SESSION OF 2025
SUPPLEMENTAL NOTE ON SENATE BILL NO. 139
As Amended by House Committee on Financial
Institutions and Pensions
Brief*
SB 139, as amended, would amend the State Banking
Code (Banking Code) as follows:
●Require administrative hearings to be held in
accordance with the Kansas Administrative
Procedure Act (KAPA) when determining whether a
bank is a holding company and whether a cease-
and-desist order should be issued by the State
Banking Board;
●Require notification to be provided to the State
Bank Commissioner (Commissioner) regarding
changes to key leadership positions of bank and
trust companies;
●Address when the charter of a bank or trust
company would be void after an approved merger;
●Exempt certain bank or trust companies from
approval by the Commissioner to lawfully engage
in banking or trust business in the state;
●Remove the requirement that certain certified
documents be provided with an application for the
contracting of trust services if certain conditions are
met;
●Expand the allowable distance for the relocation of
a trust office; and
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
https://klrd.gov/ ●Amend the requirements for non-resident trust
companies to do business in Kansas.
The bill would correct a statutory reference and make
technical amendments.
The bill would be in effect upon publication in the
Kansas Register.
Definition Pertaining to Bank Holding Companies
(Section 1)
The bill would amend the definition of a “bank holding
company” to specify that a hearing to determine whether a
bank is a holding company must be conducted in accordance
with the KAPA.
Branch Banking (Section 2)
The bill would correct a statutory reference.
Notification Requirements of Changes in Key Positions
of Bank and Trust Companies (Section 3)
The bill would require each bank and trust company to
file an oath with the Commissioner within 15 days of the
election of any officer or director. The bill would require each
bank and trust company to notify the Commissioner of:
●Any newly appointed chief executive officer,
president, or directors prior to the commencement
of such individuals’ duties; and
●Any executive officer, president, or director that is
voluntarily or involuntarily relieved from the position
duties within five business days.
2- 139 Mergers Resulting in a National Bank (Section 4)
The bill would require the charter of a bank or trust
company that will cease to exist after an approved merger to
be deemed void on the next business day immediately
following the merger consummation date.
Administrative Hearing Requirement on Cease-and-
Desist Orders (Section 5)
The bill would require administrative hearings that
determine whether a cease-and-desist order should be
issued by the State Banking Board be held in accordance
with the KAPA.
Exemption from Commissioner’s Approval to Lawfully
Engage in Banking or Trust Company Business
(Section 6)
The bill would exempt banks with federally insured
deposits that are either chartered in Kansas, another state, or
the federal government from first having to obtain authority
from the Commissioner to lawfully engage in the banking
business.
The bill would also provide that a federally insured bank
or credit union with authorization from another state or the
federal government to engage in trust business in Kansas
would be exempt from the provision that makes it unlawful for
any individual, firm, or corporation to advertise, publish, or
otherwise communicate that such entity is engaged in the
trust business without first having obtained authority from the
Commissioner.
3- 139 Documents Required for an Application for the
Contracting of Trust Services (Section 7)
The bill would remove the requirement that the following
certified copies be provided with the application made to the
Commissioner for the contracting of trust services:
●The written action taken by the board of directors
of the originating trustee or financial institution
approving the agreement; and
●Proof of publication of notice that the applicant
intends to file or has filed an application.
If the originating trustee or financial institution is
transferring more than 50 percent of the financial institution’s
total fiduciary accounts, the bill would reinstate the
requirement that certified copies of the two documents
referenced above be included with the application for the
contracting of trust services.
Relocation of a Trust Office (Section 8)
The bill would extend the Commissioner’s authority to
exempt from the application process a trust company
proposing to relocate an existing trust service office to less
than 10 miles from the trust company’s existing location.
[Note: Current law allows such an exemption only for a
relocation less than 1 mile from the existing location.]
If an exemption is granted, the bill would require each
trust company to document the written action taken by the
board of directors of the trust company approving the
proposed relocation of the trust office and all other required
regulatory approvals.
4- 139 Requirements for Non-resident Trust Companies to Do
Business in Kansas (Section 9)
The bill would allow the Commissioner to require any
non-resident trust company to meet the greater of the
requirements stated under the Banking Code or the laws of
the non-resident trust company’s home state required for a
Kansas trust company to do business in the non-resident
trust company’s home state.
Additional Statutes Repealed
The bill would repeal the following statutes not amended
in the bill:
●KSA 9-2101, pertaining to the issuance by the
Commissioner of a certificate of authority as a bank
to a trust company authorized to accept deposits
upon the surrender of such trust company’s
charter; and
●KSA 16-842, pertaining to when a credit cardholder
is liable for unauthorized use and the actions for
enforcement of liability.
Background
The bill was introduced by the Senate Committee on
Financial Institutions and Insurance at the request of a
representative of the Office of the State Bank Commissioner
(OSBC).
Senate Committee on Financial Institutions and
Insurance
In the Senate Committee hearing, proponent testimony
was provided by representatives of the Kansas Bankers
Association (KBA) and the OSBC.
5- 139 The OSBC representative stated the bill would make key
changes that affect trust companies. The OSBC
representative stated allowing an originating trustee to
transfer fiduciary assets to a contracting trustee without
written action by the originating trustee’s board of directors or
proof of publication in a newspaper if less than 50 percent of
the originating trustee’s fiduciary assets could allow a top ten
asset size bank to transfer fiduciary assets to a Kansas trust
company.
The OSBC representative stated the bill would increase
the distance allowed when a trust company relocates, making
it easier to find a new office location. The OSBC
representative noted the bill could ensure out-of-state trust
companies doing business in Kansas adhere to the same
requirements as a Kansas trust company doing business in
its home state if such requirements are stricter than the
Banking Code.
The KBA representative stated the bill would clean up
provisions within the Banking Code and other banking
statutes to keep them streamlined and up-to-date. The KBA
representative stated the amendment proposed in the KBA
testimony was withdrawn.
No other testimony was provided.
House Committee on Financial Institutions and Pensions
In the House Committee hearing, proponent testimony
was provided by a representative of the OSBC, who generally
stated the bill would make Kansas more attractive to certain
trusts and make minor changes to the Banking Code.
Written-only proponent testimony was provided by a
representative of the KBA.
No other testimony was provided.
6- 139 The Committee amended the bill to change the effective
date to publication in the Kansas Register.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the OSBC indicates that
it has only had one trust company relocate in the last three
years from its previous location. The OSBC indicates the
agency would be able to use existing resources to approve
these relocations.
The Judicial Branch indicates enactment of the bill could
increase the number of cases filed in district courts because it
expands the crime of unlawfully engaging in banking or trust
company business. These provisions of the bill would
increase time spend by district court judicial and nonjudicial
personnel in processing, researching, and hearing cases.
Since the crime committed under the bill would carry a Class
A, nonperson misdemeanor penalty, there could be additional
supervision of offenders. The enactment of the bill could
increase the collection of docket fees, fines, and supervision
fees that would be deposited into the State General Fund.
The agency indicates it is unable to estimate a fiscal effect.
The Office of Administrative Hearings believes the
number of additional cases that might come before the
agency and require an actual hearing under KAPA would be
minimal. The agency states it would be able to absorb the
increase caseload within existing resources.
Any fiscal effect associated with the bill is not reflected
in The FY 2026 Governor’s Budget Report.
State Banking Code; definitions, terms, and conditions; hearings; Kansas
Administrative Procedure Act; board member change notification; bank charters;
mergers; State Bank Commissioner
7- 139