From: Kelley C. Lee
Sent: Thursday, March 25, 2004 10:51 AM
To: regs.comments@federalreserve.gov; Comments; regs.comments@occ.treas.gov;
regs.comments@ots.treas.gov
Subject: EGRPRA Specifically 12 CFR 203 (HMDA)
As a community banker and former OCC bank examiner, I would like
to share my thoughts and comments regarding the above reference regulation.
First, I want to express my support for the need to monitor home
mortgage activity. Without specific initiatives started 15-20 years
ago, the national average for home ownership would not be where
it is today. This is a very positive thing and has helped thousands
of Americans recognize a part of the "American Dream."
However, like many good intentions that start off with noble and
right purposes, HMDA has gone awry. Our $225MM bank actively seeks
to make both conforming and non-conforming home mortgages. We generated
approximately $12MM in purchase, refi, and home equity loans during
2003. In total, we closed approximately 80 loans during the year.
Because our bank is extremely compliance sensitive, we have procedures
in place where our HMDA LAR and all supporting documentation are
reviewed quarterly and then once more prior to our submission of
the final report. These reviews are performed in-house and take
hundreds of man hours to perform. In addition to our in-house review,
we also have engaged outside compliance auditors who also review
HMDA as part of their scope.
The reasons for providing your this background information is not
to brag about how great our commitment or compliance efforts are.
We know we must comply with both the letter AND spirit of the law.
My reason for providing you this information is that with all our
efforts to comply, as well as, seek out mortgage loan opportunities,
our impact on the total picture is microscopic.
$12MM in mortgage volume for the Dallas MSMA does not even rank
us in the top 100 mortgage producers. We could have the most outlaw
operation in this part of the country and the HMDA data would not
bear that out when you are reviewing regional performance.
My point is this, HMDA is necessary and good but does not necessarily
apply to every lender. The $30MM exemption from HMDA reporting
is too low. Because of the amount of time, effort, training, and
auditing expense associated with complying with a "zero tolerance" regulation,
the materiality should fit the bill and costs associated with the
compliance effort.
My recommendation would be to provide an exemption to lenders that
make less than 200-500 mortgage loans a year. Again, materiality
is the basis for my recommendation. Because we compete against
the biggest of the big (Countrywide, Citi, Washington Mutual, B
of A, Wells Fargo) our paltry efforts for the year are exceeded
by many, many, mortgage companies on a daily and weekly basis.
If our data were excluded from HMDA analysis, no one would be able
to tell that it were missing!!! If you have never tried to understand
or deal with all of the reporting nuances regarding HMDA LAR, I
would invite you to our shop. We would love the opportunity to
show you the daily effort required in maintaining compliance. I
think you will be "shocked" if you take me up on that
offer.
This regulation should be for those who impact, control, and drive
the markets...not the little guys trying to scrape out a meager
existence.
Thank you for the opportunity to express my opinion.
Sincerely,
Kelley C. Lee
Executive Vice President
The First National Bank of Athens
Athens, Texas
|
