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FDIC Federal Register Citations

Alliance Bank

To: Kilber, Kenyon T.

From: Thomas C. Sellers, President, Alliance Bank

Date: June 27, 2005

Re: FIL-22-2005 Classification of Commercial Credit Exposure

Answers to questions related to FIL-22-2005
1) No.
2) The costs of implementing this framework are prohibitive. Employee training time would be excessive and would take away from our customer service needs. Our current software is inadequate to support the proposed framework.
3) Expenses that would likely occur would be: training, additional labor hours to implement the proposed program, and new/additional software.
4) Loss provision requires that a portion of the loan balance will be carried “off the balance sheet”. This will require additional training for all employees that have customer interaction.
5) Yes
6) No
7) Yes

Additional Comments:

Thank you for soliciting our comments on this important matter. Alliance Bank is opposed to the modification of the current commercial loan classification categories. The bank and its officers have had previous experience dealing with active loans that are partially charged-off. The accounting is very difficult and falls outside the range of ordinary bank functions. It invariably results in misinformation to customers, additional stress on employees, and greater losses to the bank. It will be impossible to maintain accuracy and good customer service when all front line employees must check in every case for “off balance sheet” loan balances and interest when quoting pay-offs or current balances to the customer. Please save us much money and difficulty by canceling any plans to implement FIL-22-2005.

Last Updated 06/30/2005

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