State of Kansas
State Bank Commissioner
Special Order 1995-4
This Order issued this 3rd day of August, 1995, by the State Bank Commissioner.
Whereas, 12 U.S.C. § 371 allow a national bank to make, arrange, purchase or sell loans or extensions of credit secured by liens on interests in real estate; and,
Whereas, the Comptroller of the Currency has interpreted a national bank power to "arrange" real estate loans, as provided by 12 U.S.C. § 371, to include authority for a national bank to enter into an agency agreement whereby the bank, as agent, would perform services for a third party lender, including advertising loans, disbursal of loan applications, assisting in completion of loan applications, accepting applications, qualifying applications according to pre-established lending standards, and furnishing applicants with disclosures and information required by law to be provided to loan applicants; and,
Whereas, state law provides no similar authority for state banks to enter into agency agreements with a third party lender for the purpose of "arranging" loans for the third party lender; 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 enter into agency agreements with third party lenders to arrange loans and extensions of credit secured by liens on real estate, and to engage in those activities which the Comptroller has determined to be incidental to the activity of "arranging" loans, as permitted by 12 U.S.C. § 371.
It is further ordered, pursuant to K.S.A. 9-1715(b) as amended, that the terms of this special order shall become effective August 3rd, 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
