Kansas Collateral Pool FAQ

The Kansas Collateral Program is a state-level system created by the 2025 Kansas Legislature through HB 2152 to protect public money deposited in Kansas banks. It requires banks to pledge safe investments (such as U.S. government securities) as collateral for public deposits that exceed FDIC insurance limits. The program pools collateral and monitors deposits to ensure public funds are secured at 102% of the uninsured amount at all times.

Collateral is required to protect taxpayer funds when public entities (like the State, cities, counties, and schools) deposit money in banks. If a bank fails or can’t return public funds, the pledged collateral ensures those funds remain secure beyond what FDIC insurance covers.

All banks (qualified depositories) that hold public funds in Kansas are required to participate. Also, all state and local units of government in Kansas must participate in the program. After implementation of the pool, the public entity’s bank will report and pledge all collateral to the KCP instead of to each public entity in the State of Kansas. For the public entity, this means that the security of deposits will be monitored by the Kansas State Treasurer's office, and they will see a reduction in administrative time and expense. They may also see lower audit expense by having all audit information in one location. 

A “public entity” includes the State of Kansas and any county, city, school, or other political subdivision that holds public money deposited in banks.

Participating banks must report to the State Treasurer at least monthly, including:

• Amount of public money on deposit

• Amount covered by FDIC insurance

• Amount that is uninsured

• Collateral pledged (with identifiers, market value, maturity date)

• Contact information for public entities represented

This ensures the pool maintains adequate collateral coverage.

If a bank’s pool of pledged collateral falls below the required percentage or if an institution defaults, the Collateral Pool has procedures in place for recovery and to ensure accountability, protecting the public funds.

The provisions of the Kansas Collateral Pool established in HB 2152 are scheduled to go into effect on January 1, 2026.

Our Treasury Management department is available to discuss options and help to answer your questions. Our team is committed to making this process smooth and straightforward, and we greatly value our customers' relationships with Union State Bank. Complete a contact us form here, or call the Treasury Department at 620-741-3069.     

 

The Collateral Pool page of the Kansas State Treasurer’s Office website includes a contact email address for questions about participation, reporting, or other details: collateralpool@treasurer.ks.gov

Union State Bank offers the option to move your deposits to IntraFi, a solution that provides attractive market interest rates, enhanced liquidity, and full FDIC protection through a single banking relationship.

The IntraFi approach streamlines deposit and collateral management, complies with K.S.A. 12-1675, K.S.A. 75-4237, and K.S.A. 9-1407 (as amended), and meets all conditions for reciprocal deposit programs. By leveraging IntraFi’s nationwide network, government depositors can access millions in aggregate FDIC insurance, offering a simplified and compliant alternative to the State of Kansas Pooled Collateral Method.

Learn more about IntraFi here.