State of Kansas
State Bank Commissioner
Special Order 1995-2
This Order issued this 9th day of May, 1995, by the State Bank Commissioner.
Whereas, K.S.A. 9-1112, with limited exception, expressly prohibits a Kansas state bank from making a loan "...on its own shares of stock or the stock of the bank's parent company...; and,
Whereas, 12 U.S.C. §83, with limited exception, also expressly prohibits a national bank from making a loan "...on the security of the shares of its own capital stock..." but does not contain a prohibition against a national bank making loans on the security of the stock of the national bank's parent company; and,
Whereas, the Comptroller of the Currency has interpreted the absence of any express prohibition to constitute an allowance for a national bank to make loans on the security of the stock of its parent company; and,
Whereas, K.S.A. 9-1715 provides the state bank commissioner with the power to authorize state banks or trust companies to engage in any activity in which such banks or trust companies could engage were they operating as national banks; and,
Whereas, the Commissioner deems the issuance of this special order to be reasonably required to preserve and protect the welfare of state banks and to promote the competitive equality of state and national banks,
It is therefore ordered that Kansas state banks shall have the authority to make loans on the security of the stock of the bank's parent company.
It is further ordered, pursuant to K.S.A. 9-1715(b) as amended, that the terms of this special order shall become effective May 9th, 1995 and shall remain in full force and effect until amended or revoked by the State Bank Commissioner.
It is so ordered.
State Bank Commissioner
Frank D. Dunnick
