Memo RM1994-18
July 11, 1994
Chief Executive Officer of a Kansas State Chartered Bank
Dear Kansas Banker:
This communication is provided to update you on various issues, memoranda, policy changes, etc. within the Office of the State Bank Commissioner. This office has placed as a priority our commitment to keep you informed of the changes occurring within the department that affect your institution. I recently completed a statewide tour, visiting eight locations throughout the state and meeting with over 100 bankers. I greatly appreciate your attendance at these interaction sessions and value your input. Only through such meetings and your communication with this office can we understand your problems and concerns with banking, regulation, and examination issues. As we did last year, the comments received this year will be compiled and changes to address the matters will be discussed by me and my senior staff. As a result of last year's tour, this office has begun the practice of prenotification on non-problem institutions. From the feedback we have received, this has worked well for both our staff and the bankers. Also, you will find communications from this office have become more frequent. Again, this resulted directly from comments received from bankers. We appreciate your comments. Please never hesitate to contact this office. We are always glad to meet with you on a one-to-one basis.
I do want to share with you some memoranda that have been prepared by my staff during the last two months to clarify the department's position on various topics. Those topics are listed below and are included as attachments to this letter. I also want to let you know of the change in scheduling of bank examinations that our department is attempting to manage. Currently, the Kansas Statutes require this department to examine all of our state chartered banks, trust companies, and savings and loan associations once every 18 month period. This law allows our agency to accept a federal examination of the institution in lieu of our actual presence. As our federal counterparts' guidelines were no more restrictive, this system of alternating examinations worked very well in the past. However, Congress imposed a more restrictive 12 month examination schedule on all federal agencies; FDIC, OCC, and the Federal Reserve Bank alike. If our agency wishes to maintain a cooperative agreement of alternating examinations with our federal counterparts, it affects the frequency of all bank examinations, state or federal. Because of the restraints mandated by the federal authorities on the federal regulatory bodies, they must examine each institution as close to a 12 month time frame as possible. They are allowed to accept our examination once during a 24 month time frame. Unfortunately, on occasion, this results in examinations occurring six to eight months since the last visit. Our agency is trying to resolve this issue by coordinating our dates with the federal regulators, however, the 12 month mandate for the federal regulators, leaves minimal flexibility. Please voice any concerns you have with the timing of your examinations to our office so we can be better informed of such. Additionally, comments may be appropriate to the Kansas congressional delegation as it relates to the federal regulator's 12 month frequency on non-problem institutions.
The following is a listing of memoranda included in this mailing:
1. Extension to ten years of DPC Other Real Estate holdings
2. Treatment of Repurchase Agreements with Municipalities
3. Regulation O and the "pay all" system
4. Changes in call report relating to FAS 66
5. FAS 115 and K.S.A. 9-910 - how they interact
6. Sale of Bank Assets to Bank Employees
Please do not hesitate to contact this office if you have questions relating to these memoranda or other issues. We are pleased to be of service to you.
Respectfully,
Frank D. Dunnick
Bank Commissioner
See Memos 1994-12, 1994-13, 1994-14, 1994-15, 1994-17
