FDIC Federal Register Citations

SMITH RIVER COMMUNITY BANK, N.A.


July 28, 2004

Mr. Robert E. Feldman, Executive Secretary
Attn: Comments, Federal Deposit Insurance Corp.
550 17th Street, N. W.
Washington, DC 20429

Dear Mr. Feldman:

Smith River Community Bank, N.A. has been offering an Overdraft Privilege Program for almost one year. The program provided to the bank by Impact Financial Services has been quite successful and has provided the bank with an invaluable source of non-interest income during a period of historically low interest rates.

We understand that the Federal Regulators have proposed "Guidelines on Overdraft Protection Programs" which for the most part are quite acceptable to the bank and Impact Financial Services.

The only guideline Smith River Community Bank, N.A. feels is worthy of comment is that guideline which addresses charging off overdrafts at 30 days. Impact Financial has created a collection process designed to minimize losses to the bank while retaining satisfactory customer relationships. Thus far, this process has been quite successful while simultaneously managing the risk to the bank. Consequently, Smith River Community Bank, N.A. feels that the bank's current policy of allowing over drafts to age up to 60 days prior to charging off is the most effective policy.

Very Sincerely,
C.R. McCullar
President and CEO