State of Kansas
State Bank Commissioner
Special Order 1995-6
This Order, is hereby issued this 2nd day of October, 1995 by the Kansas State Bank Commissioner (commissioner) pursuant to K.S.A. 9-1715, as amended.
Whereas, pursuant to 12 C.F.R. § 5.34, a national banking association may own the stock of a subsidiary established and operated for the purpose of owning, holding, and managing all or part of the parent bank's securities portfolio; and,
Whereas, no provision of Kansas law presently allows a Kansas state bank to own the stock of a subsidiary established and operated for the purpose of owning, holding, and managing all or part of the parent bank's securities portfolio; and,
Whereas, K.S.A. 9-1715, as amended, grants to the commissioner "... the power to authorize any or all state banks to engage in any activity in which such banks could engage were they operating as national banks at the time such authority is granted..."; and,
Whereas, the Commissioner deems the issuance of this special order to be reasonably required to preserve the welfare of state banks and to promotecompetitive equality of state banks and national banking associations;
It is therefore ordered, that a Kansas state bank may own the stock of a subsidiary established and operated for the purpose of owning, holding, and managing all or part of the parent bank's securities portfolio.
It is further ordered, that the subsidiary shall not own, hold or manage securities for any party other than the parent bank, and the parent bank shall own 100% of the stock of the subsidiary.
It is further ordered, that at least 15 days prior to the establishment of the subsidiary, the bank shall provide written notification to the commissioner of its intention to establish and operate a subsidiary in accordance with the authority provided by this order.
It is further ordered, that the required notification shall detail the establishment and operation of the subsidiary, including without limitation, the proposed date of establishment of the subsidiary, the expected costs of establishment and operation of the subsidiary, the proposed name and location of the subsidiary, the staffing requirements of the subsidiary, and any additional information deemed necessary by the commissioner.
It is further ordered, that, unless otherwise provided by statute or regulation, all banking laws and regulations applicable to the operations of the parent bank shall be equally applicable to the operations of the subsidiary.
It is further ordered, that the pertinent book figures of the parent bank and the subsidiary shall be consolidated for the purpose of applying all applicable statutory limitations, including without limitation, K.S.A. 9-904, K.S.A. 9-905, K.S.A. 9-906, K.S.A. 9-910, K.S.A. 9-911, K.S.A. 9-912, K.S.A. 9-1102, and K.S.A. 9-1104.
It is further ordered, that the subsidiary shall be subject to examination and supervision by the Office of the State Bank Commissioner in the same manner and to the same extent as the parent bank. The expense of examination and supervision of the subsidiary shall be borne by the parent bank and the parent bank shall reimburse the Office of the State Bank Commissioner for any special expenses, including travel costs, associated with examination or supervision of the subsidiary.
It is further ordered, that if, upon examination, the commissioner finds that the subsidiary is being operated in an unsafe and unsound manner, the commissioner shall direct the bank to take appropriate remedial action, which may include dissolution of the subsidiary.
It is further ordered, that pursuant to K.S.A. 9-1715(b), as amended, the terms of this special order shall become effective October 2nd , 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
