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Kansas FOM bill is on its way to governor
TOPEKA, Kan. (3/31/08)--The Kansas House of Representatives passed a substitute bill for banker-backed Senate Bill 535 by a vote of 115 to 8 Friday morning, and the bill is on its way to the governor's office. The bill would limit the geographic area served by credit unions and create new standards for branching, mergers and field of membership (FOM) changes. It was not amended by either the House or the Senate, said the Kansas Credit Union Association (KCUA). KCUA anticipates that Gov. Kathleen Sebelius will sign the legislation into law. “With this legislative battle put behind us, Kansas credit unions can get back to doing what they do best--serving their members and Kansas consumers," said Marla Marsha, president/CEO of KCUA. "Our industry can now wholly focus on their mission of 'people helping people,' a mission that is more important than ever as the economy continues to struggle,” she added. The legislation removes any further legislative or legal threats to credit unions and will provide a long-term standard for interpreting the Kansas FOM statute, the league said earlier last week. The league worked to amend the original bill, which was backed by the Kansas Bankers Association, with the substitute's language. The substitute bill would:
* Grandfather all existing credit union members and their immediate family members, all existing occupational and associational groups, current geographic fields of membership up to one million in population, and all current branch counties; * Outline geographic FOM limitations of up to 500,000 in population using multiple contiguous political jurisdictions for credit unions not headquartered in a metropolitan statistical area (MSA); * Limit credit unions headquartered in an MSA to that MSA plus the counties that share an immediate border until they hit one million in population; * Provide an escalator formula to allow for population growth in MSA areas; and * Continue to allow for multiple common bonds, given that the occupational and associational groups are located within the geographic field of membership.
After it is signed, the bill would affect nine state-chartered credit unions, which must immediately restrict their current geographic fields of membership because they currently extend beyond the one million in population limit. If signed, the portions of the legislation addressing future FOM changes would go into effect July 1. The grandfathering portion of the legislation would go into effect on Jan. 1, 2009, to give Kansas state-chartered credit unions and the Kansas Department of Credit Unions time to comply with the changes.


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