The 2nd meeting of the Interim Joint Committee on Banking and Insurance was held on Tuesday, August 22, 2006, at 10:00 AM, in Room 149 of the Capitol Annex. Senator Tom Buford, Co-Chair, and Representative James Bruce, Co-Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Tom Buford, Co-Chair; Representative James E Bruce, Co-Chair; Senators Julie Denton, Ernie Harris, Gerald A Neal, Richard "Dick" Roeding, Dan Seum, and Tim Shaughnessy; Representatives James R Comer Jr, Ron Crimm, Robert R Damron, Mike Denham, Ted "Teddy" Edmonds, Joseph M Fischer, Danny R Ford, Jim Gooch Jr, J R Gray, Mike Harmon, Jimmy Higdon, Dennis Horlander, Dennis Keene, Charles E Meade, Rick W Rand, Frank Rasche, Steve Riggs, Brandon D Smith, Ken Upchurch, Ron Weston, Rob Wilkey, and Addia Wuchner.
Guests: Cordell Lawrence, Executive Director, Office of Financial Institutions; Joyce Hagen, President, Passport Health Plan; and Bill Wagner, Chairman, Passport Health Plan Partnership Council.
LRC Staff: Greg Freedman, Rhonda Franklin, and Jamie Griffin.
The minutes from the July 25, 2006, meeting were approved.
Cordell Lawrence, Executive Director, Office of Financial Institutions, addressed the committee regarding Senate Bill 123 and the preparations being made to license money transmitters. He stated that there are 10 licensed entities, with 10 being reviewed and they expect an additional 25 applications. He gave the committee a brief update on the Financial Literacy 2010 program. He also updated the committee on the growth of the Check Cashing/Deferred Deposit company business in Kentucky since the passage of the 1998 legislation. He stated that the number of businesses has grown from 307 in 1998 to 720 as of June 30, 2006. He stated that there needs to be stronger enforcement power given to the Office of Financial Institutions with respect to check cashing businesses in Kentucky. He stated that internet payday lenders have become a problem and they have received many complaints regarding those. He also stated that the Department of Defense is investigating the use of these businesses by military personnel. He stated that the military base at Fort Campbell, Kentucky is specifically mentioned in the study by the Department of Defense.
Representative Jim Bruce stated that the annual interest rate charged by these businesses is about 460%.
Senator Dan Seum stated that there is a necessity for the payday lenders. He stated that people who use payday lenders usually cannot obtain a loan at a bank.
Shannon Turner, Passport Health Plan, introduced Joyce Hagan, President, Passport Health Plan and Bill Wagner, Chairman, Passport Health Plan Partnership Council, to the committee.
Bill Wagner stated that Passport is the only Medicaid partnership in the state. He stated the first member was enrolled in 1997, it covers a 16 county region and they serve 135,000 Medicaid and K-CHIP members.
Joyce Hagen stated that she is very proud of the Passport plan and it's success. She stated that it is a not-for-profit company. She gave the committee a brief update on the plan and stated that providers and members are highly satisfied with the program and there are documented savings for the Commonwealth and tax payers of Kentucky.
Representative Steve Riggs asked what would have to be done to expand services to other counties.
Shannon Turner stated that a waiver would have to be expanded from the Cabinet for Health Services to include other counties in the state.
Representative Jim Bruce made the motion for Mark Birdwhistell, Secretary, Cabinet for Health Services, to enter into discussion with Passport Health Plan to expand their plan to the remainder of the state. Representative Brandon Smith seconded the motion.
The meeting adjourned.