Commercial State Bank
April
16, 2004
Robert E Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429
Attention: EGRPRA
Burden Reduction Comments
Dear Sir or Madam:
As a community
banker, I greatly welcome the regulators' effort on the critical
problem of regulatory burden. Community bankers work hard to establish
the trust and confidence with our customers that are fundamental
to customer service, but consumer protection rules frequently interfere
with our ability to serve our customers. The community banking
industry is slowly being crushed under the cumulative weight of
regulatory burden, something that must be addressed by Congress
and the regulatory agencies before it is too late. This is especially
true for. consumer protection lending rules, which though well
Intentioned, unnecessarily increase costs for consumers and prevent
banks from serving customers. While each individual requirement
may not be burdensome itself, the cumulative impact of consumer
lending rules, by driving up costs and slowing processing time
for loans from legitimate lenders helps create a fertile ground
for predatory lenders. It's time to acknowledge that consumer protection
regulations are not only a burden to banks but are also a problem
for consumers.
Regulation Z
is a constant problem of checking and rechecking loans.
Home Mortgage
disclosures are so complicated and expensive that we don't make
home loans. Ditech does not have this problem.
Flood insurance
can be very expensive to determine flood exposure in some areas.
Equal Credit regulation B is always a problem for joint siqnature loans.
It would be much
easier for banks, especially community banks that have limited
resources, to comply with regulatory requirements if requirements
were based on products and all rules that apply to a specific product
were consolidated in one place. Second, regulators require banks
to provide customers with understandable disclosures and yet do
not hold themselves to the same standard in drafting regulations
that can be easily understood by bankers. Finally, examiner training
needs to be improved to ensure that regulatory requirements are
properly and uniformly applied.
The volume of
regulatory requirements facing the banking industry today presents
a daunting task for any institution, but severely saps the resources
of community banks. We need help immediately with this burden before
it is too late. Community bankers are in close proximity to their
customers, understand the special circumstances of the local community
and provide a more responsive level of service than meqabanks.
However, community banks cannot continue to compete effectively
and serve their customers and communities without some relief from
the crushing burden of regulation.
Thank you for
the opportunity to comment on this critical issue.
Sincerely
Jerry B. Waldo,
President
Commercial State Bank
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