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FARMERS STATE BANK
July 26, 2004
Mr Robert E Feldman, Executive Secretary
Attention- Comments
Federal Deposit Insurance Corporation
550 17th
St Building N.W.
Washington, DC 20429
Dear Sir,
I am pleased to offer my comments on PR 60-2004 for Farmers State
Bank, Inc. Booneville, Kentucky.
Our Overdraft Program has become an integral part of the of the
money management plan for our customer base, many of whom are the
more disadvantaged persons in our area. As the program has matured
our customers have become knowledgeable in the programs structure
and how to use it for their best advantage. The program was developed
with strong policies and procedures.
These policies and procedures
act to strengthen understanding by both our Customer Service Representatives
and our Customer.
The foundation
of the program is the ability of our customers remain a consumer
as long
as the account is active. This means deposits
are being made regularly to the account, in addition to the check
activity. In keeping with our policies and procedures customers
with overdrafts over 90 days with no deposit activity are charged-off.
There is also the availability of a "restart program" for
those .customers are overdrawn up to 90 days but continue to make
deposits. This important feature offers a way the customer can
place their account into a non-interest bearing repayment account
as a way to cure the overdraft. No fees are charged and the overdraft
privilege is suspended until repayment, when the customer has the
option to continue or decline use of the program.
My concern is
the requirement in the proposal to charge-off overdrafts within
30 days of the initial occurrence. This will result in a
hardship
for many persons and households because of the necessity to close
the account. This does not allow customers with ACH or Direct Deposit
activity the ability to make arrangements for the receipt of their
payments on a timely manner. This could force the return of many
checks; some for the 2nd time, which may result in merchant
assessed fees in excess of those required by the bank.
Farmers
State Bank overdraft program has been well received by the customer
base. Any regulation that would curtail
the usage or
the willingness of financial institutions to provide the service
would leave the consumer with one less product to choose from.
Respectfully Submitted,
Harvey E. Hensley
President
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