I am submitting comments on behalf of West Texas State Bank located
in Odessa, Texas FDIC# 15466.
Customer Opt-out: Since we do not take applications of any sort on
our overdraft protection plan nor do we advertise it in any way, we
feel that the customers that do not overdraft their accounts are making
the implicit decision not to participate in the program; therefore
not needing an opt-out feature. In short, keeping up with which customer
opted-out and which customer did not opt-out, will be too cumbersome
and unnecessary.
Reporting unused portions as Unfunded Commitments: With a consumer
base of roughly 7000, at a level overdraft protection of $500.00/per
customer (assuming no customer had more than one account and that none
were in the overdraft), we would be looking at 3.5 million in unfunded
commitments on Overdraft Protection only. On the Call report it would
reflect more unfunded commitments then we truly have and our liquidity
ratio would be largely understated.
Notifications: From what we read in the FIL-63-2004, the notification
is going to be the initial disclosure we give all our customers when
they open an account. This month alone, we look to have about 2200
items in the negative. With assuming one customer had an average of
two items, we would be looking at sending out 1100 customized notifications.
At this time, our bank does send out notices that identify the transaction,
disclose the overdraft amount, and any fee associated with the overdraft.
Reporting Overdraft Losses against Allowance
for Loan Loss: Because our customers are not asked to pass a credit
check to participate
in the Overdraft Protection Program, we feel that first of all, this
is
not a loan and secondly, that the charging off of this amount is
going to show our bank’s charge off amount more (in dollar
figures) than what was actually charged off (in actual loans).
Thank you for the opportunity to give our input on these types of
matters and I hope that they go to the benefit of making these types
of proposed regulations easier to implement in our day-to-day functions.
Gorge Salinas
Assistant Vice-President
