A Kansas law that takes effect July 1 will leave Iowa and Nebraska as the only states where the banking commissioner can be a bank employee.

Kansas's top regulator will no longer be able to work as a bank officer, voting director, employee, or paid consultant of any state or national bank or bank holding company.

The new law, like the 107-year-old one it is replacing, will continue to require a commissioner to have at least five years of experience working in a bank. However, the new law eases the condition a bit by allowing the commissioner's experience to be with any commercial bank in Kansas. The old law required the commissioner to work at a Kansas-chartered bank.

The new law will also give the state's leading regulator new duties. Consumer credit companies that do not take deposits will begin reporting to the banking commissioner next month.

The issue nudged W. Newton Male to resign as Kansas' banking commissioner last December. Mr. Male, chairman of Prairie State Bank in Augusta, opposed the bill and said he quit so lawmakers could back the legislation without feeling disloyal to him. Mr. Male served two stints as the state's commissioner, in 1987-1991 and 1995-1998.

The new law's chief sponsor was state Sen. Don Steffes, a longtime critic of the banking industry. Sen. Steffes complained in particular that Mr. Male had not alerted the Legislature that banks-including his own-were using a Kansas law to escape some state income tax.

Under that law, Kansas-chartered bank holding companies created "investment subsidiaries" that could shield bank profits. The loophole was closed last year.

Sen. Steffes also argued that a banking commissioner could not effectively regulate nearly 300 state banks and thrifts while working another job.

But "the thing that irritated me was Sen. Steffes' attempt to assassinate my character," Mr. Male said last week. "Those that know me well know I wasn't cozy with bankers."

Gov. Bill Graves is expected to appoint a commissioner this month. Former deputy Judy Stork has been acting commissioner.

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