Skip Header

Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Home > Regulation & Examinations > Laws & Regulations > FDIC Federal Register Citations

FDIC Federal Register Citations

Community Bank & Trust

From: Steve Hoag []
Sent: Wednesday, June 15, 2005 3:01 PM
To: Comments
Subject: Comments: Classification System of Commercial Credits

June 15, 2005

Mr. Robert E. Feldman
Executive Secretary of FDIC
550 17th Street, Northwest
Washington, DC 20429

Dear Mr. Feldman:

I am writing to express my strong opposition to the proposal that the FDIC is considering in regard to revising the classification system for commercial credit exposures. Since 1938, the current classification system has worked well and has served financial institutions adequately. As an ex-OCC bank examiner, my opinion is that the classifications utilized by examiners are more than adequate and do not need revising.

The current classifications integrate well with our current loan loss reserve calculations. Our current software would not support the recommended changes without additional expenses that will be very hard to justify as there is no rationale present to justify a change. This proposal serves as merely a modification requiring additional effort by banks with no rewards and does not appear to provide any significant improvements to the current classification methodology. The current system is a proven and well tested tool that is highly recognized, easily understood and fully integrated into the banking industry by regulators, external auditors, and bankers.

While I can not express an opinion on how these changes might help those publicly held institutions with assets more than one billion dollars, I strongly oppose the agencies enforcing this change to smaller institutions, especially privately held community banks, with less than a billion dollars in assets.

This proposal should not be implemented. Additionally, I would like to see the deadline for the comment period extended past June 30, 2005, to allow for additional input.

If you have any questions, or wish to discuss this matter further, please do not hesitate to contact me at 254.399.6155

Yours truly,

Steve Hoag, Jr.
Vice President, Audit/Compliance
Community Bank & Trust
Waco, Texas


Last Updated 06/17/2005

Skip Footer back to content