OSBC tells Kansas committee TEFI rules limit oversight as agency seeks EWA staffing

Jesse Becker, director of finance and administration for the Office of the State Bank Commissioner, told the Committee on Financial Institutions and Pensions that the agency oversees roughly 13,900 regulated entities and is asking for a $14,100,000 fee-funded budget in FY27 to sustain operations.

Becker told lawmakers the Kansas TEFI Act prevents the OSBC from conducting safety-and-soundness examinations on the TEFI, bars the agency from reviewing the entity’s earnings, and requires goodwill be included when reporting capital — limitations the agency said create weaker oversight compared with other state-chartered institutions. “This isn’t by choice,” Becker said, describing the three statutory directives that distinguish the TEFI from other regulated entities.

On examinations, Becker said the agency follows CAMELS standards and alternates exams with the FDIC and Federal Reserve when required. He gave a 2025 snapshot: 153 state-chartered banks, about $219 billion in assets collectively, 31 active trust departments and 13 trust companies. Becker noted a recent decline in the number of state-chartered banks but emphasized branch locations have not materially vanished and that consolidation is a national trend.

Becker also flagged earned-wage-access (EWA) oversight after passage of HB2560. Kansas now has 26 registered EWA providers and six applications pending, he said, and requested two FTEs dedicated to EWA oversight, to be funded by licensing fees. “Participation has been significantly higher than we anticipated,” Becker said, explaining the desired positions would support licensing, examinations, and enforcement as needed.

The presentation included OSBC consumer-education activity (more than $6 million in grants since 1999 and $241,550 awarded in FY25), and two recent grants: $47,500 to the Kansas State University Foundation for teacher professional development and funding for SparkWheel’s student outreach. Becker closed by previewing four legislative proposals OSBC plans to introduce in 2026: a Virtual Currency Kiosk Consumer Protection Act to regulate retail crypto kiosks; establishment of a charitable foundation for education; probate-code amendments to strengthen institutional accountability; and an amendment to the Financial Institutions Information Security Act to cover EWA providers.

Committee members asked about the OSBC’s IT-examination staffing (Becker said the agency hires IT professionals and trains them on bank supervision) and about whether declining state charters will create geographic banking deserts (Becker said branch counts have stayed relatively stable). The chair thanked the OSBC for the presentation and said the committee would coordinate follow-ups.

The committee did not take formal action on the OSBC’s proposed bills during the meeting; Becker’s presentation was for committee oversight and to request legislative support going forward.