February 20, 2025 • 25 mins
In rural southeastern New Mexico, bank CEO and varsity bowling coach Ken Clayton often takes his team on 500-mile one-day roundtrips for bowling tournaments. For Clayton, that commitment to going the distance is also what community banking is about. On the latest episode of the ABA Banking Journal Podcast — presented by R&T Deposit Solutions — Clayton discusses what makes community banks like his tick.
And as chair of ABA’s Government Relations Council, he also talks about ABA’s legislative and regulatory priorities for the year ahead, including tax reform and Subchapter S, regulatory challenges like the Section 1071 final rule, the SAFER Banking Act, credit card interchange policy and more. For Clayton’s 22-employee bank, policy challenges hit home in a challenging way since he and his CFO also share duties as the bank’s compliance officers. “As a banker, don’t just sit at home and say, ‘Gee, I wish this was different,'” Clayton says. “Get involved. It’s very rewarding, not to mention that it helps your customer and it helps your community.”
Clayton also discusses his own career journey in banking, his home community of Artesia and his approach to developing leaders within his bank.
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Episode Transcript
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Evan Sparks (00:00):
From the American Bankers Association, this is the ABA
Banking Today's episode is presentedwith love by R& T Deposit Solutions.
Welcome back.
I'm Evan Sparks, and I'm delightedto be here with Ken Clayton of
Western Bank in Artesia, New Mexico.
Ken is also the chairman of ABA'sGovernment Relations Council and a past
member of our Community Bankers Council,past president of the New Mexico Bankers
(00:23):
Association, a leader in the industry,and I'm glad to have you on today.
Welcome.
Ken Clayton (00:27):
Thank you.
We're very glad to be here.
Evan Sparks (00:30):
So, Ken, I'd love it if if you could kind of introduce yourself and
tell, tell, tell us a little bit moreabout you and about Artesia in New Mexico.
Ken Clayton (00:38):
Well, I became the president of Western Bank in 2003.
In 2020 I became the chairman and CEO.
I've been in banking since 1988.
I literally was in town one day andRoswell, New Mexico, and the president
of the bank who I'd got to knowa little bit said, you need to be
(00:58):
working for me and not somebody else.
And I said my mother raised us and Inever had the opportunity to go to college
and don't know anything about banking.
And he said, I can teach you that.
And he gave me theopportunity of a lifetime.
And two weeks later, I was a banker.
Evan Sparks (01:14):
That's one of the things I think is kind of neat about the
American story is that, about bankingis that it isn't one of the, you know,
we have a lot of bankers who are collegegraduates, but it's not one of those
jobs that you have to have a collegedegree to be able to perform in and in
that sense, it's a great opportunitybuilder for a lot of, a lot of Americans.
Ken Clayton (01:32):
Absolutely.
I I laugh, I tell the story that I,I kept pestering him to send me to
banking school after about four monthsof banking and quote banking I got
the mail and I saw the banking schooland I kept pestering him and finally
he said, he said I Fine, sign up.
I'm sure your four monthsexperience will serve you well.
And, and the first class I went towas asset liability management, and I
(01:55):
thought, what in the world am I doing?
So, but I survived, andit worked out great.
Evan Sparks (02:01):
Are you from Artesia originally?
Ken Clayton (02:03):
I grew up in Petroleum, Pennsylvania, a small
town of 400 north of Pittsburgh.
And I moved to New Mexicoliterally on my 25th birthday.
So I lived in Roswell for 13years and then had the opportunity
to go to Artesia in 1998.
Evan Sparks (02:19):
What was it that, what was it that brought you
to, brought you to New Mexico?
Ken Clayton (02:23):
I tell everybody I drove south to quit snowing.
So if you, it's funny, you canlook up on the internet now,
but in 1988 we had 27 below zeroand 70 below wind chill factors.
And a cousin had married and movedto New Mexico and we'd talk to
them on the phone and they would beplaying golf while I was freezing.
And I said, you know what,I don't have to do this.
(02:43):
And I literally moved toNew Mexico sight unseen.
Evan Sparks (02:46):
And so you've got ag there, you've got oil and gas there.
what the economy is like in Artesia?
Ken Clayton (02:51):
Very strong oil and gas.
Have our generations of ag people thathave been there through the families
family histories and still there.
And, but we're very strong oil and gas.
We're the top of the Permian basin.
Very, the highest producingbasin in the nation.
And Western Bank.
We were strong oil and gas lending.
We've had our same customers forever.
(03:13):
A lot of service companies.
And they have been there throughthrough generations themselves.
And it's just a very tight knitcommunity, a very involved community
and very much Kid oriented.
But a lot of family support.
The families that started the oilbusiness there in the thirties
(03:35):
are still there and support theschools and the kids tremendously
through not just the athletics.
A lot of people see the athletics.
The football fields are tremendous.
The athletic facilities, but thescholarship foundations and what they
do for the kids to enhance their life,not just their sports is amazing.
Evan Sparks (03:54):
Yeah, and speaking of that, I know you have a a connection
to Artesia high school sports.
Can you tell us about yourcareer as a bowling coach?
Ken Clayton (04:03):
This is the year 18 of being a high school varsity bowling coach.
18 years ago, a friend of mine wasthe superintendent of schools and
he came to my office and said NewMexico starting bowling is a varsity
sport and we need to be involved.
And, and our high schoolis very sports oriented.
We, our football teams won 32state championships and, and
the kids are just way involved.
(04:24):
And so, yeah.
We never, we didn't haveany kids that bowled at all.
And so we were starting fromscratch and just had the idea.
And before he left my office,I was the bowling coach.
So we did a survey, we ended upwith 30 kids the first year and
we've had 30 kids every year.
It's been tremendous.
It's not, you know, my saying isthat if all I do is teach them
(04:47):
to bowl, I failed miserably.
It's been a life journey for us.
It's been it's an opportunity to mentor.
I have a list I keep in my desk of the249 kids I've coached over 18 years.
In a town our size, you cankeep track of those kids.
We've sent kids to college on bowlingscholarships to further their education.
(05:07):
We, you know, We do, we livein the desert, so we do,
Saturday being an example, weloaded 37 kids on the bus at 6.
30 Saturday morning.
We drove 252 miles, we fed them lunch,we bowled for 5 hours, we drove 250
miles home, got home at midnight.
But it's just a tremendous opportunity andwe have one night in state championships.
(05:30):
So, the kids, the kidsare the kids are amazing.
And so I've been very blessed.
Evan Sparks (05:36):
How many state championships?
Ken Clayton (05:37):
We've won nine state championships.
And I'm the first to say, I've neverthrown a bowling ball in any of those.
It's it's the coach gets too much credit.
Evan Sparks (05:45):
Were you a bowler before?
Ken Clayton (05:47):
I've actually was fortunate enough to this fall be inducted into
the New Mexico Bowling Hall of Fame.
But.
my, I gladly put my own careerkind of on the back burner.
It feels like 18 years ago.
You kind of forget you had your owncareer, but, but I did have that.
I, I grew up in Pennsylvaniain the winter time.
There's not a whole lot to do.
Yeah.
And bowling ended up being my thing.
Evan Sparks (06:09):
Is there a professional bowling circuit?
what is the competitive structurelike for bowling in the United States?
Ken Clayton (06:14):
No, there's professional bowling.
And you can bowl regional,regionally professional.
I officially had turnedprofessional in the early 90s.
But, you have a couple kids and Yourealize that you might not wanna make
a living throwing a bowling ball.
I have been fortunate.
I've bowled 27 300 games.
I mean, I've been able tocompete at the highest level.
But at the same time that iswhen I got into banking Okay.
(06:38):
And thought, you know, I have a realopportunity to make a career here.
Yeah.
And so, but at the same time, youcan travel and compete all over
the country at the same time.
I've been able to bowlall over the country.
Yeah, but lately my wholeeffort is in these kids.
Evan Sparks (06:53):
What else do you do to be engaged in the community in Artesia?
Ken Clayton (06:55):
Fortunately the school system in Artesia is open book.
I mean, I can, I get the opportunityto go in and speak with the students.
I get to speak from anything fromneedless to say, business, money
but to life in general to my story.
So a lot of the time I get togo in and talk to the classes.
(07:18):
The foundations that sponsor thescholarships, I get to annually
speak to their scholars whoare about to go to college.
And Western Bank, we have reallyput our efforts forward the most.
We've made the commitment toreally back the community.
The young people of the town and we'vebuilt privately in Artesia, a lot of the
(07:39):
businesses we've built an aquatic center.
They've built, they're in the processof building a community center that
do it privately with private fundsand, and the banks involved in that.
And so, you know, we do that.
I've been on, you know, the chamber andthe country club and all of the boards
but in a town of 15, 000, you can.
(07:59):
Run the whole gamut.
So, it's, it's nice to be, it's niceto be able to really be involved
in, and in a town our size, fromespecially being a banker point of
view, you can see the results ofwhat you're really doing every day.
Evan Sparks (08:15):
You talked a little bit about you know, and the the,
and, and the opportunity, the,the chances that you were given
by, by people across your career.
what's your approach to developingfuture leaders for your bank?
Ken Clayton (08:28):
It's really, we were in a situation where at one time I was
the youngest officer by eight years,even though I was the president.
We, we had long tenured officers who just.
Love the bank.
I mean, we're family oriented.
When you're one location in a smalltown and then they started to retire.
And so we, I've brought insome younger younger people.
(08:51):
And to me, it's for us, we find we'vebeen fortunate to find the hometown,
the people that realize what we areand who we are, that relationship
banking is so much what we do.
And to really what I try todo is teach common sense that
yeah, it gets more complicated.
It's got a lot more complicated, butat the same time, it's just looking
(09:14):
at it and think, does this feel right?
Is this the right thing to do?
And getting them to realize like forme that it, it, it's a career, you
know, and you can do this as a career.
And, and we have a lot of examples.
We have a 40 year 40 year loan officer, 36year loan officer that they've been there
(09:34):
and it's been a great career for them.
And so, and, and just try to teachthem, try to tell them, I try
to tell the people that I get totalk to that, you know, sometimes
you have to let life come to you.
You know, I never, I grew upin Pennsylvania and thought
I'd live in New Mexico.
I mean, no chance.
I mean, so they try to figureout life way, way out ahead.
(09:56):
And, and I said, I'm living.
example that, yeah, sometimesyou have to let life happen.
Yeah.
Evan Sparks (10:02):
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(10:25):
I'd love it if we couldtalk a little bit more.
I want to, I want to get to some of thegR issues that we're talking about, but
if you could talk a little bit aboutkind of some of the challenges you
face at your bank right now, banks likeyours face, and you know, how those,
how those set up some of the advocacyand activity that you, you work on to
improve, to deal with those challenges.
Ken Clayton (10:46):
Sure.
For us, it's like, it kind ofgoes back to the common sense.
And sometimes I think, wait aminute, that doesn't line up.
I mean, we're trying to correctsomething that's, we're trying to
fix something that's not broke.
And, and sometimes I look at what theregulations they're trying to change
(11:06):
or trying to implement are things thatare gonna hinder rather than leave
them alone and they're really not aproblem or, you know, they're working.
And so for me if you're limiting,if you're doing something that's
going to limit our ability to helpthe customer, then you're not.
(11:30):
Doing what's right for, you know, to me,regulations and, and the overreach of a
regulation everybody kind of thinks, wow,that look what you're doing to the bank.
And to me, it's like, look whatyou're doing to the community, look
what you're doing to the customer.
You know, I think history's proventhat you, not everybody fits in that
(11:50):
box, you know, and we can all haveexamples in our career that that
customer that sat across from you thatdidn't exactly qualify, but it felt
right and looked right and, and youliked it and you made it and it worked.
Okay.
And if you start doing things like1071 and you have that fear of,
(12:14):
well, they're going to come inand compare this one to that one.
And that one didn't feelanywhere like the one you made.
And you start.
Putting that fair lending fear intothe box, then you're limiting the
opportunity for the banker to be a banker.
At the same time, you're limitingthe economic opportunity.
(12:36):
And so that, things like thatmake me want to be involved.
Things like trickle down effect though.
Yeah, I'm a one bank bank.
A lot of the stuff doesn'tquote affect me, but it does.
And I think that not just me,but especially the guys, the
(12:58):
people that are on the GRC.
I say we're wired to not think big orsmall, but to think right or wrong.
You know, we look at somethingand say that just doesn't.
It doesn't look right.
It doesn't, you know, why shouldwhy should a regulation say what
you can charge for a late fee?
(13:18):
Why should a regulation come inand, you know, tell you, or not help
you better do something for a ruralcustomer, for an ag customer like Acre?
It just all makes sense that if it, if youcan do something better for you, why, why
would you try to hinder that, you know?
(13:40):
And so that part of my brainjust says, hey, we together
can make something different.
Evan Sparks (13:45):
I am curious you see as some of the top policy priority issues
for the banking industry as you go intothis meeting and as we go into a new
year with a new administration and a
Ken Clayton (13:55):
Needless to say, we're going into a tax year.
Tax is going to be huge.
I think you know, things likethe pass through for community
banks, that affects me.
Sub S in a community bank is huge.
And that needs to be extended to makesure that that stays, because it allows
the community bank to have a, to have areally good chance to do better things.
(14:17):
We,
Evan Sparks (14:17):
for our listeners, we, we, we talked with Joey Connor, my ABA
colleague not long ago about the kindof the tax in particular on the tax
out reform outlook for 2025 with allthe expiring provisions and things that
need to be either extended or changed.
And, and he, he also mentioned subS banks and that being one of the
top issues that we're going to befocused on in tax reform this year.
Ken Clayton (14:37):
year.
Yeah, tax is its own animal for sure.
Okay.
We do have it in there in theblueprint because it's important.
The Acre Act where rural communitiesas far as lending to the farm racks,
give us a, give us an equal footing,give us an opportunity to So you
stand equal with the other lenders.
And not just on the farm side, onthe housing in the rural communities.
(15:00):
It's tough to get a, to get a mortgage.
And so, so look at that for us.
The mission driven banks, the banksthat are out there, the minority banks
that are just really doing a great job.
drilling down and trying to take care ofthe low to moderate income communities.
They have to be, theyhave to be taken care of.
They have to be given everyopportunity they can be given because
(15:21):
they're doing a tremendous job.
Housing, it's all over the country.
It doesn't matter who you talk to.
It doesn't matter where you come from.
Housing is huge.
I mean, so that's and fraud.
Fraud is going to be its own.
Fraud is going to, fraud, I can'timagine what the big banks have to go
through on fraud when I see what it, howit impacts me and our bank at Western
(15:44):
Bank of a community of 14, 000 a 370million bank and the fraud that we see.
So fraud is going to be something thatwe're all going to have to address.
Evan Sparks (15:54):
Yeah, we, we
hear that constantly from our members it'sjust like nothing else right now in of
what they're, what they're dealing with.
Ken Clayton (16:01):
So,
Yeah, and it's hard to figure out.
It's coming from different directions.
I mean, it's just coming from everywhere.
So that is something wedefinitely need to take a look at.
Regulatory tsunami, as Rob says.
I mean, there's no otherway to describe it.
It comes from everywhere.
Evan Sparks (16:17):
And I'm just curious how this, how this plays out at your
bank, you know, I mean, how many,you, you said you had 22 employees?
How many would you say arefocused on regulatory compliance?
Ken Clayton (16:25):
There, well, we, we have to, we, fortunately, we all touch it
because you have, you know, you haveoperation side for us and a lending
side, and the way we do it is I do thelending side and my Chief financial
officer does the operation side.
So it's not something that is pusheddown to a different department.
(16:46):
We are a department.
Evan Sparks (16:47):
The CEO is the compliance officer.
Ken Clayton (16:48):
Exactly, exactly.
On the, on the lending side, we split it.
And my Chief Financial Officer isthe Operational Compliance Officer.
And we have different BSA officers,and we have different officers.
But really when we meet, we all meet.
And so, we're all trying to,I mean, IT is the same thing.
I mean, the regulations in IT for22 employee bank is pretty brutal.
(17:13):
And so, you know, when you think youhave it figured out, it all changes.
And so that's that's somethingthat is really important to us.
And so on all of this, you know,like I said, a lot of this might,
you know, the Durbin Amendment, theinterchange, doesn't really affect us.
But that doesn't mean I don'twant to step up and say, Hey, you
know, together we can fight this.
(17:35):
We can say, you know.
It doesn't feel right.
It doesn't look right.
You know so that's very, very important.
We talked about 10 71.
The, the, the 10, the 10 71.
Hopefully it got delayed.
Hopefully we can see that get taken out.
Hopefully with the new administrationand so forth, we can see 10
(17:58):
71 go away or go mostly away.
Well, I mean, the, 1071 addedso many data fields compared
to was in the statute for it.
I mean, it's like, if you're reallyreading the statute on that, you,
there's a different approach thattaken there actually aligns with what
Congress said when they
Evan Sparks (18:17):
Right.
Ken Clayton (18:20):
And then you have, you have, I look at it both ways.
I mean, I can't imagine the bigbanks with all their customers
trying to even figure out if they'regood or bad, or if they've done it.
And then you have a small bankwhere, for us, my customers, and
we're a rural community, they'resaying, what in the world is this?
You know?
And why do I have to do this?
And you're trying to explain.
(18:41):
what it is, you know, andthe purpose behind it.
The purpose behind it isthe hard part to explain.
So, you know, capital rules,safe banking, safer banking.
We have, New Mexico hasrecreational marijuana.
We have a dispensary in our town.
Their sales in a town of 15, 000.
would blow your mind.
And so, you know, it's not safe.
(19:04):
Who knows where their money's going.
And so we're not banking them.
And there are only a few banks inNew Mexico that are even trying it.
Open banking, credit cardprograms are just a lot of
things that, that we look at.
And then you can step into FDIC insurance.
That's huge.
So there's just a lot of things in theblueprint that that hopefully tomorrow
we're going to discuss and really pinit down and but it affects everyone.
(19:28):
And I think that's why it's so important.
Evan Sparks (19:31):
What, else do you say to a banker who's like, you know, I'm busy.
I got a lot to do.
Why do I need to get involvedin this advocacy stuff?
What's your, what's your message?
Ken Clayton (19:39):
Here's my message, actually.
I brought this.
And I won't bore you with it.
I brought this letter.
I came here and I said, I wasable to attend the Government
Relations Summit last year.
I came away from Washington witha heightened awareness of the
issues facing us as bankers.
And efforts required to conveythe concerns and desires.
I was intrigued by the ABA'scommitment as a working group
(20:02):
together for a common purpose.
I have always believed that peoplewith a true desire to achieve what
is right can join as one and have thepower to consummate positive change.
My Washington trip last yearsolidified the belief and sparked my
desire to be part of such efforts.
Okay.
I wrote this letter in 2013.
I came to the Washington Summit.
(20:22):
Just the first time I'd ever been toWashington, D. C. I sat through the
summit and through the general sessions,and I was just totally intrigued.
And I walked away thinking, youknow, what the ABA does, the efforts
they make for everyone, you know,big and small totally amazed me.
And since then, I've been fortunateto have been given the chance.
(20:43):
I've been on a lot of the committees.
I've seen the efforts.
I've seen what What they allow thebankers to do to be involved in, you
know, to build the blueprint, theblueprints built by the bankers, the
blueprint isn't, you know, just dictatedfrom the administration of the ABA.
And so as a banker you know,don't just sit at home and say,
(21:05):
gee, I wish this was different.
Get involved.
And it's very rewarding.
It's very It's rewarding to seesomething work that you've worked on.
And, and not to mention that,you know, it helps your customer.
It helps your community.
So
Evan Sparks (21:21):
Well, the 2013 summit was a memorable one for me, too,
because that was my first year at ABA.
It was actually, the summit started,it was my second day working at ABA.
Ken Clayton (21:30):
Really.
Evan Sparks (21:31):
So I distinctly remember that, the
remember that, the 2013 summit, and comingand having no idea what was going on.
Ken Clayton (21:37):
Yeah, well that makes two of us, because I had no idea.
No, I did.
I wrote that after I got home, and Isent it to the ABA, and I said I'd like
to be a part of the above mentionedefforts as the banking industry moves
forward, and I was given a chance.
Yeah.
And so, well,
Evan Sparks (21:53):
for, for listeners who are, who are hearing this talk
about the summit our 2025 summit iscoming up here in D. C. and it's, the
information on that is available at aba.
com slash summit and I do encourageyou to go and register and take, and,
and come to D. C. It's a free event.
There's a lot of opportunities tolearn, hear from policymakers and
then go up with your state delegationsand, and meet with legislators.
(22:16):
And make sure you share, share yourviews, share your expertise, and bring
information back to your bank from,directly from from top leaders in
Washington, and we're going to have somany new faces in the administration
and on Capitol Hill this year that it'sgoing to be an exciting opportunity to,
an exciting thing to be part of, I think.
Ken Clayton (22:34):
I agree.
And I think what, I think whatreally if you're new and you,
you step in and Give yourself theopportunity to come and do it.
I was, I was fascinated that youcould literally walk in when we go
have our Capitol Hill day, walk inand sit down and talk to them and
really tell them what you think.
I mean, in a good way, tell themthat, Hey, this is why you go in
(22:56):
with the perfect thing to do isto do is to go in with an example.
Go in with an example of my customer this,my customer that, you know, and you don't
just say, well, I think that's wrong.
You go in and say, this is how thisaffects me or my customer or my
community and, and they hear you.
Yeah.
And so it's a firsthand effort.
Evan Sparks (23:17):
anything else that, you know, I, I should have asked about
or anything that, any kind of messageyou'd like to share with bankers
that I, that I have not gotten to?
Ken Clayton (23:24):
It's probably come across that I'm a bank junkie.
I mean, I love it.
I, I, you know, I likegoing to work every day.
I think a lot of us do.
I just think that, yeah, wehave our challenges, but that's
what you come to Washington for.
That's why you get involved in the ABA.
That's why I, I, I would really pushthat don't, don't be in a community bank
(23:48):
and think you can't make a difference.
Don't, because too many people, I mean,in New Mexico we only have 28 state banks.
But so I'll use this as an example.
Don't sit in a small town and yoursmall bank and think you can't come
to Washington and make a difference.
Or that you can't sit beside atthe table with somebody from J.
(24:08):
P. Morgan and Kick ideas around.
I mean, you can be as involved as youwant to be, and you can make a difference.
I just think, don't putyourself, don't limit yourself.
You have thoughts and ideas, so.
Evan Sparks (24:21):
Yeah, that's something that Dan Robb, our previous chair, used to
talk a lot about was, he's at the table,he's like at three branches and, you
know, 180 million dollars in assets.
And he's at the table withall these other, with the
largest banks in the country.
And, you know, what's been yourexperience at ABA in terms of having
your voice represented as a, as a,as a single branch community bank?
Ken Clayton (24:41):
Yeah.
I mean, the same thing.
I mean, the same thing.
You don't, you actually, you actuallyget involved and you can give your
opinions and, and, you know, You canbe heard and you, you actually forget.
You actually forget.
I don't come to the, I don't come anymorethinking, Wow, I'm a community bank.
I mean, I do when we talk about it likethis, but I don't think that way anymore.
(25:02):
I look at the blueprintand say, this is us.
You know, this is, you take theblueprint to the board and you
say, this is best for banking.
And, and it really that part is itcomes together as one, but you know,
again, I'll say, don't think you can'tbe heard because you can be heard.
Evan Sparks (25:20):
Yeah.
Well Ken, thank you so muchfor being interviewed today.
I really appreciate learningmore about you and your bank.
Ken Clayton (25:26):
I appreciate you having me.
Thank you.
Evan Sparks (25:28):
For our listeners, you can find the ABA Blueprint for Growth at aba.
com slash blueprint and you can find,and that'll have links to all the various
materials that we have up there aboutAdvocacy, you can find a information about
coming to our Washington summit at aba.
com slash summit.
I'm looking for Ken and I will bothlook forward to seeing you there.
And thanks so much for listening.
Thanks to R&T Deposit Solutionsfor sponsoring this episode.
(25:50):
We'll be back with you again very soon.
From the American Bankers Association, this is the ABA
Banking Today's episode is presentedwith love by R& T Deposit Solutions.
Welcome back.
I'm Evan Sparks, and I'm delightedto be here with Ken Clayton of
Western Bank in Artesia, New Mexico.
Ken is also the chairman of ABA'sGovernment Relations Council and a past
member of our Community Bankers Council,past president of the New Mexico Bankers
(00:23):
Association, a leader in the industry,and I'm glad to have you on today.
Welcome.
Ken Clayton (00:27):
Thank you.
We're very glad to be here.
Evan Sparks (00:30):
So, Ken, I'd love it if if you could kind of introduce yourself and
tell, tell, tell us a little bit moreabout you and about Artesia in New Mexico.
Ken Clayton (00:38):
Well, I became the president of Western Bank in 2003.
In 2020 I became the chairman and CEO.
I've been in banking since 1988.
I literally was in town one day andRoswell, New Mexico, and the president
of the bank who I'd got to knowa little bit said, you need to be
(00:58):
working for me and not somebody else.
And I said my mother raised us and Inever had the opportunity to go to college
and don't know anything about banking.
And he said, I can teach you that.
And he gave me theopportunity of a lifetime.
And two weeks later, I was a banker.
Evan Sparks (01:14):
That's one of the things I think is kind of neat about the
American story is that, about bankingis that it isn't one of the, you know,
we have a lot of bankers who are collegegraduates, but it's not one of those
jobs that you have to have a collegedegree to be able to perform in and in
that sense, it's a great opportunitybuilder for a lot of, a lot of Americans.
Ken Clayton (01:32):
Absolutely.
I I laugh, I tell the story that I,I kept pestering him to send me to
banking school after about four monthsof banking and quote banking I got
the mail and I saw the banking schooland I kept pestering him and finally
he said, he said I Fine, sign up.
I'm sure your four monthsexperience will serve you well.
And, and the first class I went towas asset liability management, and I
(01:55):
thought, what in the world am I doing?
So, but I survived, andit worked out great.
Evan Sparks (02:01):
Are you from Artesia originally?
Ken Clayton (02:03):
I grew up in Petroleum, Pennsylvania, a small
town of 400 north of Pittsburgh.
And I moved to New Mexicoliterally on my 25th birthday.
So I lived in Roswell for 13years and then had the opportunity
to go to Artesia in 1998.
Evan Sparks (02:19):
What was it that, what was it that brought you
to, brought you to New Mexico?
Ken Clayton (02:23):
I tell everybody I drove south to quit snowing.
So if you, it's funny, you canlook up on the internet now,
but in 1988 we had 27 below zeroand 70 below wind chill factors.
And a cousin had married and movedto New Mexico and we'd talk to
them on the phone and they would beplaying golf while I was freezing.
And I said, you know what,I don't have to do this.
(02:43):
And I literally moved toNew Mexico sight unseen.
Evan Sparks (02:46):
And so you've got ag there, you've got oil and gas there.
what the economy is like in Artesia?
Ken Clayton (02:51):
Very strong oil and gas.
Have our generations of ag people thathave been there through the families
family histories and still there.
And, but we're very strong oil and gas.
We're the top of the Permian basin.
Very, the highest producingbasin in the nation.
And Western Bank.
We were strong oil and gas lending.
We've had our same customers forever.
(03:13):
A lot of service companies.
And they have been there throughthrough generations themselves.
And it's just a very tight knitcommunity, a very involved community
and very much Kid oriented.
But a lot of family support.
The families that started the oilbusiness there in the thirties
(03:35):
are still there and support theschools and the kids tremendously
through not just the athletics.
A lot of people see the athletics.
The football fields are tremendous.
The athletic facilities, but thescholarship foundations and what they
do for the kids to enhance their life,not just their sports is amazing.
Evan Sparks (03:54):
Yeah, and speaking of that, I know you have a a connection
to Artesia high school sports.
Can you tell us about yourcareer as a bowling coach?
Ken Clayton (04:03):
This is the year 18 of being a high school varsity bowling coach.
18 years ago, a friend of mine wasthe superintendent of schools and
he came to my office and said NewMexico starting bowling is a varsity
sport and we need to be involved.
And, and our high schoolis very sports oriented.
We, our football teams won 32state championships and, and
the kids are just way involved.
(04:24):
And so, yeah.
We never, we didn't haveany kids that bowled at all.
And so we were starting fromscratch and just had the idea.
And before he left my office,I was the bowling coach.
So we did a survey, we ended upwith 30 kids the first year and
we've had 30 kids every year.
It's been tremendous.
It's not, you know, my saying isthat if all I do is teach them
(04:47):
to bowl, I failed miserably.
It's been a life journey for us.
It's been it's an opportunity to mentor.
I have a list I keep in my desk of the249 kids I've coached over 18 years.
In a town our size, you cankeep track of those kids.
We've sent kids to college on bowlingscholarships to further their education.
(05:07):
We, you know, We do, we livein the desert, so we do,
Saturday being an example, weloaded 37 kids on the bus at 6.
30 Saturday morning.
We drove 252 miles, we fed them lunch,we bowled for 5 hours, we drove 250
miles home, got home at midnight.
But it's just a tremendous opportunity andwe have one night in state championships.
(05:30):
So, the kids, the kidsare the kids are amazing.
And so I've been very blessed.
Evan Sparks (05:36):
How many state championships?
Ken Clayton (05:37):
We've won nine state championships.
And I'm the first to say, I've neverthrown a bowling ball in any of those.
It's it's the coach gets too much credit.
Evan Sparks (05:45):
Were you a bowler before?
Ken Clayton (05:47):
I've actually was fortunate enough to this fall be inducted into
the New Mexico Bowling Hall of Fame.
But.
my, I gladly put my own careerkind of on the back burner.
It feels like 18 years ago.
You kind of forget you had your owncareer, but, but I did have that.
I, I grew up in Pennsylvaniain the winter time.
There's not a whole lot to do.
Yeah.
And bowling ended up being my thing.
Evan Sparks (06:09):
Is there a professional bowling circuit?
what is the competitive structurelike for bowling in the United States?
Ken Clayton (06:14):
No, there's professional bowling.
And you can bowl regional,regionally professional.
I officially had turnedprofessional in the early 90s.
But, you have a couple kids and Yourealize that you might not wanna make
a living throwing a bowling ball.
I have been fortunate.
I've bowled 27 300 games.
I mean, I've been able tocompete at the highest level.
But at the same time that iswhen I got into banking Okay.
(06:38):
And thought, you know, I have a realopportunity to make a career here.
Yeah.
And so, but at the same time, youcan travel and compete all over
the country at the same time.
I've been able to bowlall over the country.
Yeah, but lately my wholeeffort is in these kids.
Evan Sparks (06:53):
What else do you do to be engaged in the community in Artesia?
Ken Clayton (06:55):
Fortunately the school system in Artesia is open book.
I mean, I can, I get the opportunityto go in and speak with the students.
I get to speak from anything fromneedless to say, business, money
but to life in general to my story.
So a lot of the time I get togo in and talk to the classes.
(07:18):
The foundations that sponsor thescholarships, I get to annually
speak to their scholars whoare about to go to college.
And Western Bank, we have reallyput our efforts forward the most.
We've made the commitment toreally back the community.
The young people of the town and we'vebuilt privately in Artesia, a lot of the
(07:39):
businesses we've built an aquatic center.
They've built, they're in the processof building a community center that
do it privately with private fundsand, and the banks involved in that.
And so, you know, we do that.
I've been on, you know, the chamber andthe country club and all of the boards
but in a town of 15, 000, you can.
(07:59):
Run the whole gamut.
So, it's, it's nice to be, it's niceto be able to really be involved
in, and in a town our size, fromespecially being a banker point of
view, you can see the results ofwhat you're really doing every day.
Evan Sparks (08:15):
You talked a little bit about you know, and the the,
and, and the opportunity, the,the chances that you were given
by, by people across your career.
what's your approach to developingfuture leaders for your bank?
Ken Clayton (08:28):
It's really, we were in a situation where at one time I was
the youngest officer by eight years,even though I was the president.
We, we had long tenured officers who just.
Love the bank.
I mean, we're family oriented.
When you're one location in a smalltown and then they started to retire.
And so we, I've brought insome younger younger people.
(08:51):
And to me, it's for us, we find we'vebeen fortunate to find the hometown,
the people that realize what we areand who we are, that relationship
banking is so much what we do.
And to really what I try todo is teach common sense that
yeah, it gets more complicated.
It's got a lot more complicated, butat the same time, it's just looking
(09:14):
at it and think, does this feel right?
Is this the right thing to do?
And getting them to realize like forme that it, it, it's a career, you
know, and you can do this as a career.
And, and we have a lot of examples.
We have a 40 year 40 year loan officer, 36year loan officer that they've been there
(09:34):
and it's been a great career for them.
And so, and, and just try to teachthem, try to tell them, I try
to tell the people that I get totalk to that, you know, sometimes
you have to let life come to you.
You know, I never, I grew upin Pennsylvania and thought
I'd live in New Mexico.
I mean, no chance.
I mean, so they try to figureout life way, way out ahead.
(09:56):
And, and I said, I'm living.
example that, yeah, sometimesyou have to let life happen.
Yeah.
Evan Sparks (10:02):
I'm going to take a quick moment here to thank
our sponsor for this episode.
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(10:25):
I'd love it if we couldtalk a little bit more.
I want to, I want to get to some of thegR issues that we're talking about, but
if you could talk a little bit aboutkind of some of the challenges you
face at your bank right now, banks likeyours face, and you know, how those,
how those set up some of the advocacyand activity that you, you work on to
improve, to deal with those challenges.
Ken Clayton (10:46):
Sure.
For us, it's like, it kind ofgoes back to the common sense.
And sometimes I think, wait aminute, that doesn't line up.
I mean, we're trying to correctsomething that's, we're trying to
fix something that's not broke.
And, and sometimes I look at what theregulations they're trying to change
(11:06):
or trying to implement are things thatare gonna hinder rather than leave
them alone and they're really not aproblem or, you know, they're working.
And so for me if you're limiting,if you're doing something that's
going to limit our ability to helpthe customer, then you're not.
(11:30):
Doing what's right for, you know, to me,regulations and, and the overreach of a
regulation everybody kind of thinks, wow,that look what you're doing to the bank.
And to me, it's like, look whatyou're doing to the community, look
what you're doing to the customer.
You know, I think history's proventhat you, not everybody fits in that
(11:50):
box, you know, and we can all haveexamples in our career that that
customer that sat across from you thatdidn't exactly qualify, but it felt
right and looked right and, and youliked it and you made it and it worked.
Okay.
And if you start doing things like1071 and you have that fear of,
(12:14):
well, they're going to come inand compare this one to that one.
And that one didn't feelanywhere like the one you made.
And you start.
Putting that fair lending fear intothe box, then you're limiting the
opportunity for the banker to be a banker.
At the same time, you're limitingthe economic opportunity.
(12:36):
And so that, things like thatmake me want to be involved.
Things like trickle down effect though.
Yeah, I'm a one bank bank.
A lot of the stuff doesn'tquote affect me, but it does.
And I think that not just me,but especially the guys, the
(12:58):
people that are on the GRC.
I say we're wired to not think big orsmall, but to think right or wrong.
You know, we look at somethingand say that just doesn't.
It doesn't look right.
It doesn't, you know, why shouldwhy should a regulation say what
you can charge for a late fee?
(13:18):
Why should a regulation come inand, you know, tell you, or not help
you better do something for a ruralcustomer, for an ag customer like Acre?
It just all makes sense that if it, if youcan do something better for you, why, why
would you try to hinder that, you know?
(13:40):
And so that part of my brainjust says, hey, we together
can make something different.
Evan Sparks (13:45):
I am curious you see as some of the top policy priority issues
for the banking industry as you go intothis meeting and as we go into a new
year with a new administration and a
Ken Clayton (13:55):
Needless to say, we're going into a tax year.
Tax is going to be huge.
I think you know, things likethe pass through for community
banks, that affects me.
Sub S in a community bank is huge.
And that needs to be extended to makesure that that stays, because it allows
the community bank to have a, to have areally good chance to do better things.
(14:17):
We,
Evan Sparks (14:17):
for our listeners, we, we, we talked with Joey Connor, my ABA
colleague not long ago about the kindof the tax in particular on the tax
out reform outlook for 2025 with allthe expiring provisions and things that
need to be either extended or changed.
And, and he, he also mentioned subS banks and that being one of the
top issues that we're going to befocused on in tax reform this year.
Ken Clayton (14:37):
year.
Yeah, tax is its own animal for sure.
Okay.
We do have it in there in theblueprint because it's important.
The Acre Act where rural communitiesas far as lending to the farm racks,
give us a, give us an equal footing,give us an opportunity to So you
stand equal with the other lenders.
And not just on the farm side, onthe housing in the rural communities.
(15:00):
It's tough to get a, to get a mortgage.
And so, so look at that for us.
The mission driven banks, the banksthat are out there, the minority banks
that are just really doing a great job.
drilling down and trying to take care ofthe low to moderate income communities.
They have to be, theyhave to be taken care of.
They have to be given everyopportunity they can be given because
(15:21):
they're doing a tremendous job.
Housing, it's all over the country.
It doesn't matter who you talk to.
It doesn't matter where you come from.
Housing is huge.
I mean, so that's and fraud.
Fraud is going to be its own.
Fraud is going to, fraud, I can'timagine what the big banks have to go
through on fraud when I see what it, howit impacts me and our bank at Western
(15:44):
Bank of a community of 14, 000 a 370million bank and the fraud that we see.
So fraud is going to be something thatwe're all going to have to address.
Evan Sparks (15:54):
Yeah, we, we
hear that constantly from our members it'sjust like nothing else right now in of
what they're, what they're dealing with.
Ken Clayton (16:01):
So,
Yeah, and it's hard to figure out.
It's coming from different directions.
I mean, it's just coming from everywhere.
So that is something wedefinitely need to take a look at.
Regulatory tsunami, as Rob says.
I mean, there's no otherway to describe it.
It comes from everywhere.
Evan Sparks (16:17):
And I'm just curious how this, how this plays out at your
bank, you know, I mean, how many,you, you said you had 22 employees?
How many would you say arefocused on regulatory compliance?
Ken Clayton (16:25):
There, well, we, we have to, we, fortunately, we all touch it
because you have, you know, you haveoperation side for us and a lending
side, and the way we do it is I do thelending side and my Chief financial
officer does the operation side.
So it's not something that is pusheddown to a different department.
(16:46):
We are a department.
Evan Sparks (16:47):
The CEO is the compliance officer.
Ken Clayton (16:48):
Exactly, exactly.
On the, on the lending side, we split it.
And my Chief Financial Officer isthe Operational Compliance Officer.
And we have different BSA officers,and we have different officers.
But really when we meet, we all meet.
And so, we're all trying to,I mean, IT is the same thing.
I mean, the regulations in IT for22 employee bank is pretty brutal.
(17:13):
And so, you know, when you think youhave it figured out, it all changes.
And so that's that's somethingthat is really important to us.
And so on all of this, you know,like I said, a lot of this might,
you know, the Durbin Amendment, theinterchange, doesn't really affect us.
But that doesn't mean I don'twant to step up and say, Hey, you
know, together we can fight this.
(17:35):
We can say, you know.
It doesn't feel right.
It doesn't look right.
You know so that's very, very important.
We talked about 10 71.
The, the, the 10, the 10 71.
Hopefully it got delayed.
Hopefully we can see that get taken out.
Hopefully with the new administrationand so forth, we can see 10
(17:58):
71 go away or go mostly away.
Well, I mean, the, 1071 addedso many data fields compared
to was in the statute for it.
I mean, it's like, if you're reallyreading the statute on that, you,
there's a different approach thattaken there actually aligns with what
Congress said when they
Evan Sparks (18:17):
Right.
Ken Clayton (18:20):
And then you have, you have, I look at it both ways.
I mean, I can't imagine the bigbanks with all their customers
trying to even figure out if they'regood or bad, or if they've done it.
And then you have a small bankwhere, for us, my customers, and
we're a rural community, they'resaying, what in the world is this?
You know?
And why do I have to do this?
And you're trying to explain.
(18:41):
what it is, you know, andthe purpose behind it.
The purpose behind it isthe hard part to explain.
So, you know, capital rules,safe banking, safer banking.
We have, New Mexico hasrecreational marijuana.
We have a dispensary in our town.
Their sales in a town of 15, 000.
would blow your mind.
And so, you know, it's not safe.
(19:04):
Who knows where their money's going.
And so we're not banking them.
And there are only a few banks inNew Mexico that are even trying it.
Open banking, credit cardprograms are just a lot of
things that, that we look at.
And then you can step into FDIC insurance.
That's huge.
So there's just a lot of things in theblueprint that that hopefully tomorrow
we're going to discuss and really pinit down and but it affects everyone.
(19:28):
And I think that's why it's so important.
Evan Sparks (19:31):
What, else do you say to a banker who's like, you know, I'm busy.
I got a lot to do.
Why do I need to get involvedin this advocacy stuff?
What's your, what's your message?
Ken Clayton (19:39):
Here's my message, actually.
I brought this.
And I won't bore you with it.
I brought this letter.
I came here and I said, I wasable to attend the Government
Relations Summit last year.
I came away from Washington witha heightened awareness of the
issues facing us as bankers.
And efforts required to conveythe concerns and desires.
I was intrigued by the ABA'scommitment as a working group
(20:02):
together for a common purpose.
I have always believed that peoplewith a true desire to achieve what
is right can join as one and have thepower to consummate positive change.
My Washington trip last yearsolidified the belief and sparked my
desire to be part of such efforts.
Okay.
I wrote this letter in 2013.
I came to the Washington Summit.
(20:22):
Just the first time I'd ever been toWashington, D. C. I sat through the
summit and through the general sessions,and I was just totally intrigued.
And I walked away thinking, youknow, what the ABA does, the efforts
they make for everyone, you know,big and small totally amazed me.
And since then, I've been fortunateto have been given the chance.
(20:43):
I've been on a lot of the committees.
I've seen the efforts.
I've seen what What they allow thebankers to do to be involved in, you
know, to build the blueprint, theblueprints built by the bankers, the
blueprint isn't, you know, just dictatedfrom the administration of the ABA.
And so as a banker you know,don't just sit at home and say,
(21:05):
gee, I wish this was different.
Get involved.
And it's very rewarding.
It's very It's rewarding to seesomething work that you've worked on.
And, and not to mention that,you know, it helps your customer.
It helps your community.
So
Evan Sparks (21:21):
Well, the 2013 summit was a memorable one for me, too,
because that was my first year at ABA.
It was actually, the summit started,it was my second day working at ABA.
Ken Clayton (21:30):
Really.
Evan Sparks (21:31):
So I distinctly remember that, the
remember that, the 2013 summit, and comingand having no idea what was going on.
Ken Clayton (21:37):
Yeah, well that makes two of us, because I had no idea.
No, I did.
I wrote that after I got home, and Isent it to the ABA, and I said I'd like
to be a part of the above mentionedefforts as the banking industry moves
forward, and I was given a chance.
Yeah.
And so, well,
Evan Sparks (21:53):
for, for listeners who are, who are hearing this talk
about the summit our 2025 summit iscoming up here in D. C. and it's, the
information on that is available at aba.
com slash summit and I do encourageyou to go and register and take, and,
and come to D. C. It's a free event.
There's a lot of opportunities tolearn, hear from policymakers and
then go up with your state delegationsand, and meet with legislators.
(22:16):
And make sure you share, share yourviews, share your expertise, and bring
information back to your bank from,directly from from top leaders in
Washington, and we're going to have somany new faces in the administration
and on Capitol Hill this year that it'sgoing to be an exciting opportunity to,
an exciting thing to be part of, I think.
Ken Clayton (22:34):
I agree.
And I think what, I think whatreally if you're new and you,
you step in and Give yourself theopportunity to come and do it.
I was, I was fascinated that youcould literally walk in when we go
have our Capitol Hill day, walk inand sit down and talk to them and
really tell them what you think.
I mean, in a good way, tell themthat, Hey, this is why you go in
(22:56):
with the perfect thing to do isto do is to go in with an example.
Go in with an example of my customer this,my customer that, you know, and you don't
just say, well, I think that's wrong.
You go in and say, this is how thisaffects me or my customer or my
community and, and they hear you.
Yeah.
And so it's a firsthand effort.
Evan Sparks (23:17):
anything else that, you know, I, I should have asked about
or anything that, any kind of messageyou'd like to share with bankers
that I, that I have not gotten to?
Ken Clayton (23:24):
It's probably come across that I'm a bank junkie.
I mean, I love it.
I, I, you know, I likegoing to work every day.
I think a lot of us do.
I just think that, yeah, wehave our challenges, but that's
what you come to Washington for.
That's why you get involved in the ABA.
That's why I, I, I would really pushthat don't, don't be in a community bank
(23:48):
and think you can't make a difference.
Don't, because too many people, I mean,in New Mexico we only have 28 state banks.
But so I'll use this as an example.
Don't sit in a small town and yoursmall bank and think you can't come
to Washington and make a difference.
Or that you can't sit beside atthe table with somebody from J.
(24:08):
P. Morgan and Kick ideas around.
I mean, you can be as involved as youwant to be, and you can make a difference.
I just think, don't putyourself, don't limit yourself.
You have thoughts and ideas, so.
Evan Sparks (24:21):
Yeah, that's something that Dan Robb, our previous chair, used to
talk a lot about was, he's at the table,he's like at three branches and, you
know, 180 million dollars in assets.
And he's at the table withall these other, with the
largest banks in the country.
And, you know, what's been yourexperience at ABA in terms of having
your voice represented as a, as a,as a single branch community bank?
Ken Clayton (24:41):
Yeah.
I mean, the same thing.
I mean, the same thing.
You don't, you actually, you actuallyget involved and you can give your
opinions and, and, you know, You canbe heard and you, you actually forget.
You actually forget.
I don't come to the, I don't come anymorethinking, Wow, I'm a community bank.
I mean, I do when we talk about it likethis, but I don't think that way anymore.
(25:02):
I look at the blueprintand say, this is us.
You know, this is, you take theblueprint to the board and you
say, this is best for banking.
And, and it really that part is itcomes together as one, but you know,
again, I'll say, don't think you can'tbe heard because you can be heard.
Evan Sparks (25:20):
Yeah.
Well Ken, thank you so muchfor being interviewed today.
I really appreciate learningmore about you and your bank.
Ken Clayton (25:26):
I appreciate you having me.
Thank you.
Evan Sparks (25:28):
For our listeners, you can find the ABA Blueprint for Growth at aba.
com slash blueprint and you can find,and that'll have links to all the various
materials that we have up there aboutAdvocacy, you can find a information about
coming to our Washington summit at aba.
com slash summit.
I'm looking for Ken and I will bothlook forward to seeing you there.
And thanks so much for listening.
Thanks to R&T Deposit Solutionsfor sponsoring this episode.
(25:50):
We'll be back with you again very soon.
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Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.