TOPEKA, Kan. — The bankers' proposed field of membership bill, passed by the state Senate last week and is now due for a vote by a House committee today.

The bill indeed presents “new challenges” to CUs in how they can expand and merge in the future, the state's top regulator warned Monday.

Writing in the agency's quarterly newsletter, John P. Smith, administrator of the Kansas Department of Credit Unions, urged CUs “forbearance” as new application forms and procedures are developed considering “it appears” the FOM bill drafted by the Kansas Bankers Association is headed for passage this session.

For one thing, wrote Smith, nine CUs, mostly in Topeka and Wichita, will have to “reconfigure” their FOM prior to Jan. 1, 2009 when those provisions limiting future statewide branching take effect.

CUs in those areas, while agreeing to what was described as “compromise legislation” to avoid a banker lawsuit, have complained their out-state indirect programs will be impacted in reducing membership growth.

“Credit union boards of directors and managers must carefully consider adoption of the

FOM that will 'best' serve their membership,” wrote Smith noting that the FOM bill, if enacted, grandfathers existing FOMs of CUs outside of designated metro areas with population of 1 million or more. Some CEOs have complained the language of the FOM bill is “convoluted.”

While it objected to the FOM provisions in the Senate, the Kansas Credit Union Association remains officially “neutral” on the bill as it progresses through the legislature and heads to Gov. Kathleen Sebelius, a Democrat.

Instant Insights /

Kansas Regulator Warns of 'Challenges'

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