TOPEKA, Kan. — Following negotiations between the bank and credit union lobbies, the Kansas legislature appears to be headed this week toward passing compromise legislation putting new limits on field of membership expansion.
The legislature puts new limits on state-chartered Kansas credit unions, but stops short of using language in federal FOM statutes.
The proposed bill drafted by the Kansas Bankers Association and agreed to by the Kansas Credit Union Association would restrict future statewide branching by CUs in certain metro areas of the state based on population size.
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An earlier version of the bill would have restricted new CU branches to those with 3,000 members.
"Yes, it's a political compromise and it all depends on the definition of compromise since we were able to retain grandfathering and other features which clarify field of membership" said Erich Schaefer, KCUA chairman and president/CEO of Golden Plains CU, Garden City.
For his CU, with 10 branches in western Kansas, there would be no immediate disruption "but we could not branch statewide in the future and that would have an impact on our indirect lending program that we have with dealers."
The FOM bill, which on Tuesday cleared the Kansas Senate Financial Institutions Committee, is due for a Senate vote perhaps this week. Schaefer said Kansas bankers apparently patterned their bill though not as strict after a similar measure in Missouri which wound up in lengthy court litigation and also an eventual legislative compromise.
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