Kansas 2023-2024 Regular Session

Kansas Senate Bill SB199 Compare Versions

Only one version of the bill is available at this time.

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1	1	Session of 2023
2	2	SENATE BILL No. 199
3	3	By Senator Holland
4	4	2-7
5	5	AN ACT concerning financial institutions; relating to the technology-
6	6	enabled fiduciary financial institutions act; authorizing the state
7	7	banking board to deny, suspend or revoke the charter of a fiduciary
8	8	financial institution in certain circumstances; providing procedures
9	9	therefor; requiring fiduciary financial institutions to purchase a surety
10	10	bond; establishing a civil money penalty for violations.
11	11	Be it enacted by the Legislature of the State of Kansas:
12	12	Section 1. (a) The state banking board, after notice and an
13	13	opportunity for a hearing in accordance with the provisions of the Kansas
14	14	administrative procedure act, may deny, suspend, revoke or refuse to
15	15	approve a fiduciary financial institution charter issued pursuant to this act
16	16	or issue a cease and desist order, if the state banking board finds that:
17	17	(1) The fiduciary financial institution has violated any provision of
18	18	this act or any rules and regulations adopted or orders lawfully made
19	19	pursuant to this act;
20	20	(2) facts or conditions exist that would have justified the denial of the
21	21	charter if such facts or conditions had existed or been known to exist at the
22	22	time the application for the charter was made;
23	23	(3) the fiduciary financial institution has filed with the commissioner
24	24	or state banking board any document or statement containing any false
25	25	representation of a material fact or fails to state a material fact;
26	26	(4) the fiduciary financial institution or any director, officer,
27	27	employee or agent of the fiduciary financial institution has been convicted
28	28	of a felony under the laws of Kansas or in any other jurisdiction;
29	29	(5) the fiduciary financial institution has engaged in or is engaging in
30	30	deceptive business practices;
31	31	(6) the fiduciary financial institution or any director, officer,
32	32	employee or agent of the fiduciary financial institution has been the
33	33	subject of any disciplinary action by the commissioner, the state banking
34	34	board or any other state or federal regulatory agency;
35	35	(7) a final judgment has been entered against the fiduciary financial
36	36	institution in a civil action and the state banking board finds, based upon
37	37	the conduct on which the judgment is based, that issuing a charter to such
38	38	fiduciary financial institution would be contrary to the public interest;
39	39	(8) the fiduciary financial institution or any director, officer,
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76	76	employee or agent of the fiduciary financial institution has been convicted
77	77	of engaging in fiduciary financial institution activity without authorization
78	78	pursuant to K.S.A. 9-2302 or 9-2325, and amendments thereto, or a
79	79	substantially similar offense in another jurisdiction;
80	80	(9) the fiduciary financial institution has refused to furnish
81	81	information required by the commissioner or the state banking board
82	82	within a reasonable period of time as established by the commissioner or
83	83	the state banking board;
84	84	(10) the fiduciary financial institution failed to pay timely any
85	85	assessment required by this act or any rules and regulations adopted
86	86	pursuant to this act; or
87	87	(11) the fiduciary financial institution failed to provide and maintain a
88	88	surety bond pursuant to section 2, and amendments thereto.
89	89	(b) None of the following actions shall deprive the commissioner or
90	90	the state banking board of any jurisdiction or right to institute or proceed
91	91	with any disciplinary proceeding against a fiduciary financial institution to
92	92	render a decision suspending, revoking or refusing to approve a charter or
93	93	to establish and make a record of the facts of any violation of law for any
94	94	lawful purpose:
95	95	(1) The imposition of an administrative penalty;
96	96	(2) the lapse or suspension of any charter issued under this act by
97	97	operation of law; or
98	98	(3) the fiduciary financial institution's voluntary surrender of any
99	99	charter issued under this act.
100	100	(c) Any final order of the state banking board pursuant to this section
101	101	shall be subject to review in accordance with the Kansas judicial review
102	102	act.
103	103	(d) This section shall be a part of and supplemental to the technology-
104	104	enabled fiduciary financial institutions act.
105	105	Sec. 2. (a) Each fiduciary financial institution shall purchase a surety
106	106	bond in an amount equal to 5% of the total assets of such fiduciary
107	107	financial institution. The determination of total assets shall be based on
108	108	generally accepted accounting principles. Such surety bond shall be used
109	109	for, but not limited to:
110	110	(1) Liquidation expenses incurred by the office of the state bank
111	111	commissioner;
112	112	(2) payment of fines, fees and penalties; or
113	113	(3) reimbursement of losses or damages incurred by customers of
114	114	such fiduciary financial institution.
115	115	(b) The surety bond shall:
116	116	(1) Be issued by a company authorized to do business in this state and
117	117	not affiliated in any manner with such fiduciary financial institution;
118	118	(2) be payable to the office of the state bank commissioner;
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162	162	(3) be filed with the commissioner; and
163	163	(4) contain a minimum 30-day cancellation or nonrenewal provision.
164	164	(c) This section shall be a part of and supplemental to the technology-
165	165	enabled fiduciary financial institutions act.
166	166	Sec. 3. (a) After providing notice and an opportunity for a hearing in
167	167	accordance with the Kansas administrative procedure act, the
168	168	commissioner may, with the approval of the state banking board, assess
169	169	against and collect a civil money penalty from any fiduciary financial
170	170	institution or any director, officer, employee or agent of the fiduciary
171	171	financial institution that violates the provisions of this act or any rules and
172	172	regulations adopted pursuant to this act.
173	173	(b) The amount of the civil money penalty shall be established by the
174	174	commissioner, with the approval of the state banking board, in rules and
175	175	regulations, except that such civil money penalty shall be not less than
176	176	$5,000 per violation.
177	177	(c) This section shall be a part of and supplemental to the technology-
178	178	enabled fiduciary financial institutions act.
179	179	Sec. 4. This act shall take effect and be in force from and after its
180	180	publication in the statute book.
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