, mortgage loans in the primary market.
(y) "Mortgage company" means a person engaged in mortgage business.
(z) "Mortgage loan" means a loan or agreement to extend credit made to one or more persons which is secured by a first or subordinate mortgage, deed of trust, contract for deed or other similar instrument or document representing a security interest or lien, except as provided for in K.S.A. 60-1101 through 60-1110, and amendments thereto, upon any lot intended for residential purposes or a one-to-four family dwelling as defined in 15 U.S.C. § 1602(w), located in this state, occupied or intended to be occupied for residential purposes by the owner, including the renewal or refinancing of any such loan.
(aa) "Mortgage loan application" means the submission of a consumer's financial information, including, but not limited to, the consumer's name, income and social security number, to obtain a credit report, the property address, an estimate of the value of the property and the mortgage loan amount sought for the purpose of obtaining an extension of credit.
(bb) "Mortgage servicer" means any person engaged in mortgage servicing.
(cc) "Mortgage servicing" means collecting payment, remitting payment for another or the right to collect or remit payment of any of the following: Principal; interest; tax; insurance; or other payment under a mortgage loan.
(dd) "Nationwide mortgage licensing system and registry" means a mortgage licensing system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators for the licensing and registration of mortgage loan originators.
(ee) "Not-for-profit" means a business entity that is granted tax exempt status by the internal revenue service.
(ff) "Open-end covered transaction" means a covered transaction in which a mortgage company:
(1) Reasonably contemplates repeated transactions;
(2) may impose a finance charge from time to time on an outstanding unpaid balance; and
(3) extends an amount of credit to the consumer during the term of the mortgage loan, up to any set limit, that is generally made available to the extent that any outstanding balance is repaid.
(gg) "Person" means any individual, sole proprietorship, corporation, partnership, trust, association, joint venture, pool syndicate, unincorporated organization or other form of entity, however organized.
(hh) "Prepaid finance charge" means any finance charge paid separately before or at consummation of a transaction or withheld from the proceeds of the credit at any time.
(ii) "Principal" of a mortgage loan means the total of the amount financed and the prepaid finance charges, except that prepaid finance charges are not added to the amount financed to the extent such prepaid finance charges are paid separately by the consumer.
(jj) "Primary market" means the market wherein mortgage business is conducted including activities conducted by any person who assumes or accepts any mortgage business responsibilities of the original parties to the transaction.
(kk) "Principal place of business" means a place of business where mortgage business is conducted, which has been designated by a licensee as the primary headquarters from which all mortgage business and administrative activities are managed and directed.
(ll) "Promotional items" means pens, pencils, hats and other such novelty items.
(mm) "Registrant" means any individual who holds a valid registration to conduct mortgage business in this state as a loan originator on behalf of a licensed mortgage company.
(nn) "Related" with respect to a person means:
(1) A person directly or indirectly controlling, controlled by or under common control of another person;
(2) an officer or director employed by the person performing similar functions with another person;
(3) a relative by blood, adoption or marriage of a person within the fourth degree of relationship; or
(4) an individual who shares the same home with such person.
(oo) "Remote location" means a location other than the principal place of business or a branch office where a licensed mortgage company's employee or independent contractor is authorized by such company to engage in mortgage business. A remote location is not considered a branch office.
(pp) "Unique identifier" means a number or other identifier assigned by protocols established by the nationwide mortgage licensing system and registry.
History: L. 1996, ch. 175, § 1; L. 1999, ch. 45, § 1; L. 2001, ch. 88, § 2; L. 2001, ch. 166, § 1; L. 2009, ch. 29, § 4; L. 2015, ch. 33, § 7; L. 2016, ch. 15, § 1; L. 2022, ch. 30, § 1; L. 2024, ch. 15, § 16; L. 2024, ch. 100, § 1; January 1, 2025.
§ 9-2202 Organizations, entities and individuals exempt from licensure
The following are exempt from the licensing requirements of this act:
(a) Any bank, savings bank, trust company, savings and loan association, building and loan association, industrial loan company or credit union organized, chartered or authorized under the laws of the United States or of any state which is authorized to make loans and to receive deposits;
(b) any entity directly or indirectly regulated by an agency of the United States or of any state which is a subsidiary of any entity listed in subsection (a) if 25% or more of such entity's common stock is directly owned by any entity listed in subsection (a);
(c) the United States of America, the state of Kansas, any other state or any agency or instrumentality of any governmental entity;
(d) any individual who with their own funds for their own investment makes a purchase money mortgage or finances the sale of their own property, except that any individual who enters into more than five such investments or sales in any twelve-month period shall be subject to all provisions of this act;
(e) not-for-profit entities that provide mortgage loans in conjunction with a mission of building or rehabilitating affordable homes to low-income consumers; and
(f) business entities with no employees when a related, licensed mortgage company acts as a proxy for the entity by conducting all mortgage business on behalf of the entity and by including all such mortgage business in the proxy's reports to the commissioner, but the entity and the proxy are jointly and severally liable for violations of this act by the proxy.
History: L. 1996, ch. 175, § 2; L. 1999, ch. 45, § 2; L. 2001, ch. 88, § 3; L. 2009, ch. 29, § 5; L. 2016, ch. 15, § 2; L. 2024, ch. 6, § 18; January 1, 2025.
§ 9-2203 License required to conduct mortgage business; mortgage business at remote locations, requirements; registration required for a loan originator; penalty; statute of limitations for prosecution
(a) Mortgage business shall only be conducted in this state by entities that are exempt from licensure pursuant to K.S.A. 9-2202, and amendments thereto, or a licensed mortgage company. A licensee shall be responsible for all mortgage business conducted on such licensee's behalf by any person, including loan originators, employees or independent contractors.
(b) Mortgage business involving loan origination shall only be conducted in this state by an individual who has first been registered with the commissioner as a loan originator as required by this act and maintains a valid unique identifier issued by the nationwide mortgage licensing system and registry, if operational at the time of registration.
(c) A registrant shall only engage in mortgage business on behalf of one licensed mortgage company.
(d) Mortgage business may be conducted at a remote location, if:
(1) The licensed mortgage company's employees or independent contractors do not meet with the public at a personal residence;
(2) no physical business records are maintained at the remote location;
(3) the licensed mortgage company has written policies and procedures for working at a remote location and such company supervises and enforces such policies and procedures;
(4) the licensed mortgage company maintains the computer system and customer information in accordance with the company's information technology security plan and all state and federal laws;
(5) any device used to engage in mortgage business has appropriate security, encryption and device management controls to ensure the security and confidentiality of customer information as required by rules and regulations adopted by the commissioner;
(6) the licensed mortgage company's employees or independent contractors take reasonable precautions to protect confidential information in accordance with state and federal laws; and
(7) the licensed mortgage company annually reviews and certifies that the employees or independent contractors engaged in mortgage business at remote locations meet the requirements of this section. Upon request, a licensee shall provide written documentation of such licensee's review to the commissioner.
(e) Nothing under this act shall require a licensee to obtain any other license under any other act for the sole purpose of conducting non-depository mortgage business.
(f) Any person who willfully or knowingly violates any of the provisions of this act, any rule and regulation adopted or order issued under this act commits a severity level 7 nonperson felony. A second or subsequent conviction of this act, regardless of its location on the sentencing grid block, shall have a presumptive sentence of imprisonment.
(g) No prosecution for any crime under this act may be commenced more than five years after the alleged violation. A prosecution is commenced when a complaint or information is filed, or an indictment returned, and a warrant thereon is delivered to the sheriff or other officer for execution, except that no prosecution shall be deemed to have been commenced if the warrant so issued is not executed without unreasonable delay.
(h) Nothing in this act limits the power of the state to punish any person for any conduct which constitutes a crime by statute.
History: L. 1996, ch. 175, § 3; L. 1999, ch. 45, § 3; L. 2001, ch. 88, § 4; L. 2005, ch. 144, § 1; L. 2009, ch. 29, § 6; L. 2016, ch. 15, § 3; L. 2017, ch. 52, § 8; L. 2022, ch. 30, § 2; L. 2024, ch. 6, § 19; January 1, 2025.
§ 9-2204 Application for license for mortgage company; application for registration for loan originator; content; incomplete application
(a) Any person required to be licensed as a mortgage company pursuant to this act shall submit to the commissioner an application for the mortgage company on forms prescribed and provided by the commissioner. The application shall contain information the commissioner deems necessary to adequately identify:
(1) The nature of the mortgage business to be conducted, principal place of business address and each branch office address;
(2) the identity, character and qualifications of an individual applicant;
(3) the identity, character and qualifications of the loan originators, owners, officers, directors, members, partners and employees of the applicant;
(4) the name under which the applicant intends to conduct business; and
(5) other information the commissioner requires to evaluate the financial responsibility and condition, character, qualifications and fitness of the applicant and compliance with the provisions of this act.
(b) Any individual required to register as a loan originator pursuant to this act shall submit to the commissioner an application for registration on forms prescribed and provided by the commissioner. The application shall contain information the commissioner deems necessary to adequately identify the location where the individual engages in mortgage business activities, the licensee for whom the registrant will conduct mortgage business and other information the commissioner requires to evaluate the condition, character, qualifications, and fitness of the applicant and compliance with the provisions of this act.
(c) Each application shall be accompanied by a nonrefundable fee of not less than $50, which may be increased by rules and regulations pursuant to K.S.A. 9-2209, and amendments thereto.
(d) The commissioner shall consider an application for a license or registration abandoned if the applicant fails to complete the application within 60 days after the commissioner provides the applicant with written notice of the incomplete application. An applicant whose application is abandoned under this section may reapply to obtain a license or registration and shall pay the fee set forth in subsection (c) upon such application.
(e) An application shall be approved, and a nonassignable license or registration shall be issued to the applicant if:
(1) The commissioner has received the complete application and fee required by this section;
(2) the commissioner determines the proposed name under which an applicant for a mortgage company license intends to conduct business is not misleading or otherwise deceptive; and
(3) the commissioner determines the financial responsibility and condition, character, qualifications and fitness of the applicant warrants a belief that the business of the applicant will be conducted competently, honestly, fairly and in accordance with all applicable state and federal laws.
History: L. 1996, ch. 175, § 4; L. 1999, ch. 45, § 4; L. 2000, ch. 17, § 1; L. 2001, ch. 88, § 5; L. 2017, ch. 52, § 9; L. 2022, ch. 30, § 3; July 1.
§ 9-2205 License or registration; renewal; fees, late fees, uses
(a) A license or registration shall become effective as of the date specified in writing by the commissioner.
(b) Each license and registration shall expire on December 31 of each year. A license or registration shall be renewed by filing with the commissioner a complete renewal application and nonrefundable renewal fee by December 1 of each year.
(c) A registration shall be renewed annually by filing with the commissioner, at least 30 days prior to the expiration of the registration, a renewal application, containing information the commissioner requires to determine the existence of material changes from the information contained in the applicant's original registration application or prior renewal applications, including the completion of any continuing education requirements. Renewal applications received after December 1 of each year and incomplete renewal applications as of December 1 of each year may be assessed a late fee.
(d) An expired license or registration may be reinstated through the last day of February of each year, with the same force and effect as if the license or registration had not expired and had at all times remained in full force and effect, by filing a reinstatement application and paying the appropriate application and late fees.
(e) Any renewal or reinstatement application received by the commissioner after the last day of February of each year shall be treated as an original application and shall be subject to all reporting and fee requirements contained in K.S.A. 9-2204, and amendments thereto.
(f) The commissioner may designate late fees paid under this section for consumer education to be expended for such purpose as directed by the commissioner.
History: L. 1996, ch. 175, § 5; L. 1999, ch. 45, § 5; L. 2001, ch. 88, § 6; L. 2005, ch. 144, § 2; L. 2009, ch. 29, § 7; L. 2016, ch. 15, § 4; L. 2022, ch. 30, § 4; July 1.
§ 9-2206 Application denied; application abandoned; appeal
(a) If the commissioner fails to issue a license or registration within 60 days or grant a renewal within 30 days after an application is deemed complete by the commissioner, the applicant may make written request for a hearing. The commissioner shall conduct a hearing in accordance with the Kansas administrative procedure act.
(b) If an application is considered abandoned pursuant to K.S.A. 9-2204, and amendments thereto, an applicant may make written request for a hearing. The commissioner shall conduct a hearing in accordance with the Kansas administrative procedure act.
History: L. 1996, ch. 175, § 6; L. 1999, ch. 45, § 6; L. 2001, ch. 88, § 7; L. 2016, ch. 15, § 5; L. 2017, ch. 52, § 10; July 1.
§ 9-2207 Denial, suspension or revocation of license or registration; notice; disciplinary proceedings
(a) The commissioner may deny, suspend, revoke, or refuse to renew a license or registration issued pursuant to this act, if the commissioner finds, after notice and opportunity for a hearing conducted in accordance with the provisions of the administrative procedures act, that:
(1) The applicant, licensee or registrant has repeatedly or willfully violated any section of this act or any rule and regulation or order lawfully made pursuant to this act;
(2) facts or conditions exist which would have justified the denial of the license, registration or renewal had these facts or conditions existed or been known to exist at the time the application for the license, registration or renewal was made;
(3) the applicant, licensee or registrant has filed with the commissioner any document or statement containing any false representation of a material fact or fails to state a material fact;
(4) the applicant, licensee or registrant has been convicted of any crime involving fraud, dishonesty or deceit, except that no registration shall be granted to any loan originator who:
(A) Has had a mortgage loan originator license or registration revoked in any governmental jurisdiction; or
(B) has been convicted of or pled guilty or nolo contendere to a felony in a domestic, foreign or military court:
(i) During the seven-year period preceding the date of the application for licensing and registration; or
(ii) at any time preceding such date of application, if such felony involved an act of fraud, dishonesty, deceit, a breach of trust or money laundering;
(5) the applicant, licensee or registrant has engaged in or is engaging in deceptive business practices;
(6) the applicant, licensee or registrant, or an employee of the applicant, licensee or registrant, has been the subject of any disciplinary action by this agency or any other state or federal regulatory agency;
(7) a final judgment has been entered against the applicant, licensee or registrant in a civil action and the commissioner finds, based upon the conduct on which the judgment is based, that licensing or registration of such person would be contrary to the public interest;
(8) the applicant, licensee or registrant, or an employee of the applicant, licensee or registrant has been convicted of engaging in mortgage business activity without authorization pursuant to K.S.A. 9-2203, and amendments thereto, or a substantially similar offense in another state; or
(9) the applicant, licensee or registrant has refused to furnish information required by the commissioner within a reasonable period of time as established by the commissioner.
(b) None of the following actions shall deprive the commissioner of any jurisdiction or right to institute or proceed with any disciplinary proceeding against such license or registration to render a decision suspending, revoking or refusing to renew such license or registration or to establish and make a record of the facts of any violation of law for any lawful purpose:
(1) The imposition of an administrative penalty;
(2) the lapse or suspension of any license or registration issued under this act by operation of law;
(3) the licensee's or registrant's failure to renew any license or registration issued under this act; or
(4) the licensee's or registrant's voluntary surrender of any license or registration issued under this act.
History: L. 1996, ch. 175, § 7; L. 1999, ch. 45, § 7; L. 2000, ch. 17, § 2; L. 2001, ch. 88, § 8; L. 2009, ch. 29, § 8; July 1.
§ 9-2208 Availability of evidence of licensure; providing notice of certain information to consumer; contents; advertising or solicitation disclosures
(a) Each licensee shall make available evidence of licensure in a way that reasonably assures recognition by consumers and members of the general public.
(b) The licensee shall provide each consumer a notice, containing such information as the commissioner may prescribe by rules and regulations, before the earliest of the following, as applicable:
(1) The time of entering into any contract with a consumer for the provision of services for a mortgage loan;
(2) the time of receiving any compensation or promise of compensation from or on behalf of a consumer for a mortgage loan; or
(3) 15 days after accepting a transfer of mortgage servicing.
(c) All solicitations and published advertisements concerning mortgage business directed at Kansas residents, including those on the internet or by other electronic means, shall contain the name and license number or unique identifier of the licensee on record with the commissioner. Each licensee shall maintain a record of all solicitations or advertisements for a period of 36 months. For the purpose of this subsection, "advertising" does not include business cards or promotional items.
(d) No solicitation or advertisement shall contain false, misleading or deceptive information, or indicate or imply that the interest rates or charges stated are "recommended," "approved," "set" or "established" by the state of Kansas.
(e) No licensee or registrant shall conduct mortgage business in this state using any name other than the name or names stated on their license or registration.
History: L. 1996, ch. 175, § 8; L. 1999, ch. 45, § 8; L. 2000, ch. 17, § 3; L. 2001, ch. 88, § 9; L. 2005, ch. 144, § 3; L. 2016, ch. 15, § 6; L. 2022, ch. 30, § 5; L. 2024, ch. 6, § 20; January 1, 2025.
§ 9-2209 Powers and duties of state bank commissioner; orders to appear before commissioner; other remedies available to consumers
(a) The commissioner may exercise the following powers:
(1) Adopt rules and regulations as necessary to carry out the intent and purpose of this act and to implement the requirements of applicable federal law;
(2) make investigations and examinations of the licensee's or registrant's operations, books and records as the commissioner deems necessary for the protection of the public and control access to any documents and records of the licensee or registrant under examination or investigation;
(3) charge reasonable costs of investigation, examination and administration of this act, to be paid by the applicant, licensee or registrant. The commissioner shall establish such fees in such amounts as the commissioner may determine to be sufficient to meet the budget requirements of the commissioner for each fiscal year. Charges for administration of this act shall be based on the licensee's loan volume;
(4) order any licensee or registrant to cease any activity or practice that the commissioner deems to be deceptive, dishonest, violative of state or federal law or unduly harmful to the interests of the public;
(5) exchange any information regarding the administration of this act with any agency of the United States or any state that regulates the licensee or registrant or administers statutes, rules and regulations or programs related to mortgage business and to enter into information sharing arrangements with other governmental agencies or associations representing governmental agencies that are deemed necessary or beneficial to the administration of this act;
(6) disclose to any person or entity that an applicant's, licensee's or registrant's application, license or registration has been denied, suspended, revoked or refused renewal;
(7) require or permit any person to file a written statement, under oath or otherwise as the commissioner may direct, setting forth all the facts and circumstances concerning any apparent violation of this act or any rule and regulation promulgated thereunder or any order issued pursuant to this act;
(8) receive, as a condition in settlement of any investigation or examination, a payment designated for consumer education to be expended for such purpose as directed by the commissioner;
(9) require that any applicant, registrant, licensee or other person successfully passes a standardized examination designed to establish such person's knowledge of mortgage business transactions and all applicable state and federal law. Such examinations shall be created and administered by the commissioner or the commissioner's designee, and may be made a condition of application approval or application renewal;
(10) require that any applicant, licensee, registrant or other person complete a minimum number of prelicensing education hours and complete continuing education hours on an annual basis. Prelicensing and continuing education courses shall be approved by the commissioner, or the commissioner's designee, and may be made a condition of application approval and renewal;
(11) require fingerprinting of any applicant, registrant or licensee in accordance with K.S.A. 2025 Supp. 22-4714, and amendments thereto. For the purposes of this section and in order to reduce the points of contact that the federal bureau of investigation may have to maintain with the individual states, the commissioner may use the nationwide mortgage licensing system and registry as a channeling agent for requesting information from and distributing information to the department of justice or any governmental agency;
(12) refer such evidence as may be available concerning any violation of this act or of any rule and regulation or order hereunder to the attorney general, or in consultation with the attorney general to the proper county or district attorney, who may in such prosecutor's discretion, with or without such a referral, institute the appropriate criminal proceedings under the laws of this state;
(13) issue and apply to enforce subpoenas in this state at the request of a comparable official of another state if the activities constituting an alleged violation for which the information is sought would be a violation of the Kansas mortgage business act if the activities had occurred in this state;
(14) use the nationwide mortgage licensing system and registry as a channeling agent for requesting and distributing any information regarding loan originator registration or mortgage company licensing to and from any source so directed by the commissioner;
(15) establish relationships or contracts with the nationwide mortgage licensing system and registry or other entities to collect and maintain records and process transaction fees or other fees related to applicants, licensees, registrants or other persons subject to this act and to take such other actions as may be reasonably necessary to participate in the nationwide mortgage licensing system and registry. The commissioner shall regularly report enforcement actions and other relevant information to the nationwide mortgage licensing system and registry;
(16) require any licensee or registrant to file reports with the nationwide mortgage licensing system and registry in the form prescribed by the commissioner or the commissioner's designee;
(17) receive and act on complaints, take action designed to obtain voluntary compliance with the provisions of the Kansas mortgage business act or commence proceedings on the commissioner's own initiative;
(18) provide guidance to persons and groups on their rights and duties under the Kansas mortgage business act;
(19) enter into any informal agreement with any mortgage company for a plan of action to address violations of law. The adoption of an informal agreement authorized by this paragraph shall not be subject to the provisions of K.S.A. 77-501 et seq., and amendments thereto, or K.S.A. 77-601 et seq., and amendments thereto. Any informal agreement authorized by this paragraph shall not be considered an order or other agency action, and shall be considered confidential examination material pursuant to K.S.A. 9-2217, and amendments thereto. All such examination material shall also be confidential by law and privileged, shall not be subject to the open records act, K.S.A. 45-215 et seq., and amendments thereto, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action; and
(20) issue, amend and revoke written administrative guidance documents in accordance with the applicable provisions of the rules and regulations filing act.
(b) For the purpose of any examination, investigation or proceeding under this act, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel such witnesses' attendance, adduce evidence and require the production of any matter that is relevant to the examination or investigation, including the existence, description, nature, custody, condition and location of any books, documents or other tangible things and the identity and location of persons having knowledge of relevant facts, or any other matter reasonably calculated to lead to the discovery of relevant information or items.
(c) In case of contumacy by, or refusal to obey a subpoena issued to any person, any court of competent jurisdiction, upon application by the commissioner, may issue to that person an order requiring the person to appear before the commissioner, or the officer designated by the commissioner, there, to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. Any failure to obey the order of the court may be punished by the court as a contempt of court.
(d) No person is excused from attending and testifying or from producing any document or record before the commissioner or in obedience to the subpoena of the commissioner or any officer designated by the commissioner or in any proceeding instituted by the commissioner, on the ground that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture. No individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which such person is compelled, after claiming privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.
(e) Except for refund of an excess charge, no liability is imposed under the Kansas mortgage business act for an act done or omitted in conformity with a rule and regulation or written administrative guidance document of the commissioner in effect at the time of the act or omission, notwithstanding that after the act or omission, the rule and regulation or written administrative interpretation may be determined by judicial or other authority to be invalid for any reason.
(f) The grant of powers to the commissioner in this article does not affect remedies available to consumers under K.S.A. 9-2201 et seq., and amendments thereto, or under other principles of law or equity.
History: L. 1996, ch. 175, § 9; L. 1999, ch. 45, § 9; L. 2000, ch. 17, § 4; L. 2001, ch. 88, § 10; L. 2005, ch. 144, § 4; L. 2009, ch. 29, § 9; L. 2016, ch. 15, § 7; L. 2017, ch. 81, § 4; L. 2021, ch. 82, § 3; L. 2024, ch. 15, § 17; L. 2024, ch. 100, § 2; January 1, 2025.
§ 9-2210 Fees; disposition
All fees collected by the commissioner pursuant to this act shall be subject to the provisions of K.S.A. 75-1308, and amendments thereto.
History: L. 1996, ch. 175, § 10; April 25.
§ 9-2211 Bonding requirements; positive net worth requirements
(a) Each applicant or licensee shall file with the commissioner a surety bond in the amount of not less than $100,000, in a form acceptable to the commissioner, issued by an insurance company authorized to conduct business in this state, securing the applicant's or licensee's faithful performance of all duties and obligations of a licensee meeting the following requirements:
(1) The bond shall be payable to the office of the state bank commissioner and shall be in an amount established by the commissioner by rules and regulations adopted pursuant to K.S.A. 9-2209, and amendments thereto;
(2) the terms of the bond shall provide that it may not be terminated without 30 days prior written notice to the commissioner, except that such termination shall not affect the surety's liability for violations of the Kansas mortgage business act occurring prior to the effective date of cancellation and principal and surety shall be and remain liable for a period of two years from the date of any action or inaction of principal that gives rise to a claim under the bond; and
(3) the bond shall be available for the recovery of expenses, fines and fees levied by the commissioner under this act, and for losses or damages that are determined by the commissioner to have been incurred by any borrower or consumer as a result of the applicant's or licensee's failure to comply with the requirements of this act.
(b) Each applicant or licensee shall submit evidence that establishes, to the commissioner's satisfaction, that the applicant or licensee is solvent and shall at all times maintain a positive net worth. Evidence of solvency and net worth shall include the submission of a balance sheet of the applicant or a consolidated financial statement of the entity that owns or controls the applicant.
History: L. 1999, ch. 45, § 10; L. 2001, ch. 88, § 11; L. 2005, ch. 144, § 5; L. 2009, ch. 29, § 10; L. 2016, ch. 15, § 8; L. 2017, ch. 52, § 11; L. 2022, ch. 30, § 6; July 1.
§ 9-2212 Prohibited acts for persons licensed or registered under act
No person required to be licensed or registered under this act shall directly or indirectly:
(a) Pay compensation to, contract with or employ in any manner any person engaged in mortgage business who is not properly licensed or registered, unless such person is exempt pursuant to K.S.A. 9-2202, and amendments thereto;
(b) without the prior written approval of the commissioner employ any person who has:
(1) Had a license or registration denied, revoked, suspended or refused renewal; or
(2) been convicted of any crime involving fraud, dishonesty or deceit;
(c) delay closing of a mortgage loan for the purpose of increasing interest, costs, fees or charges payable by the borrower;
(d) misrepresent the material facts or make false promises intended to influence, persuade or induce an applicant for a mortgage loan or mortgagee to take a mortgage loan or cause or contribute to misrepresentation by any person acting on behalf of the person required to be licensed or registered;
(e) misrepresent to or conceal from an applicant for a mortgage loan a mortgagor or a lender, material facts, terms or conditions of a transaction to which the person required to be licensed or registered is a party;
(f) engage in any transaction, practice or business conduct that is not in good faith or that operates a fraud upon any person in connection with conducting mortgage business;
(g) receive compensation for rendering mortgage business services where the licensee or registrant has otherwise acted as a real estate broker or agent in connection with the sale of the real estate which secures the mortgage transaction unless the person required to be licensed or registered has provided written disclosure to the person from whom compensation is collected that the person is receiving compensation both for mortgage business services and for real estate broker or agent services;
(h) engage in any fraudulent residential mortgage brokerage or underwriting practices;
(i) advertise, display, distribute, broadcast or televise or cause or permit to be advertised, displayed, distributed, broadcast or televised, in any manner, any false, misleading or deceptive statement or representation with regard to rates, terms or conditions for a mortgage loan;
(j) fail to disburse the proceeds of a mortgage loan upon the satisfaction of all conditions to the disbursement and the expiration of all applicable rescission, cooling-off or other waiting periods required by law, unless the parties otherwise agree in writing;
(k) record a mortgage if moneys are not available for the immediate disbursal to the mortgagor unless, before that recording, the person required to be licensed or registered informs the mortgagor in writing of a definite date by which payment shall be made and obtains the mortgagor's written permission for the delay;
(l) transfer, assign or attempt to transfer or assign, a license or registration to any other person, or assist or aide and abet any person who does not hold a valid license or registration under this act in engaging in the conduct of mortgage business who is not properly licensed or registered, unless such person is exempt under K.S.A. 9-2202, and amendments thereto;
(m) solicit or enter into a contract with a borrower that provides in substance that the person required to be licensed or registered may earn a fee or commission through best efforts to obtain a loan even though no loan is actually obtained for the borrower;
(n) solicit, advertise or enter into a contract for specific interest rates, points or other financing terms unless the terms are actually available at the time of soliciting, advertising or contracting;
(o) make any payment, threat or promise, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan or make any payment, threat or promise, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property or engage in any activity that would constitute a violation of K.S.A. 58-2344, and amendments thereto; or
(p) fail to comply with this act or rules and regulations promulgated under this act or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this act.
History: L. 1999, ch. 45, § 11; L. 2000, ch. 17, § 5; L. 2001, ch. 88, § 12; L. 2009, ch. 29, § 11; L. 2016, ch. 15, § 9; L. 2024, ch. 6, § 22; January 1, 2025.
§ 9-2213 Time limit for deposit of escrow funds; records required
(a) Within three business days of receipt a licensee shall deposit all fees and money received from a borrower prior to the time a loan is consummated in an escrow account in a bank, savings bank, savings and loan association or credit union incorporated under the laws of this state, or organized under the laws of the United States or another state.
(b) For each borrower the licensee shall maintain a separate record of all money received for any service performed or to be performed, including any payment to a third party, setting forth:
(1) The date the money was received;
(2) the amount of money received;
(3) the date the money was deposited in the escrow account; and
(4) the date, description, and justification for each disbursement.
(c) Upon the request of a borrower, a copy of the record required by subsection (b) shall be provided to the borrower:
(1) Within five business days of consummation of the loan; or
(2) within five business days of receipt of written notice of the borrower's intention to withdraw from the loan transaction.
History: L. 1999, ch. 45, § 12; L. 2000, ch. 17, § 6; L. 2001, ch. 88, § 13; November 1.
§ 9-2214 Ownership of documents
All original documents provided to the licensee by the borrower or at the expense of the borrower, including any appraisals, are the property of the borrower and at the borrower's request, shall be returned to the borrower without further expense if the loan is not consummated.
History: L. 1999, ch. 45, § 13; L. 2001, ch. 88, § 14; November 1.
§ 9-2215 Change in licensee's business; notice
(a) A licensee shall provide written notice to the commissioner within 10 business days of the occurrence of any of the following events:
(1) The closing or relocation of the principal place of business or the addition or closing of any branch office;
(2) a change in the licensee's name or legal entity status; or
(3) the addition or loss of any loan originator, owner, officer, partner or director.
(b) The commissioner may request additional information concerning any written notice received pursuant to subsection (a) and charge a reasonable fee for any action required by the commissioner as a result of such notice and additional information.
History: L. 1999, ch. 45, § 14; L. 2001, ch. 88, § 15; L. 2022, ch. 30, § 7; July 1.
§ 9-2216 Retention of records; time period; inspection of records; security of records; preservation of records
(a) A licensee shall keep copies of all documents or correspondence received or prepared by the licensee or registrant in connection with a loan or loan application and those records and documents required by the commissioner by rules and regulations adopted pursuant to K.S.A. 9-2209, and amendments thereto, for such time frames as are specified in the rules and regulations. If the loan is not serviced by a licensee, the retention period commences on the date the loan is closed or, if the loan is not closed, the date of the loan application. If the loan is serviced by a licensee, the retention period commences on the date the loan is paid in full or the date the licensee ceases to service the loan.
(b) All books, records and any other documents held by the licensee shall be made available for examination and inspection by the commissioner or the commissioner's designee. Certified copies of all records not kept within this state shall be delivered to the commissioner within three business days of the date such documents are requested.
(c) Each licensee shall maintain the following information:
(1) The name, address and telephone number of each loan applicant;
(2) the type of loan applied for and the date of the application; and
(3) the disposition of each loan application, including the date of loan funding, loan denial, withdrawal, name of lender if applicable, name of loan originator and any compensation or other fees received by the loan originator.
(d) Each licensee shall establish, maintain and enforce written policies and procedures regarding security of records which are reasonably designed to prevent the misuse of a consumer's personal or financial information.
(e) Before ceasing to conduct or discontinuing business, a licensee shall arrange for and be responsible for the preservation of the books and records required to be maintained and preserved under this act and applicable regulations for the remainder of each period specified.
(f) Any records required to be retained may be maintained and preserved by noneraseable, nonalterable electronic imaging or by photograph on film. If the records are produced or reproduced by photographic film, electronic imaging or computer storage medium the licensee shall meet the following criteria:
(1) Arrange the records and index the films, electronic image or computer storage media to permit immediate location of any particular record;
(2) be ready at all times to promptly provide a facsimile enlargement of film, a computer printout or a copy of the electronic images or computer storage medium that the commissioner may request; and
(3) with respect to electronic images and records stored on computer storage medium, maintain procedures for maintenance and preservation of, and access to, records in order to reasonably safeguard these records from loss, alteration or destruction.
(g) No person required to be licensed or registered under this act shall:
(1) Alter, destroy, shred, mutilate, conceal, cover up or falsify any record with the intent to impede, obstruct or influence any investigation by the commissioner or the commissioner's designee; or
(2) alter, destroy, shred, mutilate or conceal a record with the intent to impair the object's integrity or availability for use in a proceeding before the commissioner or a proceeding brought by the commissioner.
History: L. 1999, ch. 45, § 15; L. 2001, ch. 88, § 16; L. 2005, ch. 144, § 6; L. 2009, ch. 29, § 12; L. 2016, ch. 15, § 10; L. 2024, ch. 6, § 23; January 1, 2025.
§ 9-2216a Annual written report; penalty; consumer education fund; confidentiality of information in such report
(a) Each licensee shall annually, on or before April 1, file a written report with the commissioner containing the information that the commissioner may reasonably require concerning the licensee's business and operations during the preceding calendar year. The report shall be made in the form prescribed by the commissioner, which may include reports filed with the nationwide mortgage licensing system and registry. Any licensee who fails to file the report required by this section with the commissioner by April 1 shall be subject to a late penalty of $100 for each day after April 1 the report is delinquent, but in no event shall the aggregate of late penalties exceed $5,000. The commissioner may relieve any licensee from the payment of any penalty, in whole or in part, for good cause. The commissioner may apply any funds received from late penalties under this section to a consumer education fund, to be expended for such purpose as directed by the commissioner. The filing of the annual written report required under this section shall satisfy any other reports required of a licensee under this act.
(b) Information contained in the annual report shall be confidential and may be published only in composite form. The provisions of this subsection providing for the confidentiality of public records shall expire on July 1, 2030, unless the legislature reviews and reenacts such provisions in accordance with K.S.A. 45-229, and amendments thereto, prior to July 1, 2030.
History: L. 2001, ch. 88, § 1; L. 2009, ch. 29, § 13; L. 2016, ch. 15, § 11; L. 2017, ch. 52, § 12; L. 2022, ch. 62, § 2; L. 2024, ch. 6, § 24; January 1, 2025.
§ 9-2217 Confidentiality of examination reports; exceptions
Examination reports and correspondence regarding the reports made by the commissioner or the commissioner's examiners are confidential, except that the commissioner may release examination reports and correspondence regarding the reports in connection with a disciplinary proceeding conducted by the commissioner, a liquidation proceeding or a criminal investigation or proceeding. Additionally, the commissioner may furnish to federal or other state regulatory agencies or any officer or examiner thereof, a copy of any or all examination reports and correspondence regarding the reports made by the commissioner or the commissioner's examiners.
History: L. 1999, ch. 45, § 16; April 8.
§ 9-2218 Cease and desist orders; civil fines
(a) If the commissioner determines after notice and opportunity for a hearing pursuant to the Kansas administrative procedure act that any person has engaged, is engaging or is about to engage in any act or practice constituting a violation of any provision of this act or any rule and regulation or order hereunder, the commissioner by order may require any or all of the following:
(1) That the person cease and desist from the unlawful act or practice;
(2) that the person pay a fine not to exceed $10,000 per incident for the unlawful act or practice;
(3) if any person is found to have violated any provision of this act, and such violation is committed against elder or disabled persons, as defined in K.S.A. 50-676, and amendments thereto, in addition to any civil penalty otherwise provided by law, the commissioner may impose an additional penalty not to exceed $10,000 for each such violation;
(4) censure the person if the person is registered or licensed under this act;
(5) bar or suspend the person from applying for a license or registration under this act, or associating with a mortgage business or supervised lender licensed in this state;
(6) issue an order requiring the person to pay restitution for any loss arising from the violation or requiring the person to disgorge any profits arising from the violation. Such order may include the assessment of interest not to exceed 8% per annum from the date of the violation; or
(7) that the person take such affirmative action as in the judgment of the commissioner will carry out the purposes of this act.
(b) If the commissioner makes written findings of fact that the public interest will be irreparably harmed by delay in issuing an order under subsection (a), the commissioner may issue an emergency cease and desist order.
(1) Such emergency order, even when not an order within the meaning of K.S.A. 77-502, and amendments thereto, shall be subject to the same procedures as an emergency order issued under K.S.A. 77-536, and amendments thereto.
(2) Upon the entry of such an emergency order, the commissioner shall promptly notify the person subject to the order that it has been entered, of the reasons, and that a hearing will be held upon written request by the person.
(3) If the person requests a hearing, or in the absence of any request, if the commissioner determines that a hearing should be held, the matter will be set for a hearing which shall be conducted in accordance with the provisions of the Kansas administrative procedure act. Upon completion of the hearing the commissioner shall by written findings of fact and conclusions of law vacate, modify or make permanent the emergency order.
(4) If no hearing is requested and none is ordered by the commissioner, the emergency order will remain in effect until it is modified or vacated by the commissioner.
History: L. 1999, ch. 45, § 17; L. 2000, ch. 17, § 7; L. 2005, ch. 144, § 7; July 1.
§ 9-2219 Injunction
Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this act or any rule and regulation or order hereunder, the commissioner may bring an action in any court of competent jurisdiction to enjoin the acts or practices and to enforce compliance with this act or any rule and regulation or order hereunder. Upon a proper showing, a permanent or temporary injunction, restraining order, restitution, writ of mandamus or other equitable relief shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The commissioner shall not be required to post a bond.
History: L. 1999, ch. 45, § 18; April 8.
§ 9-2220 Citation of act; severability clause
(a) The provisions of K.S.A. 9-2201 et seq., and amendments thereto, and K.S.A. 2025 Supp. 9-2221 through 9-2234, and amendments thereto, shall be known and may be cited as the Kansas mortgage business act.
(b) If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
History: L. 1999, ch. 45, § 19; L. 2001, ch. 88, § 17; L. 2009, ch. 29, § 14; L. 2024, ch. 6, § 25; January 1, 2025.
§ 9-2221 Computation of any period of time under act
(a) Calendar days shall be used in computing any period of time. The day of the act, event or default from which the designated period of time begins to run shall not be included in such computation. Saturdays, Sundays and legal holidays shall be included in such computation. If the last day of the period so computed is a Saturday, Sunday or a legal holiday, the period shall run until the end of the next day that is not a Saturday, Sunday or a legal holiday. "Legal holiday" shall include any day designated as a holiday by the federal reserve bank.
(b) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 1; January 1, 2025.
§ 9-2222 Electronic writings or signatures authorized
(a) Any writing or signature required by this act may be provided or executed in an electronic form under K.S.A. 16-1601 et seq., and amendments thereto.
(b) If the consumer agrees in writing to the use of electronic methods instead of United States mail, any requirement under this act to mail a document may be satisfied by sending the document by electronic methods. When a document is sent by electronic methods, the time of sending and receipt is defined by K.S.A. 16-1615, and amendments thereto.
(c) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 2; January 1, 2025.
§ 9-2223 Applicability of provisions to covered transactions
(a) K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, shall apply only to covered transactions, as defined in K.S.A. 9-2201, and amendments thereto.
(b) K.S.A. 9-2203 through 9-2209, and amendments thereto, shall apply to licensed mortgage companies, as defined in K.S.A. 9-2201, and amendments thereto.
(c) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 3; January 1, 2025.
§ 9-2224 Restrictions on interest in land as security; violation
(a) A mortgage company shall not make a covered transaction with an interest in land as security with an amount financed of $5,000 or less in which the annual percentage rate of the loan exceeds the code mortgage rate. A security interest taken in violation of this section shall be void.
(b) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 4; January 1, 2025.
§ 9-2225 Waiver or agreement to forego rights; settlement of claims; authorization to confess judgment prohibited; authorization in violation of section is void
(a) A consumer shall not waive or agree to forego rights or benefits under K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, relating to covered transactions except as follows:
(1) The following may be settled by agreement if disputed in good faith. Any claim:
(A) By a consumer against a mortgage company for any violation of K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, including for a civil penalty; or
(B) against a consumer for default or for breach of a duty imposed by K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto.
(2) A claim against a consumer shall be settled for less value than the amount claimed.
(3) A settlement in which the consumer waives or agrees to forego rights or benefits under K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, is invalid if the court, as a matter of law, finds the settlement to have been unconscionable at the time it was made. The competence of the consumer, any deception or coercion practiced upon the consumer, the nature and extent of the legal advice received by the consumer and the value of the consideration are relevant to the issue of unconscionability.
(b) A consumer may not authorize any person to confess judgment on a claim arising out of a covered transaction. An authorization in violation of this section shall be void.
(c) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 5; January 1, 2025.
§ 9-2226 Effect of violations on rights of parties; cause of action by consumer; correction of error by mortgage company; reimbursement of fees and costs
(a) Except as otherwise provided in K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, if a mortgage company has violated any provision of K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, relating to covered transactions, the consumer shall have a cause of action to recover from the mortgage company or person liable to the consumer actual damages and except for a class action, a penalty in an amount determined by the court not less than $750 but not more than $7,500.
(b) An action under this section based on closed-end covered transaction violations shall be brought within one year of the last scheduled payment due date stated in the agreement. An action under this section based on open-end covered transaction violations shall be brought within two years from the date of occurrence.
(c) If a person has violated K.S.A. 9-2203(a), and amendments thereto, in originating a covered transaction, such covered transaction shall be void. The consumer shall not be obligated to pay the amount financed or the finance charge and such consumer shall have a right to recover any finance charge paid from either the person violating this act or from the consumer's mortgage servicer.
(d) A consumer shall not be obligated to pay a charge on a covered transaction in excess of that allowed by K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto. A consumer shall have a right of refund for twice the excess charges from the person who made the excess charge or from the consumer's mortgage servicer. A consumer may request a refund payment check or application to the outstanding obligation. Following a reasonable time after demand, if the request is refused, the consumer may recover twice the excess charge from the person liable or the mortgage company and, except for a class action, an amount determined by the court not less than $750 but not more than $7,500.
(e) A mortgage company shall have no penalty liability as discussed in this section if within 60 days after discovering the error the mortgage company corrects the error through refund or adjustment and notifies the consumer of the error. This waiver shall not apply if an action has already been instituted or the consumer has provided written notice of the violation. If the violation is a prohibited agreement, providing a corrected copy of the writing containing the error shall be sufficient notification and correction.
(f) If the mortgage company establishes, by a preponderance of evidence, that a violation is unintentional or the result of a bona fide error of law or fact notwithstanding the maintenance of procedures reasonably adopted to avoid any such violation or error, no liability is imposed under this section.
(g) A mortgage company who in good faith complies with a written administrative guidance document shall not be subject to any penalties under this section for any act done or omitted in conformity with such written administrative guidance document.
(h) Except as otherwise provided, no violation of the provisions of K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, shall impair rights on a debt.
(i) The mortgage company shall reimburse the consumer's reasonable attorney fees and cost of the action if the proceeding finds that the mortgage company has violated any provision of K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto. Reasonable attorney fees shall be determined by the value of the time expended by the attorney and not by the amount of the recovery on behalf of the consumer.
(j) This section shall not apply to attorneys or collection agencies that did not purchase the mortgage loan.
(k) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 6; January 1, 2025.
§ 9-2227 Right to prepay unpaid balance of covered transaction
(a) The consumer may prepay in full the unpaid balance of a covered transaction at any time without penalty.
(b) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 7; January 1, 2025.
§ 9-2228 Limitation on periodic finance charge for covered transactions and prepaid finance charges
(a) The periodic finance charge for a covered transaction shall not exceed 18% per annum, subject to the limitations on prepaid finance charges set forth in this subsection. This subsection shall not apply to a:
(1) Loan secured by a first mortgage that constitutes a covered transaction by virtue of the loan-to-value ratio that exceeds 100% at the time the loan is made; or
(2) covered transaction where the finance charge is governed by K.S.A. 16-207(e)(4), and amendments thereto.
(b) If a loan secured by a first mortgage constitutes a covered transaction by virtue of the loan-to-value ratio exceeding 100% at the time the loan is made, then the periodic finance charge for the loan shall not exceed that authorized pursuant to K.S.A. 16-207(a), and amendments thereto, but the loan is subject to the limitations on prepaid finance charges set forth in this section. Such prepaid finance charges may be charged in addition to the finance charges permitted under K.S.A. 16-207(a), and amendments thereto.
(c) This section shall not be construed to limit or restrict the manner of calculating the finance charge, whether by way of add-on, discount or otherwise, provided the rate and the amount of the finance charge does not exceed that permitted by this section.
(d) Prepaid finance charges on covered transactions shall be limited to an amount not to exceed 8% of the amount financed, provided that the aggregate amount of prepaid finance charges payable to the mortgage company or any person related to such company does not exceed 5% of the amount financed. Prepaid finance charges permitted under this subsection shall be in addition to finance charges permitted under subsection (a). Prepaid finance charges permitted under this subsection shall be fully earned when paid and such prepaid finance charges shall be nonrefundable unless the parties agree otherwise in writing.
(e) The finance charge limitations in subsection (a) shall not apply to a covered transaction for which the finance charge is governed pursuant to K.S.A. 16-207(e)(4), and amendments thereto.
(f) If, within 12 months after the date of the original covered transaction, a mortgage company or a person related to such company refinances a covered transaction, with respect to which a prepaid finance charge was payable to the same person then the aggregate amount of prepaid finance charges payable to the mortgage company or any person related to such company with respect to the new covered transaction shall not exceed 5% of the additional amount financed.
(g) For purposes of this section, "additional amount financed" means the difference between:
(1) The amount financed for the new covered transaction, less the amount of all closing costs incurred in connection with the new covered transaction that are not included in the prepaid finance charges for the new covered transaction; and
(2) the unpaid principal balance of the original covered transaction.
(h) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 8; January 1, 2025.
§ 9-2229 Additional charges allowed
(a) In addition to the finance charge permitted by K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto, for covered transactions, a mortgage company may contract for and receive the following additional charges for such covered transactions:
(1) Closing costs incurred in connection with the covered transaction that are not included in the prepaid finance charges for the covered transaction;
(2) late fees permitted pursuant to K.S.A. 2025 Supp. 9-2230, and amendments thereto;
(3) charges for other benefits, including insurance, conferred on the consumer if the benefits are of value to the consumer, and if:
(A) The charges are reasonable in relation to the benefits;
(B) the benefits are of a type that is not for credit and are excluded as permissible additional charges from the finance charge by rules and regulations adopted by the commissioner; or
(4) a service charge for an insufficient payment method not to exceed $30 subject to the limitations contained in this subsection.
(A) Notice shall be given to a consumer providing an insufficient payment method either by:
(i) United States first class mail addressed to the consumer's last known address; or
(ii) a clear notice of the insufficient payment method charge on the consumer's regular monthly statement.
(B) If the consumer does not pay the amount of the insufficient payment plus the service charge to the payee within 14 days from the giving of notice, the payee may add the service charge to the outstanding balance of such indebtedness of the consumer to draw interest at the contract rate applicable to such indebtedness.
(b) With respect to an open-end covered transaction, a mortgage company may charge the following fees in an amount not to exceed that agreed to by the consumer:
(1) Fees on a monthly or annual basis;
(2) over-limit fees; and
(3) cash advance fees.
(c) The fees permitted under subsection (b) are in addition to any finance charges or any additional charges permitted by K.S.A. 2025 Supp. 9-2223 through 9-2234, and amendments thereto.
(d) A mortgage company may charge a borrower up to $5 per payment when the borrower makes a single installment payment through electronic methods for a covered transaction, including by authorizing the mortgage company, verbally or in writing, to initiate the payment, subject to the following limitations. No charge shall be assessed:
(1) If a late fee is assessed on the same installment; or
(2) where the consumer has agreed in writing to make all scheduled payments through the use of electronic methods.
(e) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 9; January 1, 2025.
§ 9-2230 Late fees authorized; limitation
(a) The parties to a covered transaction may contract for a late fee on any installment not paid in full within 10 calendar days after its scheduled or deferred due date in an amount not to exceed 5% of the unpaid amount of the installment or $25, whichever is less.
(b) As an alternative to the late fee set forth in subsection (a), the parties to a covered transaction may contract for a late fee not to exceed $10 on any installment not paid in full within 10 calendar days after its scheduled or deferred due date, except that if the scheduled payment amount is $25 or less, the maximum late fee shall be $5.
(c) A late fee may be assessed only once on an installment regardless of the length of time such installment remains in default. A late fee may be collected at the time it is assessed or at any time thereafter.
(d) No late fee may be assessed when such a fee or charge is attributable solely to the failure of the consumer to pay a late fee on an earlier installment and the payment is otherwise a periodic payment received on the due date or within 10 calendar days after its scheduled or deferred installment due date.
(e) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 10; January 1, 2025.
§ 9-2231 Loans secured by mortgages on consumer's principal residence; negative amortization and balloon payments prohibited
(a) A covered transaction shall not provide for the negative amortization of principal or a balloon payment when the loan-to-value ratio at the time such covered transaction was made exceeds 100% or when the annual percentage rate of the loan exceeds the code mortgage rate unless such covered transaction is open-end, incurred to acquire or construct the consumer's principal residence or a reverse mortgage.
(b) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 11; January 1, 2025.
§ 9-2232 Appraisals required; notice to consumer of high loan-to-value mortgage; refund of certain fees after consumer withdrawals from covered transaction
(a) The provisions of this section shall not apply to a mortgage company that is exempt pursuant to K.S.A. 9-2202(a), and amendments thereto.
(b) Before making a covered transaction, a mortgage company shall obtain the appraised value of the real estate to be encumbered. If, based upon the appraisal, the loan-to-value ratio of the covered transaction exceeds 100%, then the mortgage company shall deliver to the consumer not less than three days before the loan is made a:
(1) Free copy of the appraisal; and
(2) written notice regarding high loan-to-value mortgages and the availability of consumer credit counseling.
(c) If within three days after receiving the notice, the consumer elects not to enter into the covered transaction, then the mortgage company shall promptly refund to the consumer any application fees or other amounts paid by the consumer to such mortgage company except for the following:
(1) Bona fide out-of-pocket costs incurred before the consumer elected not to enter into the covered transaction, provided that such costs were paid or are payable to unrelated persons; and
(2) a bona fide appraisal fee paid or payable to the mortgage company or a related person.
(d) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 12; January 1, 2025.
§ 9-2233 Enforcement of default provision in agreement
(a) An agreement of the parties to a covered transaction with respect to default on the part of the consumer shall be enforceable only to the extent that the:
(1) Consumer fails to make a payment as required by agreement; or
(2) (A) prospect of payment, performance or realization of collateral is significantly impaired.
(B) For purposes of this paragraph, the burden of establishing the prospect of significant impairment shall be on the mortgage company.
(b) The provisions of this section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 13; January 1, 2025.
§ 9-2234 Cure of default and notice of right to cure; surrender of collateral by consumer; possession of collateral by mortgage company
(a) After a consumer has been in default for 10 days for failure to make a required payment in a covered transaction payable in installments, a mortgage company may give the consumer the notice described in this section.
(1) A mortgage company provides notice to the consumer under this section when the mortgage company delivers the notice to the consumer or delivers or mails the notice to the consumer's residence.
(2) The notice shall be in writing and shall conspicuously state:
(A) The name, address and telephone number of the mortgage company to which payment is to be made;
(B) a brief description of the covered transaction;
(C) the consumer's right to cure the default;
(D) the amount of payment and date by which payment must be made to cure the default; and
(E) the consumer's possible liability for the reasonable costs of collection including, but not limited to, court costs, either attorney fees or collection agency fees, and any other information required by the commissioner as set forth by rules and regulations or by administrative interpretation.
(b) With respect to a covered transaction payable in installments, after a default consisting only of the consumer's failure to make a required payment, a mortgage company may neither accelerate maturity of the unpaid balance of the obligation or take possession of collateral as a result of such default until 20 days after a notice of the consumer's right to cure is given. Within 20 days after the notice is given, the consumer may cure all defaults resulting from a failure to make the required payment by tendering the amount of all unpaid sums due at the time of the tender, without acceleration, plus any unpaid late fees. Such cure restores the consumer to the consumer's rights under the agreement as though the defaults had not occurred.
(c) With respect to defaults on the same obligation after a mortgage company has once given a notice of the consumer's right to cure, this section shall confer on the consumer no right to cure and imposes no limitation on the mortgage company's right to proceed against the consumer or the collateral.
(d) Unless the consumer voluntarily surrenders the collateral to the mortgage company, the mortgage company may take possession of the collateral without judicial process only if possession can be taken without entry into a dwelling and without the use of force or other breach of the peace.
(e) Nothing in this section shall be construed to prohibit a consumer from voluntarily surrendering the collateral of the covered transaction and shall not prohibit the mortgage company from thereafter enforcing the mortgage company's security interest in the collateral at any time after surrender.
(f) This section shall be a part of and supplemental to the Kansas mortgage business act.
History: L. 2024, ch. 6, § 14; January 1, 2025.
Article 23 Technology-Enabled Fiduciary Financial Institutions
§ 9-2301 Citation of act; definitions
(a) The provisions of K.S.A. 9-2301 through 9-2327, and amendments thereto, shall be known and may be cited as the technology-enabled fiduciary financial institutions act. The technology-enabled fiduciary financial institutions act shall be a part of and supplemental to chapter 9 of the Kansas Statutes Annotated, and amendments thereto.
(b) For purposes of the technology-enabled fiduciary financial institutions act:
(1) "Act" means the technology-enabled fiduciary financial institutions act;
(2) "alternative asset" means professionally managed investment assets that are not publicly traded, including, but not limited to, private equity, venture capital, leveraged buyouts, special situations, structured credit, private debt, private real estate funds and natural resources, including any economic or beneficial interest therein;
(3) "alternative asset custody account" means an account created by the owner of an alternative asset that designates a fiduciary financial institution as custodian or agent and into which the owner transfers, electronically or otherwise, content, materials, data, information, documents, reports and contracts in any form, including, without limitation, evidence of ownership, subscription agreements, private placement memoranda, limited partnership agreements, operating agreements, financial statements, annual and quarterly reports, capital account statements, tax statements, correspondence from the general partner, manager or investment advisor of the alternative asset, an investment contract as defined in K.S.A. 17-12a102(28)(E), and amendments thereto, and any digital asset as defined in K.S.A. 58-4802, and amendments thereto, whether such information is in hard copy form or a representation of such information that is stored in a computer readable format;
(4) "charitable beneficiaries" means one or more charities, contributions to which are allowable as a deduction pursuant to section 170 of the federal internal revenue code that are designated as beneficiaries of a fidfin trust;
(5) "custodial services" means the safekeeping and management of an alternative asset custody account, including the execution of customer instructions, serving as agent, fund administrative services and overall decision-making and management of the account by a fiduciary financial institution and "custodial services" shall be deemed to involve the exercise of fiduciary and trust powers;
(6) "director" means a person designated as a member of the board of directors pursuant to K.S.A. 9-2306, and amendments thereto;
(7) "economic growth zone" means an incorporated community with a population of not more than 5,000 people located within one of the following counties: Allen, Anderson, Barber, Bourbon, Brown, Chase, Chautauqua, Cherokee, Cheyenne, Clark, Clay, Cloud, Coffey, Comanche, Decatur, Doniphan, Edwards, Elk, Ellsworth, Gove, Graham, Grant, Gray, Greeley, Greenwood, Hamilton, Harper, Harvey, Haskell, Hodgeman, Jackson, Jewell, Kearny, Kingman, Kiowa, Labette, Lane, Lincoln, Linn, Logan, Marion, Marshall, Meade, Mitchell, Montgomery, Morris, Morton, Nemaha, Neosho, Ness, Norton, Osborne, Ottawa, Pawnee, Phillips, Pratt, Rawlins, Republic, Rice, Rooks, Rush, Russell, Scott, Sheridan, Sherman, Smith, Stafford, Stanton, Stevens, Sumner, Trego, Thomas, Wabaunsee, Wallace, Washington, Wichita, Wilson or Woodson;
(8) "excluded fiduciary" means a fiduciary financial institution in its capacity as trustee of a fidfin trust, provided that a fiduciary financial institution shall only be deemed an "excluded fiduciary" to the extent the fiduciary financial institution is excluded from exercising certain powers under the instrument that may be exercised by the trust advisor or other persons designated in the instrument;
(9) "fidfin," "fidfin services" or "fidfin transactions" means the financing of a fidfin trust or the acquisition of alternative assets on behalf of and through a fidfin trust, or both, as provided in K.S.A. 9-2311, and amendments thereto, including loans, extensions of credit and direct investments;
(10) "fidfin trust" means a trust created to facilitate the delivery of fidfin services by a fiduciary financial institution;
(11) "fiduciary" means a trustee, a trust advisor or a custodian of an alternative asset custody account appointed under an instrument that is acting in a fiduciary capacity for any person, trust or estate;
(12) "instrument" means any document creating a fidfin trust or alternative asset custody account;
(13) "officer" means a person who participates or has authority to participate, other than in the capacity of a director, in major policymaking functions of a bank, trust company or fiduciary financial institution, whether or not the officer has an official title or if the officer is serving without salary or other compensation. "Officer" includes the chairperson of the board, president, vice president, cashier, secretary and treasurer of a bank, trust company or fiduciary financial institution;
(14) "organizer" means a person who filed the fiduciary financial institution formation documents;
(15) "out-of-state bank" means a national or state bank, savings and loan association or savings bank not incorporated under the laws of Kansas;
(16) "out-of-state financial institution" means an out-of-state bank or an out-of-state trust company;
(17) "out-of-state trust company" means a national or state trust company not incorporated under the laws of Kansas;
(18) (A) "qualified investment" means the purchase or development, in the aggregate, of at least 10,000 square feet of commercial, industrial, multiuse or multifamily real estate in the economic growth zone where the fiduciary financial institution maintains its principal office pursuant to K.S.A. 9-2309, and amendments thereto, provided that such community has committed to develop the necessary infrastructure to support a "qualified investment." A "qualified investment":
(i) May include, as part of satisfying the square footage requirements, the suitable office space of such fiduciary financial institution, as provided in K.S.A. 9-2309, and amendments thereto, if owned by the fiduciary financial institution;
(ii) shall be exempt from the provisions and limitations of K.S.A. 9-1102, and amendments thereto;
(iii) may be retained by a fiduciary financial institution for as long as the fiduciary financial institution operates in this state; and
(iv) may be sold, transferred or otherwise disposed of, including a sale or transfer to an affiliate of the fiduciary financial institution, if the fiduciary financial institution continues to maintain its principal office in an economic growth zone pursuant to K.S.A. 9-2309, and amendments thereto;
(B) notwithstanding the foregoing provisions, if a fiduciary financial institution leases any portion of a qualified investment made by another fiduciary financial institution as the lessee fiduciary financial institution's suitable office space:
(i) The lessee fiduciary financial institution shall make, or cause to be made, a qualified investment in an economic growth zone other than the economic growth zone where such fiduciary financial institution maintains its principal office;
(ii) the leased square footage shall count toward the square footage requirement applicable to a qualified investment under this section, if such lease has an initial term of not less than five years; and
(iii) the square footage requirement otherwise applicable to a qualified investment of the lessee fiduciary financial institution shall be reduced from 10,000 square feet to 5,000 square feet;
(19) "technology-enabled fiduciary financial institution" or "fiduciary financial institution" means any limited liability company, limited partnership or corporation that:
(A) Is organized to perform any one or more of the activities and services authorized by this act;
(B) has been authorized to conduct business as a fiduciary financial institution under this chapter pursuant to the provisions of K.S.A. 9-2302, and amendments thereto;
(C) has made, committed to make or caused to be made a qualified investment; and
(D) has committed, in or as a part of the application provided in K.S.A. 9-2302, and amendments thereto, to conduct any fidfin transactions in accordance with K.S.A. 9-2311, and amendments thereto, including the distributions required therein;
(20) "trust" means a trust created pursuant to the Kansas uniform trust code, K.S.A. 58a-101 et seq., and amendments thereto, or created pursuant to the Kansas business trust act of 1961, K.S.A. 17-2707 et seq., and amendments thereto;
(21) "trust advisor" means a fiduciary granted authority by an instrument to exercise, consent, direct, including the power to direct as provided in K.S.A. 58a-808, and amendments thereto, or approve all or any portion of the powers and discretion conferred upon the trustee of a fidfin trust, including the power to invest the assets of a fidfin trust or make or cause distributions to be made from such fidfin trust; and
(22) the definitions of K.S.A. 9-701, and amendments thereto, apply to fiduciary financial institutions except as otherwise provided in this act.
History: L. 2021, ch. 80, § 1; L. 2022, ch. 55, § 1; L. 2024, ch. 15, § 18; July 1.
§ 9-2302 Organization; application for certificate of authority; out-of-state banks and trust companies criteria for approval; fingerprinting; applicable distribution
(a) No fiduciary financial institution shall be organized under the laws of this state nor engage in fidfin transactions, custodial services or trust business in this state until the application for such fiduciary financial institution's organization and the application for certificate of authority have been submitted to and approved by the state banking board. The form for making any such application shall be prescribed by the state banking board and any application made to the state banking board shall contain such information as the state banking board shall require. Except as provided in K.S.A. 9-2325, and amendments thereto, the state banking board shall not approve any application until the beneficient conditional charter has been converted to a full charter and the commissioner has completed a regulatory examination.
(b) (1) No Kansas-chartered state bank, Kansas-chartered state trust company or fiduciary financial institution shall engage in fidfin transactions in this state unless an application has been submitted under this act and approved by the state banking board.
(2) Except as otherwise provided by this subsection, any trust company whose application has been approved in accordance with this section and any out-of-state trust company engaging in fidfin transactions in this state shall be considered a fiduciary financial institution for the purposes of this act, shall have all rights and powers granted to a fiduciary financial institution under this act and shall owe all duties and obligations imposed on fiduciary financial institutions under this act, including, but not limited to, the fiduciary duties imposed under K.S.A. 9-2311 and 9-2313, and amendments thereto, and the requirements of K.S.A. 9-2302(c)(5) and (6), and amendments thereto.
(3) Any bank whose application has been approved in accordance with this section and any out-of-state bank that engages in fidfin transactions in this state shall have a separate department for handling fidfin transactions. Except as otherwise provided by this subsection, such separate department shall be considered a fiduciary financial institution for the purposes of this act, shall have all rights and powers granted to a fiduciary financial institution under this act and shall owe all duties and obligations imposed on fiduciary financial institutions under this act, including, but not limited to, the fiduciary duties imposed under K.S.A. 9-2311 and 9-2313, and amendments thereto, and the requirements of K.S.A. 9-2302(c)(5) and (6), and amendments thereto.
(4) Notwithstanding the provisions of paragraphs (2) and (3):
(A) A bank or trust company whose application has been approved in accordance with this section or an out-of-state financial institution that engages in fidfin transactions in this state shall not be subject to the provisions of K.S.A. 9-2305, 9-2306 or 9-2308, and amendments thereto; and
(B) the commissioner shall not examine or require applications, reports or other filings from an out-of-state financial institution that is subject to oversight of such financial institution's fidfin transactions by a governmental agency of the jurisdiction that chartered the out-of-state financial institution.
(c) The state banking board shall not accept an application for a fiduciary financial institution unless the:
(1) Fiduciary financial institution is organized by at least one person;
(2) name selected for the fiduciary financial institution is different or substantially dissimilar from any other bank, trust company or fiduciary financial institution doing business in this state;
(3) fiduciary financial institutions' articles of organization contain the names and addresses of the fiduciary financial institution's members and the number of units subscribed by each. The articles of organization may contain such other provisions as are consistent with the Kansas revised limited liability company act, Kansas revised uniform limited partnership act or Kansas general corporation code;
(4) fiduciary financial institution has made, committed to make or caused to be made a qualified investment as defined in K.S.A. 9-2301, and amendments thereto;
(5) fiduciary financial institution has committed to structure any fidfin transactions to ensure that qualified charitable distributions, as defined in K.S.A. 2025 Supp. 79-32,283, and amendments thereto, are made each calendar year that the fiduciary financial institution conducts fidfin transactions; and
(6) fiduciary financial institution has consulted or agrees to consult with the department of commerce regarding the economic growth zones to be selected for purposes of paragraphs (4) and (5).
(d) The state banking board may deny the application if the state banking board makes an unfavorable determination with regard to the:
(1) Financial standing, general business experience and character of the organizers; or
(2) character, qualifications and experience of the officers of the proposed fiduciary financial institution.
(e) The state banking board shall not make membership in any federal government agency a condition precedent to the granting of the authority to do business.
(f) The state banking board may require fingerprinting of any officer, director or organizer of the proposed fiduciary financial institution in accordance with K.S.A. 2025 Supp. 22-4714, and amendments thereto.
(g) The state banking board or the commissioner shall notify a fiduciary financial institution of the approval or disapproval of an application. Any final action of the state banking board approving or disapproving an application shall be subject to review in accordance with the Kansas judicial review act.
(h) (1) In the event such application is approved, the fiduciary financial institution shall be issued a charter upon compliance with any requirements of this act and upon demonstrating to the satisfaction of the commissioner that an applicable distribution has been made. For purposes of this section, "applicable distribution" means a distribution of cash, beneficial interests or other assets having an aggregate value equal to the greater of:
(A) 2.5% of the aggregate financing balances to be held by the fiduciary financial institution immediately upon issuance of the fiduciary financial institution's charter, as reflected in the fiduciary financial institution's application filed pursuant to this section; or
(B) $5,000,000 in accordance with subsection (i), except that if a fiduciary financial institution is chartered to provide only custodial services, the applicable distribution amount shall be $500,000.
(2) If the amount provided in paragraph (1)(B) exceeds the amount provided in paragraph (1)(A), the fiduciary financial institution shall be entitled to a credit against the amount distributable under K.S.A. 9-2311(f), and amendments thereto, in an amount equal to such excess.
(i) The applicable distribution required under subsection (h) shall be distributed as follows:
(1) (A) To the department of commerce:
| Applicable distribution amount | Percentage to department of commerce | | --- | --- | | $0 to $500,000 | 90% | | $500,001 to $1,000,000 | 50% | | Above $1,000,000 | 10% |
(B) the amounts specified in subparagraph (A) shall apply to fiduciary financial institutions chartered prior to January 1, 2023. For fiduciary financial institutions chartered after such date, the department of commerce may publish one or more schedules in the Kansas register as the department of commerce deems reasonably necessary to facilitate economic growth and development in one or more economic growth zones. No such schedule shall be effective until after its publication in the Kansas register. The department of commerce shall timely submit to the commissioner any schedule published under this section. The commissioner shall provide a copy of such schedule to any applicant for a fiduciary financial institution charter prior to the issuance of such charter. A fiduciary financial institution shall be subject to the schedule in existence on the date such fiduciary financial institution's charter is issued and shall not be subject to any schedules published after such date;
(C) the department of commerce shall remit all distributions under this subsection to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the technology-enabled fiduciary financial institutions development and expansion fund established in K.S.A. 9-2324, and amendments thereto; and
(2) the balance of the applicable distribution required under subsection (h) shall be distributed to one or more qualified charities as defined in K.S.A. 2025 Supp. 79-32,283, and amendments thereto, as shall be selected by the fiduciary financial institution. Nothing in this section shall preclude a distribution to one or more qualified charities in excess of the amounts provided in this section. An economic growth zone or qualified charity shall have no obligation to repay any distributions received under this act or to make any contributions to a fiduciary financial institution.
History: L. 2021, ch. 80, § 2; L. 2022, ch. 55, § 2; L. 2024, ch. 15, § 19; July 1.
§ 9-2303 Fees and assessments; examination expenses; remittance of moneys
(a) An application for a fiduciary financial institution charter shall include a nonrefundable fee to be remitted in a manner prescribed by the commissioner. Until July 1, 2025, the application fee shall be $250,000. On and after July 1, 2025, the application fee shall be $100,000. The expense of every annual regular fiduciary financial institution examination, together with the expense of administering fiduciary financial institution laws, including salaries, travel expenses, third-party fees for consultants or other entities necessary to assist the commissioner, supplies and equipment, shall be paid by the fiduciary financial institutions of this state. Prior to the beginning of each fiscal year, the commissioner shall make an estimate of the fiduciary financial institution expenses to be incurred by the office of the state bank commissioner during such fiscal year in an amount not less than $1,000,000. The commissioner shall allocate and assess each fiduciary financial institution in this state on the basis of such fiduciary financial institution's total fidfin transaction balances, consisting of the aggregate fidfin financing balances of the fiduciary financial institution reflected in the last December 31 report filed with the commissioner pursuant to K.S.A. 9-1704, and amendments thereto. If a fiduciary financial institution has no fidfin transaction balances, but such fiduciary financial institution is otherwise providing custodial services or trust services, the commissioner shall allocate and assess such fiduciary financial institution in a manner the commissioner deems reasonable and appropriate. A fiduciary financial institution that has no fidfin transaction balances and no alternative asset custody accounts reflected in the last December 31 report filed with the commissioner may be granted inactive status by the commissioner. The annual assessment shall not exceed $10,000 for such an inactive fiduciary financial institution. The annual fee shall be first assessed for the year immediately following the year the fiduciary financial institution received authority to engage in fidfin transactions, custodial services and trust business and for each year thereafter.
(b) (1) A statement of each assessment made under the provisions of subsection (a) shall be sent by the commissioner on July 1 or the next business day thereafter to each fiduciary financial institution. When the commissioner issues such a statement, payment shall be made within 15 business days after the date the statement was sent in a manner prescribed by the commissioner, which may include such installment periods as the commissioner deems appropriate but not more frequently than monthly.
(2) The commissioner shall remit all moneys received from such fees and assessments to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury and credit 75% of each remittance to the bank commissioner fee fund and 25% to the technology-enabled fiduciary financial institutions development and expansion fund established in K.S.A. 9-2324, and amendments thereto.
History: L. 2021, ch. 80, § 3; L. 2022, ch. 55, § 3; July 1.
§ 9-2304 Provisions of state banking code applicable; exceptions; conflict of law
(a) To the extent a conflict does not exist between this act and chapter 9 of the Kansas Statutes Annotated, and amendments thereto, except as provided in subsections (b), (c) and (e), the provisions of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, shall apply to a fiduciary financial institution in the same manner as it applies to a trust company except that references in chapter 9 of the Kansas Statutes Annotated, and amendments thereto, to:
(1) "Capital stock" includes membership capital and partner capital;
(2) "stock" includes membership units and partnership interests;
(3) "common stock" includes common units and common interests;
(4) "preferred stock" includes preferred units and preferred interests;
(5) "stockholders" includes members and partners;
(6) "articles of incorporation" includes articles of organization and articles of limited partnership;
(7) "incorporation" includes organization;
(8) "corporation" includes company and partnership;
(9) "corporate" includes company and partnership;
(10) "trust business" and "business of a trust company" includes fidfin and fiduciary financial institution business; and
(11) K.S.A. 9-901a(a), and amendments thereto, means K.S.A. 9-2305, and amendments thereto.
(b) For a Kansas-chartered state trust company that receives authority to engage in fidfin transactions under K.S.A. 9-2302(b), and amendments thereto, the provisions of subsection (a) shall not apply, however, references in chapter 9 of the Kansas Statutes Annotated, and amendments thereto, to "trust business" and "business of a trust company" include fidfin and fiduciary financial institution business.
(c) For a Kansas-chartered state bank that receives authority to engage in fidfin transactions under K.S.A. 9-2302(b), and amendments thereto, the provisions of subsection (a) shall not apply, however, the provisions of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, shall apply in the same manner as they would apply to a trust department of such bank, except that references in chapter 9 of the Kansas Statutes Annotated, and amendments thereto, to "trust business" and "business of a trust company" include fidfin and fiduciary financial institution business.
(d) (1) Except as provided in paragraph (2), if any conflict exists between any provisions of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, and this act, the provisions of this act shall control.
(2) If the fiduciary financial institution is a bank department or trust company that received authority to engage in fidfin transactions under K.S.A. 9-2302(b), and amendments thereto, the provisions of this act shall only control with regard to fidfin transactions as authorized under K.S.A. 9-2302(b), and amendments thereto.
(e) The provisions of this section shall not apply to an out-of-state financial institution.
History: L. 2021, ch. 80, § 4; L. 2022, ch. 55, § 4; July 1.
§ 9-2305 Capitalization requirements
(a) For purposes of this section, "capital" means the total of the aggregate par value of a fiduciary financial institution's outstanding membership units, its surplus and its undivided profits.
(b) (1) The required capital for fiduciary financial institutions shall at all times be $250,000 when:
(A) The fiduciary financial institution does not accept deposits, other than alternative asset custody accounts;
(B) the fiduciary financial institution maintains no third-party debt except debts owed to the members of the fiduciary financial institution or affiliates of the fiduciary financial institution; and
(C) the fiduciary financial institution has secured an agreement from its members whereby such members agree to contribute additional capital to the fiduciary financial institution if needed to ensure the safety and soundness of the fiduciary financial institution. A fiduciary financial institution that fails to satisfy the foregoing requirements shall be subject to the capitalization requirements of K.S.A. 9-901a, and amendments thereto, applicable to trust companies.
(2) The capital of a fiduciary financial institution shall be divided, with 60% of the amount as the aggregate par value of outstanding membership units, 30% as surplus and 10% as undivided profits.
History: L. 2021, ch. 80, § 5; July 1.
§ 9-2306 Board of directors; membership; annual meeting; oath; notification of commissioner
(a) The business of any fiduciary financial institution shall be managed and controlled by such fiduciary financial institution's board of directors.
(b) The board shall consist of not less than five nor more than 25 members who shall be elected by the members at any regular annual meeting to be held on the date specified in the fiduciary financial institution's governing documents. At least one director must be a resident of this state.
(c) If, for any reason, the meeting cannot be held on the date specified in the governing documents, the meeting shall be held on a subsequent day within 60 days of the day fixed, to be designated by the board of directors or, if the directors fail to fix the day, by the members representing
2/3
of the membership units.
(d) In all cases, at least 10 days' notice of the date for the annual meeting shall be given to the members.
(e) The annual meeting of a fiduciary financial institution shall be held in this state. Any other meetings of the fiduciary financial institution's management or directors, including the meeting required pursuant to K.S.A. 9-1116, and amendments thereto, may be held in any location determined by the fiduciary financial institution's officers or directors.
(f) Any newly created directorship shall be approved and elected by the members in the manner provided in the fiduciary financial institution's organizational documents or, in the absence of such provisions, in the manner provided by the Kansas revised limited liability company act, Kansas revised uniform limited partnership act or Kansas general corporation code. A special meeting of the members may be convened at any time for such purpose.
(g) Any vacancy in the board of directors may be filled by the board of directors in the manner provided in the fiduciary financial institution's organizational documents or, in the absence of such provisions, in the manner provided by the Kansas revised limited liability company act, Kansas revised uniform limited partnership act or Kansas general corporation code.
(h) Within 15 days after the annual meeting, the president or cashier of each fiduciary financial institution shall submit to the commissioner a certified list of members and the number of units owned by each member. This list of members shall be kept and maintained in the fiduciary financial institution's main office and shall be subject to inspection by all members during the business hours of the fiduciary financial institution. The commissioner may require the list to be filed by electronic means.
(i) Each director shall take and subscribe an oath to administer the affairs of such fiduciary financial institution diligently and honestly and to not knowingly or willfully permit any of the laws relating to fiduciary financial institutions to be violated. A copy of each oath shall be retained by the fiduciary financial institution, in the fiduciary financial institution's records after the election of any officer or director, for review by the commissioner's staff during the next examination. The commissioner may require the oath to be filed by electronic means.
(j) Every fiduciary financial institution shall notify the commissioner of any change in the chief executive officer, president or directors, including in such fiduciary financial institution's report a statement of the past and current business and professional affiliations of the new chief executive officer, president or directors.
History: L. 2021, ch. 80, § 6; L. 2022, ch. 55, § 5; July 1.
§ 9-2307 Report to commissioner; examinations; requirements
(a) A fiduciary financial institution shall make a report to the commissioner pursuant to the provisions of K.S.A. 9-1704, and amendments thereto. In making such a report, a fiduciary financial institution shall:
(1) Report the fiduciary financial institution's fidfin transactions pursuant to generally accepted accounting principles; and
(2) calculate such fiduciary financial institution's capital solvency by including the value of all tangible and intangible assets owned by the fiduciary financial institution, regardless of use.
(b) In examining a fiduciary financial institution, the state banking board and the commissioner shall:
(1) Consider that the collateral or underlying assets associated with fidfin transactions are volatile in nature and that such volatility has been accepted by the members and customers of the fiduciary financial institution;
(2) respect the form, treatment and character of fidfin transactions under the laws of this state notwithstanding the treatment or characterization of such transactions under generally accepted accounting principles or for tax purposes;
(3) evaluate whether available capital, including the agreement of a fiduciary financial institution's members to contribute capital pursuant to K.S.A. 9-2305, and amendments thereto, exceeds the fiduciary financial institution's obligations, determined in accordance with generally accepted accounting principles;
(4) evaluate the background and qualifications of a fiduciary financial institution's executive officers and directors, the internal controls and audit processes enacted by the fiduciary financial institution and adherence to its policies and procedures;
(5) evaluate the profitability of a fiduciary financial institution in accordance with subsection (c);
(6) evaluate a fiduciary financial institution's compliance with applicable state and federal laws; and
(7) evaluate a fiduciary financial institution's information technology systems, policies and practices.
(c) Profitability shall not be a consideration in evaluating a fiduciary financial institution if sufficient capital and equity exist in the business, including, without limitation, membership capital, surplus, undivided profits and commitments by members to contribute additional capital to the fiduciary financial institution pursuant to K.S.A. 9-2305, and amendments thereto, to satisfy the fiduciary financial institution's obligations.
History: L. 2021, ch. 80, § 7; L. 2022, ch. 55, § 6; July 1.
§ 9-2308 Name of institution; advertising; restrictions
A fiduciary financial institution may use in such fiduciary financial institution's business name or advertising the words "fiduciary financial institution" or any similar term or phrase, but may not use in such institution's name the words "bank" or "trust company" without reference to fidfin trusts or any other term that tends to imply that such fiduciary financial institution is a bank or trust company, unless the commissioner has approved the use in writing after finding that the use will not be misleading. While a fiduciary financial institution is a trust company for purposes of federal and state law and rules and regulations and possesses trust powers under this act, it is the intent of this section to impose restrictions on the name of such institution to avoid confusion with other banks and trust companies that operate in this state but that are not fiduciary financial institutions. The naming restrictions imposed under this section shall in no way reduce or eliminate the trust powers granted to a fiduciary financial institution as a trust company under this act. Other than indicating that the fiduciary financial institution is headquartered and chartered in Kansas, no fiduciary financial institution's name or advertising shall infer or imply that such fiduciary financial institution is endorsed by, an affiliate of or otherwise connected with the government of the state of Kansas.
History: L. 2021, ch. 80, § 8; July 1.
§ 9-2309 Maintaining suitable office space; requirements; staffing; maintenance of records
(a) A fiduciary financial institution shall:
(1) Maintain suitable office space in an economic growth zone, as defined in K.S.A. 9-2301, and amendments thereto, for fidfin transactions, custodial services and trust business and for the storage of, and access to, fiduciary financial institution records;
(2) employ, engage or contract with at least three employees to provide services for the fiduciary financial institution in Kansas related to the powers of the fiduciary financial institution and to facilitate the examinations required by this act; and
(3) perform fidfin transactions, custodial services and trust business in Kansas, and a fiduciary financial institution may also engage in fidfin transactions, custodial services and trust business in other states to the extent permitted by applicable law.
(b) As used in this section, the term "suitable office space" means at least 2,000 square feet of class A office space located in an economic growth zone selected by the fiduciary financial institution that the fiduciary financial institution utilizes as such fiduciary financial institution's principal office.
(c) The fiduciary financial institution's principal office shall:
(1) Be in premises distinct and divided from the office space of any other entity;
(2) be located in an economic growth zone selected by the fiduciary financial institution;
(3) have the name, charter and certificate of authority of the fiduciary financial institution prominently displayed;
(4) have access to premises in or adjacent to the office space sufficient to facilitate on-site examinations by the state banking board or commissioner;
(5) to the extent the fiduciary financial institution maintains hard copies of any documents required to be maintained under this chapter, have a secure fireproof file cabinet that contains all such hard copies; and
(6) to the extent the fiduciary financial institution maintains any record electronically, have a secure computer terminal or other secure electronic device that provides access to such records, including account information, as necessary to facilitate an efficient and effective examination.
(d) Fidfin transactions, custodial services and trust business is deemed to have been performed in Kansas for purposes of this section if fidfin transaction or custodial service agreements are approved or signed in this state on behalf of the fiduciary financial institution and at least three of the following acts are performed by a technology platform wholly or partly operated in this state:
(1) Annual account reviews;
(2) annual investment reviews;
(3) trust or custodial accounting;
(4) account correspondence;
(5) reviewing and signing trust account or custodial account tax returns; or
(6) distributing account statements.
History: L. 2021, ch. 80, § 9; July 1.
§ 9-2310 General powers
Any fiduciary financial institution is hereby authorized to exercise by its board of directors or duly authorized officers or agents, subject to law, the following powers:
(a) To engage in fidfin transactions in accordance with K.S.A. 9-2311, and amendments thereto;
(b) to receive, retain and manage alternative asset custody accounts in accordance with K.S.A. 9-2313, and amendments thereto; and
(c) to engage in trust business as defined in K.S.A. 9-701, and amendments thereto, as incidental to the activities in subsections (a) and (b).
History: L. 2021, ch. 80, § 10; L. 2022, ch. 55, § 7; July 1.
§ 9-2311 Financing; required distribution amount; schedules; remittance of moneys; disclosure to customers
(a) If authorized by the terms of an instrument as such term is defined in K.S.A. 9-2301, and amendments thereto, a fiduciary financial institution may:
(1) Extend financing, such as through loans or extensions of credit to a fidfin trust when:
(A) The fiduciary financial institution serves as trustee of the borrowing fidfin trust;
(B) the financing is collateralized or supported by the assets of such fidfin trust;
(C) the financing is nonrecourse as to the fiduciary financial institution's customer and is not otherwise guaranteed by such customer;
(D) the fiduciary financial institution agrees, in the applicable financing agreement or other written document, that the fiduciary financial institution is providing financing in a fiduciary capacity;
(E) the fiduciary financial institution agrees that such fiduciary financial institution will manage the collateral or assets underlying the financing in a fiduciary capacity; and
(2) acquire or invest in an alternative asset on behalf of and through a fidfin trust.
(b) The financing of a fidfin trust pursuant to subsection (a)(1) and (a)(2) shall be considered a fiduciary finance or fidfin transaction.
(c) If authorized or directed by the terms of an instrument, no fiduciary financial institution shall be deemed to have a conflict of interest, to have violated a duty to a fidfin trust or the beneficiaries thereof or to have engaged in self-dealing by entering into a fidfin transaction.
(d) The combination rules of K.S.A. 9-1104(f), and amendments thereto, shall be inapplicable to a fiduciary financial institution's fidfin transactions regardless of the identity of the fidfin trust beneficiary if:
(1) The borrower is a fidfin trust; and
(2) the fiduciary financial institution serves as trustee of the borrowing fidfin trust.
(e) A fiduciary financial institution that engages in a fidfin transaction shall be a fiduciary. Subject to the duties and standards of utmost care and loyalty that are associated with serving as a fiduciary, a fiduciary financial institution shall be deemed to be exercising fiduciary powers. All income generated by such fidfin transactions, including interest and investment income, shall be deemed to be income derived from the exercise of such fiduciary powers.
(f) A fiduciary financial institution that engages in fidfin transactions shall distribute, cause to be distributed or otherwise facilitate the distribution of the required distribution amount as provided by this section. For purposes of this section, "required distribution amount" means cash, beneficial interests or other assets with a value equal to 2.5% of such fiduciary financial institution's fidfin transactions originated during the calendar year. Such transactions shall exclude any renewals, extensions of credit or accruals associated with transactions made in a prior calendar year, less any credit available to such fiduciary financial institution pursuant to K.S.A. 9-2302, and amendments thereto. The required distribution amount shall be distributed as follows:
(1) (A) To the department of commerce:
| Required distribution amount | Percentage to department of commerce | | --- | --- | | $0 to $500,000 | 90% | | $500,001 to $1,000,000 | 50% | | Above $1,000,000 | 10% |
(B) the amounts specified in subparagraph (A) shall apply to fiduciary financial institutions chartered prior to January 1, 2023. For fiduciary financial institutions chartered after such date, the department of commerce may publish one or more schedules in the Kansas register as the department of commerce deems reasonably necessary to facilitate economic growth and development in one or more economic growth zones. No such schedule shall be effective until after its publication in the Kansas register. The department of commerce shall timely submit any schedule published under this section to the commissioner. The commissioner shall provide a copy of such schedule to any applicant for a fiduciary financial institution charter prior to the issuance of such charter. A fiduciary financial institution shall be subject to the schedule in existence on the date such fiduciary financial institution's charter is issued and shall not be subject to any schedules published after such date;
(C) the department of commerce shall remit all distributions under this subsection to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the technology-enabled fiduciary financial institutions development and expansion fund established in K.S.A. 9-2324, and amendments thereto; and
(2) the balance of the required distribution amount shall be distributed to one or more qualified charities as defined in K.S.A. 2025 Supp. 79-32,283, and amendments thereto, as shall be selected by the fiduciary financial institution. An economic growth zone or qualified charity shall have no obligation to repay any distributions received under this act or to make any contributions to a fiduciary financial institution.
(g) The form, treatment and character of fidfin transactions under the laws of this state shall be respected for all purposes of this act notwithstanding the treatment or characterization of such transactions under generally accepted accounting principles or for tax purposes.
(h) A fiduciary financial institution shall disclose to a customer the information required by rules and regulations adopted by the commissioner pursuant to K.S.A. 9-2322, and amendments thereto, to ensure that the customer is informed regarding the nature of the customer's transactions with the fiduciary financial institution, taking into account the level of sophistication of the customer.
History: L. 2021, ch. 80, § 11; L. 2022, ch. 55, § 8; July 1.
§ 9-2312 Authorized functions; parties engaged by an institution; services to residents of other states
(a) Subject to the requirements of K.S.A. 9-2309(d), and amendments thereto, a fiduciary financial institution may:
(1) Employ attorneys, accountants, investment advisors, agents or other persons, even if they are affiliated or associated with the fiduciary financial institution, to advise or assist the fiduciary financial institution in the performance of such fiduciary financial institution's fidfin transactions, custodial services and trust business and act without independent investigation upon such recommendations;
(2) employ one or more agents to perform any act of fidfin transactions, custodial services or trust business;
(3) license internet-related services, including web services, software, mobile applications, technology-enabled platforms and processes to or from affiliates, third parties, other fiduciary financial institutions and their affiliates;
(4) license fidfin products and forms, as defined in K.S.A. 9-2321, and amendments thereto, to or from other fiduciary financial institutions and their affiliates;
(5) perform any services that a fiduciary financial institution is authorized to perform under the laws of this state on behalf of another fiduciary financial institution; and
(6) employ another fiduciary financial institution to perform any services that a fiduciary financial institution is authorized to perform under the laws of this state.
(b) A party engaged by a fiduciary financial institution pursuant to subsection (a) shall not be deemed to have engaged in fidfin transactions, custodial services or trust business in this state nor shall such party be deemed a trust service office of the fiduciary financial institution under K.S.A. 9-2108, and amendments thereto, or a trust facility or out-of-state facility under K.S.A. 9-2111, and amendments thereto, by reason of providing services to a fiduciary financial institution or licensing products, platforms, systems or processes to such fiduciary financial institution.
(c) A fiduciary financial institution that provides services or licenses fidfin products or forms pursuant to subsection (a) shall not be deemed a trust service office of the fiduciary financial institution that has acquired such services or licensed such products or forms.
(d) If a fiduciary financial institution offers its technology-enabled platform to provide fidfin services to residents of other states, neither the marketing, use and deployment of such platform by parties in other states nor the origination of fidfin services through such platform shall constitute an out-of-state trust facility under K.S.A. 9-2111, and amendments thereto, if the fiduciary financial institution complies with the provisions of K.S.A. 9-2309, and amendments thereto.
(e) A fiduciary financial institution shall provide notice to the commissioner pursuant to the provisions of K.S.A. 9-2103(a)(12), and amendments thereto, if such fiduciary financial institution engages a party pursuant to the provisions of subsection (a).
(f) Whenever a fiduciary financial institution causes to be performed for such fiduciary financial institution, by contract or otherwise, any service authorized under this act or the state banking code, such performance shall be subject to regulation and examination by the commissioner to the same extent as if such service was being performed by the fiduciary financial institution itself.
History: L. 2021, ch. 80, § 12; L. 2022, ch. 55, § 9; July 1.
§ 9-2313 Custodial services; requirements
(a) A fiduciary financial institution may serve as a custodian, which may include serving as a qualified custodian, as defined by the United States securities and exchange commission in 17 C.F.R. § 275.206(4)-2, of an asset custody account. In performing custodial services under this section, a fiduciary financial institution shall:
(1) Implement all accounting, account statement, internal control, notice and other standards specified by applicable state or federal law and rules and regulations for custodial services;
(2) maintain information technology best practices relating to alternative assets held in custody;
(3) fully comply with applicable federal anti-money laundering, customer identification and beneficial ownership requirements; and
(4) take other actions necessary to comply with the requirements of this section.
(b) Alternative asset custody accounts over which a fiduciary financial institution serves as a custodian or qualified custodian are not depository liabilities or assets of the fiduciary financial institution.
(c) In performing custodial services under this section:
(1) A fiduciary financial institution shall be a fiduciary and shall be subject to the duties and standards of utmost care and loyalty that are associated with serving as a fiduciary;
(2) a fiduciary financial institution shall be deemed to be exercising fiduciary powers; and
(3) all income earned by a fiduciary financial institution and derived from performing custodial services shall be deemed to be income derived from the exercise of fiduciary powers.
History: L. 2021, ch. 80, § 13; July 1.
§ 9-2314 Trust advisor; rights, powers, immunities and liabilities
Any instrument providing for a trust advisor may also provide such trust advisor with some, none or all of the rights, powers, privileges, benefits, immunities or authorities available to a trustee under Kansas law or under such instrument. Unless the instrument provides otherwise, a trust advisor has no greater liability to any person than would a trustee holding or benefiting from the rights, powers, privileges, benefits, immunities or authority provided or allowed by the instrument to such trust advisor.
History: L. 2021, ch. 80, § 14; July 1.
§ 9-2315 Excluded fiduciary; actions not liable for; relieved of certain duties; deemed administrative actions
(a) An excluded fiduciary is not liable, either individually or as a fiduciary, for any of the following:
(1) Any loss that results from compliance with a direction of the trust advisor, including any loss from the trust advisor breaching fiduciary responsibilities or acting beyond the trust advisor's scope of authority; or
(2) any loss that results from a failure to take any action proposed by an excluded fiduciary that requires a prior authorization of the trust advisor if such excluded fiduciary timely sought but failed to obtain such authorization.
(b) Any excluded fiduciary is relieved from any obligation to review or evaluate any direction from a trust advisor to make distributions or to perform investment or suitability reviews, inquiries or investigations or to make recommendations or evaluations with respect to any investments to the extent the trust advisor had authority to direct the acquisition, disposition or retention of the investment. If the excluded fiduciary offers such recommendations or evaluations to the trust advisor or any investment person selected by the trust advisor, such action shall not constitute an undertaking by the excluded fiduciary to monitor or otherwise participate in actions within the scope of the advisor's authority or to constitute any duty to do so.
(c) Any excluded fiduciary is also relieved of any duty to communicate with or warn or apprise any beneficiary or third party concerning instances in which the excluded fiduciary would or might have exercised the excluded fiduciary's own discretion in a manner different from the manner directed by the trust advisor.
(d) Absent contrary provisions in the governing instrument, the actions of the excluded fiduciary, such as any communications with the trust advisor and others and carrying out, recording and reporting actions taken at the trust advisor's direction, pertaining to matters within the scope of authority of the trust advisor, shall be deemed to be administrative actions taken by the excluded fiduciary solely to allow the excluded fiduciary to perform those duties assigned to the excluded fiduciary under the governing instrument. Such administrative actions shall not constitute an undertaking by the excluded fiduciary to monitor, participate or otherwise take any fiduciary responsibility for actions within the scope of authority of the trust advisor.
(e) In any action against an excluded fiduciary pursuant to the provisions of this section, the burden to prove the matter by clear and convincing evidence is on the person seeking to hold the excluded fiduciary liable.
History: L. 2021, ch. 80, § 15; July 1.
§ 9-2316 Trust advisor; presumed fiduciary; jurisdiction; appointment
(a) A trust advisor shall be presumed to be a fiduciary when exercising such trust advisor's authority under this act.
(b) By accepting an appointment to serve as a trust advisor of a fidfin trust or an alternative asset custody account that is subject to the laws of this state, the trust advisor submits to the jurisdiction of the courts of Kansas even if investment advisory agreements or other related agreements provide otherwise. The trust advisor may be made a party to any action or proceeding relating to a decision or action of the trust advisor.
(c) An instrument may appoint an individual, corporation or limited liability company as the trust advisor of a fidfin trust or an alternative asset custody account.
History: L. 2021, ch. 80, § 16; July 1.
§ 9-2317 Entity as trust advisor; requirements
(a) If an entity is appointed as a trust advisor, the provisions of article 8 of chapter 9 of the Kansas Statutes Annotated, and amendments thereto, shall not apply to such entity, if the entity:
(1) Is established for the exclusive purpose of acting as a trust advisor;
(2) is acting in such capacity under an instrument that names a fiduciary financial institution as trustee or custodian;
(3) is not engaged in trust business with the general public as a public trust company or with any family as a private trust company;
(4) does not hold itself out as being in the business of acting as a fiduciary for hire as either a public or private trust company; and
(5) agrees to be subject to examination by the office of the state bank commissioner at the discretion of the commissioner.
(b) The governing documents of any such entity shall limit such entity's authorized activities to those of a trust advisor and shall further limit the performance of such functions to only fidfin trusts and alternative asset custody accounts. An entity complying with this section shall notify the commissioner in writing of its existence and capacity to act within 30 days of the establishment of such capacity.
History: L. 2021, ch. 80, § 17; L. 2022, ch. 55, § 10; July 1.
§ 9-2318 Indemnification of trust advisor; exceptions
An instrument may relieve and indemnify a trust advisor and a fiduciary financial institution that serves as trustee of a fidfin trust or alternative asset custody account from liability for a breach of fiduciary duty. Any such provision is unenforceable to the extent that it relieves the trust advisor or fiduciary financial institution from liability for a breach of fiduciary duty committed:
(a) In bad faith;
(b) intentionally; or
(c) with reckless indifference to the interest of a beneficiary.
History: L. 2021, ch. 80, § 18; L. 2022, ch. 55, § 11; July 1.
§ 9-2319 Trustee compensation
(a) Notwithstanding the provisions of K.S.A. 58a-708, and amendments thereto, if the terms of a fidfin trust specify the trustee's compensation, such trustee is entitled to be compensated as provided in such terms, except that compensation may be increased or decreased upon approval by the trustee and by unanimous consent of the beneficiaries.
(b) If the terms of a fidfin trust specify the trustee's compensation, the trustee is entitled to be compensated as specified, except that the court may allow more compensation if:
(1) The duties of the trustee are substantially different from those contemplated when the trust was created; or
(2) the compensation specified by the terms of the trust would be unreasonably low.
History: L. 2021, ch. 80, § 19; July 1.
§ 9-2320 Privacy; protection in court proceedings; exception
The privacy of those who have established a fidfin trust or alternative asset custody account shall be protected in any court proceeding concerning such trust if the acting trustee, custodian, trustor or any beneficiary so petition the court. Upon the filing of such a petition, the instrument, inventory, statement filed by any trustee or custodian, annual verified report of the trustee or custodian, final report of the trustee or custodian and all petitions relevant to trust administration and all court orders thereon shall be sealed upon filing and shall not be made a part of the public record of the proceeding, except that such petition shall be available to the court, the trustor, the trustee, the custodian, any beneficiary, their attorneys and to such other interested persons as the court may order upon a showing of need.
History: L. 2021, ch. 80, § 20; July 1.
§ 9-2321 Forms; definition; request for review; review not approval or endorsement
(a) For purposes of this section, "form" includes:
(1) An instrument as defined in K.S.A. 9-2301, and amendments thereto;
(2) a transaction agreement between a fiduciary financial institution and a fidfin trust;
(3) any other documents executed by a fiduciary financial institution or a fidfin trust in connection with a fidfin transaction; and
(4) any document executed by a fiduciary financial institution or a customer in connection with the creation and management of an alternative asset custody account.
(b) The commissioner may, upon a written request from a fiduciary financial institution prior to a form submission, offer to review a form and reply with informational comments only. Such informational comments shall not, in any manner, constitute approval or endorsement of such form, and the fiduciary financial institution shall not represent that such form has been approved by the office of the state bank commissioner.
History: L. 2021, ch. 80, § 21; July 1.
§ 9-2322 Adoption of rules and regulations by the commissioner; contracts for technical assistance
(a) Pursuant to K.S.A. 9-1713, and amendments thereto, the commissioner shall adopt rules and regulations on or before January 1, 2022, as are necessary to administer this act.
(b) The office of the state bank commissioner may enter into contracts for technical assistance and professional services as are necessary to administer the provisions of this act and to meet the deadline for the adoption of rules and regulations provided by this section. Such contracts shall be exempt from the requirements of K.S.A. 75-3739, 75-37,102 and 75-37,132, and amendments thereto, or any other statute relating to the procurement of such services.
History: L. 2021, ch. 80, § 22; July 1.
§ 9-2323 No maximum interest rate or charge
Notwithstanding the provisions of chapter 16 of the Kansas Statutes Annotated, and amendments thereto, to the contrary, or any other statute, there is no maximum interest rate or charge or usury rate restriction between or among a fiduciary financial institution and a fidfin trust if the interest rate or charge is established by written agreement. A "written agreement" means a document in writing, whether in physical or electronic form, in which the parties have demonstrated their agreement to the terms and conditions of an extension of credit, including the rate of interest.
History: L. 2021, ch. 80, § 23; July 1.
§ 9-2324 Technology-enabled fiduciary financial institutions development and expansion fund; administration by secretary of commerce; purpose; interest earnings
(a) There is hereby established in the state treasury the technology-enabled fiduciary financial institutions development and expansion fund to be administered by the secretary of commerce. Expenditures from the fund shall be for the purposes of distributing to economic growth zones for the purposes of economic development projects or opportunities and promoting and facilitating the development, growth and expansion of fiduciary financial institutions, fidfin activities and custodial services in the state and to locate such fiduciary financial institutions' office space in an economic growth zone as defined in K.S.A. 9-2301, and amendments thereto. All expenditures from the technology-enabled fiduciary financial institutions development and expansion fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the secretary of commerce or the secretary's designee.
(b) On or before the 10th day of each month, the director of accounts and reports shall transfer from the state general fund to the technology-enabled fiduciary financial institutions development and expansion fund interest earnings based on:
(1) The average daily balance of moneys in the technology-enabled fiduciary financial institutions development and expansion fund for the preceding month; and
(2) the net earnings rate for the pooled money investment portfolio for the preceding month.
History: L. 2021, ch. 80, § 24; July 1.
§ 9-2325 Pilot program; requirements; fees; distributions; conversion to full charter; report to certain committees of the legislature
(a) On July 1, 2021, the commissioner shall:
(1) Grant a conditional fiduciary financial institution charter to the Beneficient company upon the Beneficient company:
(A) Filing an application with the commissioner;
(B) satisfying the requirements of K.S.A. 9-2302(c)(1) through (5), and amendments thereto;
(C) satisfying the requirements of K.S.A. 9-2302(f), and amendments thereto; and
(D) satisfying the capital requirements imposed under K.S.A. 9-2305, and amendments thereto; and
(2) designate a community within Harvey county, as selected by Beneficient fiduciary financial institution, as the first economic growth zone.
(b) On July 1, 2021, the commissioner shall establish a fidfin fiduciary financial institution pilot program that:
(1) Includes the Beneficient company as a participant in such pilot program;
(2) assesses the Beneficient company an initial fee of $1,000,000 in lieu of the initial fee provided in K.S.A. 9-2303, and amendments thereto; and
(3) imposes a requirement for the Beneficient company to distribute, cause to be distributed or otherwise facilitate a distribution of cash, beneficial interests or other assets having an aggregate value of $9,000,000 in accordance with the requirements of K.S.A. 9-2302(i), and amendments thereto, and such amount shall be construed as the applicable distribution amount for purposes of K.S.A. 9-2302, and amendments thereto.
(c) Except as provided by subsection (d), upon issuance of the conditional fiduciary financial institution charter, the Beneficient company shall be subject to all requirements imposed on fiduciary financial institutions under this act but may not commence fidfin transactions, custodial services or trust business in this state until the earlier of:
(1) December 31, 2021; or
(2) the date the commissioner adopts rules and regulations pursuant to K.S.A. 9-2322, and amendments thereto.
(d) (1) On December 31, 2021, the conditional charter granted under this section to the Beneficient company shall be converted to a full fiduciary financial institution charter.
(2) The commissioner may extend the period that the Beneficient company may not commence fidfin transactions, custodial services or trust business in this state for a period not to exceed six months from the date specified in subsection (c) if the commissioner submits a report to the senate financial institutions and insurance committee and to the house of representatives financial institutions and rural development committee identifying the specific reasons for which such extension is necessary. Such report shall be submitted on or before January 10, 2022. Notwithstanding the provisions of this subsection, the Beneficient company may satisfy the applicable distribution requirement of K.S.A. 9-2302(i), and amendments thereto, and the required distribution amount in K.S.A. 9-2311(f), and amendments thereto, by placing assets in escrow with one or more qualified charities, except that such funds shall be released when the Beneficient company is permitted to commence fidfin transactions, custodial services or trust business.
(e) On or before January 10, 2022, the office of the state bank commissioner shall provide a report to the house of representatives financial institutions and rural development committee and the senate financial institutions and insurance committee updating such committees on the progress of such pilot program. Such report shall include recommendations from the office of the state bank commissioner for any legislation necessary to implement the provisions of this act.
History: L. 2021, ch. 80, § 25; L. 2022, ch. 4, § 1; March 10.
§ 9-2326 Trust interest not void or invalid by any common law rule
Notwithstanding the provisions of K.S.A. 59-3401, and amendments thereto, no interest held in a fidfin trust shall be void or invalid by reason of any common law rule, including, but not limited to, the rule against perpetuities or rule limiting the duration of trusts.
History: L. 2021, ch. 80, § 26; July 1.
§ 9-2327 Tax classification as determined under the federal internal revenue code
Notwithstanding the provisions of K.S.A. 17-2035, and amendments thereto, for purposes of any tax imposed by the state or any instrumentality, agency or political subdivision of this state, a business trust that is used in connection with fidfin transactions or custodial services, as defined in K.S.A. 9-2301, and amendments thereto, and for which a fiduciary financial institution, as defined in K.S.A. 9-2301, and amendments thereto, serves as trustee shall be classified as a corporation, an association, a partnership, a trust or otherwise, as shall be determined under the federal internal revenue code.
History: L. 2021, ch. 80, § 27; July 1.
Article 24 Earned Wage Access Services
§ 9-2401 Citation of act; entities exempt therefrom
(a) K.S.A. 2025 Supp. 9-2401 through 9-2416, and amendments thereto, shall be known and may be cited as the Kansas earned wage access services act.
(b) This act shall not apply to a:
(1) Bank holding company regulated by the federal reserve;
(2) depository institution regulated by a federal banking agency; or
(3) a subsidiary of either paragraph (1) or (2) if such subsidiary directly owns 25% of the bank holding company or depository institution's common stock.
History: L. 2024, ch. 64, § 43; July 1.
§ 9-2402 Definitions
As used in K.S.A. 2025 Supp. 9-2401 through 9-2416, and amendments thereto:
(a) "Act" means the Kansas earned wage access services act.
(b) "Commissioner" means the state bank commissioner or the commissioner's designee, who shall be the deputy commissioner of the consumer and mortgage lending division of the office of the state bank commissioner.
(c) "Consumer" means an individual who is a resident of this state. A provider may use the mailing address provided by a consumer to determine such consumer's state of residence for purposes of this act.
(d) "Consumer-directed wage access services" means offering or providing earned wage access services directly to consumers based on the consumer's representations and the provider's reasonable determination of the consumer's earned but unpaid income.
(e) "Director" means a member of the registrant's or applicant's board of directors.
(f) "Earned but unpaid income" means salary, wages, compensation or other income that a consumer has represented, and that a provider has reasonably determined, to have been earned or to have accrued to the benefit of the consumer in exchange for the consumer's provision of services to an employer or on behalf of an employer, including on an hourly, project-based, piecework or other basis and including where the consumer is acting as an independent contractor of the employer, but, at the time of the payment of proceeds, have not been paid to the consumer by the employer.
(g) "Earned wage access services" means the business of providing consumer-directed wage access services or employer-integrated wage access services, or both.
(h) "Employer-integrated wage access services" means the business of delivering to consumers access to earned but unpaid income that is based on employment, income and attendance data obtained directly or indirectly from an employer.
(i) "Fee" means a fee imposed by a provider for delivery or expedited delivery of proceeds to a consumer or a subscription or membership fee imposed by a provider for a bona fide group of services that include earned wage access services. A voluntary tip, gratuity or donation shall not be deemed a fee.
(j) "Member" means someone who has the right to receive upon dissolution, or has contributed 10% or more of the capital, of a limited liability corporation or a limited liability partnership of the registrant or applicant.
(k) "Nationwide multistate licensing system and registry" or "registry" means a multistate licensing system developed by the conference of state bank supervisors and the American association of residential mortgage regulators and operated by the state regulatory agency, LLC, for the licensing and registration of non-depository financial service entities by participating state agencies or any successor to the nationwide multisystem licensing system and registry.
(l) "Non-mandatory payment" means the following:
(1) A charge imposed by a provider for delivery or expedited delivery of proceeds to a consumer so long as a provider offers the consumer at least one option to receive proceeds at no cost to the consumer;
(2) an amount paid by an obligor to a provider on a consumer's behalf that entitles the consumer to receive proceeds at no cost to the consumer;
(3) a subscription or membership charge imposed by a provider for a group of services that include earned wage access services so long as the provider offers the consumer at least one option to receive proceeds at no cost to the consumer; or
(4) a tip or gratuity paid by a consumer to a provider so long as the provider offers the consumer at least one option to receive proceeds at no cost to the consumer.
(m) "Nonrecourse" means a provider shall not compel or attempt to compel repayment by a consumer of outstanding proceeds or fees owed by such consumer to such provider through any of the following means:
(1) A civil suit against the consumer in a court of competent jurisdiction;
(2) use of a third party to pursue collection of outstanding proceeds or fees on the provider's behalf; or
(3) sale of outstanding amounts to a third-party collector or debt buyer.
(n) "Obligor" means an employer or other person who employs a consumer or any other person who is contractually obligated to pay a consumer earned but unpaid income in exchange for a consumer's provision of services to the employer or on behalf of the employer, including on an hourly, project-based, piecework or other basis, and including where the consumer is acting as an independent contractor.
(o) "Officer" means a person who participates or has authority to participate, other than in the capacity of a director, in major policymaking functions of the registrant or applicant, whether or not the person has an official title. "Officer" includes, but is not limited to, the chief executive officer, chief financial officer, chief operations officer, chief legal officer, chief credit officer, chief compliance officer and every vice president.
(p) "Outstanding proceeds" means proceeds remitted to a consumer by a provider that have not yet been repaid to such provider.
(q) "Owner" means an individual who holds, directly or indirectly, at least 10% or more of a class of voting securities or the power to direct the management or policies of a registrant or an applicant.
(r) "Partner" means a person that has the right to receive upon dissolution, or has contributed, 10% or more of the capital of a partnership of the registrant or applicant.
(s) "Person" means any individual, corporation, partnership, association or other commercial entity.
(t) "Principal" of a registrant means a person that oversees the daily operations of a registrant or applicant and is not an owner or key individual of such registrant or applicant.
(u) "Proceeds" means a payment to a consumer by a provider that is based on earned but unpaid income.
(v) "Provider" means a person who is in the business of offering and providing earned wage access services to consumers.
(w) "Registrant" means a person who is registered with the commissioner as an earned wage access services provider.
History: L. 2024, ch. 64, § 44; July 1.
§ 9-2403 Registration; application; fee
(a) No person shall engage in or hold such person out as willing to engage in any earned wage access services business with a consumer without registering with the commissioner. Any person required to be registered as an earned wage access services provider shall submit to the commissioner an application for registration on forms prescribed and provided by the commissioner. Such application for registration shall include:
(1) The applicant's name, business address, telephone number and, if any, website address;
(2) the name and address of each owner, officer, director, member, partner or principal of the applicant;
(3) a description of the ownership interest of any officer, director, member, partner, agent or employee of the applicant in any affiliate or subsidiary of the applicant or in any other entity that provides any service to the applicant or any consumer relating to the applicant's earned wage access services business; and
(4) any other information the commissioner may deem necessary to evaluate the financial responsibility, financial condition, character, qualifications and fitness of the applicant.
(b) Each application for registration shall be accompanied by a nonrefundable fee.
(c) The commissioner shall approve an application and shall issue a nontransferable and nonassignable registration to the applicant when the commissioner:
(1) Receives the complete application and fee required by this section; and
(2) determines the financial responsibility, financial condition, character, qualifications and fitness warrants a belief that the business of the applicant will be conducted competently, honestly, fairly and in accordance with all applicable state and federal laws.
(d) Each earned wage access services registration issued under this section shall expire on December 31 of each year. A registration shall be renewed by filing a complete renewal application with the commissioner at least 30 calendar days prior to the expiration of the registration. Such renewal application shall contain all information the commissioner requires to determine the existence and effect of any material change from the information contained in the applicant's original application, annual reports or prior renewal applications. Each renewal application shall be accompanied by a nonrefundable renewal fee.
(e) If the commissioner fails to issue a registration within 60 calendar days after a filed application is deemed complete by the commissioner, the applicant may make written request for a hearing. Upon receipt of such written request for a hearing, the commissioner shall conduct a hearing in accordance with the Kansas administrative procedure act.
(f) Not later than the first day of the sixth month beginning after the effective date of this act, the commissioner shall prescribe the form and content of an application for registration to provide earned wage access services pursuant to this act.
(g) Notwithstanding the provisions of subsection (a), a person who, as of January 1, 2024, was engaged in the business of providing earned wage access services in this state may, until the commissioner has processed the person's application for registration, continue to engage in the business of providing earned wage access services in this state without registering if the person has submitted an application for registration within three months after the commissioner has prescribed the form and content of an application pursuant to subsection (f) and otherwise complies with this act.
(h) The registration requirements of this act shall not apply to individuals acting as employees or independent contractors of business entities required to register.
History: L. 2024, ch. 64, § 45; July 1.
§ 9-2404 Surety bond
Each applicant or registrant shall file with the commissioner a surety bond in a form acceptable to the commissioner. Such surety bond shall be issued by a surety or insurance company authorized to conduct business in this state, securing the applicant's or registrant's faithful performance of all duties and obligations of a registrant. The surety bond shall:
(a) Be payable to the office of the state bank commissioner;
(b) provide that the bond may not be terminated without 30 calendar days' prior written notice to the commissioner, that such termination shall not affect the surety's liability for violations of this act occurring prior to the effective date of cancellation, and principal and surety shall be and remain liable for a period of two years from the date of any action or inaction of principal that gives rise to a claim under the bond;
(c) provide that the bond shall not expire for two years after the date of surrender, revocation or expiration of the applicant's or registrant's registration, whichever occurs first;
(d) be available for:
(1) The recovery of expenses, fines and fees levied by the commissioner under this act; and
(2) payment of losses or damages that are determined by the commissioner to have been incurred by any consumer as a result of the applicant's or registrant's failure to comply with the requirements of this act; and
(e) be in the amount of $100,000.
History: L. 2024, ch. 64, § 46; July 1.
§ 9-2405 Registrant requirements
A provider that is registered in the state of Kansas shall be subject to the following requirements:
(a) The registrant shall provide all proceeds on a non-recourse basis and shall treat all fees and non-mandatory payments as non-recourse payment obligations.
(b) The registrant shall develop and implement policies and procedures to respond to questions raised by consumers and address complaints from consumers in an expedient manner.
(c) Before entering into an agreement with a consumer for the provision of earned wage access services, the registrant shall:
(1) Inform the consumer of their rights under the agreement;
(2) fully and clearly disclose all fees associated with the earned wage access services; and
(3) clearly and conspicuously describe how the consumer may obtain proceeds at no cost to such consumer.
(d) A registrant shall inform the consumer of any material changes to the terms and conditions of the earned wage access services before implementing such changes for such consumer.
(e) The registrant shall provide proceeds to a consumer via any means mutually agreed upon by the consumer and registrant.
(f) The registrant shall allow a consumer to cancel the use of the provider's earned wage access services at any time without incurring a cancellation fee or penalty imposed by the provider.
(g) The registrant shall comply with all applicable federal, state and local privacy and information security laws.
(h) If a registrant solicits, charges or receives a tip, gratuity or other donation from a consumer, the registrant shall disclose:
(1) To the consumer immediately prior to each transaction that a tip, gratuity or other donation amount may be zero and is voluntary; and
(2) in its agreement with the consumer and elsewhere that tips, gratuities or other donations are voluntary and that the offering of earned wage access services, including the amount of proceeds a consumer is eligible to request and the frequency with which proceeds are provided to a consumer, is not contingent on whether the consumer pays any tip, gratuity or donation or on the size of any tip, gratuity or other donation.
(i) If a registrant will seek repayment of outstanding proceeds or payment of fees or other amounts owed, including voluntary tips, gratuities or other donations, in connection with earned wage access services from a consumer's depository institution, including by means of electronic funds transfer, the registrant shall do all of the following:
(1) Inform the consumer when the provider will make each attempt to seek repayment of the proceeds from the consumer;
(2) comply with applicable provisions of the federal electronic fund transfer act, 15 U.S.C. § 1693 et seq., and any regulations adopted thereunder; and
(3) reimburse the consumer for the full amount of any overdraft or nonsufficient funds fees imposed on a consumer by the consumer's depository institution that were caused by the provider attempting to seek payment of any outstanding proceeds, fees or other payments in connection with earned wage access services, including voluntary tips, gratuities or other donations, on a date before, or in an incorrect amount from, the date or amount disclosed to the consumer. Notwithstanding the provisions of this paragraph, no provider shall be subject to the requirements of this paragraph with respect to payments of outstanding proceeds or fees incurred by a consumer through fraudulent or other unlawful means.
History: L. 2024, ch. 64, § 47; July 1.
§ 9-2406 Prohibited acts
No person required to be registered under this act shall:
(a) Compel or attempt to compel repayment by a consumer of outstanding proceeds or payments owed by such consumer to the registrant through any of the following means:
(1) A civil suit against the consumer in a court of competent jurisdiction;
(2) use of a third party to pursue collection of outstanding proceeds or payments on the provider's behalf;
(3) use of outbound telephone calls to attempt collection; or
(4) sale of outstanding amounts to a third-party debt collector or debt purchaser;
(b) charge a late fee, a deferral fee, interest or any other penalty or charge for failure to repay outstanding proceeds, fees, voluntary tips, gratuitites or other donations;
(c) charge interest or finance charges:
(d) charge an unreasonable fee to provide expedited delivery of proceeds to a consumer;
(e) share with an employer a portion of any fees, voluntary tips, gratuities or other donations that were received from or charged to a consumer for earned wage access services;
(f) condition the amount of proceeds that a consumer is eligible to request or the frequency with which a consumer is eligible to request proceeds on whether such consumer pays fees, voluntary tips, gratuities or other donations or on the size of any fee, voluntary tip, gratuity or other donation that such consumer may make to such registrant in connection with the provision of earned wage access services;
(g) mislead or deceive consumers about the voluntary nature of tips, gratuities or other donations or make representations that tips, gratuities or other donations will benefit any specific individuals if the registrant solicits, charges or receives tips, gratuities or other donations from a consumer;
(h) charge a deferral fee or any other charge in connection with deferring the collection of any outstanding proceeds beyond the original scheduled repayment date;
(i) accept credit of any kind as payment from a consumer of outstanding proceeds or non-mandatory payments;
(j) report a consumer's payment or failed repayment of outstanding proceeds to a consumer credit reporting agency or a debt collector; or
(k) require a credit score to determine a consumer's eligibility for earned wage access services.
History: L. 2024, ch. 64, § 48; July 1.
§ 9-2407 Earned wage access services not considered to be a loan or money transmission; act controls in conflict with other state law
(a) For purposes of the laws of this state:
(1) Earned wage access services provided by a registrant in accordance with this chapter shall not be considered to be:
(A) A loan or other form of credit or the registrant a creditor or lender with respect thereto;
(B) in violation of or noncompliant with the laws of this state governing the sale or assignment of, or an order for, earned but unpaid income; or
(C) money transmission or the registrant a money transmitter with respect thereto.
(2) Fees, voluntary tips, gratuities or other donations paid to such a registrant in accordance with this chapter shall not be considered interest or finance charges.
(b) A registrant that provides proceeds to a consumer in accordance with this act shall not be subject to the provisions of the uniform consumer credit code in connection with such registrant's earned wage access services.
(c) If there is a conflict between the provisions of this act and any other state statute, the provisions of this act control.
History: L. 2024, ch. 64, § 49; July 1.
§ 9-2408 Annual report; confidentiality; reportable events; penalty for failure to report
(a) (1) On or before April 1 of each year, each registrant shall file with the commissioner an annual report relating to earned wage access services provided by the registrant in this state during the preceding calendar year. The annual report shall be on a form prescribed by the commissioner.
(2) The information contained in the annual report shall be confidential and shall not be subject to the open records act, K.S.A. 45-215 et seq., and amendments thereto. The commissioner may publish aggregate annual report information for multiple registrants in composite form. The provisions of this paragraph shall expire on July 1, 2029, unless the legislature reviews and acts to continue such provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to July 1, 2029.
(b) Within 15 calendar days of any of the following events, a registrant shall file a written report with the commissioner describing the event and such event's expected impact on the registrant's business:
(1) The filing for bankruptcy or reorganization by the registrant;
(2) the institution of a revocation, suspension or other proceeding against the registrant by a governmental authority that is related to the registrant's earned wage access services business in any state;
(3) the addition or loss of any owner, officer, partner, member, principal or director of the registrant;
(4) a felony conviction of the registrant or any of such registrant's owners, officers, members, principals, directors or partners;
(5) a change in the registrant's name or legal entity status; or
(6) the closing or relocation of the registrant's principal place of business.
(c) If a registrant fails to make any report to the commissioner as required by this section, the commissioner may require the registrant to pay a late penalty of $100 for each day such report is overdue.
History: L. 2024, ch. 64, § 50; July 1.
§ 9-2409 Records retention; examination; expenses
(a) Each registrant shall maintain and preserve complete and adequate business records, including a general ledger containing all assets, liabilities, capital, income and expense accounts for a period of three years.
(b) Each registrant shall maintain and preserve complete and adequate records of each earned wage access services contract during the term of the contract and for a period of five years from the date on which the registrant last provides proceeds to the consumer.
(c) The registrant shall provide the records to the commissioner within three business days of the commissioner's request or, at the commissioner's discretion, pay reasonable and necessary expenses for the commissioner or commissioner's designee to examine them at the place where such records are maintained. The registrant may provide such records electronically to the commissioner in a manner prescribed by the commissioner.
History: L. 2024, ch. 64, § 51; July 1.
§ 9-2410 Denial, suspension or revocation of registration
The commissioner may deny, suspend, revoke or refuse to renew a registration issued pursuant to this act if the commissioner finds, after notice and opportunity for a hearing conducted in accordance with the provisions of the Kansas administrative procedure act, that:
(a) The applicant or registrant has repeatedly or willfully violated any provision of this act, any rules and regulations adopted thereunder or any order lawfully issued by the commissioner pursuant to this act;
(b) the applicant or registrant has failed to file and maintain the surety bond required under this act;
(c) the applicant or registrant is insolvent;
(d) the applicant or registrant has filed with the commissioner any document or statement containing any false representation of a material fact or omitting to state a material fact;
(e) the applicant, registrant or any officer, director, member, owner, partner or principal of the applicant or registrant has been convicted of any crime;
(f) the applicant or registrant fails to keep and maintain sufficient records to permit an audit satisfactorily disclosing to the commissioner the applicant's or registrant's compliance with the provisions of this act and applicable federal law;
(g) the applicant, registrant or an employee of the applicant or registrant has been the subject of any disciplinary action by the commissioner or any other state or federal regulatory agency;
(h) a final judgment has been entered against the applicant or registrant in a civil action and the commissioner finds that the conduct on which the judgment is based indicates that it would be contrary to the public interest to permit such person to be registered;
(i) the applicant or registrant has engaged in any deceptive business practice;
(j) facts or conditions exist that would have justified the denial of the registration or renewal had such facts or conditions existed or been known to exist at the time the application for registration or renewal was made; or
(k) the applicant or registrant has refused to furnish information required by the commissioner within a reasonable period of time as established by the commissioner.
History: L. 2024, ch. 64, § 52; July 1.
§ 9-2411 Powers of the commissioner to administer the act; rules and regulations; fingerprinting and criminal history record check
(a) The commissioner shall administer the provisions of this act. In addition to other powers granted by this act, the commissioner, within the limitations provided by law, may exercise the following powers:
(1) Adopt, amend and revoke rules and regulations as necessary to carry out the intent and purpose of this act;
(2) make any investigation and examination of the operations, books and records of an earned wage access services provider as the commissioner deems necessary to aid in the enforcement of this act;
(3) have free and reasonable access to the offices, places of business and all records of the registrant that will enable the commissioner to determine whether the registrant is complying with the provisions of this act. The commissioner may designate persons, including comparable officials of the state in which the records are located, to inspect the records on the commissioner's behalf;
(4) establish, charge and collect fees from applicants or registrants for reasonable costs of investigation, examination and administration of this act, in such amounts as the commissioner may determine to be sufficient to meet the budget requirements of the commissioner for each fiscal year. The commissioner may maintain an action in any court to recover such costs;
(5) order any registrant or person to cease any activity or practice that the commissioner deems to be deceptive, dishonest, a violation of this act, or of any other state or federal law, or unduly harmful to the interests of the public;
(6) exchange any information regarding the administration of this act with any agency of the United States or any state that regulates the applicant or registrant or administers statutes, rules and regulations or programs related to earned wage access services laws with any attorney general or district attorney with jurisdiction to enforce criminal violations of this act;
(7) disclose to any person or entity that an applicant's or registrant's application or registration has been denied, suspended, revoked or refused renewal;
(8) require or permit any person to file a written statement, under oath or otherwise as the commissioner may direct, setting forth all the facts and circumstances concerning any apparent violation of this act, any rule and regulation adopted thereunder or any order issued pursuant to this act;
(9) receive, as a condition in settlement of any investigation or examination, a payment designated for consumer education to be expended for such purpose as directed by the commissioner;
(10) delegate the authority to sign any orders, official documents or papers issued under or related to this act to the deputy of consumer and mortgage lending division of the office of the state bank commissioner;
(11) require any officer, partner, member, owner, principal or director of an applicant or registrant to submit to a state and national criminal history record check in accordance with K.S.A. 2025 Supp. 22-4714, and amendments thereto;
(12) issue, amend and revoke written administrative guidance documents in accordance with the applicable provisions of the Kansas rules and regulations filing act;
(13) enter into any informal agreement with any person for a plan of action to address violations of this act; and
(14) require use of a nationwide multi-state licensing system and registry for processing applications, renewals, amendments, surrenders and any other activity that the commissioner deems appropriate. The commissioner may establish relationships or contracts with the nationwide multi-state licensing system and registry or other entities to collect and maintain records and process transaction fees or other fees related to applicants and licensees, as may be reasonably necessary to participate in the nationwide multi-state licensing system and registry. The commissioner may report violations of the law, as well as enforcement actions and other relevant information to the nationwide multi-state licensing system and registry. The commissioner may require any applicant or licensee to file reports with the nationwide multi-state licensing system and registry in the form prescribed by the commissioner.
(b) Examination reports and correspondence regarding such reports made by the commissioner or the commissioner's designees shall be confidential and shall not be subject to the provisions of the open records act, K.S.A. 45-215 et seq., and amendments thereto. The commissioner may release examination reports and correspondence regarding the reports in connection with a disciplinary proceeding conducted by the commissioner, a liquidation proceeding or a criminal investigation or proceeding. Additionally, the commissioner may furnish to federal or other state regulatory agencies or any officer or examiner thereof, a copy of any or all examination reports and correspondence regarding the reports made by the commissioner or the commissioner's designees. The provisions of this subsection shall expire on July 1, 2029, unless the legislature reviews and acts to continue such provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to July 1, 2029.
(c) For the purpose of any examination, investigation or proceeding under this act, the commissioner or the commissioner's designee may administer oaths and affirmations, subpoena witnesses, compel such witnesses' attendance, introduce evidence and require the production of any matter that is relevant to the examination or investigation, including the existence, description, nature, custody, condition and location of any books, documents or other tangible things and the identity and location of persons having knowledge of relevant facts or any other matter reasonably calculated to lead to the discovery of relevant information or items.
(d) The adoption of an informal agreement authorized by this section shall not be subject to the provisions of the Kansas administrative procedure act or the Kansas judicial review act. Any informal agreement authorized by this subsection shall not be considered an order or other agency action and shall be considered confidential examination material. All such examination material shall be confidential by law and privileged, shall not be subject to the provisions of the open records act, K.S.A. 45-215 et seq., and amendments thereto, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. The provisions of this subsection shall expire on July 1, 2029, unless the legislature reviews and acts to continue such provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to July 1, 2029.
History: L. 2024, ch. 64, § 53; L. 2025, ch. 98, § 4; May 1.
§ 9-2412 Violations of act; notice and hearing; orders; penalties; hearings
(a) If the commissioner determines after notice and opportunity for a hearing pursuant to the Kansas administrative procedure act that any person has engaged, is engaging or is about to engage in any act or practice constituting a violation of any provision of this act, any rules and regulations adopted or order issued thereunder, the commissioner may issue an order requiring any or all of the following:
(1) That the person cease and desist from the unlawful act or practice;
(2) that the person pay a fine not to exceed $5,000 per incident for the unlawful act or practice;
(3) if any person is found to have violated any provision of this act and such violation is committed against elder or disabled persons as defined in K.S.A. 50-676, and amendments thereto, the commissioner may impose an additional penalty not to exceed $5,000 for each such violation, in addition to any civil penalty otherwise provided by law;
(4) that the person to pay restitution for any loss arising from the violation or requiring the person to disgorge any profits arising from the violation. Such order may include the assessment of interest not to exceed 8% per annum from the date of the violation;
(5) that the person take such action as in the judgment of the commissioner will carry out the purposes of this act; or
(6) that the person be barred from subsequently applying for registration under this act.
(b) (1) If the commissioner makes written findings of fact that the public interest will be irreparably harmed by delay in issuing an order under subsection (a), the commissioner may issue an emergency cease and desist order.
(2) Such emergency order, even if not an order within the meaning of K.S.A. 77-502, and amendments thereto, shall be subject to the same procedures as an emergency order issued under K.S.A. 77-536, and amendments thereto.
(3) Upon the entry of such an emergency order, the commissioner shall promptly notify the person subject to the order that such order has been entered, the reasons for such order and that a hearing will be held upon written request by such person.
(4) If such person requests a hearing or, in the absence of any request, if the commissioner determines that a hearing should be held, the matter shall be set for a hearing that shall be conducted in accordance with the provisions of the Kansas administrative procedure act. Upon completion of the hearing the commissioner shall, by written findings of fact and conclusions of law, vacate, modify or make permanent the emergency order.
(5) If no hearing is requested and none is ordered by the commissioner, the emergency order shall remain in effect until such order is modified or vacated by the commissioner.
(6) Fines and penalties collected pursuant to paragraphs (2) and (3) shall be designated for use by the commissioner for consumer education.
History: L. 2024, ch. 64, § 54; July 1.
§ 9-2413 Failure to obey subpoena
(a) In case of failure or refusal to obey a subpoena issued to any person, any court of competent jurisdiction, upon application by the commissioner, may issue an order requiring such person to appear before the commissioner, or the commissioner's designee, to produce documentary evidence if so ordered or to give evidence relating to the matter under investigation or in question. Any failure to obey the order of the court may be punished by the court as contempt of court.
(b) No person shall be excused from attending, testifying or producing any document or record before the commissioner or in obedience to the subpoena of the commissioner or the commissioner's designee, or in any proceeding instituted by the commissioner, on the ground that such testimony or evidence, documentary or otherwise, required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture. No individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which such person is compelled, after claiming privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.
History: L. 2024, ch. 64, § 55; July 1.
§ 9-2414 Criminal penalties for violations
It is unlawful for any person to violate the provisions of this act, any rules and regulations adopted or any order issued under this act. A conviction for an intentional violation is a class A nonperson misdemeanor. A second or subsequent conviction of this section is a severity level 7, nonperson felony. No person may be imprisoned for the violation of this section if such person proves that such person had no knowledge of the act, rules and regulations or order.
History: L. 2024, ch. 64, § 56; July 1.
§ 9-2415 Actions to enjoin any violation of the act
The commissioner, attorney general or a county or district attorney may bring an action in a district court to enjoin any violation of this act or any rules and regulations adopted thereunder.
History: L. 2024, ch. 64, § 57; July 1.
§ 9-2416 Disposition of fees
All fees collected by the commissioner pursuant to this act shall be subject to the provisions of K.S.A. 75-1308, and amendments thereto.
History: L. 2024, ch. 64, § 58; July 1.
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