First
State Bank
From:
mebie@fsbmesquite.com [mailto:mebie@fsbmesquite.com]
Sent: Tuesday, April 20, 2004 4:51 PM
To: regs.comments@federalreserve.gov; Comments; regs.comments@occ.treas.gov;
regs.comments@ots.treas.gov
Cc: jlindsey@firststatebank.com
Subject: EGRPRA
Please permit
me to first applaud your efforts in attempting to reduce
regulatory burden on financial institutions. As the Compliance Officer for
First State Bank, Mesquite, Texas, I always find myself attempting to
explain to our Lending Staff, in particular, regulations that really do not
make much sense. Most of these regulations are too burdensome; require too
much paperwork that most consumers DO NOT read. Above all, they are too
costly for community banks such as First State Bank, Mesquite, Texas - a
$170 million bank.
The intents behind most consumer regulations are noble; however, the
required documentations necessary to prove compliance are laughable in most
cases. I will address two here:
§ 22.9 Notice of special flood hazards and availability of Federal disaster
relief assistance.
(a) Notice requirement. When a bank makes, increases, extends, or renews a
loan secured by a building or a mobile home located or to be located in a
special flood hazard area, the bank shall mail or deliver a written notice
to the borrower and to the servicer in all cases whether or not flood
insurance is available under the Act for the collateral securing the loan.
I understand the need for "Notice" following the initial determination
for
properties in a flood zone, but not the need for providing another notice at
renewals, if no additional funds are advanced. Flood Zone Determinations
ordered by First State Bank include Life of Loan coverage, and the
determinations are good for seven years (according to regulation). If this
same loan is renewed before the expiration of the initial flood zone
determination, I do not see the need for providing another notice to the
consumer. The consumer was already notified earlier. TOO MUCH BURDENSOME
PAPERWORK!
§ 202.7(d)(1)
Evidence of Intent.
This change to Regulation B (Equal Credit Opportunity Act), which became
effective April 15, 2004 places additional burden on financial institutions
to prove a person's intent to be a joint applicant at the time of
application.
It is my understanding
that the producers of the Uniform Residential Loan
Applications (URLA) that most banks use for residential loans have
categorically refused to revise their forms. Consequently, financial
institutions are now left to come up with additional piece of paper to use
in documenting intent of consumers. This is one regulation that defies
logic. Banks have operated for years without this new requirement, and I am
not sure if the benefit (if any) to the consumer is worth the added cost and
burden on financial institutions.
I thank you for
this opportunity to express my opinion on these issues. I
know I am not alone; I am sure a lot of compliance professionals feel my
frustrations.
Sincerely,
Michael N. Ebie
Senior Vice President & Compliance Officer
First State Bank
Mesquite, Texas
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