Kansas Bankers Prompt Legislative AuditOf CU Regulator

TOPEKA, Kan. - (12/28/04) -- The state legislature's Post AuditCommittee, based on prompting from the Kansas Bankers Association,has initiated a review of the state's oversight of credit unions.The review, formerly requested by the legislature's FinancialInstitutions and Insurance Committee, will try to determine whetherthe Department of CUs is properly overseeing interstate branching,field of membership and safety and soundness of the 98 statechartered credit unions in Kansas, according to Chuck Stones,president of the KBA, who convinced the legislature to ask for theaudit. Stones said their interest was prompted by the AmericanBankers Association's 'Operation Credit Union' which seeks to shinethe spotlight on credit union practices and regulatory oversight inthe states, but he insisted it is not an attack on the taxexemption. "Frankly, I think credit unions are paranoid andsingle-minded in what the banking industry may have in mind forthem," he told The Credit Union Journal Monday. The bankers'concern, he said, has been piqued by the operations of credit uniongiant Community America CU, which serves the entire state of Kansasbut is headquartered in Kansas City, just over the state line; andby the oversight of U.S. Central CU, the central bank for creditunions, which is regulated by the state, among other things, saidStones. "There's some interesting things going on in Kansas," saidStones. "I'm not saying that (CU Supervisor) Jerel Wright is doinga bad job. We just want a third-party, independent, unbiased reviewof the whole situation."