FDIC Federal Register Citations

From: Steve Zeman
Sent: Monday, November 10, 2008 6:22 PM
To: Comments
Subject: RIN#3064-AD37 - Temporary Liquidity Program

November 10, 2008 

TO:       Robert E. Feldman, Executive Secretary
            Federal Deposit Insurance Corporation
            550 17^th Street NW
            Washington, DC 20429

Dear Mr. Feldman,

While I can certainly appreciate the efforts being made to strengthen confidence in the banking system, the rules that we are beginning to see are all coming to us too fast, with limited information, and with too short of a time span to make good decisions.   I feel that I must not “opt-out” (in other words we will opt-in) to the TLGP program because we will simply “have to” in order to do business as usual.   Well operated and capitalized community banks like ours have always found an available market for overnight funds, whether we were in need of funds or had funds to invest.  Now we are being “forced” to “opt-in” to be sure that the same old banks we always did business with will continue to want to do business with us.   And, we have to pay a very high price for this.

The 75bp is simply too high.  It will only hurt bank profitability at a critical time.    Also, what will happen after June 30, 2009?

On September 30, 2008 our bank had no borrowings, yet we did at various times in October and just last week for a few days.   Why do we have to use September 30^th as a base value and what process is in place to set an amount for my bank for future borrowing?

In light of the fact that almost all community banks have adequate capital and are not the cause of the current economic crisis I find it very unfair that we have to pay the 75bp’s to do business as usual.  Can this be reduced for us?   Maybe you should send troubled institutions to the fed discount window and leave the rest of us to do business as is.

Thank you, 

Steven L. Zeman
President
Union State Bank of West Salem
120 S. Mill Street, P O Box 870
West Salem, WI  54669