The 3rd meeting of the Interim Joint Committee on Banking and Insurance was held on Thursday, August 30, 2007, at 2:00 PM, at the University Club on the University of Louisville campus. Senator Tom Buford, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Tom Buford, Co-Chair; Representative Tommy Thompson, Co-Chair; Senators Julie Denton, Ernie Harris, Gerald A. Neal, Dorsey Ridley, Dick Roeding, Dan Seum, and Tim Shaughnessy; Representatives James R. Comer Jr, Ron Crimm, Robert R. Damron, Ted Edmonds, Tim Firkins, Danny Ford, Jim Gooch Jr, J. R. Gray, Jeff Greer, Mike Harmon, Jimmy Higdon, Dennis Keene, Adam Koenig, Steve Riggs, Brandon Smith, John Tilley, Ken Upchurch, Ron Weston, and Susan Westrom.
Guests: Ballard Cassady, President & Chief Executive Officer, and Debra Stamper, General Counsel, Kentucky Bankers Association; and Bill Harned, AARP and Dale Short, AARP.
LRC Staff: Greg Freedman, Rhonda Franklin and Jamie Griffin.
The minutes of the July 24, 2007, meeting were approved.
Ballard Cassady, President, Kentucky Bankers Association, addressed the committee regarding fraud and financial crimes. Mr. Cassady further stated that banking institutions are already regulated at the state and federal level. Mr. Cassady stated that the most efficient way to deal with increasing "cyber" crime is through uniform, federal legislation. He stated that federal legislation would eliminate safe havens for criminals and would allow the federal authorities to pursue these criminals on a national basis. It does not mean, however, that there is nothing to be done at the state level to protect the financial industry and its clients. Mr. Cassady also state that security breach notification should be risk based only.
One area of increasing importance is the old fashioned bank robbery. Although bank robbery legislation does not necessarily fall within the jurisdiction of the Banking and Insurance Committee, it is of utmost importance to the overall stability of the banking industry, which is overseen by the committee. He stated that the Kentucky Bankers Association has approached the Judiciary Committee for the last two years asking for bank robberies to be included as a category of violent crime requiring mandatory minimum time served without success. He asked committee members to discuss this issue with their colleagues on the Judiciary Committee and encourage them to support mandatory served sentences on bank robberies.
Mr. Bill Harned, President, AARP of Kentucky, addressed the committee regarding the marketing of financial products to seniors. Mr. Harned stated that there are three things the legislature can do to protect the senior citizens of Kentucky: 1) There should be a single toll-free number for buyers or prospective buyers of financial products that has the capability to connect the caller with the source of information needed; 2) Institute and fund a public alert program that includes TV and other media, warning customers they need information before purchasing financial products and include consumers in the development of the message; and, 3) Give special attention to annuity marketing. Provide three business day "cooling off period" after the purchase of an annuity product. During this period the customer's investment will be held in escrow and immediately refunded upon cancellation of the contract. Mr. Harned urged the members to prepare legislation necessary to create these measures to protect the senior citizens of Kentucky.
With no further business, the meeting adjourned.