Committee hears SB 139 to amend Kansas banking code; trust-company rules, relocation distance and reciprocity among key changes

The Senate Committee on FINI heard proponent testimony on Senate Bill 139, a broad update to parts of the Kansas banking code that would change filing timelines, trust‑company rules, and reciprocity standards for nonresident trust companies.

Jason Thompson of the Revisor’s office summarized the bill’s major changes: it adds a reference to the Kansas Administrative Procedure Act so hearings will be conducted under that act; it modifies rules about board oaths and required notice when a bank or trust executive departs or is appointed; it alters merger provisions to ensure a charter is void the next business day after a merger’s effective date; and it exempts some federally insured institutions from state‑level approval in specified circumstances. Thompson noted the bill, if enacted, would take effect July 1 and that it passed the Senate 40–0.

Brock Breyler, general counsel for the Office of the State Bank Commissioner (OSBC), testified in support and walked the committee through the trust‑company provisions he described as the most important changes. Breyler said section 7 would allow certain transfers of fiduciary assets to proceed without a written action by the originating trustee’s board or newspaper publication when the transfer involves less than 50% of the originating trustee’s fiduciary assets; the change responded to a request by a large, publicly traded institution reluctant to use newspaper publication or board action for a relatively modest transfer.

Section 8 would raise the distance threshold for when notice and publication requirements apply to relocation of a trust office from 1 mile to 10 miles. Breyler said trust companies sometimes receive short notice from landlords and that a 1‑mile threshold is “too short” in some markets; staff told the committee one firm that would have been affected in the past three years supported 10 miles.

Section 9 would require the commissioner to apply the more stringent of Kansas law or a nonresident trust company’s home‑state requirements when deciding what conditions to impose, Breyler said. He framed the change as “apples to apples” reciprocity so Kansas trust companies operating in other states face comparable obligations when counterpart states require them.

Breyler also asked repeal of two statutes he described as obsolete — K.S.A. 9-2101 and K.S.A. 16-842 — and explained a technical adjustment to merger timing designed to align statutory timing with Federal Deposit Insurance Corporation rules.

Representative White asked why the committee chose 10 miles rather than a larger distance; Breyler said the figure was somewhat arbitrary but that a single trust company that would have been affected endorsed 10 miles. Representative Neely asked whether federally chartered banks still require state permission; Breyler confirmed federal law allows federally chartered institutions to do business without state approval and said the bill clarifies that reality in statute.

The Kansas Bankers Association provided written proponent testimony. No opponents or neutrals appeared at the hearing. The committee closed the SB 139 hearing and said it would take final action on the bill at a later meeting.