Congressman Barr Hosts Subcommittee Hearing in Lexington with Financial Leaders

Congressman Andy Barr convened a field hearing of the Financial Services Subcommittee on Financial Institutions and Monetary Policy on Friday in Lexington at Shrewsbury Hall, housed within Alltech’s Lexington Brewing & Distilling Co. Titled, “Financial Institution-Fintech Partnerships: Leveraging Third-Party Relationships to Increase Access to Financial Services,” the hearing featured commentary from five key business leaders, listed below:

• Steve Trager, Executive Chair, Republic Bank & Trust Company
• Kirk Chartier, Chief Strategy Officer, Enova
• Mike de Vere, CEO, Zest AI
• Ms. Karen Harbin, President and CEO, Commonwealth Credit Union
• Ms. Amy Roberti, Global Head of Public Policy, Stripe

Congressman Barr began the hearing by welcoming guests to Kentucky’s 6th Congressional District and making an opening statement on the importance of utilizing financial technology (referred to as “fintech”) companies to strengthen the banking industry and level the playing field across large-scale banks, community banks, and credit unions.

“On both sides of the aisle, there has been keen interest in fostering the prosperity of community banks, credit unions, and the businesses they serve,” Barr said. “There has been joint concern that our banking system has been losing some of its dynamism and breath. We do not want to end up with a ‘barbell’ banking system with a lot of ‘too big to fail’ banks and Wall Street institutions on one end, and a scattering of small financial institutions on the other without much in between. The strength of our financial system is its diversity, and that’s what we’re here to talk about today.”

Banks and credit unions partner with third-party vendors, which increasingly employ cutting-edge technology and artificial intelligence to meet the evolving needs of consumers and businesses of all sizes, while expanding access to and reducing costs of financial services.

Stripe, Zest AI, and Enova are all third-party vendors, headquartered in San Francisco, Burbank, and Chicago, and each provides a unique set of services utilized by Kentucky banks and credit unions.

After providing a broader overview of general operations, the “fintech” representatives elaborated on how they partner with companies in Kentucky to expand services.

“Smaller banks leverage the investments of companies like Enova for their marketing, data, analytics, servicing, compliance, and capital market capabilities, so they may better compete with those large money center banks,” said Kirk Chartier of Enova.

Trager and Harbin gave specific examples of how they utilize third-party relationships to enhance their business operations in Kentucky.

“We knew we needed to meet our members increased demand for a fast, frictionless lending experience. We set out to find a fintech partner in the marketplace that could help us meet our various challenges, and we found one with Zest AI and their underwriting tool,” said Karen Harbin of Commonwealth Credit Union. “Zest AI was ready to fill in the gaps with increased automation and accuracy. This allowed our underwriting teams to focus on members who need more personal support with the application. Their technology allowed us to say ‘yes’ to more members without majorly impacting charge-off and delinquency ratios.”

Also in attendance for the hearing were subcommittee members Congressman Mike Flood (R-NE), Congressman Pete Sessions (R-TX), Congressman Scott Fitzgerald (R-WI), and Congressman John Rose (R-TN). Each subcommittee member had five minutes to ask questions of the business leaders and provide relative commentary.

Congressman Barr concluded the meeting by thanking colleagues and witnesses for making the trip to Lexington, and recognizing the efforts of his staff and the staff of the Financial Services Committee for working so hard to “bring Congress to the people.”