Federation
Bank
April 19, 2004
Mr. Robert E.
Feldman
FDIC
550 – 17th Street, NW
Washington, DC 20429
Attn: EGRPRA Burden Reduction Comments.
Dear Mr. Feldman:
I appreciate
the regulators working toward reducing the regulatory burden on
banks and especially on community banks.
They biggest
problem we have in our community bank is with the interpretation
of the way certain regulations are administered. There are so many
forms and disclosures that we are required to give the customer
it has become a joke with our customers and a huge burden for our
loan officers.
I have been in
banking for over 30 years and I can honestly say I cannot recall
more than a couple of customers actually reading all of the documents.
Customers are interested in presenting their case, working with
the loan officer and acquiring the loan to finance their need.
It is pretty simple. I don’t think the regulatory burden
we are under is driven by any of our customers.
The regulatory
items that are particularly burdensome are: right of recission,
HMDA, and flood insurance.
Right of recission.
I know this is a statutory requirement of lending, but it is one
of the most confusing to the customer of all regulations. What
makes this especially confusing is that I have never had any customer
rescind the loan in all of the years I have been in banking. Generally
when a customer has made the final decision to purchase a property
they have made sure what they want to do and they do not want to
stop the transaction. If this right of recission could be waived
I think you would find the large majority of the customers who
would waive it, get the money to close the loan and move into their
new home the same day. It is a very misunderstood regulation.
HMDA. We have
just recently come under this burdensome regulation. It is very
difficult to interpret how the information is to be reported and
if it is done wrong, even though it is not intentional, the penalties
are substantial. We have had to devote up to 15 hours per week
of one of our employees to administer this program. We are a $100
million bank in a rural area. Our county has 25,000 population
and our bank is located in a town of 7,500. I hardly think we have
much to add to the reporting of HMDA. I would suggest that you
increase the exemption for this burdensome regulation to $250 million
in assets and set a limit for population that is more realistic.
Flood Insurance.
This is another regulation that customers do not understand. It
would help if these requirements were more streamlined and simplified.
This is another area where the government requires the insurance
in certain circumstances, but the customer blames the bank for
the problem.
Again I appreciate
your interest in reducing our regulatory burden. It may be useful
for you to involve community bankers who actually serve the customer
to work on an advisory panel to reduce the burden that is so costly
to our banks and customers.
If you have any
questions please contact me.
Yours truly,
Dale J. Torpey
President & CEO
Federation Bank
Washington, IA 52353
|
