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A
One
I
know
I'll
ask
the
secretary:
please
call
the
road.
C
D
D
A
E
Mr
chairman,
my
name,
is
Mike.
Modell
I
have
been
fortunate
to
represent
entrepreneurs,
investment
funds
and
governmental
entities
throughout
Kentucky,
as
they
work
to
grow
their
businesses
into
businesses
a
fellow
kentuckians.
It
is
with
this
experience
that
I
come
to
Frankfurt
today
to
testify
in
support
of
Senate
bill.
109.
E
Existing
law
was
created
in
an
era
when
private
Equity,
Funds,
invention
or
Capital
funds
were
not
prevalent
in
the
modern
economy.
These
funds
provide
an
important
source
of
capital
for
small
businesses.
Senate
Bill
109
makes
two
changes
to
the
existing
regulation
of
investment
advisors.
First,
it
provides
for
the
adoption
of
a
new
exemption
for
private
fund
advisors,
based
on
a
Model
rule
adopted
by
the
North
American
Securities
Administration
Association,
the
oldest
International
investor,
Protection
Organization
of
its
kind.
This
exemption
qualifies.
E
The
this
exemption
provides
an
exemption
for
from
registration
for
fund
advisors
who
compile
with
certain
qualifications
and
operate
their
funds
in
accordance
with
the
exemption.
More
than
two
dozen
states
have
already
adopted
some
form
of
this
role.
Second,
it
modifies
an
existing
exemption
to
put
kentucky-based
fund
advisors
on
the
same
footing
as
advisors
who
are
not
located
in
Kentucky,
thereby
discouraging
funds
for
moving
their
offices
and
employees
to
a
nearby
State.
These
changes
could
mark
would
Mark
a
significant
advancement
for
Kentucky's
regulatory
framework.
E
D
Mr
chairman,
we
do
appreciate
the
time
as
Mike
said,
this
is
actually
a
very
simple
change
for
certain
funds
that
have
that
deal
with
higher
net
worth
investors
and
the
advisors
that
serve
them,
making
sure
that
they
get
treated
in
a
more
entrepreneurial
manner
as
they're
dealing
with
just
a
different
class
of
investor
as
defined
federally.
This
came
about
because
we
realized
that
there
were
several
folks
that
were
actually
leaving
Northern,
Kentucky
and
headed
into
Ohio.
I
know:
Louisville's
got
some
folks
who
are
being
advised
to
head
to
Indiana.
D
A
A
motion
in
a
second
Mr
chairman
knows
how
it
works.
Anytime.
You've
got
a
motion,
a
second
he's
ready
to
continue
on,
but
I
appreciate
you
bringing
your
your
guest
stuff,
the
other
day
to
where
we
had
opportunity
to
talk
about
this
issue
at
the
beginning
of
session
and
looked
like
something
that
is
going
to
be
helpful
to
everybody
across
the
state.
So
with
that
being
said,
as
secretary,
please
call
the
roll.
A
D
A
Cinder
Howe
I
think
is
running
just
a
little
lady's
got
a
meeting
going
on
in
his
office
on
a
issue,
so
we'll
go
ahead
and
do
Senate
Bill
209.
Now
this
is
actually
my
bill.
I'll
just
do
it
from
here.
It's
pretty
simple.
It's
an
issue
that
got
brought
to
me
earlier
in
a
session
from
from
an
issue
that
had
occurred
from
actually
the
hollow
walls
of
Senator
Alvarado,
still
hunting
US
senator
Douglas.
A
We
can't
get
rid
of
his
name,
so
it's
a
bill
that
he
had
passed
a
few
years
ago.
Senate
Bill
209
is
a
simple
fix
to
a
bill.
We
passed
without
opposition
in
2021
this.
A
This
is
to
fix
something
we
need
to
to
do
about
on
some
coupons
for
IRS
ruling
and
I
have
plenty
of
folks
that
are
able
to
body
to
testify,
as
John
Cooper
is
here
as
well
as
Maria
Cole,
so
I'll,
just
let
you
all
introduce
yourself
to
the
record
and
I
know
we
have
somebody
that
is
zooming
in
as
well
and
I
think
we
can
let
her
join
now
and
John
I'll.
Let
you
get
started
and
look.
A
F
There,
yes,
this
this.
Basically,
this
209
ensures
that
state
law
is
aligned
with
the
federal
Internal
Revenue
Service
Guidance,
with
relationship
to
the
deductibles
on
these
high
deductible
insurance
plans,
and
the
banks
administer
a
lot
of
the
hsas.
Do
you
want
to
go
into
any
further
detail
or
let
her
do
that.
A
Yes,
ma'am,
we
even
see
you
so
we'll
we'll
let
you
go
ahead
and
present.
H
Sure
so,
thank
you,
chairman
Carpenter
members
of
the
committee,
for
letting
me
give
a
few
remarks
here
today
on
why
the
committee
substitute
for
Senate
Bill
209
is
needed,
as
you
mentioned,
in
2021
Kentucky
enacted
Senate
Bill
45,
which
established
important
protections
for
patients
that
prohibit
the
use
of
accumulator
adjustment
programs.
H
Accumulator
adjustment
programs
are
used
by
insurers
to
exclude
the
value
of
cost,
sharing
assistance
from
Counting
toward
patient
posturing
requirements,
including
deductibles
and
out-of-pocket
maximums,
and
excluding
this
assistance
can
lead
patients
to
abandon
their
medicines
due
to
out-of-pocket
costs
that
they
may
not
be
able
to
afford,
and
so
after
Kentucky
passed
this
bill
in
April
of
2021,
the
IRS
issued
a
letter
on
the
impact
of
accumulator
adjustment
program.
Bans
on
the
ability
of
health
plans
to
qualify
as
a
high
deductible
health
plan
that
can
be
paired
with
a
health
savings
account.
H
So
as
a
result
of
the
input
from
the
IRS,
the
number
of
states
have
added
savings,
Clause
language,
similar
to
the
language
in
front
of
you
today
to
existing
accumulator
adjustment
program
bands
to
protect
patients.
In
the
event,
the
law
would
result
in
loss
of
Health
Savings
Account
eligibility
for
high
deductible
Health
Plans.
H
Some
of
these
states
include
Delaware,
Illinois,
Maine,
New,
York,
Oklahoma
and
Virginia,
so
these
states
have
passed
laws
specifying
that
exemptions
from
the
accumulator
adjustment
program
ban
for
high
deductible
Health
Plans
apply
only
up
to
the
minimum
deductible
set
by
the
IRS
and
ensure
protections
for
certain
preventive
services.
That
was
a
brief
explanation
of
the
language
I'm
happy
to
answer
any
additional
questions.
A
Yeah,
this
is
an
issue:
that's
we've
reached
out
to
several
of
the
insurance
companies
and
all
the
stakeholders
and
we've
not
had
any
opposition
at
all.
So
it's
just
a
clarification.
Everybody
wants
to
be
in
good
standing
with
the
IRS,
so
have
a
motion
on
the
bill
and
a
second
Senate
with
the
amendment
so
I'll
ask
secretary:
please
call
the
roll.
A
You
all
very
much
Christina.
Thank
you
for
zooming
in
appreciate
your
testifying
that
takes
care
of
Senate,
Bill,
209
and
109.
Senator
Hal
has
has
arrived,
and
so
we'll
have
him.
Do
his
presentation,
an
act
relating
consumer
loan
companies
I
think
you
have
a
some
guests
with
you.
I'll
have
those
folks
introduce
himself
for
the
record
and
send
her
Howell
you
ready
to
get
started?
Oh
yes,
thank
you.
I
Mr
chairman
this
bill
involves
consumer
lending.
We
had
a
very
similar
Bill
last
year
that
came
through
the
house
and
made
it
all
the
way
to
the
Senate
and
died
right
at
the
end.
For
a
couple
of
different
reasons,
the
parties
have
gone
back
and
worked
over
the
interim
for
a
for
a
number
of
times
resolving
the
issues
for
all
the
different
parties
and
are
in
agreement
on
this
bill.
It's
a
good
resolution
amongst
all
the
interested
stakeholders.
It's
an
access
to
credit
to
bill
at
its
heart
in
the
consumer.
I
Lending
space
there
are
are
certain
demographics
that
need
access
to
this
credit
that
don't
have
it
by
more
traditional
means,
and
this
allows
the
lenders
to
to
be
able
to
go
into
this
space
and
lend
effectively
for
them
and
I
think
it
simplifies
the
process
a
lot
and
the
thing
that's
probably
the
most
important
from
my
perspective
is
it
allows
this
us
to
keep
our
our
providers
more
in-state
for
the
for
these
Consumer
Credit
issues
and
where
we
can,
we
can
keep
an
eye
on
where
we
can
regulate
them,
where
we
can
do
some
things
and-
and
if,
in
the
absence
of
that
space
there's
there
are
other
option,
is
for
online
lenders
that
aren't
regulated
by
us
and
that
don't
have
caps
on
interest
rates.
I
So
it
protects
us
from
some
of
the
online
stuff
that
people
fall
victim
to
as
well.
I.
Think
I
need
to
to
bring
up
to
the
committee
that
DFI
Department
of
Finance
has
issued
a
letter
that
they're
not
comfortable
with
this
bill,
but
but
we've
we've
met
with
them.
A
number
of
times
on
it
I
think
is
it's
as
much
of
a
timing
thing
and
an
ultimate
and
an
ultimate
ability
to
monitor
this
is
as
much
as
it
is
anything
and
I'll.
Let
them
go
through
this
as
well.
I
I,
don't
know
which
one
of
you
wants
to
start,
but,
oh
so
we'll
start
start
with
Austin
and
please
introduce
yourself
and
start
with
your
testimony.
Absolutely.
J
My
name
is
Austin
Clancy
I'm
a
vice
president,
director
of
government
relations
for
One,
Main,
Financial
and
I
have
the
privilege
of
being
the
president
of
the
Kentucky
Financial
Services
Association
kfsa
is
made
up
of
a
consumer
finance
companies
that
specialize
in
serving
kentuckians
household
credit
needs
with
traditional
installment
lending,
we're
here
in
support
of
SB
165,
as
it
promotes
The
Beneficial
alignment
of
interest
between
borrowers
and
lenders
and
expanding
credit
options
for
kentuckians
SB
165
will
strengthen
Kentucky's,
regulated
non-depository
lending
Market
by
expanding
accessible
and
affordable
Consumer
Credit
options
for
more
hard-working
kentuckians.
J
Traditional
installment
lending
has
been
a
safe
and
Affordable
Credit
product
for
over
a
hundred
years.
Our
installment
loans
contain
fixed
interest
rates,
fixed
terms
and
fully
amortizing
level
payments
to
support
household
budget
management.
Each
loan
is
subject
to
strict
underwriting
criteria,
including
assessing
a
borrower's
ability
to
repay,
to
ensure
that
our
customers
receive
loans.
They
need
with
payments
that
are
manageable
to
promote
a
successful
consumer
outcome.
The
members
of
kfsa
operate
primarily
from
brick
and
mortar
networks
located
in
in
your
local
community,
throughout
the
Commonwealth,
supporting
those
communities
with
jobs
and
lending
capital
for
consumers.
J
Currently
Kentucky
statutory
rate
structure
limits,
State
regulated,
non-depository,
Consumer
Finance
lenders
from
providing
wider
Market
access
to
a
more
affordable
option
for
kentuckians
household
credit
needs.
In
many
cases,
this
forces
many
kentuckians
into
less
desirable
forms
of
credit
that
often
carry
rates
significantly
higher
than
what
SB
165
is
offering
well
at
first
glance,
lower
statutory
interest
rates
may
seem
better
for
consumers.
In
reality,
rate
structures
that
are
too
restrictive
to
serve
the
market
often
have
the
opposite
effect.
J
Overly
restrictive
rate
structures
often
cause
more
consumer
loan
applications
to
be
denied
with
most
kfsa
members,
having
turn
down
rates
between
75
and
80
percent.
Here
in
the
Commonwealth,
the
allowable
interest
rate
on
a
loan
is
a
direct
reflection
of
both
the
risk
associated
with
making
the
loan
and
the
ongoing
relationship
with
the
customer
through
community-based
Branch
branches,
which
facilitate
successful
customer
outcomes
without
an
interest
rate
comparable
to
servicing
a
broader
Market.
J
J
In
that
study,
61
counties
in
Kentucky
were
rated
credit,
insecure
or
credit
at
risk.
The
level
right
above
credit,
insecure
Kentucky,
ranked
13th
in
credit,
insecurity
and
Fifth
and
had
the
fifth
highest
number
of
counties
ranked
credit
and
secure,
meaning
that
those
consumers
do
not
have
access
to
the
credit
options
that
they
need.
J
This
lack
of
access
to
traditional
Consumer
Credit
has
caused
many
kentuckians
to
turn
to
online
lenders
that
are
not
licensed
and
regulated
by
the
state
of
Kentucky.
These
online
lenders,
utilize,
Federal,
preemption
and
Bank
partnership
models
to
import
rates
from
other
states,
with
some
rates
ranging
as
high
as
150
percent.
J
According
to
credit
bureau
data
in
2022
over
43
000
loans
were
made
in
Kentucky
through
online
channels
totaling
over
400
million
dollars
in
loan
volume,
a
court
that
that
statistic
accounts
according
to
the
credit
bureaus
for
23
percent
of
the
Consumer
Finance
lending
in
the
state.
To
be
clear,
the
rates
charged
by
these
online
lenders
are
higher
than
what
is
proposed
in
SB
165..
J
The
proposed
rate
structure
in
SB
165
will
allow
lenders
in-state
to
appropriately
gauge
risk
in
Lucid
underwriting
restrictions,
as
well
as
provide
a
better
basis
for
competition
with
online
lenders
to
provide
more
positive
outcomes
for
consumers
in
Kentucky.
In
addition
to
our
credit
offerings,
the
proposed
fee
changes
in
SB
165
will
modernize
how
consumers
can
get
loan
proceeds
clarify
how
various
payment
types
are
addressed
in
the
statute
and
allow
for
lenders
to
recoup
origination
costs
and
keeping
with
previous
statutory
modernization
efforts.
J
Sb
165
will
move
Kentucky
to
a
more
modern
lending
landscape
that
is
able
to
adequately
meet
consumer
needs
through
expanded
loan
offerings,
combat
inflation
and
provide
Kentucky
lenders
with
the
ability
to
better
compete
with
online
lenders
that
are
not
subject
to
Kentucky
law.
On
behalf
of
kfsa,
it's
in
its
member
companies
I
encourage
the
members
of
the
committee
to
vote
in
favor
of
SB
165..
Thank
you
for
your
time
and
happy
to
answer
any
questions.
If
you
have
them.
A
I'm
sorry,
I'll,
wait
and
we'll
have
the
questions
after
I'll.
Let
Bob
go
ahead
and
do
his
testimony.
If
that's
okay,
Bob
introduce
yourself
for
the
record
thanks.
K
For
being
here
good
afternoon,
thank
you.
Mr,
chairman
members
of
the
committee,
appreciate
you
having
us
here
today.
My
name
is
Bob
Whitehouse
and
I'm,
the
CEO
of
Eagle
Financial
Services.
We
have
27
Offices
here
in
the
state,
and
our
headquarters
is
actually
in
Florence
I'd
like
to
Echo
Austin's
comments,
but
I'll
do
my
best
to
not
repeat
them
as
well.
The
Kentucky
Consumer
Finance
Association,
its
membership,
is
supportive
of
Senate
Bill,
165
and
thankful
for
Senator
Howe
and
representative
Meredith's
work
to
help
Forge.
K
K
Additionally,
Senate
Bill
165
codifies
the
established
Department
of
financial
institutions
policy
that
the
loan
processing
fee
is
not
part
of
the
loan
principle.
Although
the
department
has
issued
official
guidance,
we
are
still
seeing
significant
litigation
because
the
policy
has
not
been
transferred
to
statute.
K
Second,
though,
installment
loans
have
been
around
for
over
100
years
with
very
little
change
to
the
product.
Just
like
every
other
business.
Our
customers
are
asking
for
more
electronic
interaction
and,
as
with
any
shift
in
technology,
the
lender
costs
to
provide
a
better
customer.
Experience
are
significant,
so
Senate
Bill
165
makes
two
important
changes
to
help
us
modernize
our
statutes
for
the
Contemporary
world.
K
First,
a
returned
payment
charge.
The
current
law
was
drafted
before
the
invent
of
PayPal
venmo,
the
cash
app
Etc
and
it
needs
to
be
modernized.
Senate
Bill
165
allows
the
return
payment
charge
to
include
insufficient
electronic
payments,
but
importantly,
it
does
not
change
the
fee
amount.
That
Remains,
the
Same.
We
want
to
provide
our
customers
with
the
flexibility
to
pay
and
their
preferred
electronic
means,
and
this
helps
ensure
that
we
can
allow
those
channels
and
provide
those
services.
K
As
you
know,
consumer
finance
companies
are
not
Banks
and
in
order
for
us
to
provide
these
type
of
services,
we
have
to
contract
with
third
parties,
and
these
vendors
obviously
charge
us
a
fee,
so
this
convenience
charge
will
help
us
offset
the
significant
cost
to
implement.
This
concludes
my
written
comments
and
I.
Thank
you
very
much
for
your
time.
Today.
A
I
appreciate
that
very
much
this
is
the
issue
it's
been
Senator.
Hal
knows
I've
talked
about
this
and
for
several
sessions
we've
been
working
on
this
and
I
I
appreciate
everybody
I'm
always
trying
to
get
folks
to
come
to
the
table
to
try
to
work
these
issues
out
and
if
both
parties
are
not
all
the
way
happy.
Most
time
we
have
the
bill
that
we
need,
and
so
I
think
this
bill
is,
is
once
again
that
and
I
appreciate
your
all's
efforts.
A
L
Chair
and
first
of
all,
thank
you,
Senator
Hal
I
know
this
is
a
tough
one
to
work
on
and
I
appreciate
you
and
also
Austin,
come
to
my
office
and
working
and
Bob
your
testimony
when
I
first
go
through
these
I
kind
of
get
that
well,
the
part
of
me
for
my
history
being
the
AG's
office,
doing
consumer
protection
litigation
and
stuff.
Obviously
you
look
at
the
numbers.
You
know
the
interest
rates
are
really
high
and
you
kind
of
get
that
that
worry,
because
you
don't
want
your
constituents
to
wind
up
upside
down.
L
But
I.
Look
at
this
like
a
lot
of
things
like
we
look
at
our
gambling
or
marijuana
and
things
and
say
it's
out
there:
it's
here
you
have
these
online
lenders
that
are
lending
at
these
tremendous
High
rates
and
in
the
event
that
individuals
don't
aren't
able
to
access
a
loan
they're
going
to
turn
to
the
online
lenders
that
we
don't
have
any
oversight
to
look
at
or
they
don't.
They
turn
to
Loan
Sharks
as
a
injury
law
attorney
a
personal
injury.
L
There's
a
lot
of
times,
I
get
people
who
you
know
there
may
be
small
limits
they're,
they
can't
work.
They
wind
up
in
really
really
tight
spots
and
I've
seen
them
turn
to
some
areas
that
I
hope
our
attorney
general
will
be
going
after
some,
but
sometimes
they're
out
of
the
nation
and
whatnot.
So
to
me,
I
started
off
just
just
not
be
able
to
jump
on
board,
but
I
think
because
of
the
good
work
of
our
senator
in
the
back
and
forth
and
the
compromise.
L
That's
worked,
I'm
a
yes
vote
for
it,
because
I
think
it
does
allow
a
service
that
needs
to
be
provided
to
our
individuals
and
if
we
are
too
restrictive,
I
was
looking
at
different
numbers
onto
it.
Well,
there
then
you
can't
loan
to
them
and
I
understand
that
the
risk
is
too
high.
They
go
to
the
online
lenders
eventually,
if
you
don't
lend
to
them
and
they
wind
up
upside
down.
So
I
think
this
is
a
good
compromise
and
I'll
be
a
yes
with
you.
C
Senator
I'd
like
to
congratulate
you
on
your
diligent
work
on
this.
As
you
know,
I've
been
very
passionate
about
this
issue
because
I
have
both
organizations
represented
heavily
in
my
district,
so
I
agree.
I
appreciate
the
compromise
here
that
that
you
all
and
your
organizations
have
been
able
to
reach
and
if
there's
no
further
questions
I'll
make
a
motion
on.
I
For
everyone,
and
thanks
for
your
time
there
and
I
do
want
to
say
thanks
to
to
all
the
people
involved
this.
This
was
a
process
that
that
they
really
did
a
good
job
of
working
through
and
sometimes
reworking
through,
and
it's
easy
to
to
get
lines
drawn
in
the
sand
and
not
budge
and
and
get
dug
in
and
if,
if
all,
if
every
issue
that
we
have
before
us
worked
like
this
issue
with
the
parties
coming
together,
our
job
will
be
a
lot
easier
and
I.
Think
our
product
would
be
a
lot
better.
M
Mr
chairman
may
I
explain
my
vote.
Please
I'd
like
to
vote
I
on
this
bill
and
appreciate
the
sponsor's
work
on
it
and
I'd
also
like
to
be
recorded
as
voting
I
on
Senate
Bill,
109
and
Senate
bill
209.
A
A
Have
a
motion
for
consent
and
a
second
Senator
Yates,
all
those
in
favor
signifies
saying
aye
any
opposed
we're
on
consent.
Gentlemen,
thank
you
all
for
your
efforts
and
and
all
the
folks
behind
the
scenes
that
put
this
together.
We
appreciate
you
all.
Thank
you.
Mr
chairman
I,
think
that
concludes
all
three
of
our
bills.
We
got
through
in
a
good
time
and
all
good
quality
stuff.
Is
there
anybody
that
brings
anything
before
the
committee
I
have
a
motion
for
a.