From:
Melvin Chustz
Sent: Tuesday, February 24, 2004 5:41 PM
To: Comments
Subject: EGRPRA burden reduction comment
February 24, 2004
To Whom It May Concern:
Relative to reducing the regulatory burden on banks, I have the
following suggestions:
1. RESPA - I feel that in-house refinancings of Residential Real
Estate should not be subject to the Real Estate Settlement Procedures
Act (RESPA), when there are no outside parties involved. Example:
Our real estate loans are amortized for 20 years with 5 year balloons.
After 5 years, the customer comes into the bank to refinance. No
attorneys, appraisers or any other outside parties are used. The
only fee charged is a $100.00 origination fee, which is retained
by the bank. This same approach is used when a customer wishes
to use a mortgage on his home to consolidate bills, purchase a
car, etc. If the mortgage is already in place,(i.e. Collateral
Mortgage or Multiple Indebtedness Mortgage) which is often the
case, we again only charge a $100.00 origination fee. To comply
with the existing regulation, we must give all of the advance disclosures
estimating all sorts of fees for services that are not required.
Many times this requires that the borrower make 2 trips to the
bank and turns a simple 15 minute transaction into a more complex
90 minute ordeal, only to disclose our same old $100.00 origination
fee. It appears to me that the regulation should not apply to loans,
when the fees are less than some predetermined, reasonable threshold.
2. HMDA - Our Community Bank of 34 Million Dollars has recently
become subject to the Home Mortgage Disclosure Act. We are located
in the town of Maringouin, La.,which has a population of approximately
1100. We have 1 branch in the neighboring town of Grosse Tete,
La., which has a population of approximately 480. We are located
approximately 20 miles from Baton Rouge, La., which is the nearest
MSA. The vast majority of our loans are local and at this time
we only have 2 or 3 loans within the boundaries of the nearest
MSA (only because existing customers moved from our area into Baton
Rouge, but wanted to continue to do business with us). It appears
unnecessarily burdensome for us to be subject to HMDA reporting
requirements, when we are located in a farming community. Perhaps
the size and location of small community banks could be considered
individually whenever counties or parishes are being included in
MSA's.
Please accept these comments as possible ideas to aid in reducing
the regulatory burdens to community banks, which can be expensive
but not always helpful to the consumer.
As always, your consideration and guidance is very much appreciated.
Sincerely,
Bank of Maringouin
Melvin L. Chustz
President & CEO
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