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PALMETTO STATE BANK
July 28, 2004
Robert E.
Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429
Dear Mr. Feldman:
PALMETTO
STATE BANK has reviewed the newly published Interagency
Guidance on Overdraft Protection Programs, published in Volume 69,
Number 109 of the Federal Register on June 7, 2004. We agree that
the majority of the proposed guidelines are good, but we would like
to comment on a few areas.
I. OVERDRAFT
CHARGE OFFS
Palmetto State Bank believes that 30 days is too soon to charge:
off an overdraft. Our program allows for several systematic contacts
with a customer and provides a monthly. repayment plan for those
who wish to cure their overdraft. We would propose not charging off
an overdraft until it is aged 60 days.
II.
UNUSED COMMITMENT REPORTING
Palmetto State
Bank feels that the guidelines proposed to report the amount
of unused commitments would not be appropriate We believe
that a loss reserve based on the previous performance of our program
would more accurately reflect the risk involved with our program.
III. FREE ACCOUNT
DISCLOSURES
Palmetto State Bank knows that many financial institutions have
offered free accounts and that they are popular with many depositors.
While Palmetto State Bank doesn't currently offer this product, it
seems logical that clear, conspicuous disclosures in any free account
disclosure would be satisfactory.
IV. OVERDRAFT
NOTICES
Palmetto State
Bank believes that an overdraft notice should be provided each
time that an overdraft is created. It would not, however,
be possible for our current system to include the additional information
or our notices. Therefore, we feel that this guideline should be
omitted.
V. REPAYMENT PLAN
Palmetto State Bank has had very good success with the repayment
plan that we offer when an overdraft has aged to 30 days. We suggest
that performing repayment plans not be charged off.
Thank you for allowing this time for comment. We trust this information
will be helpful in your deliberation.
Sincerely,
John R. Peters, III
Vice President
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