17-5830.   Trust powers; generally.The commissioner is authorized and empowered to grant by special permitto any savings and loan association organized under the laws of this statewhose principal office is located in the state of Kansas, the right to actas trustee, corporate agent or in any other fiduciary capacity in whichtrust companies and banks incorporated under the laws of Kansas are permittedto act. The commissioner may approve and issue a special permit to suchstate savings and loan association to act in one or more of such fiduciarycapacities. Any state savings and loan association having been grantedtrust authority by the commissioner may add "and trust company" to its corporatename. Such trust powers shall be subject to the following:

      (a)   The association exercising any or all of the powers enumerated inthis section shall segregate all assets held in any fiduciary capacity fromgeneral assets of the association, and shall keep a separate set of booksand records showing in proper detail all transactions engaged in under authorityof this section. Such books and records shall be open to the inspectionof, and subject to the supervision of, the commissioner;

      (b)   the Kansas bank commissioner, may have access to examination reportsmade by the savings and loan commissioner insofar as such reports relateto the trust department of such association but nothing in this sectionshall be construed as authorizing such state banking authority to examinethe books, records and assets of such associations;

      (c)   no association shall receive in its trust department deposits of currentfunds subject to check or the deposit of checks, drafts, bills of exchange,or other items for collection or exchange purposes. Funds deposited orheld in trust by the association awaiting investment shall be carried ina separate account and shall not be used by the association in the conductof its business unless it shall first set aside in the trust department,United States bonds or other securities approved by the commissioner;

      (d)   in the event of the failure of such association, the owners of thefunds held in trust for investment shall have a lien on the bonds or othersecurities so set apart in addition to their claim against the assets ofthe association;

      (e)   if at any time Kansas law requires trustees to deposit securitieswith the state for the protection of private or court trusts, associationsso acting shall be required to make similar deposits, and securities sodeposited shall be held for the protection of private or court trusts, asprovided by Kansas law. Associations in such cases shall not be requiredto execute the bond usually required of individuals if corporate trusteesunder similar circumstances are exempt from this requirement. Associationsshall have the power to execute such bond when so required of corporatetrustees by the laws of the state of Kansas;

      (f)   in the event the laws of Kansas require a corporation acting as trustee,executor, administrator, guardian or conservator, to take an oath or makean affidavit, the president, any vice president, or trust officer of suchassociation may take the necessary oath or execute the necessary affidavit;

      (g)   it shall be unlawful for any association to lend any officer, director,or employee any funds held in trust under the powers conferred by this section.Any officer, director, or employee making such loan, or to whom such loanis made, may be fined not more than $5,000, or imprisoned not more thanfive years, or may be both fined and imprisoned, in the discretion of the court;

      (h)   in passing upon applications for permission to exercise the powersenumerated in this section, the commissioner may take into considerationthe amount of capital and surplus of the applying association, whether ornot such capital and surplus is sufficient under the circumstances of thecase, the needs of the community to be served, and any other facts and circumstancesthat seem to the commissioner proper, and may grant or refuse the applicationaccordingly. In any event no trust authority permit shall be issued toany association having a capital and surplus less than the capital and surplusrequired by Kansas law applicable to Kansas banks and trust companies;

      (i)   any association desiring to surrender its right to exercise the powersgranted under this section, in order to relieve itself of the necessityof complying with the requirements of this section, or to have returnedto it any securities which it may have deposited with the state authoritiesfor the protection of private or court trusts, or for any other purpose,may file with the commissioner a certified copy of a resolution of its boardof directors signifying such desire. Upon receipt of such resolution, thecommissioner may issue to such association a certificate certifying thatsuch association is no longer authorized to exercise the powers grantedby this section, subject to compliance with all reasonable terms and conditionsset forth by the commissioner as a condition to being relieved. Upon theissuance of such a certificate, the association shall no longer be subjectto the provisions of this section and shall be entitled to have returnedto the association any securities which it may have deposited;

      (j)   in addition to the authority conferred by this section and all otherapplicable laws and regulations, if, in the opinion of the commissioner,an association is unlawfully or unsoundly exercising or has unlawfully orunsoundly exercised, or has failed for a period of five consecutive yearsto exercise, the powers granted by this section or otherwise fails or hasfailed to comply with the requirements of this section, the commissionermay conduct a hearing in accordance with the provisions of the Kansasadministrative procedure act to determine whether an order revokingauthority to exercise such powers should issue against the association. Inthe event the commissioner finds that grounds for revocation have beenestablished, the commissioner may issue and serve upon the association anorder prohibiting it from accepting any new or additional trust accountsand revoking authority to exercise any and all powers granted by thissection, except that such order shall permit the association to continue toservice all previously accepted trust accounts pending the expeditiousdivestiture or termination.The revocation order shall become effective not earlier than the expirationof 30 days after service of such order upon the association so served andshall remain effective and enforceable except to such extent as it is stayed,modified, terminated, or set aside by action of the commissioner or a reviewing court.

      History:   L. 1981, ch. 105, § 6; L. 1988, ch. 356, § 64; July 1, 1989.