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From: Charlie Brown [mailto:firstname.lastname@example.org]
Sent: Thursday, June 16, 2005 10:12 AM
I am writing about the proposed changes in the method to reserve for loan and lease losses. The proposed changes will impose a burden on small banks that will be difficult to shoulder and larger banks will be no better off with the new system, nor will the public.
Assigning a risk rating to each loan is overkill and will cause much confusion. Bankers and regulators understand the present system and it has served us well for a long time.
The biggest harm that I see coming from the proposed changes is that the regulators, the ones whose charge it is to see that banks maintain sound reserves, will recommend lowering loss reserves in banks that have more than the calculated reserve.
The banks that made it through the great depression were banks that had more than adequate capital and reserves. They were conservative and prudent and had reserves stuck away for a rainy day. The proposed changes, if I understand them correctly, would not allow a bank to reserve more than the calculated amount. These changes would discourage bankers from being conservative.
These changes, if implemented, will be a nightmare for both regulators and bankers and will serve to undermine our entire system of banking. The system in place now has worked and worked well for a long time. Don't try and fix it because it is not broken.
Charles F. Brown III
P. O. Box 647
Lucedale, Ms, 39452
|Last Updated 06/17/2005||Regs@fdic.gov|