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FDIC Federal Register Citations
From: Larry West [] 
Sent: Friday, August 12, 2005 4:26 PM
To: Comments
Subject: EGRPRA Burden Reduction Comment; OCC Docket 0418; Fed Docket R-1206; OTS 2004-35

Larry West
Toulon, IL 

August 12, 2005

Comments to FDIC

Dear Comments to FDIC:

As a community banker, I support the EGRPRA project and commend the 
banking agencies for their efforts to identify outdated, unnecessary, or 
unduly burdensome regulatory requirements.  I have the following comments 
concerning the regulations that are currently being reviewed and are 
categorized as Consumer Protection: Account/Deposit Relationships and 
Miscellaneous Consumer Rules.

Privacy of Consumer Financial Information

The annual privacy notice that banks must send to customers is not only 
very burdensome and costly but the language for the notices required by 
law and regulations is confusing to customers.  An optional short form 
notice would be welcome, but it should replace - not supplement - the 
existing notice.  Since we have already developed processes and procedures 
to comply with existing requirements, use of a short form notice should be 
at the bank's option.  

Even more important, we should not have to send out an annual notice if we 
do not change our privacy policies and procedures.  We give our customers 
the notice at account opening. That should be enough, especially since we 
are happy to provide information about our privacy policy upon request. 
The annual notice is particularly unnecessary for community banks that 
share information only as permitted by one of the statutory or regulatory 

Truth in Savings (Regulation DD)

Even though we are used to the many disclosures required under Truth in 
Savings, most of our customers pay little attention to the disclosures. 
Many of them end up in the trashcan.  There is a cost to developing the 
programs and procedures to produce these disclosures, but if consumers are 
not paying attention to them, then this is a perfect example of a needless 
regulatory requirement.  

The banking agencies should study whether these disclosures are truly 
serving their purpose.  All interested parties should be involved in the 
study, including banks, consumers and software providers.  Regulation DD 
would be an ideal regulation for streamlining and simplification to save 
banks from unnecessary costs and burdens and to improve disclosures to our 

Deposit Insurance Coverage

The FDIC has taken steps in recent years to simplify the rules about 
deposit insurance coverage, but the rules still need simplification and 
streamlining. Customers know that they can organize accounts to expand 
coverage beyond $100,000, but how that works and what steps are needed are 
confusing to both consumers and front-line bank employees.  Broader 
dissemination of the tools the FDIC offers would help.  For example, the 
EDIE CD-ROM should be distributed to every branch office of every bank.  
We would support simplification of the rules provided it does not reduce 
the ability of individual consumers to expand coverage, especially since 
the coverage levels have been steadily eroded by inflation since they were 
last raised in 1980.

Consumer Protection in Sales of Insurance 

The disclosures required by these regulations do not fit certain products 
including credit life and related products, debt cancellation contracts, 
and crop and flood insurance.  The focus of the rule should be on 
insurance products that are similar to a deposit product and that a 
consumer might confuse with a deposit that is FDIC-insured.  Bankers find 
it burdensome to disclose each time they sell a customer credit life 
insurance, that credit  life insurance is not a deposit and not 
FDIC-insured nor insured by any federal government agency.  They also find 
it burdensome to obtain the consumer's written acknowledgement of the 
disclosures each time an insurance product or annuity is sold.

Electronic Fund Transfers (Regulation E)

Consumer liability from unauthorized transactions resulting from writing 
the personal identification number (PIN) on a card or keeping the PIN in 
the same location as the card should be increased from $50 to $500.  It is 
unfair for banks to be presumed liable in every instance for unauthorized 
electronic transactions.  Furthermore, the notification requirement under 
Regulation E for a change in account terms or conditions should be 
extended from 21 days to 30 days.  This would make the notification 
timeframe consistent with Regulation DD and would simplify compliance.

Thank you for the opportunity to comment.


Larry West

Last Updated 08/16/2005

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