Via email
From: Frank Wooley
Sent: Monday, September 15, 2003 11:33 AM
To: Comments; regs.comments@federalreserve.gov; regs.comments@occ.treas.gov;
regs.comments@ots.treas.gov
Subject: EGRPRA
Regulatory Burden Reduction
Board Regulation 12 CFR Part 225, Subpart B
This regulation Subpart requires all entities to file an application
and obtain Board approval for formation of a holding company. This takes
place whenever an entity has power to vote 25 per cent or more of the
bank or company.
Our bank established an Employee Stock Ownership Plan (ESOP) for the
purpose of providing a positive employee benefit and creating
marketability opportunities for the aging shareholder base of our
holding company. The ESOP has exceeded the 25% and properly applied for
and received approval to become a bank holding company.
The burden now becomes that with each and every single share acquired
we must file an additional holding company application, publish notice,
and obtain prior approval, which is valid for only three months, unless
extended. Such application is lengthy and requires considerable
financial and supporting data.
As mentioned, our shareholder base consists of aging individuals,
with small shareholder interests. Their needs for cash are often
unexpected and immediate; for medical care, nursing home expense, and
the like. In addition, many shares pass on to heirs, who wish to
liquidate. Being a non-public entity, it is only fitting that we try to
accommodate these individuals who have been our loyal shareholders for
years by providing a ready and fair market at an independently
determined value.
It is impossible to anticipate the magnitude of these redemption
requests. Requiring an application and pre-approval for every solitary
share is an undue burden. Even if we attempt to anticipate the number of
shares that may be purchased, the repeated application process is a
waste of resources for Board personnel, as well as our own.
The applicant holding company here is an employee owned trust that
provides a very positive benefit for employees and serves as source of
strength for the underlying holding company by preserving capital in an
efficient manner and insuring orderly control. Given both the purpose
and the risk, the burden is inordinate.
Thank you for the opportunity to comment.
Frank J. Wooley
President
Oswego Community Bank
Oswego, IL
