FDIC Federal Register Citations

SHERMAN COUNTY BANK

Mr. Feldman:
I can understand some of the concerns surrounding the overdraft protection programs. How these are marketed to customers, the perception some customers receive, etc. I would caution you to not clamp down too hard on this type of program because it also saves consumers a considerable amount of money in two ways. When a consumer overdraws their account and they use this program they are saving a considerable amount of money, not only the overdraft fee of the banks they are not paying, but they are also not paying the $30+ fee charged by the entity which took the bad check. These programs are also used to extend short term, line of credit type loans to consumers at a reduced cost. If a consumer comes into our bank and wants a $300 loan, it is significantly cheaper for the consumer and the bank to use the overdraft protection loan system to give out the loans as opposed to the regular loans system. To some degree this guidance puts a negative spin on this practice. For loan programs administered and promoted properly, this is a great loan program for both consumers and the banks. You can assure proper marketing, but leave well enough alone the system which in many ways is in the best interest of the consumer. Don't make this simple system another loan which cost more for the consumer because of a regulation.
Leo
 

Leo R. Kringle
Sherman County Bank
734 'O' Street, PO Box 543
Loup City, Nebraska 68853-0543
(308)745-1500 or 745-1655 (fax)
lkringle@shercobank.com
lkringle@shercobank.com
lkringle@shercobank.com