From: Sharon Moorhead [mailto:SMoorhead@sharonbank.com]
Sent: Monday, April 19, 2004 11:25 AM
To: Comments
Subject: EGRPRA Review of Consumer Protection Lending Related Rules
Sharon Moorhead
9 Chester Pike
Darby, PA 19023
April 19, 2004
Dear FDIC:
April 8, 2004
Dear Sir or Madam,
As a community banker at an institution w/$200MM in assets, I appreciate
the regulator’s efforts to address our mutual burden. Community
banks
continue to fulfill an important role for consumers and small businesses
in today’s financial services arena. Often competing with megabanks
and
their mega resources, the limited human resources of community banks
struggle to juggle the ever increasing demands of regulatory and
technological change.
We are traditional in our loan product offering...pretty much plain
vanilla fixed or adjustable purchase or refinance mortgages and fixed
or
adjustable rate home equity loans and lines of credit. Referring
back to
our asset size, it is a Herculean task to remain cognizant of current
and
pending regulatory issues and their effective implementation. With
the
revised HMDA and the addition of some consumer loans subject to
government monitoring, another burdensome task has been necessitated.
As
we really don't have any more ‘ hats to wear’ , we are
currently
contemplating the most effective way for us to comply with the recording
of HMDA data and HOEPA assessment . This would not be an issue for
us if
the threshold were increased to banks with assets > $250MM.
Regarding Reg Z, I relish this opportunity to comment on two issues.
First
of all, I have always found that the APR is so contradictory to the
very
nature of the Truth in Lending Act. When I started by Banking career
in
the early eighties, TIL was explained to me as EZ. The idea that
disclosures were to be designed so that consumers could easily compare
loan products and that Notes should clearly display finance charges
and
rates, etc. In my experience, I have never heard even a seasoned
Lender
satisfactorily explain the APR calculation to an inquiring consumer.
Additionally, lets face it, often times the APR can be (un)intentionally
distorted. Any regular “ Joe” will appreciate the actual
rate and the Good
Faith Estimate of Closing Costs as comparative tools and question
suspiciously the APR.
My second comment regarding Reg Z concerns the Right of Rescission.
I
advocate the right of consumers to have a period of time to review
loan
documents privately at their leisure and furthermore to have the
right to
cancel. Predatory lenders make this consumer protection well deserved.
What is overkill about the ROR is the three day period. The consumers
of
this world disdain the wait often begging the Lender to accept a
consumer
request to waive the rescission period. I propose a compromise wherein
the
next business day (perhaps by 11:00 am) is a sufficient period of
time
for document examination and rescission contemplation.
Thank you for this opportunity to share some personal observations
and
suggestions. Best of luck with your charge.
Sincerely Yours,
Sharon B. Moorhead
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