Mr. Robert E. Feldman, Executive Secretary
Attention Comments
Federal Deposit Insurance Corp.
550 – 17th Street, NW
Washington, DC 20429
Dear Mr. Feldman:
We applaud your efforts to reduce regulatory burden on the financial
services industry. Taylor Bank has always been a highly capitalized
bank with above average profits. We have had no consumer complaints,
to our knowledge. In spite of our strong 114-year history, we experience
regulatory burden during exams and in daily operations. Chairman
Powell is correct in his stated initiatives in asking for comments
regarding regulatory burden. Our comments are:
• Flood Hazard Insurance – The
value of the land should be taken into consideration of flood insurance
requirements, even
if located in a flood zone. If the value of the land exceeds the
amount of the loan, the borrower should be able to opt out of purchasing
flood insurance. Also, if the loan is on vacant land, in a flood
zone, we are required to advise the customer. Vacant land cannot
be insured therefore this requirement should be eliminated. Because
of the Regulators strong stance on this requirement, banks are at
a competitive disadvantage with non-regulated mortgage companies.
Bank customers would also benefit from this requested change.
• 12 CFR 202 (Reg. B) – Equal Credit Opportunity – Monitoring
information – If a customer does not wish to disclose this
information, the loan officer must complete it through visual determination.
We should not be required to do this, which is against the customer’s
wishes. In some cases the accuracy of visual determination might
be questioned. Making this requested change would protect bank customer’s
privacy.
• RESPA, HUD (Reg.X) – Servicing
transfer disclosure: Our bank retains servicing on all residential
mortgages loans that
we originate. We have never sold any loans. Only lenders with a history
of transferring servicing should be required to disclose their practice.
Bank customers would benefit by having one less disclosure to deal
with.
• 12 CFR 226 (Reg. Z) – Truth In Lending – 3-day
Right Of Rescission. This should be eliminated entirely. The intent
of the original law was not for banks and should not apply to bank
mortgages. Bank borrowers do not need a “cooling off period” to
consider their decision to take a mortgage. Bank customers would
benefit greatly from this requested change.
• CRA and HMDA – The
threshold for reporting banks should be raised to $1 Billion with
respect to CRA and HMDA.
• Consolidate
exams by combining Safety and Soundness, Compliance, IS exams and
CRA
concurrently. Banks are asked for a lot of the same
information during these separate exams, which is a duplication of
work for the bank.
• Examine a well-run bank every 2 years for Safety and Soundness,
Compliance, IS exam and CRA concurrently. Since the bank’s
Call Report data is available quarterly and customer complaints are
available on an on-going basis, well-run banks could be monitored
with increased outreach between examinations.
• Require each field office to enforce FDIC regulations the
same. We have a disclosure requirement from the Maryland field office
that my research has determined, is unique to that office alone. “Examiner
discretion” creates many unique burdens for banks.
• Reduce
the quarterly and annual regulatory filing burden for smaller bank
holding companies.
The following should be combined
or made uniform: FFIEC Call Reports (banks only), Federal Reserve
reports (parent company and consolidated), and SEC quarterly filings
(consolidated)). A small bank holding company might be one with consolidated
assets of $1 billion or less.
• As a side issue, we implore the FDIC to continue it’s
strong support of adequate loan loss reserves, which have recently
come under scrutiny by the AICPA and SEC. This matter is very important
to the safety and soundness of our industry and should not be subject
to influence by non-banking regulators.
I will be glad to expand on any of the above. We look forward to
working with the FDIC in keeping the banking industry as a symbol
of confidence.
Reese F. Cropper, Jr.,
Chairman/CEO
