►
Description
00:00:00 – call to order and roll call
00:01:44 – Consideration of Referred Regulations
00:04:00 – What a failure of Silicon Valley Bank means for Kentucky Banks
01:02:10 – Economic Update
01:31:12 – Community Banking Update
01:50:13 – Creation of a Kentucky All-payer Claims Database
A
I
think
it
is
9
30
now
and
we
have
had
a
quorum
roll
in
based
on
my
count
up
here.
So
we
will
call
the
first
meeting
of
this
interim
joint
committee
on
Banking
and
insurance
to
order
at
this
time.
If
everyone
would
please
move
towards
your
seat,
silence
your
cell
phones,
Madam
Secretary,
we'll
start
with
you
calling
the
roll.
Please
consider.
D
E
B
A
F
A
A
G
C
A
H
A
C
A
A
Now
that
we
have
the
voting
business
behind
us
this
morning,
we
will
get
started
with
our
presenters
that
we
have
for
today.
If
our
folks
from
the
Kentucky
Bankers,
Association,
Ballard,
Cassidy
and
Dr
Charles,
skip
hedgeback
president
CEO
of
City
National
Bank
would
come
forward,
you
all
and
and
John
Cooper.
If
you
all,
would
identify
yourself
for
the
record
please
and
then,
if
you
all,
would
proceed
with
your
presentation.
J
I
All
right,
Mr,
chairman
members
committee,
if
you
don't
mind,
I,
will
introduce
the
entire
group
up
here
this
morning.
My
name
is
Ballard
Cassidy
I'm
with
the
Kentucky
Bankers
Association,
and,
to
my
farthest
right
we
also
have
John
Cooper,
who
is
the
legislative
consultant,
Kentucky
Bankers
association
with
us
here
today.
I
You
have
Dr
hatchback's
Vita
and
resume
in
front
of
you,
I
think
I
should
have
and
additional
personal
history,
so
I
will
not
waste
your
time
going
through
that
again
with
you
here
this
morning,
except
I
would
like
to
add
something
that
isn't
in
the
resume.
In
earning
his
PhD
in
economics,
from
Indiana
University
Dr
hatchback
did
his
dissertation
on
causes
of
bank
failures
and
their
predictability
based
upon
financial
performance.
I
He
is
that
rare
individual
in
our
industry
that
possesses
both
academic
and
practical
operational
experience,
and
he
uses
it
well
as
the
CEO
of
City
National
Bank,
which
is
consistently
regarded
as
one
of
the
most
profitable
Bank
franchises
in
the
United
States,
while
at
the
same
time
maintaining
one
of
J.D
powers
highest
ranking
for
customer
service.
It's
my
privilege
to
present
Dr
Charles
skip
hatchback.
J
Mr
chairman
members
of
the
committee,
thank
you
for
inviting
me
to
speak
to
you
today
and
thank
you
for
your
interest
in
the
health
of
the
banking
industry
in
Kentucky.
The
primary
purpose
of
banks
is
to
provide
Financial
intermediation,
which
is
the
critical
component
of
a
strong
and
vibrant
economy.
A
solid
banking
industry
is
important
to
the
state's
economic
success
in
March
and
April
of
this
year.
The
U.S
banking
system
experienced
the
second
third
and
fourth
largest
bank
failures
ever
in
U.S
history.
J
J
The
second
failure
occurred
two
days
later
on
Sunday
March
12th.
When
the
FDIC
announced
that
Signature
Bank,
a
110
Billion
Dollar
Bank
based
in
New
York
City,
would
be
acquired
by
Flagstar
First
Republic
Bank,
a
213
Billion
Dollar
Bank,
the
second
largest
bank
to
ever
fail
in
U.S
history,
failed
on
May
1st
and
became
part
of
JPMorgan
Chase.
J
The
failure
of
these
three
very
large
Banks
highlights
the
challenges
that
the
entire
banking
industry
is
facing
today.
I'll
describe
those
challenges,
why
they're
important
to
banks
in
Kentucky
and
why
they
should
be
important
to
you,
but
first
it's
important
to
say
that
the
banking
industry
is
really
better
position
than
might
be
implied
by
these
very
large
bank
failures.
J
J
I
think
it's
important
for
you
all
to
understand
how
Community
Banks
work
banks
operate
by
accepting
deposits
and
the
most
important
deposits
we
accept
are
those
in
checking
accounts
which
provide
the
critical
lubrication
that
the
economy
needs
to
function
properly.
Banks
pay
interest
on
some
of
these
deposits.
Banks
then
deploy
these
deposits
into
earning
assets,
which
are
predominantly
loans
on
which
we
charge
interest
and,
to
a
lesser
extent
we
deploy
them
in
investment
Securities,
which
also
pay
us
interest.
J
The
difference
between
what
we
earn
on
loans
and
Investments
and
what
we
pay
for
deposits
is
something
we
call
net
interest
income
and
that
spread
between
loan
rates
and
deposit
rates
is
the
primary
driver
of
Bank
earnings.
It's
also
important
to
understand
that
banks
operate
with
relatively
little
Capital
as
compared
to
most
other
businesses.
J
Banks
have
razor
thin
profit
margins
as
compared
to
most
businesses.
Bank
profit
margins
are
generally
about
one
percent
of
assets
and
it's
a
fundamental
principle
of
corporate
finance
that
businesses
within
profit
margins
must
operate
with
high
Leverage.
Often
less
than
10
percent
of
A
bank's
assets
are
funded
by
shareholder
equity,
and
please
understand
more
Equity
is
really
not
a
choice
for
businesses
that
have
than
profit
margins.
Banks
must
be
highly
leveraged.
Of
course.
J
Operating
with
high
leverage
also
implies
that
that
you
are
taking
risk
so
Banks
having
thin
Capital
must
be
especially
careful
with
asset
quality
and
when
Banks
fail,
it
is
usually
due
to
bad
loans,
but
with
a
balance
sheet
of
illiquid
loans
funded
by
highly
mobile
deposits
and
very
little
Capital,
banks
are
also
exposed
to
deposit
runs
prior
to
1933
when
the
FDIC
was
created.
Bank
runs
were
very
common,
so
Banks
make
money
by
accepting
deposits,
making
loans
and
carefully
managing
loan
risks
and
potentially
managing
the
risks
of
deposit
runs.
J
J
With
that
spread,
Banks
earned
enough
to
pay
their
operating
expenses
and
still
make
a
reasonable
profit,
but
without
sufficient
margin
between
loan
yields
and
deposit
costs,
banks
will
struggle
and
that's
exactly
what
happened
in
2020
when
covid
pushed
the
U.S
economy
into
a
significant
economic
downturn.
As
the
stock
market
crashed
and
the
U.S
economy
tumbled
toward
a
recession,
Congress
approved
the
PPP
Loan
program
and
trillions
of
dollars
of
stimulus
checks,
trillions
of
dollars.
J
Those
dollars
were
then
deposited
into
the
banking
system,
deposits,
which
banks
could
not
easily
deploy
into
loans
when
the
economy
was
so
weak.
At
the
same
time,
the
Federal
Reserve
lowered
interest
rates
to
almost
zero.
In
order
to
try
to
sustain
the
economy
as
interest
rates
fell,
consumers
refinance
their
mortgages.
Today,
the
majority
of
Residential
Mortgages
in
the
U.S
are
locked
into
long-term
rates
under
four
percent,
and
businesses
refinance
their
loans
into
lower
rates
as
well.
So
the
margin
between
loan
yields
and
deposit
rates
got
smaller
and
Banks
became
less
profitable.
J
The
difference
between
loan
and
deposit
rates
during
2020
fell
by
20
percent.
Profits
fell
by
40
percent,
with
trillions
of
dollars
on
the
balance
sheet,
and
no
new
loan
demand
and
short-term
interest
rates.
The
lowest
in
U.S
history
Banks
had
to
do
something
with
all
those
new
deposits
to
bolster
earnings
unable
to
make
loans.
J
J
Trillions
in
fiscal
stimulus
didn't
create
new
cars;
it
didn't
create
new
houses,
more
food,
more
cell
phones
or
more
gasoline.
It
just
created
inflation
and
by
2022
inflation,
as
we
all
know,
was
rampant
that
caused
Federal
Reserve.
Despite
what
they
said
before,
to
raise
interest
rates
really
up
the
fastest
straight
in
all
of
recorded
history,
which
was
an
uh-oh
for
banks.
J
Remember
that
before
rates
went
up,
Banks
had
already
locked
in
loans
and
investment
Securities.
At
all
time.
Low
rates
like
1.6
those
loans
in
investment
Securities,
remain
on
our
balance
sheets.
Today,
Banks
had
locked
in
loans
and
Investments
using
trillions
of
new
dollars
of
deposits,
which
came
in
during
covid,
paying
little
or
no
interest
and
normally
as
interest
rates
rise,
Banks
increase
the
rate
they
pay
on
deposits,
but
Banks
couldn't
do
that
this
time,
because
the
assets
they
have
on
their
books
are
locked
into
extremely
low
paying
loans
and
Investments.
J
So
banks
have
increased
deposit
rates
only
slowly.
For
example,
in
Kentucky
this
week
the
average
rate
paid
on
a
money
market
deposit
account,
if
it
has
a
hundred
thousand
dollar
balance,
is
point
six
percent
less
than
one
percent
point.
Six
percent
money
market
funds
offered
by
brokerages
like
Fidelity
and
lots
of
other
places
pay
close
to
five
percent
eight
times
as
much
as
Kentucky
banks
are
paying
for
a
hundred
thousand
dollar
deposit.
J
As
a
result,
some
depositors
go
looking
for
higher
rates
and
transfer
their
funds
elsewhere,
not
all
depositors,
of
course,
Phil
and
Rosie
didn't
move
their
thousand
dollar
checking
account,
thank
goodness,
but
you
can
bet
that
businesses
and
individuals
with
very
large
accounts,
did
and
that
created
a
problem
for
banks
like
Silicon,
Valley,
Bank,
signature
and
First
Republic.
That
preferred
to
bank
rich
people
and
mega
corporations,
rather
than
small
businesses
and
ordinary
citizens.
J
On
top
of
all
of
that,
all
of
those
bonds
which
banks
bought
at
rates
below
two
percent
and
which
won't
come
due
for
years,
are
now
valued
at
far
less
than
was
paid
for
them
and
a
sad
fact
of
accounting.
Gap
accounting
requires
that
Banks
recognize
paper
losses
on
investment
Securities
by
immediately
reducing
the
book
value
of
capital,
forcing
some
banks
to
show
Capital
levels.
Look
look
really
really
low.
J
Declining
Capital
levels
tended
to
hit
those
banks
that
had
the
largest
inflows
of
deposits
in
2020
and
2021
and
subsequently
bought
the
largest
amount
of
fixed
rate
Investments
at
just
the
wrong
time.
Silicon
Valley
signature
and
First
Republic
all
grew
like
weeds
during
those
years
at
the
compound
average
growth
rate
of
20
to
40
percent
a
year
that
growth
came
from
very
large
deposits
from
very
large
corporations
and
from
the
very
wealthy
who,
by
definition,
are
going
to
be
the
most
interest
rate,
sensitive
customers.
J
When
rates
go
up
at
these
Banks
as
rates
Rose,
customers
demanded
better
yields
or
left
on
the
table,
I.
Provided
you,
if
you
look
at
the
bottom
row,
the
bottom
row
shows
that
the
average
cost
of
deposits
for
these
banks
in
December
of
2022
Compares
it
to
our
bank.
Is
it
representative
Bank
a
Community
Bank,
and
you
can
see
that
the
these
three
Banks
had
much
much
higher
costs
of
paying
for
deposits
than
did
most
Community
Banks
in
America
those
High
deposit
rates,
pinched
the
earnings
of
these
three
banks?
J
At
the
same
time,
these
three
Banks
experienced
huge
deterioration
of
their
Capital
as
they
accounted
for
the
falling
value
of
the
long-term
bonds
that
they
bought.
So
the
appearance
of
low
capital
and
the
declining
profitability
led
the
shareholders
of
these
Banks
to
become
concerned
about
their
profitability
and
because
shareholders
were
concerned.
Uninsured
depositors
became
concerned
insured
deposit,
of
course,
couldn't
care
less
because
they
know
they're
insured,
but
the
uninsured
ones
did
care
and
all
it
took
was
a
little
bit
of
a
of
a
spark
created
deposit
run
once
ignited.
J
Uninsured
depositors
ran
for
the
doors,
some
of
you
and
I'm
learning
that
anybody
under
40
doesn't
know
this
movie.
But
some
of
you
will
remember
Mary
Poppins
when
one
little
boy
couldn't
get
his
toppings
from
the
bank.
Other
depositors
quickly
lined
up
and
withdrew
their
funds
in
2023,
though
you
don't
have
to
line
up
outside
the
bank
to
get
your
funds,
you
open
up
your
cell
phone,
you
you
hit,
go
and
the
money
is
transferred
very
very
quickly,
and
so
once
the
Run
started,
these
Banks
experience
massive
drains
of
their
deposits.
J
In
just
a
few
short
days.
These
three
Banks
knew
they
had
few
insured
depositors.
They
should
have
been
more
conservative
about
their
risk,
taking
as
a
result
they
weren't
and
they
paid
the
price.
Every
Bank
in
Kentucky
is
struggling
with
the
same
challenges
as
these
three
Banks
were,
but
to
a
lesser
degree.
First,
loans
and
Investments
on
our
balance
sheets
are
locked
in
at
low
rates
of
Interest.
Nationally,
banks
are
in
less
than
five
percent
on
their
loans
today,
and
asset
yields
are
only
going
to
go
up
fairly
slow,
very
slowly
as
loans
reprice.
J
I'll
give
you
an
example:
Community
Trust
in
Pikeville
on
my
rate
sheet
tells
me
that
they
pay
0.2
percent
on
a
money
market
account
the
national
or
the
average
in
west
or
in
Kentucky
today
is
0.6,
but
Community
Trust
is
paying
0.2
percent
in
Pikeville
in
Pikeville.
You
could
put
your
money
in
a
seven
month,
CD
at
five
percent
at
Community
Trust.
Well,
why
not?
Moving
into
the
seven
month,
CD
picks
you
up
4.8
percent
of
additional
interest
income,
but
subjects
Community
Trust
to
higher
interest
expense.
J
Customers
are
moving
their
money
to
higher
returns
and
that
this
is
just
going
to
continue
day
by
day
week,
by
week,
month
by
month,
third,
higher
higher
Market
interest
rates
have
lowered
the
value
of
low,
yielding
investment,
Securities
owned
by
Kentucky
Banks,
and
those
losses,
as
required
have
been
booked
as
a
decrease
in
capital.
Lower
Capital
means
less
ability
to
lend
and
it
means
likely
more
regulatory
oversight,
neither
of
which
are
good
things
for
banks.
Fourth,
the
federal
reserve's
goal
of
reducing
inflation
necessarily
means
slowing
the
economy.
Even
the
point
of
recession.
J
Recessions
means
fewer
loans
and
recessions
tend
to
result
in
higher
loan
losses,
which
requires
Banks
to
set
aside
earnings
for
potential
or
real
loan
losses.
Further
constraining
the
ability
of
banks
to
lend
so
to
be
clear,
at
least
so
far,
Kentucky
Banks
as
a
group
and
in
fact
Banks
throughout
the
United
States
as
a
group,
have
remained
solidly
profitable
so
far,
Banks
as
a
group
have
not
experienced
any
decrease
in
asset
quality.
J
So
far,
there
remain
very
few
Banks
identified
as
problem
banks
by
our
Regulators,
but
stresses
continue
and
Bank
stock
analysts
tell
us
they
generally
expect.
Bank
profitability
to
decrease
throughout
2023
and
throughout
2024
as
a
result
of
a
weaker
economy
and
repricing
deposits.
So
any
Banker
you
know
today
is
worried
at
this
stressful
time.
J
What
do
Kentucky
Banks
need
from
their
legislature,
and
these
will
be
my
opinions-
they're,
not
necessarily
the
kba's
opinions
or
Ballard's
opinion,
but
first
I
think
legislators
need
to
understand
the
unique
role
that
Banks
play:
Within
the
economy
Banks
intermediate
between
depositors
who
need
immediate
access
to
their
funds
and
borrowers
who
want
long-term
financing
when
Banks
take
risk
when
they
intermediate
between
borrowers
and
lenders.
So,
but
in
order
to
take
that
risk,
Banks
require
a
certain
level
of
economic
stability
to
make
the
risk
manageable.
High
inflation
or
high
unemployment
either
one
can
threaten
Bank
survival.
J
Government
must
seek
to
provide
a
relatively
stable
economy
and,
while
the
Kentucky
Legislature
can't
primarily
be
held
responsible
for
economic
stability,
they
can
contribute
to
creating
a
stable
business
environment
to
by
ensuring
Fair
legislation
and
fair
regulation.
I'll
give
you
an
example.
From
this
week,
the
West
Virginia
Economic
Development
Division
announced
plans
to
provide
financing
for
West
Virginia
customers
who
need
business
equipment
at
a
three
percent
interest
rate
way
below
Market
interest
rates.
You
know
that's
great
for
West
Virginia
businesses
that
need
to
borrow
for
equipment.
It's
really
bad
for
banks.
These
are
loans.
J
That
Banks
would
like
to
make
that,
in
fact,
their
the
bank's
bread
and
butter
fewer
loans
means
less
profit
at
a
time
when
most
banks
are
quite
worried
about
the
future,
not
the
right
move
on
the
part
of
the
West
Virginia
legislature.
In
my
opinion,
second
I
think
legislature.
Legislators
need
to
understand
the
unique
role
played
by
small
Community
Banks
as
compared
to
role
the
role
played
by
larger
banking
organizations.
J
Banks,
like
JPMorgan
Chase,
facilitate
large
business
loans,
which
small
Banks
wouldn't
be
able
to
underwrite
Banks
like
Chase,
also
do
a
lot
more
than
simply
make
loans
and
accept
deposits.
They
operate
in
many
complex
lines
of
business
and
there
is
a
role
for
these
banks
in
our
economy.
Although
it's
my
opinion
that
generally
they're,
far
bigger
than
they
would
need
to
be
to
serve
that
role.
But
small
Community
Banks
typically
serve
small
businesses
and
their
business
model
is
simple.
We
take
deposits
and
we
make
loans
for
small
Community
Banks.
J
There
generally
aren't
other
ways
to
make
money,
particularly
for
small
Banks.
Excessive
regulation
and
the
cost
of
keeping
up
with
technology
makes
it
tough
to
be
a
small
Community
Bank
and
be
competitive
with
larger
organizations.
So,
in
my
opinion,
government
both
at
the
state
and
National
level
needs
to
be
proactive
in
their
support
for
small
banking
organizations,
which
I
Define
as
anything
under
20
billion
dollars
in
assets
or
less
than
300
branches.
You
can
debate
what
that
definition
should
be.
Third
legislators
in
Kentucky
need
to
be
supportive
of
Community
Banks
operating
in
rural
markets.
J
J
These
communities
need
access
to
banking
services,
while
the
large
banks
have
no
interest
in
providing
those
services
in
rural
communities.
Absolutely
they
don't.
In
my
opinion,
legislators
need
to
be
proactive
in
finding
ways
to
support
Community
Banks
who
operate
in
rural
parts
of
the
state.
These
Banks
face
all
the
challenges
of
being
small,
while
also
facing
an
additional
challenge
of
finding
adequate
talent
and
staff
to
lead
their
bank
today
and
into
the
future.
J
In
conclusion
conclusion,
particularly
at
this
time
when
banks
are
experiencing
serious
challenges
and
facing
lots
of
uncertainty
about
the
cost
of
retaining
our
deposit
base,
please
avoid
doing
anything
that
makes
it
harder
to
be
a
bank.
The
challenges
our
industry
is
facing
are
real
and
will
weigh
on
us
heavily
for
at
least
the
next
two
years.
Thank
you.
A
K
K
Okay,
we
understand
that
that
we
are
losing
clients
because
of
a
lower
rate,
but
I
also
understand
the
profit
margin
that
you
have
to
operate
under.
So
where
is
the
line
of
saying?
Maybe
we
should
raise
our
rates
to
keep
these
clients
from
leaving,
while
at
the
same
time
watching
our
our
bottom
line.
J
So,
okay
I'll,
give
you
the
truth
there
in
in
a
normal
world,
had
the
the
governor,
the
government
not
put
five
trillion
dollars
under
the
balance
sheets
of
the
banking
system.
When
rates
began
going
up,
Banks
would
have
followed
relatively
quickly
because
they
would
have
had
to
with
five
trillion
dollars
of
additional
deposits.
When
rates
started
going
up
in
mid-2022,
the
banks
didn't
have
to
they
looked
at
their
balance
sheet
and
said
we're
flush
with
deposits.
J
We
don't
need
to
pass
this
long,
we're
not
going
to
do
it
and
all
of
those
decisions
of
course
made
uniquely
and
individually
by
each
bank
for
their
four
thousand
banks
in
the
country,
but
they
all
saw
the
same
Trends
and
so
Market
rates
went
up,
Banks
didn't
raise
rates
Market.
What
rates
went
up,
Banks
didn't
raise
rates,
and
it
got
to
the
point
when
that
you
realize
the
market
interest
rates
are
three
percent
you're,
still
paying
25
basis
points.
J
You
say
well.
If
we
reprise
place
that
one
and
a
half
percent
for
trillion
for
a
billion
dollars
in
deposits,
that's
15
million
dollars
of
earnings
is
going
to
disappear.
How
many
of
these
accounts
are
going
to
leak
out
and
we'll
have
to
replace
those
at
five
or
three
at
that
that
time?
So
it's
there's
a
there's,
a
balancing
act.
J
J
We've
looked
at
our
deposits
for
every
product
by
the
tier
of
the
account
balance,
and
you
can
see
that
the
deposits
that
are
leaving
our
bank
and
we
had
relatively
low
losses
of
deposits
in
the
last
six
months
are
in
the
highest
years.
So
they're
check
people
that
have
money
in
a
checking
account
that
may
be
over
a
million
dollars.
J
I'll
give
you
an
example:
I
had
dinner
last
night
with
my
client,
he
happened
to
mention
that
he
had
a
personally,
not
the
business
I
had
a
million
dollars
in
the
tracking
account
that
he'd
set
aside
for
a
business
transaction
that,
as
you
had
unnamed,
you
know
Surplus
money,
and
he
said
you
know
how
to
Pro
how
to
be
probably
putting
that
to
work.
My
guess
is
today
he's
calling
his
representative
at
city
and
talking
about
where
he
can
move
that
to
a
better
yield.
J
So
in
Chris,
at
Christmas
of
last
year,
I
and
I
suspect
most
Bankers
were
very,
very
worried
about
what
was
going
to
happen,
because
our
assets
are
locked
into
very
long-term
rates.
Our
Market
interest
rates
are
rising.
We
were
sensing
that
we
would
have
to
do
more
and
quicker,
and
we
were
worried
about
what
that
meant
today
in
the
summer
of
2023
I'm
relieved
that
we
didn't
have
to
do
what
I
was
afraid
would
result
in
many
banks
earning
nothing
in
2023,
but
dollars
every
day
are
walking
out
of
the
system.
J
J
My
son
called
me
in
January
and
said
dad
what
am
I
making
on
my
regular
savings
account
and
I
said
well:
you're,
making
five
basis,
ones
Robbie
and
he
said
well
I
think
I
could
get
more
Fidelity
I
said
you
could
Robbie
and
he
said
well
I'm
going
to
move
it
and
I
said
okay
Robbie
and
pointed
out
to
him
where
he
might
want
to
look
on
the
Fidelity
website
to
put
his
four
thousand
dollars
to
better
work.
Robbie
happens
to
be
an
unusual
person,
who's
rate
sensitive
with
four
thousand
dollars.
J
K
Your
question:
yes,
sir,
it
does
and
kind
of
as
a
follow-up
to
that
you
mentioned
your
kids.
I've
I've
got
two
two
kids
and
they
are
20
and
18
about
to
be
21.,
and
so
I've
I've
been
trying
to
to
tell
them
and
teach
them
about
saving
money
and
Banking
and
so
forth,
and
neither
one
of
them
are
went
to
at
all
walk
into
a
local
bank
branch
and
do
banking.
K
They
want
to
do
it
all
online,
and
so
they
they
go
to
a
Bank
of
America
or
Ally
Bank,
or
you
know
something
like
that,
and
even
when
they
were
looking
at
car
loans,
the
same
thing
they
did
not
walk
into
a
local
bank
branch.
So
as
you
kind
of
look
down
the
road
in
terms
of
the
future
of
of
local
banking,
how
do
you
think
a
generational
impact
in
terms
of
a
generation
that
does
everything
online
and
doesn't
walk
into
a
place
of
business?
They
buy
all
their
goods
on
Amazon?
K
J
J
Very
strong,
Mobile
Banking
presence
is
very
strong,
not
as
good
as
Chase,
not
as
good
as
B
of
A,
not
as
good
as
Wells
Fargo.
We
can
survive.
We
are
growing
checking
accounts
in
every
region
every
year,
even
regions
that
don't
have
population
growth
and
even
regions
where
we
already
have
large
share
because
we
do
have
good
technology,
but
for
the
small,
smaller
Community
Banks
than
us.
J
That's
a
really
a
real
issue
and
it
isn't
going
to
go
away,
which
is
one
of
the
reasons
I
believe
the
legislature,
both
here
and
in
DC,
need
to
be
supportive
of
small
Community,
Banks
and
Rural
Banks,
where
they
can
and
proactively
supportive,
because
they've
got
pressure.
Absolutely
they
do
I.
Think
custo,
your
kids
and
my
kids
come
to
a
real
Bank
about
the
time
they
get
their
their
reg,
their
first
regular
paycheck
and
then
they've.
J
H
A
H
Thank
you,
Mr
chairman,
thank
you
doctor
for
the
presentation.
Very
educational
and
thorough
I'm
gonna
in
the
interest
of
time
skip
my
joke
about
George
Bailey
and
the
run
on
the
banks
and
go
straight
to
my
question
with
the
uninsured
deposits
in
these
other
Banks,
been
at
90,
90
and
70,
and
then
about
15
percent.
It's
your
local
bank!
H
J
There
is
a
database
that
data
comes
from
Bank
call
reports
which
are
required
to
be
filed
by
every
Bank
in
the
country,
every
quarter
so
they're.
So
there
is
that
database
I'll
see
if
I
can't
get
it
for
you,
I've
got
a
financial
analyst.
Who
is
a
whiz
that
pulling
data
out
of
there
I?
It
would
be
my
guess
that
there
are
no
banks
in
Kentucky
that
have
large
amounts
of
uninsured
deposits.
It
just
isn't
the
nature
you.
J
You
have
Republic
Stockyard
Community
Trust
Central
as
banks
that
are
headquartered
here:
People's
Bank
and
Marietta
WesBanco
City
that
are
not
headquartered
here,
but
have
significant
presence
here.
None
of
those
are
going
to
have
large
amounts
of
uninsured
depositors.
They
cater
mostly
to
small
businesses.
J
There
are
more,
there
are
ways
to
ensure
customers
who
have
more
than
a
quarter
of
a
million
dollars
in,
but
using
various
naming
techniques
and
then
using
the
Cedars
program
to
get
money
additional
FDIC
insurance,
so
most
businesses,
most
small
businesses,
most
medium-sized
businesses,
most
families
can
find
get
themselves
fully
insured,
Silicon,
Valley
and
First.
Republic
and
signature
grew
like
crazy.
They
they
went
after
they
attracted.
We
read
in
the
paper
about
a
three
billion
dollar,
who
has
a
three
billion
dollar
checking
account.
H
L
H
A
Dr
Hedrick
one
and
your
presentation
was
very
thorough
and
I
just
want
to
highlight
two
things.
The
first
is
obviously
talking
about
the
Silicon
valleys
and
and
these
other
banks
that
failed
and
the
the
chasing
of
the
deposits
that
they
had
and
the
growth
that
they
had.
Can
you
talk
just
a
little
bit
about
a
little
bit
more
about
kind
of
the
organic
non-chaste
growth
that
happened
because
of
that
five
trillion
dollars
put
in
the
system
just
seen
by
the
average
Bank
out
there.
I
I
Take
I'll
take
a
a
shot.
Mr
chairman,
it's
said
that
we,
through
during
PPP
about
five
trillion
dollars
to
fill
up
a
two
trillion
dollar
hole,
is
basically
what
we
did.
So,
where
did
that
money?
Go
that
money
went
into
the
banks
in
the
former
deposits
and
it
sat
there.
People
didn't
need
it,
they
couldn't
get
out
and
go
shopping.
They
couldn't
go
on
a
trip.
They
couldn't
buy
clothes,
they
you
know
it.
I
It
just
sat
there
and
it
refers
back
to
what
Dr
hatchback
was
talking
about
Banks
having
to
do
something
with
that,
and
that
was
go
to
long-term
Investments.
Who
would
have
ever
thought
that
buying
a
treasury
bill
would
have
been
dangerous
not
in
my
lifetime
and
I've
been
around
a
while.
So
the
the
average
Bank
out
there
right
now
is
is
subjected
to
that
huge
amount
of
influx
of
deposits
with
no
loan
demand.
The
loan
demand
left
when
you
did
the
PPP
loans,
you
lent
money
to
every
customer.
I
A
I'll
just
highlight
and
again
I'm
a
banker
by
trade.
That's
what
I
do
for
a
living.
Our
bank
had
grown
somewhere
in
the
two
three
percent
range
on
average
every
year
for
for
the
last
couple
of
decades,
except
for
when
we
might
open
a
new
Branch
or
something
like
that
and
went
into
a
new
area.
We
saw
about
a
15
to
20
percent
increase
in
our
deposit
base
and
our
asset
based,
not
based
on
any
actual
work.
We
were
doing
to
try
to
attract
new
deposits
or
Market
to
new
deposits.
A
That
was
just
organic
growth
in
the
system
that
occurred
because
of
the
influx
of
federal
dollars
that
were
coming
in
and
I
think
what
we
experienced
was
not
uncommon,
Amos
amongst
most
banks
throughout
Kentucky
and
throughout
the
nation.
So
there
was
a
huge
amount
of
increase
in
that
base
just
because
of
the
federal
intervention
that
occurred.
Absolutely
and
my
second
question
just
quickly-
and
you
highlighted
this
some
too
and
just
the
brief
explanation.
J
J
A
J
I
I'll,
let
you
go
there.
Hallelujah
the
1071
rule
for
those
that
are
not
familiar
with
some
is
a
rule
that
came
out
of
the
Dodd-Frank
Bill
several
years
ago.
Not
many
people
made
much
attention
to
it
paid
much
but
at
the
time,
but
it
did
require
the
Consumer
Financial
Protection
Bureau,
to
come
out
with
I.
Think
it's
at
that
time.
I
So
it's
put.
This
is
a
trial,
lawyer's
dream
coming
to
fruition.
However,
just
day
four
yesterday
or
Friday,
the
court
and
the
federal
court
in
the
Texas
district
sought
fit
to
and
I'm
not
a
lawyer,
I'm
I'm
grabbing
for
legal
terms.
Here
they
enjoying
the
cfpb
from
implementing
1071
to
banks
in
Texas
and
also
members
of
the
American
Bankers
Association,
which
they
should
have
done.
The
American
Bankers
association
should
have
done
that
in
a
class
action
and
should
have
done
that
across
the
board
to
all
banks
in
the
United
States.
I
I
A
M
Yes,
thank
you
chairman,
so
I'm
a
real
estate
appraiser
by
trade,
and
so
what
do
you
think?
The
here's,
a
million
dollar
question?
Well,
you
think
the
turnaround
is
the
turnaround
time
between
the
time
that
people
that
have
these
long-term
loans
at
low
interest
rate
will
sit
in
these
houses
because
normally
six
or
seven
years,
they're
going
to
turn
something
around
something's
going
to
change
in
their
life.
You
know
it
doesn't
really
matter
at
some
point
in
time:
I,
don't
care.
J
C
J
Did
we
had
one
in
the
whole?
It
was
in
the
next
year
gonna,
so
we
we
sent
them
a
gift
in
a
congratulatory
note
and
so
forth,
so
they
pay
them
off
quicker
and
you're,
seeing
that
today,
I
think
you're,
seeing
more
houses
coming
to
Market,
because
life
happens,
but
when
you
have
a
rate
of
three
percent
on
a
mortgage
and
you
could
afford
nicer
and
you'd
like
to
have
nice
or
you'd
like
a
little
bit
more
space
and
the
new
loan
is
six
percent.
You
can't
afford
that
payment.
J
So
only
when
life
happens,
divorce
death,
move
to
a
new
town
for
a
better
job.
Are
you?
Is
that
all
going
to
happen
most
banks?
However?
Don't
book
30-year
mortgages
most?
Don't
book
15.?
We
we
book
five
and
seven
year
arms,
so
most
of
the
loans
at
a
bank
will
turn
over
in
about
five
years.
But
five
years
is
a
very
long
time
to
worry
about
what
deposit
costs
are
going
to
do.
J
If
Market
interest
rates
are
five
percent
and
deposit
rates
that
the
bank
are
paying
are
rising,
which
they
are
when
do
deposit
costs
get
so
close
to
five
percent
that
there's
not
profit
anymore
or
not
enough
profit
anymore,
so
they
they
are
going
to
turn
over
they're,
not
going
to
turn
over
fast
over
about
a
five-year
period
of
time.
But
that's
a
long
time
to
a
banker.
J
M
I
I
I
S
and
I
was
watching
on
the
side,
the
the
the
the
the
chat
board
on
the
side
and
the
appraisers
were,
as
you
can
imagine,
were
going.
They
were
apoplectic,
but
the
the
cfpb
thought
it
might
be
a
good
thing
for
them
to
get
in
and
start
looking
at
appraisers
now
and
the
possibility
of
taking
location,
reducing
the
value
of
location
inside
that
algorithm.
C
M
That
in
Rural
America,
that's
just
not
going
to
work
and
and
like
in
in
towns
and
cities,
even
in
towns
and
size
of
Lexington
and
Louisville
are
different
in
Bowling
Green.
You
can
probably
predict
that
pretty
easy,
but
when
you
get
outside
of
that,
you
know
we
get
pressure
all
the
time
right
now
from
having
people,
send
us
data
and
us
through
appraisers
appraisals,
sitting
at
our
desk
and
so
I
took
10
of
these
and
decided
I
would
look
at
them
and
see
what
percent
and
how
good
that
data
was.
It
was
about
30
percent.
M
They
were
missing
properties,
they
were
missing
garages.
They
were
missing
property
lines.
They
were
missing
everything,
so
I
just
sent
them
back
and
said.
This
is
not
a
Arena
I'm
going
to
play
again
until
you
all
can
get
your
data
a
lot
closer
to
what
I
need
that
when
I
go
out
and
put
my
eyes
on
it,
that
I
can
be
your
eyes.
N
Lewis,
thank
you.
Mr
chairman
and
Dr
hejman
I
appreciate
your
your
testimony
in
a
former
life,
and
this
is
before
Dodd-Frank
I've
actually
audited,
Banks
and
I
know
this
is
Bank.
Secrecy
acts
ours,
all
the
all
the
fun
stuff,
but
you
mentioned
several
times
in
your
overview
that
we
need
to
proactively
support
rural
Banks,
and
so,
of
course
you
know
more
regulations.
Tightening
restrictions,
I
understand
that,
but
to
be
proactive,
I
assume
you
mean
passing
policy.
What
would
that
look
like.
J
That's
a
good
question,
and
particularly
at
the
state
level,
Ballard
might
be
a
better
expert
on
that
nationally.
One
of
the
things
I
ask
Andy
Barr
to
consider
is
the
the
10
billion
dollar
limit
for
cfpb
regulation
and
the
10
billion
dollar
limit
for
debit
card
Revenue
debit
card
revenue
is
a
big
part
of
my
revenues
as
a
Community
Bank,
my
customers
use
their
debit
card.
A
lot.
If
you
have
a
thousand
dollar
checking
account
I'm,
not
making
any
money
on
the
spread
between
what
I'm,
paying
you
and
and
the
loan.
J
I
If
you
don't
mind,
I
I
think
tailoring
regulations
to
size
is
very
important.
If
you
refer
back
to
Dodd-Frank.
In
your
day
of
of
regulations,
the
majority
of
Dodd-Frank
was
not
supposed
to
apply
to
any
Bank
under
10
billion
dollars.
It
applies
to
just
about
ever
back
in
the
country.
Today,
those
things
have
a
tendency
to
to
flow
down.
We
have
talked
with
regulator
after
Regulators
gone
to
Regional,
Offices
and
so
forth,
and
have
been
told
that
several
times
that
you
were
rarely
ever
if
ever
see,
a
banking
regulation
doesn't
apply
to
all
banks.
F
Howe,
thank
you.
Mr
chairman
I've
got
just
a
couple
of
questions.
Dr
Harrisburg.
You
had
mentioned
that
you
were
seeing
more
arms,
more
five
and
seven
year
arms
and
are
we
seeing
more
of
those
in
the
housing
market
as
people
kind
of
Mark
time
on
a
more
adjustable
rate
loans
and
see
what
the
long-term
interest
rates
do?
If
we've
seen
more
of
that
in
the
housing
agreement.
J
I
I
think
no
I
think
nationally,
most
customers
are
going
to
opt
for
a
30-year
mortgage,
Banks
tend
not
to
hold
those,
and
the
number
of
arms
is
one
out
of
seven
loans
is,
is
an
arm
homes
over
a
certain
price
amount,
can't
go
into
the
secondary
market
and
we'll
end
up
on
a
bank
balance
sheet.
So
only
a
small
portion
of
the
loans
that
are
made
are
arms,
but
those
are
the
ones
that
my
industry
ends
up
holding.
So
those
are
the
ones
we
know
the
best
and
there's
there's.
No.
J
When
interest
rates
are
Rel,
the
the
yield
curve
is
inverted,
so
the
the
tenure
rates
lower
than
the
a
seven
year,
eight,
which
is
lower
than
the
three
year
rate,
so
there's
an
incentive
for
the
customer
to
to
select
the
30-year
mortgage
that
he
does
a
lot
of
Arms
by
tailoring
a
product
with
no
fees
and
a
higher
legal.
A
higher
limit
loan
to
value
for
customers
that
have
excellent
credit
scores.
J
So
we're
able
to
do
to
create
we're
able
to
get
the
kind
of
loans
we
need
to
fill
up
our
balance
sheet,
but
arms
are
not
particularly
if
the
yield
curve
ever
is
steep
again
so
that
the
third
year
treasury
is
higher
than
the
five-year
treasury.
Then
you
then
you
Nev
will
see
arms
go
up
to
maybe
25
percent
of
the
originations.
F
Thank
you.
Another
thing
you've
talked
about
this
a
couple
of
different
times.
I've
heard
you
mention
it
about
technology
challenges,
especially
for
our
smaller
Banks.
Obviously,
that's
going
to
be
in
the
Securities
cyber
security
type
Arena,
and
also
something
I,
hadn't
really
thought
about
as
much
until
you
mentioned.
It
is
the
the
need
to
build
out
your
online
presence
for
this.
Is
there
any
other
Arena
that
creates
some
technology
challenges?
Are
they
pretty
much
limited
to
those
two.
J
I
would
add
fraud,
which
is
a
huge
and
rapidly
growing
problem.
The
crooks
are
ahead
of
us
all
the
time
and
inventing
new
ways
and
small
Banks
don't
have
the
systems
in
place
to
help
look
for
the
the
that
fraud
AI
is
likely
to
be
implemented
to
help
us
sift
through
the
data
to
be
indicative
of
transactions
that
look
like
they
might
not
be
right.
J
I
I
didn't
I,
wasn't
a
fan
of
that
until
our
most
recent
release
and
I
said,
I
really
ought
to
check
this
out.
I
looked
and
said:
oh,
my
God.
This
is
super
fantastic
I!
Don't
need
to
go
to
the
branch
Much
Anymore
and
if
you
don't
have
that
kind
of
Technology,
it's
going
to
be
very
hard
to
open
checking
accounts.
If
you
can't
open
checking,
accounts
you're
not
going
to
survive
very
long.
F
I
F
L
Thank
you,
Mr
chairman
I'll,
be
real,
quick
and
brief
I
I'm.
Listening
to
your
testimony,
I
think
when
you
first
started
out,
she
was
looking
for
ways
of
community
bank's
been
have
more
ability
to
get
in.
You
know
able
to
get
money
out.
I
understand
the
the
money
that
was
brought
in.
It
was
a
lot
of
it
was
in
my
area
through
the
through
the
injection
of
the
the
programs,
and
that
happens.
It's
not
stopping
we're,
seeing
still
more
federal
dollars
being
brought
down
pumped
into
our
our
communities.
L
In
saying
that,
I
wanted
to
kind
of
make
a
statement
to
to
for
you
to
look
into
mostly
the
Kentucky
banking
Association.
We
have
strong
Community
Banks
in
my
area
with
Fort
Banks
and
several
of
them
that
participate
a
lot
in
in
our
community,
but
there's
something
that
we
passed
several
years
ago
called
P3,
that
it
really
hasn't
taken
a
lot
of
legs
and
I.
Think
the
banking
industry
could
really
benefit
from
that
in
community
projects,
rather
than
federal
dollars
or
State
dollars.
L
That
is
coming,
and
it's
going
to
be
here
for
probably
with
that
much
money,
six
to
ten
years
of
infrastructure
and
I
would
volunteer
in
the
communities.
Look
at
p3s,
I'm,
not
saying
I,
know
it
a
lot
about
P3
I
just
know
it
gave
access
for
fed
for
state
and
private
or
or
really
local
governments
and
privates
to
come
together
on
projects.
So
anyway,
I
wanted
to
throw
that
out.
Mr
chairman.
A
And
representative
Smith
I'd
just
say,
and
we
have
had
some
interaction
with
that
in
the
place
that
I
work
in
sometimes
it's
you
know
it
may
be
a
fire
department
or
or
a
water
district
or
whatever
that
comes
to
us.
One
of
the
things
and
I
think
Skip
led
to
this
in
some
of
the
discussions
he
was
having.
That
makes
it
hard
is
when
the
the
Government
rate
on
those
loans
is
at
much
below
Market.
It
makes
it
very
hard
for
us
to
compete
and
we
want
to
do
what's
best
for
that
consumer.
A
That's
in
our
office
that
may
have
a
deposit
account
with
us
or
whatever
and
many
times
it
is
that
they
have
to
come
to
see
us
to
find
out
that
they
can't
get
a
loan
at
the
rate
that
they
can
get
from
the
government.
We
have
to
provide
them
that
letter
so
that
they
can
then
qualify
for
that
government
loan
program,
that's
out
there
through
cdbg
or
whoever
it
may
be,
and
I've
been
in
that
situation
several
times.
We've
got
to
move
on
to
the
next
presentation.
A
Thank
you,
gentlemen,
for
being
here
and
for
answering
all
the
questions.
Commissioner,
would
you
like
to
to
introduce
our
next
guest
by
Zoom,
or
do
you
want
him
to
just
do
it
from
the
from
the
program?
Thank
you
much.
Okay,
GM.
If
you
would
introduce
yourself
for
the
record
and
then
proceed
with
your
remarks,
we'd
appreciate
it
very
much.
O
A
great
thank
you,
Mr
chairman
and
members
of
the
committee
also
commissioner,
bursts
and
Ballard.
Although
I
can't
see
you
nice
to
nice
to
hear
you
as
well,
so
my
name
is
Jim
Fuchs
I'm,
with
the
Federal
Reserve
Bank
of
St
Louis.
For
those
of
you
who
may
be
unfamiliar
with
the
Federal
Reserve
Districts
I
know
a
lot
are
not,
but
the
the
Western
Kentucky
is
in
the
eighth
District,
so
that
is
the
St
Louis
fed.
O
O
I
suspect
that
if
we
did
them
again
this
year
they
would
be
slightly
different,
but
nonetheless,
we've
had
more
than
100
Year
history
with
the
western
part
of
Kentucky
in
our
district
and
I'm
pleased
to
speak
with
everyone
today,
I
believe
everyone
has
a
copy
of
of
my
presentation,
so
I
will
I'm
gonna
share
that
now,
please,
let
me
know
if
you
can
not
see
it
Mr,
chairman
or
members
of
the
committee.
It
should
be
on
my
screen
and
I
know
you
have
hard
copies
in
front
of
you.
H
O
Can
see
it
okay,
great
again,
pretty
pretty
generic
title
economic
and
banking
conditions
update
for
for
Kentucky
and
certainly
Dr
hedgeback
I
appreciate
your
your
remarks
as
well.
I
will
note
a
couple
areas
that
I
have
responsibility
for
here
in
St,
Louis
I
am
in
Bank
supervision,
so
I
have
responsibility
for
our
mergers
and
applications,
mergers
and
Acquisitions
unit
or
Bank
applications
as
we
call
them
so
I.
O
The
PPP
program,
while
that
came
through
the
SBA,
was
backed
by
the
Federal
Reserve
through
a
program
called
the
PPP
LF,
the
paycheck
Protection
Program
liquidity
facility,
and
we
are
currently
since
March
operating
the
bank
term
funding
program.
That
is
a
program
that
values
a
number
of
those
Securities
that
Dr
hedgeback
mentioned
values
them
at
par
instead
of
market
value
which
enables
us
to
well.
O
You
know
that
serves
as
the
collateral
that
it
enables
us
to
provide
liquidity
in
in
larger
amounts
than
we
otherwise
would
have
at
market
value
Securities,
and
that
program
which
I'll
discuss
very
briefly,
is
scheduled
to
conclude
in
March
of
2024..
So
let
me
just
go
through
just
very
quickly
and
I
know.
My
time
is
limited,
so
I'm
glad
everybody
has
a
copy
of
the
presentation
I
may
skip
through
and
just
get
to.
Some
of
the
highlights.
I
do
have
to
note
that
the
views
expressed
today
are
mine.
O
They
do
not
reflect
the
views
of
the
Federal
Reserve
Bank
of
St
Louis,
the
Federal
Reserve
Board
of
Governors,
the
Federal
Reserve
System,
or
the
Federal
Open
Market
Committee,
as
I'm
sure
you're
aware
we
had
our
meeting
last
week
and
the
Federal
Reserve
resumed
its
increasing
interest
rate
policy.
I'd
also
like
to
thank
Economist
Kathleen
Navin,
who
is
my
colleague
here
in
St
Louis
for
her
assistance
with
this
presentation
today.
O
So,
let's
very
quickly,
look
at
some
economic
conditions
in
blue
we've
have
just
real
GDP
red
looks
for
the
state
of
Kentucky
that
you
know
at
first
glance
that
doesn't
look
particularly
promising
as
we
look
at
GDP
growth
in
2021.
However,
if
you
look
at
that,
especially
for
the
national
GDP
in
blue,
if
you
look
at
that
2.1
percent
reading,
that
is
more
in
line
with
some
of
the
growth
that
we've
seen
in
the
past
decade.
O
So
if
I
was
going
to
title
my
presentation
in
a
more
interesting
way
today,
I
would
say
cause
for
optimism
or
cause
for
concern
and
I
think
we're
seeing
evidence
of
both
and
I
think.
Even
in
the
last
presentation
we've
heard,
we've
heard
some
examples
of
concern
and
also
on
some
level,
some
some
cause
for
optimism.
O
As
we
look
ahead,
you
know
we
are
seeing
stronger
growth
growth
in
in
2023,
so
the
most
recent
reading
of
2.4
percent
came
in
a
little
bit
higher
than
expected,
which
again
when,
when
we're
looking
at
a
interest
rate
environment
that
is
currently
increasing,
we
see
we
have
a
situation
where
you
know
a
rising.
Gdp
certainly
seems
to
push
against
that
a
little
bit
right,
so
it
speaks
to
still
some
very
strong
fundamentals
in
our
economy.
O
We
talked
about
housing
and
housing
is
one
of
those
areas
where
we
very
quickly
see
the
impact
of
interest
rate
policy.
The
discussion
earlier
on
30-year
fixed
rate
mortgages.
You
know
you
can
you
can
see
a
picture
here
of
you
know.
Overall,
we
can
well.
Let
me
look
at
the
the
transactions
price
index,
because
I
think
that's
where
we
have
kind
of
a
more
more
dramatic,
a
more
dramatic
situation
right
so
right
now
we
have
mortgage
rates
in
the
high
six
percent,
which
was
mentioned
before
that's
nationally.
O
You
know
we
are
seeing
some
improvement
in
affordability,
but
you
know
as
the
as
the
price
index
goes
down,
but
certainly
you
know
challenges
remain
in
in
housing,
particularly
as
we
look
at
those
higher
interest
rates,
as
mentioned
before,
a
lot
of
those
mortgages
are
locked
in
at
much
lower
rates.
The
incentive
for
refinancing,
of
course,
is
zero.
There
are
natural
events
that
would
cause
turnover
in
property,
but
we're
also
hearing
a
lot
more
reports
of
cash
buyers
as
well
or
folks
that
are
just
downsizing.
O
O
You
know
we
are
still
seeing
significant
increases
overall
that
they
are
less
when
we
look
at
2023
the
first
quarter
again
this
comes
from
the
federal
Housing
Finance
Agency,
so
they
don't
necessarily
have
enough
transactions
in
every
Market
in
the
United
States.
So
it's
where
they
have
concentrated
transactions
that
we
see
some
of
the
data
moving
to
slide.
Eight.
You
know
again
when
we
look
at
home
sales.
This
is
really
you
know.
O
O
You
know
there
is
a
challenge
in
getting
new
new
inventory
on
the
market
and
we're
also
seeing
a
little
bit
of
a
little
bit
of
a
shift
in
in
in
where
consumer
interest
is
more
of
a
shift
away
from
multi-family
and
back
into
single-family
homes,
and
and
that's
what
these
pictures
on
slide.
Nine
show
I
think
the
most
interesting
piece
here,
though,
is
you
know
on
on
the
left.
We
have
you
know:
housing
start
single
family
unit
on
the
blue
line,
multi-family
in
red.
O
O
We
see
an
increase,
but
when
it
comes
to
multi-family
we're
starting
to
see
some
softening
and
looking
ahead
in
terms
of
permits
issued
for
for
multi-family
units
moving
on
to
slide
10
for
those
of
you
that
are
following
along,
we
continue
to
see
strength
in
consumer
spending
now,
in
this
case,
it's
led
by
led
by
Goods
right.
So
when
we
look
at
overall
real
pce,
the
personal
consent,
consumption
expenditures,
the
one-year
change
was
three
percent
in
June.
So
that's
headline
inflation.
O
You
hear
us
at
the
FED
talk
a
lot
about
headline
and
core
core,
just
strips
out
energy
and
food.
It's
just
another
way
of
thinking
about
inflation.
It's
because
traditionally
you
know,
food
and
energy
are
much
more
volatile
than
than
other
goods
and
services,
and
so
the
next
release
for
real
pce
will
be
on
August
31
first.
So
this
this
captures
kind
of
our
our
current
thinking.
O
O
You
know
the
one-year
change
from
the
last
reading,
as
I
mentioned,
was
three
percent-
that
again
that's
headline
inflation,
that's
down
from
3.8
percent
in
May.
So
again
it's
still
a
positive
trend.
That's
expected,
but
not
not
quite
as
steep
it's
starting
to
level
off
a
little
bit,
which
again
shows
some
of
the
effects
of
the
federal
reserve's
interest
rate
policy.
O
O
You
know.
Overall,
you
know:
Consumer
Credit
increase
1.8
percent
revolving
credit,
increased
8.2.
So
that's
your
credit
cards
so
we're
starting
to
see
people
utilize
those
lines
again.
This
may
be
a
little
bit
more
of
a
of
a
sign
of
some
of
that.
Those
excess
funds
that
were
in
the
banking
system
being
drawn
down
and
non-revolving
credit
actually
decreased
by
by
point.
Four
percent,
so
you
know,
and
that
that
includes
you
know:
car
loans,
Mobile
Home,
Mobile,
Home,
Loans,
Education,
Loans
boats,
trailers,
Vacations.
O
So
there's
a
lot
in
that
non
non-revolving.
So
again
we're
seeing
a
little
bit
of
the
the
impact
of
interest
rate
policy.
But
even
when
we
look
at
some
of
those
non-revolving
loans,
you
know
the
rates
are
pretty
high.
You
know,
average
car
loan
rate
from
the
last
fed
report
was
7.81
and
that's
for
June,
sorry
in
May,
up
from
a
7.48
in
in
the
first
quarter
and
that's
average
across
the
country.
O
So
again,
okay,
the
cost
of
cost
of
credit
is
very
expensive
to
a
lot
of
consumers,
keeping
a
lot
of
individuals
on
the
sideline
and-
and
you
know
again
what
we're
seeing
is.
You
know
there
is
a
a
difference
between
what
we're
seeing
in
in
core
and
and
headline
inflation,
where
you
know
we're.
Goods
prices
seem
to
be
moderating
a
bit
but
Services
not
as
much
and
that's
where
we
see
this.
O
This
is
this
is
a
fairly
interesting
chart,
because,
typically,
that
headline
inflation
right
is,
as
you
can
see
in
like
January
of
2022.
It's
it's
generally
going
to
be
higher
than
quarter.
You
know
than
core
right,
because
we've
stripped
out
no
sorry,
we've
stripped
out.
You
know
food
and
inflation,
but
right
now
core
inflation
is
4.1
headline.
O
Inflation
is
3.0
and
again
that's
because
we're
seeing
the
difference
between
inflation
in
in
goods
and
services-
and
this
gives
you
just
a
little
bit
more
a
little
bit
better
picture
on
on
what
that
looks.
Like
part
of
the
reason
for
this
is
that
we
have
seen
a
little
bit
of
easing
on
the
right
side
of
this
of
global
supply
chain
pressures.
O
O
You
know
again
more
or
less
less
nationally
as
well,
but
you
know
it's
it's
up
a
little
bit
from
from
where
it
was,
but
again
not
much.
So
this
is
part
of
that
that
conundrum
that
the
FED
is
facing
with
its
current
interest
rate
policy
and
when
we
look
overall
at
an
employment
Kentucky
actually
is
one
of
those
Estates
that
seems
to
you
know
defy
some
of
the
trends.
O
sorry,
my
my
slide
seems
to
have
gotten
stuck
here
there
we
go
just
to
give
you
a
a
bit
of
a
picture
of
of
where
that
strength
and
employment
comes
from
on
slide
17,
so
employment
is
exceeding
pre-pandemic
levels
and
education,
and
this
is
in
Kentucky
in
Education,
Health,
Services,
professional
business
services,
trade,
Transportation
utilities
and
Manufacturing
again,
not
surprisingly,
still
weak.
In
Leisure
and
hospitality,
and
also
interestingly,
government
employment
has
not
returned
to
its
levels
immediately
preceding
the
pandemic.
O
Job
openings,
which
are
you
know,
which
are
which
are
a
sign
of
our
of
kind
of
our
labor
market.
They
have,
they
have
turned
down
but
again
remain
elevated
compared
to
where
they
have
been
historically.
So
again,
this
is
still
you
know,
there's
still
a
lot
of
jobs
that
that
need
to
be
filled
both
in
Kentucky
and
across
the
United
States.
These
are
these.
These
data
are
indexed
so
basically,
we
started
before
the
pandemic.
O
O
As
we
know,
labor
force,
particip
participation
is
important
to
to
understanding
kind
of
Labor
markets
and
our
our
economy,
Kentucky
typically
has
a
lower
labor
force
participation
rate
than
the
rest
of
the
than
the
rest
of
the
country,
but
we
are
still
from
a
participation
rate
standpoint.
We
see
both
in
Kentucky
and
nationally
a
lot
of
folks
are
still
sitting
on
the
sidelines.
O
There
are
also
some
demographic
factors
at
play
here
as
well,
taking
a
quick
look
at
Financial
conditions,
so
the
St
Louis
fed
publishes
a
financial
stress
index
where
we,
where
zero
basically
means
above
zero,
we're
seeing
a
above
average
stress
in
in
financial
markets
and
below
that
line.
We
are
seeing
below
average
stress
so
again,
a
little
bit
of
a
conundrum
here
right
financial
markets
continue
to
be
strong.
O
We
can
see
on
the
right
side
when
we
just
look
at
the
s
p,
Dow
Jones,
you
know
we're
not
quite
at
where,
where
the
S
P
500
was
in
the
middle
of
2022,
but
it
is,
it
is
starting
to
to
increase
and
get
to
get
to
those
levels.
So
you
know,
as
I
said
before,
you
know
cause
for
concern
a
cause
for
optimism
there
there
are.
O
O
So
you
can
see
if
we
look
at
the
brief
recession
here
in
2020
right
it.
You
know
where,
when
it
you
know
when
we
basically
have
Market
yields
on
shorter
terms,
Securities
going
higher
than
longer
term
Securities
it,
it's
usually
a
predictor
of
a
recession.
If
I
took
this
back
further
to
2008
2009,
you
would
see
much
more
predictive
basis,
and
so
this
is
normally
considered
a
very
reliable
indicator
of
a
recession.
The
spread
is
usually
a
positive
0.89.
O
The
push
against
that
that
story
as
well
and
then
I
know
we
talked
about
some
banking
conditions
earlier
I
know
the
state
of
Kentucky,
thanks
to
commissioner
Burris
is
very
much
involved
with
the
conference
of
State
Bank
supervisors
in
producing
this
community
bank
sentiment
index,
as
we
heard
in
the
last
presentation,
Community
Bankers
in
particular
are
not
optimistic.
This
is
the
lowest
reading
since
this
index
was
created
in
in
2019
in
the
past
three
times
at
the
index
it's
a
quarterly
index
was
was
published.
O
O
So
just
you
know
to
see
some
of
that
right.
We
are
seeing
an
increase
in
the
delinquency
rate
and
charge
drop
rate
for
Consumer
loans.
In
particular.
Those
are
some
of
the
more
small
dollar
loans.
If
we
look
at
business
loans,
you
know
the
charge
off
rate
we're
starting
to
see
a
slight
uptake
take,
although
the
delinquency
rate
is
at
least
trending
in
the
right
direction.
O
Sorry,
it
looks
like
I
had
another
issue
there
in
my
in
my
slide
advancement
when
we
look
at
real
estate
and
agriculture.
However,
look
charge
offs
in
real
estate
and
agriculture
remain
low
through
2023
in
the
first
quarter,
a
significant
drop
in
delinquency
rates
on
AG
production.
Here
on
the
right,
we
are
seeing
a
slight
increase
in
charge
of
rates
for
AG,
but
it's
off
a
very,
very
low
and
historically
low
base
and
same
when
we
look
at
real
estate
secured
loans
at
commercial
Banks,
delinquency
rates
and
charge-offs.
O
First
of
delinquency
rates
are
within
historical
averages
and
as
our
as
our
charge
off
rates
as
well
for
for
Consumer
and
cni
Loans
that
you
know
so.
This
comes
out
of
the
senior
loan
officer
survey.
We
are
seeing
tightening
credit
standards
so
again,
this
is
that
you
know
cause
for
concern
or
cause
for
optimism.
This
may
be
a
little
bit
more
for
concern
as
we
see
tightening
standards
and
it
makes
sense
in
a
rising
rate
environment
for
credit
cards,
auto
loans,
Consumer
loans.
O
O
And
then,
when
we
look
at
Commercial
Real
Estate,
which
has
received
a
lot
of
attention
lately
again,
we
are
seeing
an
increase.
We
are
seeing
tightening
standards
so
again
anything
above
the
zero
line.
We
are
looking
at
tightening
standards
and
then
we
have
loosening
standards
if
you're
above
below
that
below
that
zero
line
we
talked
to
the
earlier
presentation
talked
about
the
surge
in
deposits.
This
gives
you
a
graphic
representation
of
that
surge.
O
So
the
red
line
is
deposits
and
the
blue
line
is
loans
and
leases
at
all.
Commercial
Bank,
we
see
lending,
is
kind
of
slowing,
is
moderating
here
and
that
surgeon
deposit
is
unwinding
and
looks
like
it's
starting
to
stabilize
a
little
bit
and
that's
what
that's
what
this
this
picture
shows
as
well.
If
we
look
at
the
deposits
at
all
commercial
Banks,
this
is
total
number
of
deposits
in
the
system
we
do
see.
O
We
do
see
a
little
bit
of
a
stabilization
after
recent
outflows.
Some
of
the
conversations
we've
had
with
Community
Bankers
that
indicate
that,
despite
some
of
the
challenges
that
we
saw
in
March
and
April-
and
you
know
a
lot
of
community
Bankers
did
not
personally
experience
that
deposit
flight
and
I
think
it
speaks
to
many
of
the
things
that
we
heard
earlier.
You
know
the
the
amount
of
uninsured
deposits
in
the
community
banking
system
are
significantly
less
than
than
we've
seen
in
some
of
our
larger
and
Regional
Banks
and
again
here.
O
This
gives
you
more
of
a
of
a
representation
of
of
how
deposits
flowed
more
specifically
right.
So
if
we
look
at
deposit
flow
here
in
in
2023,
you
can
see
the
the
decline
in
deposits
that
blue
bar
is
large,
domestically
Charter
Banks.
Even
that
has
started
to
recover
a
little
bit.
The
hit
is
much
less
for
smaller
Banks.
O
We
are
monitoring
lending
for
signs
of
credit
tightening
again
at
this
point,
though,
loans
and
leases
at
all
commercial
Banks
seem
to
be
a
fairly
stable
again
that
surge
that
that
we're
seeing
throughout
2021
and
22.
You
know
that
is
you
know.
That
is
a
lot
of
that.
You
know
from
from
the
pandemic
and
kind
of
coming
out
of
the
pandemic
and
post-pandemic
lending
as
well,
and
this
gives
you
a
graphic
representation
on
the
right
of
loans
and
leases.
O
We
are
seeing
Banks
continue
to
use
that
bank
term
funding
program.
You
will
you'll
note
here
that
there
you
know
the
primary
credit
is
your
traditional
discount
window
lending
program.
As
of
today,
the
primary
credit
rate
is
5.5.
So
that's
what
that's
what
the
Federal
Reserve
lends
to
Banks.
It
used
to
be
on
an
overnight
basis.
The
Federal
Reserve
switched
to
a
90-day
term
during
the
pandemic,
and
it
has
not
for
primary
credit
and
is
not
relaxed,
relaxed
that
the
bank
term
funding
program.
O
As
of
as
of
this
morning,
it's
a
daily
rate
is
at
4.47
and
then
for
banks
that
keep
balances
in
their
master
account.
The
rate
we
pay
on
those
balances
is
5.40
for
our
AG
Banks.
The
FED
does
have
a
seasonal
credit
program
and
the
current
rate
is
5.25,
but
again
this
program
we're
about
Midway
through
and
we
expect
to.
It-
is
expected
to
end
March
11
2024.
C
O
Just
just
a
few
pieces
about
the
bank
term
funding
program,
as
I
noted
before
collaterals,
valued
at
par
instead
of
the
market
rate.
So
again,
that's
due
that's
designed
to
allow
the
the
FED
to
to
lend
more
on
collateral
that
may
be
that
may
have
taken
a
hit
as
a
result
of
the
inversion
and
rates.
These
are
one-year
advances,
no
prepayment
penalty
generally,
a
favorable
rate.
O
But
again
there
has
been
some
hesitation
in
terms
of
of
overall
usage
and
then
just
very
quickly
and
I'm
looking
at
the
time.
That
probably
are
a
number
of
other
topics.
In
fact,
the
discussion
earlier
touched
on
a
number
of
things
that
that
we
look
at
here
at
the
St
Louis
fed
and
they're.
We're
particularly
interested
in
I
thought
we
put
together
just
a
quick
slide
on
buy
now
pay
later,
because
we've
seen
it
grow
in
popularity.
O
You
know
in
general
again
these
are.
These
are
my
views.
We
don't.
We
don't
necessarily
view
this
as
as
a
benefit
to
Consumers.
There
are
other
options
options
out
there.
Community
Banks
offer
a
number
of
options,
but
you
know
this
speaks
to
convenience.
You
know
we
talked
in
the
last
conversation
about
the
convenience
of
Technology,
the
importance
of
technology
G
being
there
in
the
moment,
but
you
know
what
we
are
seeing
is
that
in
general
this
is.
O
This
is
a
product
that,
while
it
has
a
lot
of
you
know,
gets
a
lot
of
attention
right
right
now.
It
is
still
attracting
folks
with
high
amounts
of
credit
card
debt
and
use.
You
know
pawn
shops
and
payday
loans
and
have
experience
to
overdrafts.
You
know
so
this
these
are.
These
are
programs
that
they
may
provide
some
some
benefit
in
in
real
time,
but
right
now
they
seem
to
be
utilized
by
some
of
the
same
folks
that
have
struggled
in
the
past
with
with
managing
their
their
credit.
O
So
again,
I
wanted
to
include
this
there's
lots
of
other
topics
we
can
talk
about.
We
also
have
a
center
here
in
St
Louis
for
the
study
of
competition
and
competitive
factors.
That
is
that's
becoming
more
and
more
interesting,
as
banks
are
exploring
different
merger
combinations.
You
know
it
is
the
the
current
formula
used
by
the
Department
of
Justice
looks
at
physical
geography
of
of
one's
Branch
Network
when
it
determines.
O
If
a
merger
is
going
to
create
competitive
concerns
and
whether
it
could
be
allowed
or
not,
it
does
not
currently
account
for
the
phone.
It
does
not
account
for
the
fact
that
Banks
can
can
project
their
brand
into
any
any
corner
of
of
the
United,
States
and
and
compete
and
I
think
to
some
of
the
points
that
were
raised
earlier
when
there
was
some
initial
deposit
outflow.
O
There
were
also
a
number
of
you
know:
non-brick
and
mortar
online,
only
banks
that
were
able
to
offer
very
competitive
rates
and
and
launched
aggressive
marketing
campaigns
to
try
to
attract
those
deposits.
So
it
is
a
brand
new
ecosystem
in
many
ways
and
a
lot
of
times
our
our
laws,
don't
necessarily
keep
up
with
the
growth
in
technology.
Again,
as
mentioned
in
the
previous
presentation,
the
growth
and
Technology
tends
to
you
know,
tends
to
outpace
a
lot
of
industry
in
this
country.
O
Unfortunately,
as
was
mentioned,
that
also
applies
to
you
know
to
to
fraud
and
cyber
security
issues
as
well.
One
final
point
I'll
make
and
then
I'll
close.
We
are
fortunate
here
in
St
Louis
to
host
an
annual
Community
Bank
research
conference.
This
will
be
our
11th
year
of
doing
at
Ballard.
I
know
you're
very
familiar
with
it,
so
we
we
made
a
commitment
to
attract
academic
research
on
community
banking
because
we
believe
it's
important
to
understand,
relationship
lending
and
the
value
that
relationship
lenders
provide
to
the
United
States
economy
and
to
local
economies.
O
Commissioner
Burris
was
very
involved
with
that
with
Kentucky
Banks,
the
survey
period
closed
in
July
and
the
results
will
be
released
in
early
August
and
we
look
forward
to
being
able
to
to
share
those.
So
with
that
I'm
gonna,
I'm
gonna
stop
I'm
gonna,
stop
sharing
my
screen
and
I
appreciate
any
any
questions.
Anyone
might
have
and
appreciate,
certainly
the
opportunity
today
to
to
to
share
some
some
some
pictures
and
ideas
with
with
you,
Mr
chairman
and
members
of
this
committee
and
other
distinguished
guests.
So
thank
you.
Jim.
A
In
the
interest
of
time,
I
think
we're
going
to
move
on
Beyond
questions
and
catch
our
other
presentations,
but
do
appreciate
the
information
about
the
liquidity
program,
which
I
think
is
vital
right
now
in
the
environment
that
we
find
ourselves
in
and
also
I
think.
It
is
a
little
bit
of
a
positive
to
look
at
some
of
those
graphs
where
we
see
that
that
delinquencies
and
things
of
that
nature
charge
offs
are
much
lower
than
what
we
saw
during
the
recessions
in
2008
through
2010
and
I.
A
A
At
this
time,
I'd
like
to
call
in
the
Hughes
up
with
Bluegrass
Bankers,
Association,
I've,
known
Anna
for
several
years
and
and
I
think
Edna
would
be
representative
of
what
many
of
you
are
from
small
rural
areas
in
this
in
this
committee
would
see
back
in
your
communities
a
locally
owned
bank
that
has
three
to
four
branches,
or
maybe
less,
maybe
a
few
more
and
she's
going
to
talk
just
a
little
bit
about
that
smaller
Bank
perspective.
On
some
of
these
things
as
she's
before
us
today,
so
thank
you.
P
The
button
it
should
turn
green
I
got
it
now,
I'm,
usually
pretty
loud
anyway,
but
good
morning
to
all
of
you.
I'm
Edna
Hughes
I'm,
representing
the
Bluegrass
Community
Bankers
Association
here
in
Kentucky
I
am
president
and
CEO
of
Lewisburg
Banking
Company
and
we're
located
in
Logan
County
next
February
in
2024.
We
will
turn
130
years
old
and
we
have
operated
under
that
same
Charter
since
February
of
1894.
P
and
that's
something
we're
very
proud
of,
because
I
do
feel
like,
and
there
are
still
several
really
old
banks
in
Kentucky,
but
the
numbers
are
decreasing
all
the
time
and
we've
had
such
wonderful
presentations
ahead
of
me
a
little
bit
nervous
because
I'm
like
okay
there's
a
lot
of
the
things
that
I
wanted
to
talk
about
and
they've
already
discussed
it,
probably
better
than
I
could.
But
what
they
shared
with.
You
is
all
very
true.
P
P
We
did
everything
by
hand.
Some
of
you
are
not
old
enough
to
remember,
but
Banks
always
closed
at
two
in
the
afternoon,
and
that's
because
we
had
to
do
everything
by
hand.
We
didn't
go
home
till
5
or
5
30..
Everything
was
handwritten,
so
a
lot
of
things
have
gotten
better
on
that
perspective,
but
then
again,
they've
gotten
so
much
more
complicated.
Also,
remember
very
well
that
we
had
three
to
five
policies
that
we
had
to
maintain.
P
P
So
we
are
regulated
by
the
state
of
Kentucky
in
the
Kentucky
Department
of
financial
institutions,
and
then
all
banks
have
a
federal
regulator
and
our
our
federal
regulator
is
the
Federal
Reserve
Bank
of
St
Louis
I.
Think
both
of
those
agencies
do
a
wonderful
job.
Kentucky
as
a
whole
has
always
been
a
conservative,
State
and
I.
Think
our
banks
are
conservative
and
I
think
that
you
know
that
that
has
really
played
a
big
role
in
the
fact
that
there's
been
very
few
bank
failures
in
Kentucky
over
the
years.
P
But
we
also
must
give
credit
to
our
state
and
federal,
Regulators,
I
believe
and
especially
our
state
Regulators,
because
they
know
us
better
than
anyone
else
and
the
kdfi
has
done
a
great
job,
as
you
well
know,
I'm
sure,
but
and
I
don't
want
to
step
on
any
toes
with
this,
but
I
really
feel
like
and
and
I.
Don't
know
how
all
that
works.
P
I'm,
just
a
small
community,
Banker
I
feel
like
they
need
some
more
money,
I
think
they're,
short,
staffed
I
think
that
they
can't
help
that
and
I
know
the
number
of
banks
that
they
are
regulating
has
shrunk
over
the
years.
But
if
we
want
to
maintain
those
good,
safe,
Banks
I
think
they
need
a
boost.
P
P
We
have
actually
had
some
federal
or
state
Regulators
in
the
bank
that
we
used
to
see
the
same
people
for
20
years.
We
would
see
the
same
group
of
people,
and
now
we
don't
see
the
same
people
every
time
when
they
come
every
three
years
and
we
might
ask
well
where
is
so-and-so
now
well
they're,
making
more
money,
they
went
to
the
Federal
Reserve,
they
went
to
the
FDIC.
They
were
hired
away
from
a
bank,
you
know
by
a
bank,
so
you
know
I
feel
like
that.
P
We
need
to
boost
and
help
them
to
boost
their
agency
by
you
know
whatever
that
takes
to
maintain
that
experience,
because
you
know
how
frustrating
it
is
in
your
own
jobs.
I
know
it
is
with
me
when
you
get
somebody
completely
trained
after
one
two
three
years
and
then
all
of
a
sudden
someone
that's
got
a
deeper
pocket
than
you
do,
hires
them
away,
and
you
have
to
start
all
over.
That's
not
good
for
your
institution,
your
business
and
I'm.
P
Certainly
certain
it's
not
good
for
the
kdfi,
so
I'm,
a
big
cheerleader
for
them.
They're,
our
friends,
regulation,
I,
think
Regulators
in
the
way
that
they
operate
with
banks
has
changed
much
over
the
years.
I
can
remember
as
and
maybe
it
was
because
I
was
so
young
and
so
green.
But
you
know
I
can
remember
they.
P
P
I
believe
because
of
his
strong
background
in
a
community
bank
and
in
banking
and
I,
know
he's
reached
out
to
the
kba
Bluegrass
Bankers,
the
kdfi
over.
You
know
the
last
several
months
to
be
able
to
get
us
to
start
thinking
about
things
and
to
join
together
to
again
strengthen
this.
You
know
business
that
is
so
important
to
every
aspect
of
our
state
or
of
our
Commonwealth
and
I
I.
Guess
in
saying
more
about
Community,
Banking
and
I.
P
P
Maybe
a
beauty
pageant
the
non-profits,
they
come
to
the
banks
and
they
expect
for
us
to
help
them
not
only
monetarily,
which
is
very
important,
but
guess
what
all
of
us
and
our
employees
are
out
working
at
those
county
fairs
and
the
4-H
steer
show
helping
to
make
everything
happen,
and
we
know
our
know.
Our
customer
base
very
well
I've
told
my
employees
for
a
very
long
time.
P
Even
long
before
I
became
president
that
there's
big
Banks
everywhere
they're
on
every
corner
and
now
they're
all
over
your
phone
and
any
any
way
you
want
to
be
in
contact
with
the
bank.
You
can
make
that
happen
and
the
only
thing
that
we
have
to
offer
in
the
community
bank
that
is
really
different
is
those
personal
relationships
and
I.
Think
that
is
that
that's
a
big
discussion
in
the
fact
that.
P
When
times
do
get
tough
and
we've
been
through
some
of
those,
obviously,
as
all
banks
have-
we
normally
can
get
on
top
of
those
things
before
they
really
happen.
Because
that's
how
well
we
know
our
customer
base
and
I
know
that's
not
possible
in
every
bank,
but
it's
really
important
in
a
lot
of
our
rural
counties,
possibly
underserved
counties.
P
We
talk
about
a
while
ago
with
the
Federal
Reserve.
He
was
talking
about
the
different
kinds
of
loans,
the
you
know
the
loans
that
people
have
to
get
with
pawn
shops
and
pay,
as
you
go
loans
and
type
things
like
that,
and
we
see
a
lot
of
that
and
we're
never
going
to
going
to
eliminate
all
of
that
ever
in
the
Community
Banks.
P
But
people
will
come
into
the
bank
and
and
they
will
not
have
a
good
credit
score
and
we
try
very
hard
to
coach
them,
because
sometimes
we
can
actually
get
some
good
collateral.
Maybe
Mom
Dad
will
co-sign
where
there'll
be
different
things
that
we
can
do
to
try
to
help
them,
but
it's
not
just
a
flat
no
like
with
maybe
a
centralized
lending
product.
We
know
those
people
and-
and
we
try
to
lay
out
a
plan
if
they'll
stick
with
us
to
be
able
to
help
them
get
credit.
P
So
I've
always
thought
you
know
it's
kind
of
like
the
the
food.
That's
the
worst,
for
you
is
maybe
at
your
Save
A
Lot
and
it's
really
cheap.
It's.
You
know
fatty
things
and
you
can
just
pick
up
a
box
of
cookies
for
two
dollars
and
macaroni
over
here,
but
if
you
go
to
really
get
good
food
at
Kroger
or
someplace
equivalent,
it's
expensive
and
it's
kind
of
the
same
way
with
credit
like
if
you,
if
you,
if
you're,
not
worthy,
then
you're
going
to
have
to
pay
a
whole
lot
more.
P
You've
got
to
shop
at
a
place
where
you're,
paying
24
30
percent
and
there's
just
a
fine
line
there
and
and
I
think
a
lot
of
times
that
we
can
help
people
in
the
Community
Banks.
And
you
know
we
talk
about
the
unbanked
I
think
the
last
statistic
I
saw
was
in
2021,
there's
four
and
a
half
percent
of
the
population.
That's
unbanked!
P
Let
some
of
these
Community
Banks
go
by
the
wayside
and
be
bought
up
by
the
bigger
Banks
and
I.
Think
we're
going
to
see
a
whole
lot
more
than
that
and
we're
going
to
see
a
spread
between
that
low-class
upper
class
that
you
know,
as
as
we
see
that
that
squeeze
and
then
the
small
business
lending,
something
that
we
do
very
well
and
the
icba
reported
last
year.
60
of
the
small
business
loans
in
this
in
the
nation
is
made
by
Community
Banks
and
again
it's
one
of
those
things
and
we
talk
about.
P
You
know
what
is
a
small
loan.
Twenty
five
thousand
that
happens
every
day,
maybe
15.
Maybe
we
just
need
this
little
piece
of
equipment
over
here
to
help
us
better
automate,
something
it
we
don't.
We
don't
typically
see
on
a
regular
basis,
half
million
750
000
loans.
A
lot
of
the
loans
that
we
do,
that
are
small
business,
are
under
a
hundred
thousand
dollars
and
it's
not
worth
a
lot
of
people's
time
to
fool
with
those,
but
that
is
the
backbone
of
our
community
and
they
employ
people.
P
Our
small
businesses
that
in
turn
bank
with
us-
and
you
know,
I,
don't
have
to
explain
to
you
what
that
trickle-down
effect
is
Community.
Banks
are
leaving
at
a
rapid
rate
and
I
think
that's
something
that's
fully
aware
by
everyone
as
well
and
and
there's
a
lot
of
things
that
factor
into
that
one
is
the
uneven
lending
playing
field
and
I'm
not
gonna,
dwell
on
that
very
often
but
I
or
very
much
more
in
this
presentation.
P
That
would
be
a
game
changer,
but
guess
who
else
would
be
a
game
changer
for
be
a
game
changer
for
all
of
our
local
governments
and
the
state
government?
When
you
didn't
get
our
money
for
those
taxes,
so
I
think
those
are
some
of
the
things
that
we
need
to
think
about
as
well
fintex
playing
a
big
role
in
the
way
banks
are
operating,
the
expense
as
a
whole,
a
whole
lot
of
our
expense
that
I
can
just
really
tag
back
to
when
Dodd-Frank
was
introduced
because
that
kind
of
started
a
roller
coaster.
P
We
were
forced
to
invest
in
new
software
technology
compliance
Personnel.
We
just
have
a
lot
of
high
fixed
costs
that
are
disproportionate
to
larger
institutions,
and
that's
just
pretty
well
the
tip
of
the
iceberg.
It's
really
funny,
because
in
1982
I
was
at
Western,
Kentucky,
University
and
I
wasn't
going
to
even
be
a.
G
P
P
That
would
be
more
fulfilling
I,
just
love
my
customers,
so
much,
and
the
people
that
I
work
for
and
the
people
that
have
helped
me
be
president
of
a
bank
now,
but
when
I
I
did
take
a
banking
class,
my
dad
insisted
on
that.
Even
though
I
was
going
to
be
this
journalist
and
that
Professor
he,
he
said
a
couple
of
things
that
have
always
stuck
with
me
and
the
two
things
that
I'll
share
with
you
is
that
in
1982
he
told
us
by
2020.
There
would
be
no
checks
he's
not
going
to
miss
it.
P
Don't
let
that
happen,
and
so
I
don't
have
all
the
answers.
But
I
just
appreciate
you
allowing
me
to
share
with
you
that
there
is
a
place
for
us
we're
the
Mainstay
in
our
communities,
but
the
trends
are
not
in
our
favor,
always
no
matter
how
much
we
all
love
to
talk
about
local
and
shopping
local
and
the
idea
of
local
and
small.
We
aren't
winning
right
now
when
Community
Banks
die
and
in
an
entire
sector
of
people
and
businesses
will
suffer
and
and
that's
for
sure,
we're
mostly
locally
owned.
P
A
Thank
you
and
I
appreciate
you
being
here
again
in
the
interest
of
time
I'm
going
to
move
on
to
our
final
presentation
of
the
day.
If
our
folks,
with
the
creation
of
the
all
player
claims
database,
could
come
forward,
introduce
themselves
for
the
record,
and
then
you
can
proceed
with
your
presentation.
G
Q
S
E
Well,
Mr
chairman,
thank
you
and
the
committee
members
very
much
for
the
opportunity
today
and
we're
here
today
to
really
highlight
the
the
imperative
for
establishing
an
all-payer
claims
database
in
the
state
of
Kentucky
and
if
we
think
about
what
the
vision
of
that
is,
is
that
the
all
pair
claims
database
is
to
improve
the
overall
overall
health
of
Kentucky's
children,
family
communities
and
workplace,
and
in
pursuit
of
that,
we
we've
spent
a
lot
of
energy
over
a
number
of
years.
In
this
concept
of
value
and,
of
course,
at
its
Basic
Value.
E
Is
this
delicate
balance
between
optimizing
quality
against
against
cost?
Obviously,
that
can
be
very
helpful.
We
have
a
wonderful
resource
in
Kentucky
called
the
Kentucky
Health
Information
exchange
or
k.
High
and
k-high
is
a
wonderful
resource
because
it's
a
conduit
for
transmitting
information
from
between
providers.
So
that's
another
resource.
We
have
the
Registries.
We
have
the
immunization
register,
we
have
the
cancer
registry
and
we
have
a
whole
number
of
of
what
we
call
Internet
of
Things,
where
increasingly
there's
all
kinds
of
devices
that
are
submitting
information
that
we
have
access
to.
E
So
as
we
build
this
Foundation
of
of
a
database,
that
gives
us
a
comprehensive
look,
we
begin
to
think
about.
Where
are
the
gaps,
and
where
are
some
of
these
other
parts
of
data
that
we
can
really
start
to
pull
together
and
create
a
much
more
complete
and
holistic
picture
of
what's
occurring
and
actually
create
what
we
call
a
single
source
of
Truth?
And
so,
if
we,
as
we
think
about
moving
forward,
let's
create
that
single
source
of
truth.
E
There's
a
couple
things:
there's
lots
of
goals
with
our
all
payer
claims
databases
you're
going
to
hear
about
some
of
those
in
just
a
minute
and
as
far
as
uses
and
users,
it's
a
growing
list
and
that's
really
determined
by
by
the
committee
that
helps
control
the
the
database
itself.
So
with
that
I'm
going
to
to
have
have
missed
Goins
talk
about
the
employer
perspective.
Q
Dr
langfeld,
and
just
to
give
some
credibility
to
coming
to
you
from
that
employer
perspective.
The
Kentuckiana
Health
collaborative
is
an
employer-led
multi-stakeholder
Coalition
out
of
Louisville
Kentucky,
but
our
mission
is
to
build
healthier
communities
through
high
quality,
affordable
and
Equitable
Health
Care
in
Louisville
throughout
Kentucky
and
Southern
Indiana.
We
have
been
around
for
20
plus
years,
so
I
wanted
to
share
that.
Q
Also
I
have
been
in
the
employee
benefits
space
for
about
15
years
and
I
led
the
Kentucky
employees,
health
plan
as
Deputy
Commissioner,
and
then
commissioner,
for
a
combination
of
about
10
years
and
three
governors,
so
I
feel
like
I.
Come
to
this,
having
been
in
the
seat
of
the
employers
but
also
leading
employers,
and
one
of
the
first
things
that
you'll
see
is
improving
the
health
of
employees,
while
controlling
costs
is
something
an
apcd
can
help
us
do.
Dr
langfeld
mentioned
all
of
the
different
data
sets
that
we
have
available
in
Kentucky.
Q
Even
the
Kentuckiana
Health
collaborative
has
a
data
measurement
program
where
we
look
at
hedis
measures
and
we
release
those
hedis
measures
and
we
look
at
communities,
but
all
of
these
pockets,
as
you'll
see
in
the
last
bullet,
does
not
put
everything
together
in
one
concise
place
that
we
can
really
look
at
high
quality,
affordable
and
Equitable
care.
In
that
second
bullet
you're,
probably
aware
that
in
the
last
year
the
federal
government
has
come
in
and
put
and
layer
on
employers,
I
mean
I
can
say
from
running
a
state
health
plan.
Q
We
always
looked
at
fiduciary
responsibility,
but
now
the
federal
government
is
saying
you
have
to
pay
and
are
responsible
for
paying
for
a
fair
price.
How
do
you
know
if
you're
paying
a
fair
price?
If
you
don't
understand
the
data
in
the
communities
and
across
the
state,
and
then
that
all
boils
down
into
that
benefit,
design
and
planning?
And
on
the
next
slide,
Dr
langfeld
mentioned
that
we
are
43rd
in
the
nation.
Q
So
this
the
state
graph
on
our
nation
graph
on
the
right
is
highlighting
communities
or
states
where
we,
the
ranking,
so
the
lighter
the
color.
The
better
Kentucky
is
in
that
dark
blue.
When
I
go
around
and
I
have
had
the
opportunity
to
go
around
the
country
to
talk
about
health
care
benefits,
I,
always
joke
at
Louisiana
and
Mississippi
I.
Think
goodness
for
them,
because
they're
lower
than
us
we're
not
going
in
the
right
direction.
We're
staying
as
low
as
those
other
Southern
in
States.
Q
If
you
look
to
the
left,
that
is
a
map
of
states
with
apcds
10
of
the
highest
help
ranked
healthy
states
have
an
apcd.
So
I
think
that
that
correlation
is
important,
that
you're
able
to
to
really
look
at
Health
Care
from
a
larger
lens.
When
you
have
all
the
data
in
one
place
the
next
slide.
This
is
a
concern
for
employers
when
we
recognize
for
the
last
few
years.
Q
Medicaid
and
Medicare
is
spending
at
a
particular
rate,
but
look
at
where
commercial
plans
are
paying
that
private
insurance
is
moving
and
increasing
at
a
rate
faster
than
Medicare
and
Medicaid,
and
if
we
can
go
to
the
the
next
slide,
Dr
langfield.
Thank
you.
This
is
what's
worrying
your
constituents,
your
communities
of
people
is
that
commercial
private
pay
they
are
in.
They
have
skin
in
the
game
too.
So
you
can
see.
73
percent
is
well.
My
glasses
are
not
helping
me
with
that
big
screen.
Q
I'm
gonna
have
to
look
at
my
little
slide
here
so
that
73
percent
is
overall
inflation.
Workers
earning
is
increasing
at
101
percent.
That
worker
contribution
at
the
very
top
in
the
light
yellow,
is
290
percent
for
a
family
premium.
We
can't
sustain
that
as
employers
or
as
communities
for
your
constituents.
We
have
to
do
better
and
being
able
to
understand.
S
Sure,
thank
you
so
you've
heard
about
what
an
apcd
is
and
about
some
of
the
reasons
why
we
need
one
I'm
going
to
talk
to
you
about
some
common
myths
and
misunderstandings
related
to
an
apcd,
so
myth
number
one
is
that
we
don't
need
an
apcd.
We
already
have
all
this
data
from
other
sources
next
slide
so
well.
We
do
have
a
lot
of
data
in
place,
so
we
have
Medicare.
S
We
have
Medicaid
data,
we
have
Hospital
discharge
data,
we
have
behavioral
risk
factor,
surveillance
system,
data
registry
data
and
on
and
on,
but
the
problem
with
those
data
sets
is
they're
not
linked
together
and
so
the
link
together,
piece
I'll,
give
you
an
idea
from
that
is.
Let's
say
we
want
to
use
the
hospital
discharge,
data
to
study,
opioid
overdoses,
and
so
we
want
to
know
how
many
people
went
to
the
emergency
department
with
an
opioid
overdose.
S
S
Myth
number
two
apcd
is
our
partisan
issue
for
number
three.
So
well,
that's
a
that's
a
good
question,
but
actually,
if
we
look
at
the
at
the
map
here,
these
are
current
apcds
around
the
country.
You'll
see
that
they
did
start
with
the
kind
of
the
Left
Coast
out
there
with
California
Oregon
and
Washington
and
New
York
and
the
Northeast.
S
But
more
recently,
we've
had
Texas
Florida
Georgia
Arkansas
Indiana,
all
within
2016
to
2020
and
2021
past
apcds
in
their
state
and
the
reason
they're
passing
these
things
is
because
they
want
to
lower
the
health
care
costs
for
people
in
their
state
and
get
a
better
idea
of
the
quality
of
health
care.
That's
delivered
in
their
states.
S
A
couple
of
use
case
examples
here,
just
from
some
of
these
states,
Arkansas
in
2017
used
their
apcd
to
study
medical
marijuana.
A
growing
use
case
in
in
many
of
our
states.
Florida's
apcd
is
really
focused
on
transparency
measurement.
They've
got
websites
for
consumers
to
use
to
look
at
Healthcare
quality
pricing
and
health
outcomes.
New
Hampshire's
insurance
department
is
using
apcd
to
revamp
Network
adequacy
requirements.
S
Texas
apcd
has
a
number
of
issues
that
they're
focused
on
and
they're
rolling
out
a
lot
of
programs
around
value-based
purchasing
and
value-based
Care
delivery
and
then
Utah
uses
their
apcd,
create
Dynamic
quality
measure
comparisons
that
they
they
use
in
maps
and
their
data
is
available
for
download
across
the
state.
The
next
one
number
three
here
apcds
are
used
to
regulate
and
cap
commercial
prices.
S
Apcds,
don't
have
the
authority
to
regulate
our
cap
prices,
some
states
do
cap
prices,
Montana,
Oregon
and
Washington
have
current
programs.
Those
programs
were
enacted
by
the
state
legislature,
not
the
apcds.
Apcds
only
provide
data
and
information
that
can
be
used
by
policy
makers.
Apcds
also
have
comprehensive
data
governance
requirements
that
govern
how
the
data
can
be
used.
S
Here's
an
example
of
the
data
governance
from
Colorado.
It's
you
can
see
it's
pretty
complex.
It
includes
reporting
relationships
to
the
governor
and
the
legislature
to
the
Department
of
Health
Care
policy
and
financing
in
in
Colorado,
as
well
as
there's
an
appointed
apcd
advisory
committee
that
consists
of
the
members
that
actually
submit
data
to
the
apcd.
So
people
that
will
submit
data
have
a
seat
on
that
advisory
committee.
S
There's
also
a
data
release
Review
Committee
that
anything
that
goes
out
of
the
door
has
to
be
recorded
and
go
through
this
committee
to
make
sure
it
meets
one
of
their
appropriate
use
cases
for
the
data
to
get
out
the
door
next
slide.
Myth
number
four
apcds
violate
patient
privacy,
but
patient
data
at
risk
of
data
breach.
Well,
apcds
follow
rigorous
data
procedures.
Just
like
most
other
health
insurance,
our
health
care
providers,
do
they
comply
with
the
HIPAA
high-tech,
National
Institute
of
Standards
and
Technology
reporting.
The
data
is
encrypted.
Submissions
are
sent
over
encrypted
connections.
S
Personal
identifiers
are
removed
and
replaced
with
encrispy
identifiers
as
soon
as
they're
they're
sent
to
the
data
source.
This
is
important
so
that
any
data
in
apcd
is
not
going
to
contain
individual
identifiers.
It
has
encrypted
numbers
that
allows
that
data
to
be
linked
across
data
sets,
but
it
doesn't
allow
any
identification
of
that
particular
person.
S
Other
identifying
information
like
age,
zip
codes
and
small
and
small
data
are
suppressed,
sometimes
so
that
you
can't
makes
it
harder
to
re-identify
patients,
even
if
you
don't
have
their
information
and
then
also
this
last
Point
here
is
data
release
follows
data,
use
agreements
generated
from
the
data
governance
process.
The
only
data
that
gets
used
is
what
the
committee
that
governs
the
apcd
approves
apcds
report
inaccurate
data
and
did
not
give
submitting
organizations
opportunity
to
correct
errors.
S
There's
most
apcds
use
a
common
data
set.
That's
called
the
all-payer
claims
database
common
data
layout.
This
helps
ensure
Harmony
and
harmonize
the
claims.
Data
across
States,
if
you're
an
insurance
provider
that
that
the
28
states
that
have
apcds
now
you
can
submit
the
data
in
the
same
format
you
do
in
all
your
other
states
that
would
be
in
in
any
of
the
states
makes
it
easier
on
them
to
generate
their
processes.
To
do
this,
they
also
also
have
workflow
where
data
is
submitted.
S
Data
then
gets
loaded
into
the
system
sent
back
to
that
provider.
To
look
at
to
say:
does
the
data
look
correct
to
you?
They
get
to
sign
off
on
the
data
before
it
gets
used
for
any
kind
of
research
and
Reporting.
So
these
data
submissions
follow
this
prescribed
process
which
allows
checks,
validation
and
testing.
S
The
last
slide.
I
want
to
talk
to
you
about
our
last
couple
of
months.
Here
is
well
what
are
the
elements
of
a
good
apcd
program?
So
if
you
look
at
the
purpose
here,
we've
got
kind
of
four
or
five
bullets:
understanding,
healthcare
costs
and
utilization,
Trends
and
treatment,
settings
providers
and
modalities
informed,
State,
Healthcare
planning
and
targeted
populations,
support
research,
evaluate
the
effectiveness
of
care
programs
and
improve
accessibility,
adequacy
and
affordability
of
Health
Care.
S
E
Okay,
thank
you,
Jeff
and
so
really
to
sum
it
up,
as
we
think
about
moving
from
our
current
state,
which
is
a
system
that
is,
is
sallowed,
it's
opaque,
it's
unsustainable
and
how
we
think
about
moving
forward
to
a
time
where
we
can
really
quantify
improvements
in
our
health,
at
both
the
individual
level
and
a
population
level,
and
to
do
that.
The
apcd
we
talked
about
is
a
foundational
resource
and
tool
to
help
do
that.
This
is
not
a
New
Journey.
E
We
we've
been
exploring
this
journey
at
least
five
years
ago,
Dr
Alvarado
started
this
process.
We've
had
multiple
discussions.
We
had
a
work
group
that
include
all
stakeholders
around
the
state
for
over
a
year
and
a
half
trying
to
sort
through
all
the
issues
that
needed
to
be
addressed,
including
privacy
and
security
and
and
all
of
the
perspectives
from
the
different
stakeholder
needs,
and
we
reached
a
point
now
where
we're
asking
you
to
consider
putting
this
resource
in
place,
because
we
are
well
behind
other
states,
it's
a
time
where
data
is
significantly
increasing.
E
C
D
All
I've
had
a
couple
meetings
about
this
in
the
past
and
the
idea
of
the
program
I
can
kind
of
understand
and
kind
of
get
behind,
but
the
devil's
always
in
the
details.
So
who
would
maintain
the
database?
Who
would
have
access
to
the
information
of
the
database?
Who
is
responsible
for
reporting
the
information
that's
needed?
Are
we
going
to
put
additional
burden
on
the
Health
Care
system?
E
Tape
yeah,
thank
you
for
the
question
and
I'll
I'll
start
start
to
answer
it
and
there
may
be
some
additional
information,
but
first
of
all,
I'll
start
with
the
providers
themselves.
This
should
not
place
any
additional
burden
on
the
part
of
the
providers,
because
this
really
they've
already
submitted
their
claims.
They,
you
know
they
the
part
of
the
issue
with
the
claims
themselves.
Is
they
don't
get
paid
unless
they
submit
those
to
begin
with,
so
they
don't
have
to
handle
it
again
to
get
it
to
the
database.
E
The
issue
relative
to
thinking
about
things
like
privacy
and
security
who
manages
the
database?
How
is
it
how?
How
is
what's
the
operation,
no
processes?
Those
are
all
things
that
are
established
as
we
work
through
the
various
pieces
of
it,
including
the
governance
that
Jeff
was
talking
about.
Some
states
put
it
in
a
in
in
in
a
governmental
entity.
E
Some
states
put
it
in
a
quasi-governmental
entity,
and
so
those
are
things
that
would
need
to
be
worked
through
and
a
lot
of
those
questions
are
are
vetted,
as
you
think
about
where
the
funding
might
come
from
and
how
to
optimize
the
funding.
The
levels
that
are
available
so
was
there
a
question:
I
didn't
answer
there.
D
The
so
when,
when
I
go,
see
a
doctor
and
I'm
referred
for
X
treatment,
you're
telling
me
that
when
the
doctor
submits
for
reimbursement
for
that
claim,
whether
it's
to
Medicare
or
through
private
insurance,
that
so
it'll
be
the
the
government
itself,
chfs
or
Medicaid
or
whoever
will
have
to
report
that
or
the
insurance
companies.
That's.
E
Correct,
so
if
you,
if
yeah,
is
there
a
question,
follow
up?
Okay?
Yes,
the
the
claims
themselves
are
already
submitted
to.
It
may
be
Medicare
Medicaid
insurance
company
it.
It
could
be
through
a
self-funded
employer
who
still
has
an
insurance
kind
of
or
a
third
party
administrator,
that
processes
that,
but
that
data
then
all
resides
in
those
third
parties
who
would
submit
the
data
from
their
database.
Okay,.
E
Yeah
we
we
have
examples
and
actually
there's
an
all-pair
claims
database
Council
that
tracks
all
of
this
at
a
national
level.
But
what
I
can
tell
you
is
that
the
funding
to
establish
an
all-pare
claims
database,
particularly
in
today's
world,
where
a
lot
of
the
original
hurdles
and
friction
points
about
obtaining
data
and
transferring
data
are
are
really
significantly
lower
than
they
were
before.
So
the
general
answer
is
we're
not
talking
about
increasing
a
cost
burden
either
on
the
provider
side.
S
Most
other
states
have
a
standardized
process
that
comes
from
this
apcd
Council,
that
it
determines
the
process
of
what
data
gets
submitted
in
exact
format.
How
that
data
then
gets
validated
and
checked
and
then
sent
back
to
those
providers.
To
then
say
yes,
this
looks
like
what
we
sent
you
and
what
we
think
it
should
be.
So
there's
this
check
on
what
they
submitted
was
actually
correct
before
it
gets
used.
Okay,.
D
And
then,
finally,
the
I
guess
I
take
issue
with
the
idea
that,
because
Kentucky
doesn't
have
this
apcd
is
why
we
rank
so
low
in
these
Healthcare
metrics.
When
you
know
we
know
the
biggest
one
of
the
biggest,
if
not
the
biggest
issue
facing
Kentucky
is
obesity
and
substance
abuse,
whether
that's
tobacco
alcohol.
D
But
you
know
you
just
look
at
obesity
and
you
can
tie
that
with
you
know
to
diabetes,
heart
heart
disease.
You
know
the
list
goes
on
and
on
cancer,
but
we've
got
all
this
data
already
and
it
doesn't
seem
like
we're
making
any
ground
in
these
areas,
because
I
mean
we.
We
know
the
Obesity
epidemics
kind
of.
What
is
why
we're
seeing
increased
cost
of
care
I
mean
even
through
covid.
It
was
the
number
one
comorbidity
in
determining
you
know
patient
outcome,
and
we
see
that
all
across
the
right.
D
Q
Obesity
is
a
disease
state.
So
we
have
to
deal
with
the
stigma,
but
obesity
Also
may
have
issues
with
where
people
live.
Can
they
get
to
the
doctor?
Do
they
have
do?
They
live
in
a
food
desert?
What
are,
and
we
don't
really
understand
all
that
unless
we're
able
to
look
at
information
about
our
state
and
our
communities
holistically,
and
that
is
what
some
of
the
other
states
that
Dr
Talbert
shared
by
looking
at
these
larger
areas,
sud
was
the
Florida
example.
S
I'll
just
add
one
more
piece
of
that,
and
that
is
if
you,
if
we
know
where
the
problems
are
and
exactly
where
they
are,
then
we
can
enact
or
we
can
think
about
what
program
can
we
put
in
place
to
try
to
address
that
problem,
and
then
we
can
measure
and
see?
If
does
it
work,
or
does
it
not
work?
Otherwise,
we
put
programs
in
place.
Now
we
don't
have
any
really
way
to
tell
how
well
they
work
or
don't
work,
and
so
it
makes
it
really
hard.
D
I
mean
it
appears
to
me
the
problems
everywhere.
I
mean
it's
all
across
Kentucky
and
particularly
in
rural
Kentucky
and
I'm.
Just
maybe
I
just
need
to
meet
with
you
all
after
this,
so
you
can
kind
of
explain
how
once
we
have
the
data,
how
it's
going
to
improve
anything
because
we've
had
the
data
for
years
and
it's
we've
not
done
anything
with
it.
E
Well,
I
think,
that's
part
of
the
whole
point
is
we've
had
data.
A
lot
of
the
data
is
very
retrospective.
It
might
be
a
couple
of
years
old,
for
example,
so,
looking
back
two
years
ago
and
seeing
what
happened
then
didn't
help
me
today.
Also,
it
is
full
of
a
lot
of
gaps
as
Jenny
was
saying,
because
we
don't,
if
we're
trying
to
understand,
what's
happening
in
a
local
community
level.
E
We
may
know
what's
happening,
maybe
in
some
of
the
Medicaid
patients,
maybe
some
of
the
Medicare
patients,
but
but
it's
all
very
fragmented,
so
we're
trying
to
to
make
assumptions
again
when
we
talk
about
assumptions,
let's
quit
making
assumptions
about
what
the
issues
are
and
where
we
can
develop
appointed
strategic
plans.
Let's
let
the
data
help
drive
that
in
the
most
comprehensive
way,
because
we
know
that
at
least
80
percent
of
what
drives
Health
outcomes
has
nothing
to
do
with
what
we're
doing
in
our
in
our
health
system
today.
E
So
we're
we're
just
treating
the
symptoms
rather
than
addressing
some
of
the
core
drivers
of
that,
whether
that's
food
or
Transportation
or
housing,
or
you
know
our
social
environmental
factors
and
so
as
we
think
about
what
those
gaps
are
and
how
we
can
fill
those
gaps
and
understand
more
completely.
With
the
data
the
more
targeted
we
can
be.
E
T
Thanks
so
much
for
this
presentation,
I'm
sad,
it
came
so
late
and
so
many
of
our
colleagues
are
gone
because
I
think
it's
a
really
important
conversation
I'm
glad
we're
considering
it.
I
just
wanted
to
start
by
letting
everyone
know
that
encoil
passed
a
model
act
in
Minnesota
just
a
couple
weeks
ago
on
this
subject.
So
it's
something
my
colleagues
may
want
to
take
a
look
at
since
we
all
respect
that
organization.
T
Could
you
all
just
talk
a
little
bit
more
about
this
from
the
consumer
and
the
patient
side
and
I'm
very
familiar
with
the
Civic
program
in
Colorado,
which
I
I
tend
to
think
of
as
sort
of
a
gold
standard
for
this?
So
could
you
just
talk
about
how
these
can
help
the
consumers
and
then
to
the
previous
question?
S
Sure
so
the
a
lot
of
the
apcds
do
have
Quality
Systems,
that
and
and
actually
pricing
systems
and
cost
systems
as
well.
But
the
quality
ones
seem
to
be
the
most
prevalent
across
the
different
apcds,
where
you,
as
a
patient,
can
log
on
to
see
how
the
quality
ratings
of
all
different
types
of
providers
in
your
area
for
pharmacy,
for
example,
in
the
in
the
Florida
system,
you
can
log
on
to
webpage
today.
Look
up
a
drug
in
your
county
and
it'll.
S
Tell
you
all
the
prices
at
the
different
drug
stores
in
your
county
and
how
much
that
costs.
Now
it
doesn't
have
your
insurance
data
if
you
have
insurance
and
how
that
might
change
the
price,
but
at
least
it
has
those
those
prices
across
there
like
that,
so
I
think
as
a
patient,
you
do
have
access
to
some
of
those
tools
to
help
understand
the
HealthCare
Marketplace
some,
but
then
also
you
have.
S
The
patients
will
benefit
because
their
employers
are
going
to
be
trying
to
look
at
how
they
invest
in
high
quality
care
and
avoid
low
quality
care
so
that
your
patients
will
end
up
having
to
pay
less.
For
for
their
premiums
for
their
health
insurance
and
it
while
they're,
while
everyone's
Health
gets
improved
overall.
H
E
Hl7
would
be
clinical
data
right,
so
claims
data
are
what's
called
HIPAA
transaction
sets
right,
so
HIPAA
transaction
sets
are
what
what
defines
the
the
layout
of
the
of
the
data
set
itself
that
insurance
companies
use.
So
it
is
not
an
hl7
feed.
Hl7
would
come
from
an
electronic
medical
record.
For
example,
okay,.
H
E
You
begin
to
integrate
those
sets.
Then.
Not
only
can
you
see
what
happened,
let's
say
you
had
an
office
visit.
You
could
actually
see
here's
the
blood
pressure,
here's
the
blood
sugar,
here's
elements
of
what
occurred
at
a
more
granular
level.
So
that's
the
beauty
of
beginning
to
link
data
sets
together
and.
H
And
my
point:
the
reason
for
asking
that
to
the
gentleman
from
Rock
Castle's
comments
and
questions
earlier
is
I,
don't
Envision
that
anybody
would
be
filling
out
paperwork
for
these
reports.
It
would
be
set
up
in
an
electronic
feed
over
the
integration
to
automatically
transport
this
data
to
the
data
set.
So
there
would
be
a
little
bit
of
work
up
front
to
establish
that
feed
much
like
an
hl7
feed,
but
once
it's
established
and
tested
it's
there
and
it's
working.
Yes
other
states.
S
Q
That's
basically
what
I
was
going
to
say.
You
can
see
those
areas
where
you
can
hone
in
like
obesity
and
focus
in
on
a
program
or
a
project,
and
you
can
see
success
but
as
I
mentioned,
10
states
that
are
very
healthy
are
also
states
that
have
apcds.
That's
not
a
direct.
You
know,
I'm,
not
saying
it's
a
one-to-one,
but
what
I
am
saying
when
you
can
understand
the
data,
you
can
work
toward
Better
Health
outcomes,
which
is
what
Dr
Talbert
basically
just
said.
N
You
Mr
chairman
a
comment
and
a
question.
Thank
you
all,
first
of
all,
for
presenting
and
also
taking
time
to
sit
down
with
me
and
and
really
walking
through
this
I
think
this.
This
has
a
lot
of
potential
and
I
especially
appreciate
one
of
your
last
slides
the
elements
of
a
good
apcd
legislation.
That
being
said,
I
think
there's
a
lot
of
questions
as
well.
So,
like
you
know,
I'm
in
Pharmacy
space,
so.
Q
N
G
N
A
You
we
did
have
one
person
sign
up
that
wanted
to
speak
as
a
response
to
some
of
this
discussion:
Jim
Musser
from
the
hospital
Association
if
you'd
come
forward,
Jim
give
you
about
five
minutes
if
that'll
work,
we
have
run
along
today
and
I
apologize
to
everyone
for
that.
But
I
think
these
were
all
very
worthy
topics
that
needed
to
be
addressed
in
the
time
that
we
find
ourselves
in
right
now
so
Jim.
If
you
would
just
introduce
yourself
for
the
record
and
then
you
can
proceed
with
your
comments.
R
There's
no
question
that
data
is
is
useful
and
there's
certainly
no
question
that
the
folks
seeking
an
all-pair
claims
database
want
better
outcomes
for
our
patients.
Everybody
does
I
can't
imagine
if
there's
anybody
in
this
room
that
doesn't
want
to
improve
health
here
in
Kentucky,
and
that
is
certainly
why
hospitals
exist.
It's
you
know
it's
our
mission
to
restore
Health
to
preserve
life,
to
bring
new
life
into
the
world,
and
so
you
would
think
we
might
be
at
the
Forefront
of
this.
R
If
an
all-payer
claims
database
was
the
answer,
but
it's
kind
of
a
solution
looking
for
a
problem,
because
it
is
not
a
mythology
that
there's
plenty
of
data
already
available.
If
you
want
to
know
how
Medicaid
is
spending
money,
the
data
is
already
there.
The
Cabinet
for
Health
and
Family
Services
actually
has
a
web
page
with
data
that
they've
been
collecting
in
collaboration
with
the
house
hospitals
for
basically
20
years.
R
L
R
There's,
not
a
direct
correlation
between
healthy
States
and
an
apcd,
not
saying
that.
Having
data
isn't
helpful
to
making
policy,
it
is
absolutely
crucial
to
making
policy
this
just
isn't
the
right
way
to
go
about
doing
it.
If
you
want
data,
it's
already
there,
adding
another
layer
of
bureaucracy,
adding
more
cost
and
and
I
would
disagree
with
representative
all
just
a
little
bit.
It's
not
just
The
Upfront,
there's
their
ongoing
costs
for
the
state
in
maintaining
the
databases,
so
adding
another
layer
on
doesn't
really
make
much
sense.
R
Apcds,
don't
necessarily
give
you
any
more
transparency
than
the
federal
government
is
already
requiring
hospitals
I.
You
know,
I
can't
talk
to
doctors
and
Pharmacists
and
dentists,
but
hospitals
are
already
federally
mandated
to
share
300
shoppable
services
so
that
people
can
compare
prices,
their
charges
for
every
service
and
every
item
that
the
hospital
offers
the
negotiated
price
with
each
payer
for
each
of
those
services
and
items
is
on
those
websites
and
the
discounted
cash
price
is
on
there.
So
there's
there's
plenty
of
transparency.
R
Quite
frankly,
the
problem
in
the
shoppable
services
really
is
that
there's
not
much
incentive
for
the
insured
person
to
do
the
shopping,
because
the
savings
simply
goes
back
to
the
insurance
company.
It's
not
I'm,
not
incentivized
as
the
insured
to
shop,
because
the
savings,
if
I,
if
I
get
savings,
is
simply
going
to
accrue
to
the
insurance
company.
So
there
are
all
those
things
that
are
involved
so
I
think
we
ought
to
be
very
cautious
going
down
this
road
again.
We
all
want
to
see
those
good
outcomes.
R
It's
not
something
that
you
know
any
of
us
would
disagree
about.
You
know.
I've
worked
with
Ms
Goins
and
many
of
the
people
sitting
here
behind
me.
Their
intentions
are
all
good,
but
the
hospitals
think
that
that
this
is
probably
sort
of
a
solution
searching
for
a
problem.
The
the
data
is
there.
If
you
want
it.
T
Thank
you.
Thank
you
for
being
here
today,
I'm
just
going
to
push
back
a
little
bit
on
that
last
statement
that
you
made
that
that
patients
aren't
incentivized
to
shop
I'm,
a
small
business
owner
when
I
first
moved
back
to
Kentucky
I
had
to
buy
my
own
policy,
which
had
a
really
large
deductible
I'd,
be
incentivized
to
shop.
T
If
I
was
going
to
have
a
treatment
or
procedure
that
was
less
than
my
deductible
I'm
still
in
incentivized
to
shop,
if
I
have
co-pays
so
I
just
I
think
that
I
love
the
idea
of
the
shop
ability
in
the
future
of
this
so
I'm
just
going
to
give
you
a
little
bit
of
push
back
there.
If
you,
if
I
am
mistaken,
then
please
correct
me:
yeah.
R
I,
don't
think
we're
I,
don't
think
we're
on
different
pages,
representative
I
think
it's
a
it's
a
case
of
who
who
benefits?
Who
gets
the
savings
once
upon
a
time,
I
was
self-employed
too
and
you're
absolutely
right.
The
insurance
costs
for
the
self-employed
certainly
make
you
want
to
want
to
show
up.
Excuse
me
I'm,
so
sorry
certainly
make
you
want
to
shop
and
make
sure
that
you're
getting
the
best
bang
for
your
buck.
I
just
think
as
it's
currently
set
up.
R
R
I
I
certainly
understand
that
position.
The
state
doesn't
spend
money
on
Medicare
or
private
insurance,
except
for
your
employees.
It
spends
billions
on
Medicaid.
That's
that's
really
the
key,
and
there
was
a
a
little
bit
of
a
of
a
misnomer
in
one
of
the
slides.
That
said,
that
Medicaid
only
covers
people
who
can't
afford.
It
also
covers
a
lot
of
elderly
people
because
they're
they're
dual
eligibles
there
any.