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From: Albert Kelly [mailto:akelly@SpiritBank.com]
I oppose the proposed change to the classification system of commercial
credit exposures primarily because any possible benefits, such as reduction
of inefficiencies in the examination process, an increase in efficiently and
properly classified credits, or a significant decrease in risk do not
significantly outweigh the cost and effort of implementation, the cost and
effort of re-training, and the burden of reworking loan and accounting
procedures to comply with the proposed system. Furthermore, banks are
already regulated and it is doubtful that the proposed change will
significantly increase the safety and soundness of banks.
Our bank is a community orientated bank with assets of approximately $700
million. We have streamlined our credit classification system to work within
the current standard and find the current standard not only familiar, but
See the following for responses to the specific questions put forward by
the agencies for comment.
1. The agencies intend to implement this framework for all sizes of
institutions. Could your institution implement the approach?
3. What types of implementation expenses would financial institutions
likely incur? The agencies welcome financial data supporting the estimated
cost of implementing the framework.
4. Which provisions of this proposal, if any, are likely to generate
significant training and systems programming costs?
5. Are the examples clear and the resultant ratings reasonable?
6. Would additional parts of the framework benefit from illustrative
7. Is the proposed treatment of guarantors reasonable?
8. Other information to be considered.
Thank you for the opportunity to comment.
Albert C. Kelly, Jr.
|Last Updated 06/27/2005||Regs@fdic.gov|