State of Kansas
State Bank Commissioner
Special Order 2000-3
This order, is hereby issued this 7th day of August, 2000 by the Kansas State Bank Commissioner (Commissioner) pursuant to K.S.A. 9-1715, as amended.
Whereas, the Comptroller of the Currency, pursuant to 12 C.F.R. 5.36 and various Interpretive Letters, including but not limited to OCC Interpretive Letter Nos. 697, 732 and 889, has ruled that a national bank has authority to acquire a minority interest in a corporation engaged solely in activities which are permissible for the bank itself to engage in, provided certain requirements or standards are satisfied; and
Whereas, pursuant to 12 C.F.R. § 7.1010, maintaining and operating a postal substation in accordance with rules and regulations of the United States Postal Service and advertising, developing and extending those services for the purpose of attracting customers to the bank is a permissible activity for a national banking association to engage in directly; and,
Whereas, no provision of Kansas law presently allows a Kansas state bank to acquire a minority interest in a corporation engaged in activities that the bank itself could engage in; and
Whereas, The Peoples Bank, Pratt, Kansas, has requested authority to acquire a minority interest in a Kansas corporation which will engage in postal substation activities; and
Whereas, K.S.A. 9-1715, as amended, grants to the commissioner "... the power to authorize any ... state bank(s) 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 promote competitive equality of state banks and national banking associations;
It is therefore ordered, that The Peoples Bank, Pratt, Kansas, may acquire a minority interest in stock of a Kansas corporation that engages in postal substation activities, provided the following standards are met:
1. The services to be provided by the corporation are activities that a national bank could engage in directly through operation of a postal substation;
2. The corporation's articles of incorporation or bylaws specifically limit its activities to those activities a national bank could perform through a postal substation, and the bank has the ability to prevent the corporation from engaging in activities that do not meet the foregoing standard, or to withdraw its investment; and
3. The bank's potential loss exposure is limited to the amount of its investment in the corporation.
It is further ordered, that pursuant to K.S.A. 9-1715(b), as amended, the terms of this special order shall become effective August 7th, 2000 and shall remain in full force and effect until amended or revoked by the State Bank Commissioner.
It is so ordered.
State Bank Commissioner
Franklin W. Nelson
