Garden Plain State Bank
From: Deneen Fayette [mailto:dfayette@gpsbank.com]
Sent: Friday, April 09, 2004 5:48 PM
To: Comments
Subject: EGRPRA Review of Consumer Protection Lending Related Rules
Dear Sir or Madam:
Garden Plain State Bank is a small community bank located in Wichita,
KS. I
have been with the bank for six year, where I am in charge of auditing,
compliance, loan review, regulatory reporting, etc.. Prior to working
at
the bank, I was a Bank Examiner for the FDIC in the Wichita, KS field
office
for nearly eight years. Working as both a banker and examiner, I
can
appreciate the struggles in both implementing and enforcing regulations.
I
can remember many times as an examiner asking a banker to do something
that
at the time I thought would be an easy task - now knowing that things
at a
small bank, where all employees are required to wear many different
hats,
are never that easy. With this knowledge, it is my pleasure to provide
my
views on reducing the burden in consumer protection lending related
rules.
Home Mortgage Disclosure Act (HMDA)
HMDA has always been a burdensome regulation with no direct benefit
to the
consumer. Collecting and reporting data takes a significant amount
of
manpower in a small institution and the addition of more sophist
acted
software to track such loans is cost prohibitive. Recent changes
increasing
the volume of information to be collected has skyrocketed this already
imposing burden. The areas added are difficult to apply and increase
our
potential for error (such reporting rate spreads, determining dates
interest
rates were set, etc). Additionally, some changes were not well thought
through, such as the new definition of refinancing which will include
commercial loans renewed that are secured by the borrower home or
other
dwelling. This new definition will increase the number of loan applications
we report and provide no meaningful data as far as the original purpose
of
the regulation.
To solve this problem, I would recommend increasing the current
exemption of
$33MM to $250MM. However, if this data is deemed truly helpful to
someone,
decrease the reporting volume back to at least the previous level.
I also
would suggest that they change the definition of refinancing to exclude
commercial purpose loans.
Truth in Lending - Reg Z
Finance Charges: A clear definition and example of finance charges
- a
simplification of sorts - would be helpful. Simplification could
help
consumer understanding of the regulation and help bankers more easily
calculate the APR.
Right of Rescission: In my 14 years of banking I have never seen
a consumer
rescind a transaction, nor have I seen a customer have an excuse
worthy
enough to meet the regs requirements to waive their right. Many customers
are annoyed at the fact that they can not have their money right
away. They
see this as an insult to their intelligence. I believe this part
of the
regulation should be repealed.
These are the most prevalent areas in lending that I believe need
changed.
Please consider my comments when making your recommendations for
change.
Again, my background as an examiner helps me to understand the
purpose/intention of a regulation and appreciate its place. However,
working in a small bank with limited resources helps me to see that
the ever
changing/increasing of regulations will be the fall of the small
community
bank. Please help to change regulatory burden in all areas before
its too
late!
Sincerely,
Deneen Fayette
Senior Vice President
Garden Plain State Bank, Wichita, KS
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