Back Channel Utah
Back Channel is a Utah politics, policy, and business podcast hosted by Marty Carpenter.
Every episode is a one-on-one conversation with someone who matters in Utah — an executive, a policymaker, a lobbyist, a community leader. Someone who's in the room when things happen.
The conversation has four parts: who they are before they're a title, the issue they're closest to right now, their read on what's happening in Utah, and a few lighter questions at the end. It's candid, it moves fast, and it doesn't sound like a press release.
Marty's been the one in the room too — as a governor's spokesman, his job was to take complex policy and make it clear, make it compelling, and keep it on message. That's still the job.
Back Channel. Off Script. On Record.
Back Channel Utah
Stablecoins, AI, and Utah’s Banking Boom with Howard Headlee
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In Episode 10 of Back Channel, Marty Carpenter sits down with Howard Headlee, President and CEO of the Utah Bankers Association, to talk about how deposits fuel lending, what stablecoins change, what the GENIUS Act is trying to solve, and how AI is reshaping banking.
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Off Script. On Record.
Utah's economy runs on more than just ideas. It runs on the quiet, often unglamorous work of bankers. Money is the lifeblood of the economy, and for nearly 30 years, one man has been the voice of the people who move it. He's led the Utah Bankers Association since 1997, navigating every financial crisis, every regulatory wave, and now a moment where the very definition of money is changing. Stablecoins, AI, digital assets. The future of banking is arriving fast, and Utah banks are being asked to run toward it, not away from it. My guest today is the president and CEO of the Utah Bankers Association, one of Utah's 100 most influential people, a member of the Tabernacle Choir at Temple Square, and, and I'm gonna ask him about this, a man who may have to decide where his hockey allegiance now belongs. Coming up on Back Channel, we go off script and on record with Howard Headley.
SPEAKER_01This is the Back Channel. Back channel.
SPEAKER_00You didn't hear this from me. Back channel. Hey, you're not gonna quote me, are you? What channel is it on? Back channel. Off script on record. Uh yeah, we don't really have an intro. We just jump in and get going.
SPEAKER_01So I prefer that. Yeah. I hate podcasts.
SPEAKER_00You went, you went uh uh full octane diet coke. And that's good. And we won't tell people how early in the morning we're we're diving in already with our first soda of the day, but nothing could be more Utah.
SPEAKER_01It's very helpful.
SPEAKER_00Yeah. Uh you've been with the Bankers Association for a long time. Tell me how long you've been there. 30 years. Is that amazing to you when you start to think 30 years?
SPEAKER_01First of all, it it doesn't seem like very long, but then it seems like a long time. Maybe it just depends on how you're looking at it. But never thought I'd do it for 30 years. Yeah. But um there's always a challenge, there's always sometimes a crisis, and there's just a never-ending list of things to do.
SPEAKER_00So does it ever make you laugh when you think about like what were banks like when you started at the Bankers Association? Like far less electronic, no internet banking, no none of that. I mean, we're talking 30 years, you go back to 1996, essentially, 96, 97. Uh I mean, paper deposit slips, things like that. Like a banking has changed a whole lot, not just on the policy side, but just the the way people interact with banks.
SPEAKER_01Yeah. Yeah. The interaction is obviously, I think, the biggest change. The policies fundamentally are the same. They had to adapt for these new innovations. But um the interaction is is what's fascinating. And it it's just always more, right? There are people, oh, we're gonna have ATMs, so we're not gonna need the branches. I think some people even like close down their drive-up windows and then they had to reopen them. I mean, you never eliminate any channel. You just add channels. Yeah. You went to ATMs and then you went to online banking and mobile banking, and you just keep adding them. And so when I hear people say, oh, you know, this is gonna happen and it's gonna change it, you know, it's like, not really. It'll be new, but it won't fundamentally change it.
SPEAKER_00It's funny you mentioned the vacuum tubes, right? That's like the one thing that hasn't changed with banking my entire life. I remember being a little kid and running to the bank with like my mom and having the vacuum tube kind of go back and forth over it. So how'd you get into the banking world? Like, is that what you went to school for and thought, I'm gonna go run the bankers' association someday? I'm guessing the answer to that is no.
SPEAKER_01No. No, I uh not at all. I mean, banking to me was what banking was to you, is the vacuum tubes and the in the suckers, you know. And oh, you can't forget the suckers. That's a great part of the bankers. Yeah, it's one of my favorite things that I did, but um I we created some specialty suckers for banks in Utah, which was they were very tasty. Um but no, I I I was like most everybody else, you know, went to college, didn't know what I wanted to do. Um I I majored in accounting because it was my worst subject. You know, and I figured, well, I better figure this out if I'm gonna go into business. And I BYU had like one of the number one accounting school in the country. So I figured, well, if I want to pay the tuition, might as well get the best degree. But then I found myself working in accounting and I was miserable, right? It wasn't my best subject. Um the school there was amazing and prepared me incredibly well. I um I I was you know performing really well and being promoted, but I I wasn't yeah, I wasn't gonna be an accountant. I mean, it's very important, but it wasn't who I was. I was I mean, I I was I played in a rock band, you know. But when I tell people I was I majored in accounting, they just look at me like, you did what? Um no, so yeah, I was I was an 80s rock, you know, fanatic.
SPEAKER_00Well, paint the picture for us on that. What instrument did you play and tell us about the costume that went along with that?
SPEAKER_01Oh because it's the 80s. The ripped jeans, the ponytail, the um I played keyboards and then was a lead vocalist, which is always awkward, right? Because you're behind a keyboard, but you're the lead vocalist, you've got to connect with the audience. Um you remember those axes? The guitar. You're a guitarist. Those were so ridiculous. I never did that. I was saying never did that.
SPEAKER_00No, I've got a clear picture now.
SPEAKER_01Ponytail, ripped jeans, and a guitar. That's no, I never did the guitar. Uh but when I when I did that, I would just leave the keyboard all entirely and you know, go into the the drunken masses singing like that. What was the name of your band? Oh, we had a number of names. The one that probably Intensive Care. Nice. Intensive care. And we had, yeah, a cool shirt with like a heartbeat, you know, the EKG thing on the front of it.
SPEAKER_00Very nice. Intensive care. I love it.
SPEAKER_01Perfect 80s.
SPEAKER_00Uh did you and Governor Huntsman ever connect on this? Because he played keyboards in a band called Wizard. Yes. And I'm picturing kind of the same thing.
SPEAKER_01Uh he I'm just offended he never asked me to sing, and I think he was just protective of being the keyboardist in the band. But uh, we've talked a lot about our our band days, and um it, you know, it's been great, you know. The the my my history of music starting from classical piano, classical voice, into rock and roll, pop, and then rock and roll, uh, and then vocal jazz and then the tabernacle choir. And you know, as kind of the full gamut. I I just retired from Tabernacle Choir, and it's like I did it all. Yeah, I did it all. I I feel really good about it.
SPEAKER_00So uh I want to get to the tabernacle choir in just a minute, but it feels like we're talking about sort of two sides of your brain that work impressively well because I put I I think of music on a completely opposite end of the of the brain spectrum than accounting.
SPEAKER_01Yeah, but that's why I majored in accounting, because it was like I I've gotta do this, I've gotta understand this, and I've got to nail this. So I majored in accounting. I went to work for KPMG, which was one of the largest accounting firms in the world. Um and I interestingly enough, I audited banks. Um and so that's kind of what where I started my interaction with bank. I've never worked for a bank. Now I technically I worked for all the banks, but I've never like worked in a bank um doing the banking thing. Um but I how I got into this job was pretty much running away from accounting. I was after a few years in accounting, I was like, I've got to do something else. So I went to MBA school just to kind of reset um and and and to figure out you know what I would really enjoy doing. And during MBA school, I took an internship at the state capitol. And I and I I'm gonna say this for the first time in a public setting. Breaking news. In accounting, those people who work in accounting understand in January what happens in the accounting world, we have to go out and inventory assets. Every every business has to determine these are my assets as of January 1, and somebody has to go out and and document those. So I had some of the most interesting inventories assignments. Like one was, you know, the big cement pipes that go under the streets and infrastructure. I I spent probably four weeks in the middle of January climbing around a huge yard full of cement pipes, inspect counting them and inspecting them to make sure that they weren't cracked, that they were, you know, still usable. Um, and I had to account for every pipe on this yard in the middle of January in Detroit, Michigan. Um it was it was brutal. So I had a number of just brutal accounting, you know, inventory experiences. So I'm rapidly approaching January in MBA school, knowing that KPMG, who I still worked for technically, were gonna call me with the absolute worst inventory assignment that no one else in the office wanted to do. And so I said, I better have an answer. So I took an internship up at the Capitol so I could say, Oh, I'm sorry I can't do that. Because I've seeing this internship up at the Capitol, um I took it literally to avoid a nasty uh inventory just to have an assignment for a while. Yeah. And um and I loved it. I I loved the policy, especially on taxes. My dad was massively involved in the State of Michigan in tax policy. He amended the Michigan State Constitution for tax limitation uh back in the big in 78 when the uh uh tax limitation proposals were running around the nation, Prop 13 in California. We had the Headley Amendment in Michigan. And um it was written actually by Milton Friedman. And and Milton Friedman and my dad were friends, and and he asked my dad to run this amendment in Michigan as a kind of a test. And it was a great proposal, and it passed. It was the first time the Michigan economy constitution of Michigan had been amended uh by a signature petition drive, and um and it literally saved the Michigan economy. Most people will say this the the Headley amendment was the thing that saved the Michigan economy when they lost so much. Um because it right-sized government, forced the government to adjust to the Trevor Burrus.
SPEAKER_00Tell tell us more about your dad then, because I we haven't touched on that at all. Like what did he do?
SPEAKER_01And uh my dad um he ran George Romney's presidential campaign in 1968. It's kind of the that's right after I was born, so that's kind of the first thing I remember. Um so he ran that campaign in 68. He ran this campaign to amend the Michigan Constitution. He ran for governor of Michigan in 1982. Um and his opponent wouldn't debate him. I was 18, I was in high school. His opponent wouldn't debate him, so I became they his opponent would send somebody to debate, and my dad would send me. So for about six months, I I was the guy that engaged in the debates with usually state senators, congressmen, um the the candidate for, you know, lieutenant governor. Um so it was a great political experience for me. But again, my background with my dad was on tax policy. So going and taking an internship with the Utah Taxpayers Association was it it turned out in retrospect to be this perfect fit for me. Um and it got me out of the inventories with KPMG. So uh I I started on doing that uh during my MBA, and I I just kept doing that. Um Howard Stevenson, who was the head of the Taxpayers Association at the time, decided to run for the state senate, and he won. So during the session, he had to be a senator from Draper. And me, the new guy at the Taxpayers Association, was thrust into the this leadership role right out of the chute, which was now looking back very rare. I was 30 years old, 28 years old, and and basically playing a lead lobby role for one of the more influential lobbyists in the state.
SPEAKER_00So But it sounds like you were accustomed to that. You're kind of getting pushed into the spotlight or pushed into the leadership role early because I I can imagine uh there are a few people, uh there are a few of us around who would say, man, there's nothing more fun than getting into a debate. Or there's nothing more fun than being in the spotlight. But at 18, I don't know if I would have said, I'm ready to go debate a state senator or someone running for lieutenant governor. Did thinking back to that time, like how how did you react to that? Were you just like, well, my dad said I gotta do it, so I gotta do it, or were you like excited about it, nervous?
SPEAKER_01Yeah, I loved it. I mean, I was it was it was um it was easy because you're the 18-year-old, no expectations. I could pretty much say or do anything in the audience would respond. It was it was torture for the the opponent. Yeah. Um, this young guy. Uh everybody was rooting for me.
SPEAKER_00Yeah, I guess if they go too hard against you, they look like a bully. And you can throw haymakers, and if you land one, it's awesome, right?
SPEAKER_01Exactly. It was not fair by any means. Um, but it was great, great background for me. But it was it was brutal. Michigan politics was was was not pleasant. You know, we had troopers living at our home driving us everywhere. Our house was evacuated in the middle of the night for bomb threats. I mean, it was it's a it's a tough place. Jimmy Hoffa was abducted like a mile from my house. You know, so it it's just a different environment. And after that campaign, was this in the Detroit area?
SPEAKER_00Did you live in the Detroit area? Yeah.
SPEAKER_01No, no. I was just in the suburbs of Detroit. Okay. And um after that campaign, uh I had pretty much had it. Yeah. It it was it was brutal. It was brutal on the family. People don't understand how hard these campaigns are for the members of the family.
SPEAKER_00Even the easy ones are hard on the family. But the tough ones are even more so.
SPEAKER_01This was Reagan's off year. This was when inflation and interest rates were in the 18 percent area. It was brutal. And uh we lost that race by about three three percentage points, and emotionally, we went to bed that non-election night thinking we had won. Then, of course, you know, Detroit vote came in late and we had lost. So I this whole debate about election integrity goes back decades for me, and and there are real issues there, there were real issues there. But, you know, my dad losing that race was one of the best things that ever happened to me. Number one, he made most of his money after that. So my kids and grandkids are excited that he lost. And number two, I I left Michigan. I was gonna go to the University of Michigan. I'm a Wolverine fan, you know, hate Ohio State, a Red Wings fan, you know that. Yeah, we'll talk more about that, trust me. But suffering Lions fan, but they've they've gotten better. Um but it I I left Michigan as a refugee. I was like, I'm out of here. I don't know how I got into BYU. I got into BYU in January. I never I can't even remember applying to BYU. It was just the election was over in November and we lost, and I wasn't gonna go to the University of Michigan and walk around in that environment. And so I just left town and I came out to BYU um mid-year and and just fell in love with it. I mean, holy mackerel, the weather here is better, the mountains are spectacular. I tried to go back to Michigan and work at KPMG, and it just I married a girl from California. She wasn't gonna have it. She didn't, wasn't a big Tigers fan. So we we ended up, I wasn't going to California, no way I was gonna go to California, so I said, well, let's go back to Utah and and try to make a life of it there.
SPEAKER_00So Michigan seems like an okay place to go visit in the summer and then not want to be there in the winter. So I'm with her on this.
SPEAKER_01The fall's great. I mean, fall is probably my favorite football season. It's awesome. Yeah.
SPEAKER_00But by about Thanksgiving, you can skip it for the next three or four months. It's nothing. Yeah. Uh that's fascinating.
SPEAKER_01I wouldn't argue with you on that.
SPEAKER_00I want to talk a little bit about uh banking. Just it's a it's a passion of yours, right? I mean, 30 years someplace, you know a lot about the banking world. Um you've written that most people don't realize the balances in their savings and checking accounts are the most powerful force in the economy. Tell me why it is that that's true from your perspective, because I don't only think most people think about, I don't know, I just put my money there so I can and and most of us don't even physically take a check anymore somewhere, right? It's just a bunch of numbers that move back and forth on a computer. But why is it the most powerful force in the economy, these deposits and withdrawals?
SPEAKER_01Well, rightly so. What people are most concerned about is where's my money? Is it safe? Do I have access to it easy? You know, I can I see how much I have and keeping track of it. That's what people want. There's all kinds of really nifty tools today to help that, especially fintech and stuff like that, mobile banking. Um but it's what's happening with your money while it's there and you're not using it that is what actually drives the U.S. economy. I mean, people talk about we're the greatest economy on earth and so forth. That's it that's that money that drives that. So when you talk about w where you put your money, it's it's important that you know how to access it and where it's at and you feel safe that it's there, it's insured. I mean, banking is important that way, no question. But you should also ask the question, what are you doing with it when I'm not using it? That's a really, really important question. So you may find some cool app where you can put your balance and you can do something nifty with it, and and people say, Oh, I I like that, that's what I do with it. Okay, well what's happening with that when you're not using it? Where are they in they're they're do they're investing it somewhere. They're making a loan to a business. Um you you probably ought to know what they're doing with it. And to the extent you're concerned about your local economy and jobs and you know, in your state or your local community, um that's really important that that that people think about that because it it is what drives that. Um and that's why I've been at it for 30 years. I did not know this going into this job. And once I learned this, I'm like, holy, this is really important. Yeah. This is how everything happens. I mean, what people people talk about the Fed printing money, that's not what happens. It's not what happens. Banks make loans. You we create money. We create they give us the power to create money.
SPEAKER_00Because it essentially, if I understand this and correct me if I'm off base here, but it essentially magically doubles the money when we go put it into savings. I give you $1,000. You have $1,000 that I have access to.
SPEAKER_01You never lose your thousand bucks.
SPEAKER_00My thousand bucks are there and it's protected.
SPEAKER_01But I set up a reserve and I can lend that $1,000 to this business. Well, now there's $2,000. Yeah.
SPEAKER_00There's more thousands of economic than that $1,000, and it's all the same $1,000 to start with.
SPEAKER_01And if it's a good loan and they pay it back, right? It's like you can see how this grows. In PPP, you know, the the with the COVID, the pandemic, it's where this really became evident. The government structured this their response in the form of these PPP loans, these forgivable loans. And I was like, why are we why are we doing this? I mean, and now you understand what's happening is that the banks are lending this money out. It's being forgiven. It just created a ton, those loans created a ton of money in the economy. And that's what we're dealing with inflationary-wise. I mean, it that money is still there. It doesn't just disappear.
SPEAKER_00Everybody didn't just bring it back.
SPEAKER_01Yeah, they don't Yeah, because as soon as they bring it back, it's sitting at the bank and we have these deposits. What do we have to do with those deposits? We have to make a loan. If we just sat on deposits, we'd we'd collapse. Yeah. It just because we're paying you money on your deposit. We have to be earning money on that deposit. So we have to go out and make good loans. So the PPP and those deposits really just lit a fire under the banks. We had to go out and work to get the money deployed in the economy in a in a rational, safe way. And and and the bankers were amazing. Yeah. They were amazing in that crisis.
SPEAKER_00It's it's such an interesting idea, the the idea of like I put in the deposits and it doubles the money. I think it's it speaks a little bit to the under to the lack of understanding most people, I'd say just broadly the general public has in how money works. I mean, we've we've sort of focused on financial literacy in Utah schools, but that's sort of here's the money you have, here's how you balance a checkbook. Not that anyone does that with the checkbook, but how you balance your account and such. But like I noticed this, especially this week, we as we're recording this, we just had. The IPO for SpaceX. And you've got some people going, wow, this is amazing. And then you have other people going, I can't believe this guy has a trillion dollars. And I think the problem is they think of it like Scrooge McDuck, that he's just swimming in a trillion dollars as if he has it in a bank, like in a in a vault somewhere. And not just that he's worth a trillion dollars, but most of that is out kind of in the same way you're talking about. It's out doing things, it's out growing value and paying people and investing on research and development, all these things that happen. It's not like, you know, when we took the people love to villainize billionaires, they don't, they're not walking around with a billion dollars in their pocket. Do you feel that sense of frustration a little bit sometimes when you hear people talk about whether it's something like SpaceX or if it's just even the economy generally, that like, yeah, oh well, we just print money is one of the things you said. Does it frustrate you that sometimes people don't get what's really happening?
SPEAKER_01Yeah, because we all benefit from people who take risks and create value. It's what it's all about taking risks and creating value. No one got rich without taking a risk and creating a value for somebody. We know we have these phones. We I mean this. You create something that someone's willing to pay money for because they value it, and they took a risk to do that. I mean, and bankers do that at a very minimal level. I mean, what mostly what we get criticized for is banks don't take enough risk. I I went and tried to get a loan for my bank, they wouldn't give me a loan. Um, they don't understand the money that we're dealing with. We're dealing with money that people expect back. How much risk are you willing to take with your $1,000 deposit? No. It's none. It's insured. And so that because it's guaranteed, it's insured to you, we're limited in how much risk that we can take with that. Now, when someone gives Elon Musk, you know, $1,000 for a share of stock, they're taking a lot more risk. They're they're they're not guaranteed, and they realize this is going up in rockets and they blow up sometimes or whatever. There's there's that risk. When it comes to banks, we take uh our our risks that we take is tied to the risks that you as a depositor are willing to take with that money. This is the lowest risk on that totem pole of risk and value. Banks are at that lowest risk, which is hard, right? It's like we have to be very, very, very careful with the loans that we make. At the same time, the cost of that funding is the lowest. So every business wants a bank loan because they pay the lowest amount of interest on the bank loan. That just means that you have achieved a level of risk. You've meant you as a as a businessman have managed your risk so well that I can lend you money that Marty's relying on back. Yeah. And everybody's trying to get to that point. Even SpaceX, right? That's very expensive money that they just got. Those people are looking for massive returns, so they're taking pretty significant risk. At some juncture, SpaceX wants to just go out and get a low-cost bank loan. They're gonna have to manage a lot of risk to get to that point.
SPEAKER_00Yeah. And they're essentially saying with an IPO, give us your money and we're gonna go help this thing go from here to here, and everyone gets a return on it.
SPEAKER_01But people do need to understand this better because nothing just happens. First of all, no one's stealing anything. I mean, this notion that a billionaire is a billionaire because he stole something, that's that's ridiculous. He created value somewhere that people were willing to pay for. Yeah. He took on some risk and managed that risk effectively, that's how you make money.
SPEAKER_00Yeah. I saw a tweet over the weekend that said, I know how Elon Musk became a trillionaire. I don't understand how the senators and congressmen who are railing against him became millionaires. Right? Like talking about not creating value necessarily. Um, that's the part I think that that frustrates a lot of people. But you get this division because some people just love it and some people um are very much against it. And I've, you know, you and I both know generally all for their own benefit. Um this is an interesting time because I was thinking about um how much banking has changed, not just sort of in the everyday application of it, but some of the outside forces uh that it that it faces right now. And I think of like stable coins and digital assets, deregulation, AI, um legislation, all of this stuff that's always coming at banks who are sort of trying to do the same fundamental thing they did when it was cash and and paper receipts. Um let's just talk through some of those if we could. I wonder, just give me an idea. What what are digital assets, stablecoin, bitcoin, uh cryptocurrency? How does all that right now um impact the banking community? How are you guys looking generally at that?
SPEAKER_01Well, it it's it's an asset like any other asset. Uh the question, you know, you have to evaluate what value to it you give to it and the risk. Um and that I think that is that's why it's so important to understand what we just talked about. Because fundamentally that doesn't change. Fundamentally, risks have to be managed. And bankers are incredibly that's what we do. That that's what they're really good at. And so it whether it's digital assets, with stablecoin, blockchain, AI, or those are just components to that process. But ultimately you have to follow certain rules and manage risk. You know, that you saw with Sam Bangman Freed. You know, we watched that play out and we're like, guys, they're acting like this is some kind of revolutionary new thing, when in reality the the fundamentals of it were all the same. There's just no rules around it. So now Congress has adopted rules around it saying, oh, no, you can't take money from Marty and buy your mom a house with it. And i it it's like that's this has never been the case. Trevor Burrus, Jr. Is that tied back to the Genius Act, the what you're describing? The Genius Act is a big part of that.
SPEAKER_00Give us an idea of what that is and how it improves banks.
SPEAKER_01So if if you give me a million dollars and I give you a stable coin, which is uh uh something electronic.
SPEAKER_00Trevor Burrus, Jr.: A digital a digital currency.
SPEAKER_01Trevor Burrus, Jr.: A digital coin. Um I have to what do I do with your million dollars so that if you ever come back and say, hey, you know what? I'm gonna turn in my digital asset, my stable coin, and you I want my million dollars back, that it's there, right? That's what it's all about, that it's there. So the Genius Act says, okay, you have to take the million and you have to put it in a safe, liquid asset, and it has to be there and sit there safely. So when Marty wants it back, or maybe Marty gives it to ten people later, they say, ah, we're gonna cash that out. Yeah. We we like that money back. It it has to maintain its value. Otherwise, when you give it to somebody, they don't know if it really means anything. So that's what the Genius Act kind of creates that structure, but it's still kind of well, it's a good first step. I'm not gonna criticize it. But it's nothing like what we do at banks. You know, we're reconciling to the Fed every day. I mean, it's it's an ongoing process. This is like a 30-day window. But at least it's not Sam Bankman-Fried. It's at least it's not you get to take that money and and buy houses in the Cayman Islands for your mom. Um but it it's a it's a useful tool to to make payments. This is what we're debating about right now. People need to understand. I can use Marty's million dollars as a deposit in the bank to make a million-dollar loan to a local business that's going to build something, and we just created a million two million, now there's two million dollars working like we talked about, or I can give you a stable coin, a payment stable coin, which becomes this tool that moves around and you can buy inventory from China with it, and it's a lot easier. But that then sits in U.S. government treasuries in an account. So I can either fund economic development in my community or I can fund the federal debt. That's the decision Congress is making today. And what people are saying is, well, we love stable coin and we want to facilitate stable coin, and bankers are fighting back against stable coin. That's really not true, because we're gonna be engaged, we're gonna be issuing stable coin. We're gonna be engaged in this. But the question is, what does your money do when it's sitting there? Is it working to build our local economy or is it financing the federal government debt? And that's a policy decision that Congress has to make right now, which will affect everybody. Everybody listening to this is going to be affected by that because it'll it'll either make loans easier to get or harder to get. Which do you think it'll be? I think Congress is figuring out that this isn't what they thought it was going in. And but at the same time, they're spending more money than they have, and they have to figure out a way to finance the federal government debt. This is basic economy w economics 101, where it's the crowding out effect of government debt. That thir whatever 38, 40 trillion in debt we have, it's a problem. Yeah. It's a problem. It has to be financed by somebody, and that money can't be used elsewhere. And and we've got to come to grips with that.
SPEAKER_00Let's talk about deregulation. Um the Trump administration has uh made some movements to deregulate uh the OCC, FDIC, um, the Fed. They've all they've all moved to reduce burden on community banks. Um is that actually making a difference on the ground in Utah yet? Will it eventually, or uh have you seen it make the kind of changes that you would like to make it have made?
SPEAKER_01Well, it's it's a really important thing because the b there's a bigger picture here. Um and we need we all should want uh many independent banks. When it comes down to it, it's about allocating capital, and we want more people uh independently making those decisions, kind of crowdsourcing those decisions, you know, decentralizing, democratizing the economy, so to speak, rather than a few big institutions. There are people in our policy world that want fewer bigger banks because they know as policymakers they can control those a fewer bigger ones. Right. They can't control 5,000 banks all over the country making independent decisions. I'm gonna give you a loan, I'm not gonna give you a loan, you know, primarily based upon the finances of that loan. Uh there are people who want to make that decision based upon their politics. And we cannot uh politicize banking. So um I'm a big advocate of more banks, more decisions being made, and that requires the deregulation because the Dodd-Frank Act, which was passed after the financial crisis, mostly punished small banks who had nothing to do with the crisis. It was it was the most ridiculous public policy response. And I I it clearly Washington had more to blame in the financial crisis than any little bank anywhere. And in an attempt to push the blame, the people in Washington were pointing the finger in every direction, and the public responded, you know, to this bank narrative. And in the end, we got more regulations on little banks, and we just saw them all just consolidating into the bigger banks, and we lost thousands of banks in terms of consolidation. The banks themselves were fine, but they couldn't they couldn't pay for that regulatory burden, and so had this big consolidation, which was bad for the economy, bad for the country, um, but it played into the hands of the people who wanted to centralize and politicize banking. So we've got to move back in the other direction. That's what's happening in a in a broader sense. Um AI is really disappointing those central planners because AI is the first time where we can take AI and apply it to these ridiculous regulations and have the AI comply with a lot of the ridiculous stuff and free up the banks to go back to doing what they do best. So I'm really excited about AI because it it's a game changer when it comes to the regulatory burden.
SPEAKER_00Is that its best application at this point for banking to say government has heaped all this regulation on us, even if the current administration is trying to deregulate, but there's still a ton of regulation. And it's it in essence busy work, right? That you have to kind of check a bunch of boxes and you can tell an agent or a robot, go check those boxes while we get back to doing the work we can do. It's stupid stuff. Yeah.
SPEAKER_01It really is a lot of it. Some of it is really essential, but it's hard to distinguish the essential from kind of the box checking. And so this AI is just transformative. It it's not the only place, but it was the first easiest no-brainer place to deploy it. And even the regulators are deploying it, which is good to see.
SPEAKER_00So on the positive side on AI, it helps you deal with government regulations that you wish you weren't there anyway. But on the other side, um, do you see some risk in things like cyber fraud, um AI-generated deepfakes? Uh are those sort of the biggest threats that AI poses to banking at this point, or is there something else we should know about?
SPEAKER_01No, I think that's that's a big threat. Fraud is a is a huge threat, and and everybody needs, you know, there's it's so hard. Everybody's been touched by it. I mean, you have family members, I have family members that get scammed, and um, but AI on the other side is helping us fight back, right? And and the blockchain and and some of these other advancements are gonna really help us identi, you know, how do I know you're Marty, and how do you know I'm Howard? And if you're a bank and making loans and transferring money, um these innovations are gonna help us do that better and and avoid the identity scams that are out there. So I I'm very optimistic about the deployment of both AI and blockchain technology. Um and and that will transform banking as we know it. People have said it's funny, you know, they'll say, oh, blockchain is the greatest thing in, you know, and and it's gonna it's gonna get rid of banks. And it's like, no, to the extent that blockchain is gonna benefit you, it's probab that benefit is gonna deliver to you probably by your bank that you trust. And that that it understands these regulations, the ones that are necessary to build that trust. So and that's what's happening. Banks are applying the blockchain to make the banking process simpler and more efficient, lower cost, faster, more convenient, and and it's all it's all good. I mean, it's not and it's not gonna eliminate the banks.
SPEAKER_00But we've talked primarily about federal regulations at this point or AI, which is sort of beyond state borders. But I'm wondering um here in Utah, where you do a lot of your policy-making work, a lot of your lobbying work with the state legislature, uh how would you rate Utah's regulatory climate for uh for local banks? Um and and what would you like to see change?
SPEAKER_01Well, uh I rate it is the best. I mean, and the market is speaking, right? That's been my goal over 30 years is to make Utah the best place to operate a bank. And we are now the fifth largest banking state. We're the fastest growing banking state. Most people are surprised to hear that, but I mean you have banks moving their charters to Utah. I mean, Sun West Bank came from California's, moved their headquarters here. Um, you know, one of the most innovative new entrants into banking, bought a bank in California and moved its headquarters to Utah. Lending Club, one of the FinTech innovators that partnered with the Utah Bank, bought a bank in Massachusetts, moved it here. So my goal is to make sure Utah is the best place from a regulatory policy standpoint to operate a bank. And I, you know, I would say we're there, and the the markets are are ri realizing that, and we've we've got a lot of new banks coming to town, um, banks that people aren't aware of. I mean, in the last two months, we've had four General Motors Stellantis all approved. Edward Jones was approved in the last couple months. So um, and there's a whole range of folks, PayPal's an application for their bank here. So it's it's a great spot. I give my hats off to our our our legislators and our policymakers. Um they've been, they've just been very responsive. They understand you can't have the number one economy in the country without having a strong and in in in the strongest banking state. It the two go together. Um and so they've they've realized that, the leadership has realized the governor and and and created an environment that's been great for banking. One thing I would change is just and there's nothing that we can do about it. I mean, the federal government, you know, the this credit union issue, credit unions are great. We love credit unions, they're an important part of the ecosystem, you know. But there's a couple of them that are they're not credit unions anymore. There's there's no union. They serve anybody, everybody. They provide all the same services as banks. They look like banks. People refer to them as banks. When I talk to them, I say, we're already banking. Oh, I bank at this credit union. It's like, okay, they they clearly don't get that. The state legislature tried to solve that problem, um, but they can't really deal with it until the federal government gets their arms wrapped around it. And that's the only the only thing that and it's hurt the small credit unions and it's hurt the small banks. When you get policy bat wrong, that's what it yields. You're picking winners and losers, you're playing favorites, and the the big get bigger and the small can't compete. And that's a bad market. So that's something we you know we need to deal with at some point, but in the meantime, you know, we just keep moving forward. The the technology, the AI, the blockchain, and um it's helping helping us become more efficient to deal with the places where the policy isn't as efficient.
SPEAKER_00All right, we're almost out of time, so I want to move on and wrap up with a lightning round. Are you ready for that? Lightning round. Hopefully we get back to the Trevor Burrus, it's faster, rapid feeding rocks. Yeah, lightning round would have been a good name for a band in the 80s. You guys should have been lightning. Maybe I'll go back to that.
SPEAKER_01I don't know. That's the next thing.
SPEAKER_00Some guys have lost their fastball, and they but they still like to cash the checks to keep deposits going into banks.
SPEAKER_01Kenny Loggins, we had him come up and perform at our convention a couple years ago, and he he was unbelievable, right? He could because he sings really high for people who and you know, highway to the danger zone. I mean, it's he and but he was still rocking it. And I said, Kenny, as a singer, how do you do this at your age? Um it's a sensitive topic, but you know, he he he shared with me what he does to stay there, and it's it's not easy. Yeah. You do lose the fastball. Once you lose it, it's gone.
SPEAKER_00Yeah. Some folks just haven't been good to their voice, and some hey, father time is undefeated, right? That's the way it goes. I saw you two at the sphere a year or two ago, and I was like, yeah, this just this is just loud to hide the fact that you don't still quite have the vocal range, but anyway, I'm sad. All right, lightning round. Uh favorite food. What are you ordering and eating when nobody's watching or counting calories?
SPEAKER_01This is gonna be where this is. I go to Aubergin Kitchen and I get this salmon mango bowl. I love Aubergine Kitchen. I I'm I'm a health kind of nut. So that's but I literally I get excited. Thinking about it right now, it's like I'm going there for lunch.
SPEAKER_00What's coming up next? All right. Um that's maybe the healthiest thing anybody has said uh when they're gonna be.
SPEAKER_01Yeah.
SPEAKER_00Yeah. All right. You and I are hockey guys uh and it predates Utah having a team. Uh our teams were uh for a very long time the best rivalry in professional sports the Detroit Red Wings, the Colorado Avalanche. Um Colorado Evangeline. They they were relatively new. Yeah. Well you know, we were an expansion team, just a relocated team, kind of like what we've got here.
SPEAKER_01But you made big.
SPEAKER_00Yeah, we did win the Stanley Cup our very first year in Colorado. Okay, that's it. You like the Red Wings growing up. I like the Avalanche. We have a new team in Utah. Have you changed your allegiance? Are you a Mammoth fan? Are you sticking with the wings?
SPEAKER_01I have. I have I went to a couple games. Awesome. Awesome environment. And I love the guys on the team. They're just good guys. And I'm yeah, I'm connected to Mammoth.
SPEAKER_00So but that's a different question. Do you like the mammoth is one thing.
SPEAKER_01But uh when you say, hey, is my favorite team is I find myself checking the mammoth scores more regularly than the Red Wings scores now. I probably loyal to the Red Wings brand because it's just cool. Yeah. Um it's hard to beat original six. But the but the tusks up is pretty pretty pretty cool too.
SPEAKER_00So I will say this, uh because I've stuck with my team. Uh but the Mammoth did nail the color scheme, the logo, the whole thing. So they uh kudos to them for that. All right. Uh if you if you were not running the Utah Bankers Association, what profession would you most like to try? Not accounting, it sounds like.
SPEAKER_01I'd no, I'd be I'd be in music, I'd be writing music and um and recording. I still do that, but but that's everybody's dream. It's it's a tough business. And even when you, you know, I I recorded an album when I was 16. Uh, had an agent, I had a contract, I you know, uh, and I yeah, I had a and you just realize it's a tough lifestyle. And it really I came to that conclusion on my own. Because I kind of got to a point where I was like, a point that I wanted to be at and realized this isn't so hot. Um and and I chose a different path. But I still miss it. I wish there was some way to do that and do it in a way that was that was consistent with having a family and and having kids and grandkids. But there is now. With technology and stuff, you can do a lot of recording, and that's kind of what I'm gonna focus on as I slow down professionally.
SPEAKER_00Uh, what profession other than yours would you absolutely not like to try?
SPEAKER_01Yeah. Elected official.
SPEAKER_00Fair enough. Yeah.
SPEAKER_01We know accounting, so accounting and elected officials are and I respect the people that are willing to put their name on a sign and and and and go through that scrutiny. I I did it as a child and as a and I just decided I couldn't do that to my family. But the people that do it, I tremendous amount of respect. And I love working with them.
SPEAKER_00You mentioned that you uh just wrapped up your service as a member of the Tabernacle Choir at Temple Square. Uh what piece of music, we can go sacred or secular here, uh, hits the hardest every time you listen to it or sing it?
SPEAKER_01Oh, that is that's that is a hard question. I mean, I I I'm a battle hymn of the Republic is and I I'm actually singing in LA at the Hollywood Bowl and in next week. That'll be the last song I ever sing with the choir. And I'm I'm very happy about that. But come thou found is one that just moves me. Um consider the lilies. My cousin wrote that song, and and uh and his yeah, I that that song moves me. Yeah, there's so many pieces of song music that I've had deep sacred experiences with over the last seven years in the choir. It's hard to ask that question, but those are the ones that come to mind.
SPEAKER_00That's a really good top three. I don't think I would throw any of those three out. In fact, two of them you mentioned are for sure in my top two. All right, uh, give me a recommendation. A book, a podcast, TV show, a movie, something that you've uh consumed lately that you think everybody else should get tuned in on.
SPEAKER_01Uh wow. I I I will I listen to too many podcasts. Um I I don't know how to pick one of those out. Um give me the list again. All right. TV show.
SPEAKER_00Yeah, book, TV show, movie, podcast. It's just something you've you've consumed lately where you said, that was really good. I need to tell somebody else about this.
SPEAKER_01Um what was the show? I just I have a hard time remembering the things that I love the most. But you know, the one that I the show that I will just plug is this Sheep Detectives.
SPEAKER_00Sheep Detectives, yeah.
SPEAKER_01It's a movie that just came out with um I can't remember the name of the the um actor Hugh Jackman. Um and I went thinking one thing, and it was pretty it was a good movie. Okay. And most people won't go see it because it's like talking sheep. Yeah. But it was a lot more to that show that I'll plug that. But lots of podcasts, lots of books that I would say, but I don't want to be too typical.
SPEAKER_00I gotta be honest, I would have guessed at least one of your two favorite songs and did not have Sheep Detective on my radar. Okay, last question. Uh we'll wrap up with this. Uh what's one piece of advice that you would give, let's say, a 15-year-old Howard Headley, because that's before you had a recording contract and before you debated uh it as part of a gubernatorial campaign. Go back to your 15-year-old self. What's one thing you would say? Here's some advice I'd give that kid.
SPEAKER_01Yeah, it sounds so trite, but it's really you just have to find what you love and and can be passionate about. And I'm so grateful I found banking because I am I am passionate about it. It we we talk about this, you know, the pursuit of happiness and and the role it will it's what makes America great. So don't get distracted by what really makes America great. It's it's the pursuit of happiness, and it's different for everybody. But that doesn't happen without a bank and and that trusted relationship and um and and people willing to take you know chances and risk and manage those risks and create value. So that's what your job in this life is to do, is to is to pursue happiness, whatever that means to you, and and and find a way to do it within, you know, um as you manage those risks and and create value for other people. And just be bold enough to do it. I mean, you think about Elon Musk, we talked about it. I mean, he's crazy. He's shooting rocks, he's got rockets into space, he's he's got cars that drive themselves, right? He's gonna build robots and Neuralink and all these things, and he he just does it. And what if he had chosen to do something else? Or I mean regardless of what it is that you find, just if you're passionate about it and you do it and you and you do it well, you're gonna bless lives and yours, of course. But that's that's your duty to find that and to do it.
SPEAKER_00Howard Hoodley, thanks so much for taking some time. Now go get yourself a salmon bowl.
SPEAKER_01I'm looking forward to that.
SPEAKER_00Appreciate it.
SPEAKER_01Thanks.
SPEAKER_00Back channel is a northbound strategy production. Remember, you can subscribe to the audio version of our show wherever you get your podcasts. You can also find us on YouTube, Facebook, Instagram, LinkedIn, and TikTok. We're everywhere as Back Channel Utah, and we now have video on Apple Podcasts as well. Uh, great conversation today with Howard Headley. Really appreciate him coming in. It's important to learn about how banks are just this fundamental piece of our economy. And as he mentioned, a strong banking community, a strong banking environment uh goes hand in hand with having the strongest economy in the country. So appreciate the conversation with Howard Headley. We're back next week with another episode of Back Channel.