From:
Melvin Chustz
Sent: Tuesday, February 24, 2004 5:41 PM
To: Comments
Subject: EGRPRA burden reduction comment
February
24, 2004
To Whom It May Concern:
Relative to reducing the regulatory burden on banks, I have the following suggestions:
1. RESPA - I feel that in-house refinancings of Residential
Real Estate should not be subject to the Real Estate Settlement Procedures
Act (RESPA), when there are no outside parties involved. Example: Our real
estate loans are amortized for 20 years with 5 year balloons. After 5 years,
the customer comes into the bank to refinance. No attorneys, appraisers or
any other outside parties are used. The only fee charged is a $100.00 origination
fee, which is retained by the bank. This same approach is used when a customer
wishes to use a mortgage on his home to consolidate bills, purchase a car,
etc. If the mortgage is already in place,(i.e. Collateral Mortgage or Multiple
Indebtedness Mortgage) which is often the case, we again only charge a $100.00
origination fee. To comply with the existing regulation, we must give all of
the advance disclosures estimating all sorts of fees for services that are
not required. Many times this requires that the borrower make 2 trips to the
bank and turns a simple 15 minute transaction into a more complex 90 minute
ordeal, only to disclose our same old $100.00 origination fee. It appears to
me that the regulation should not apply to loans, when the fees are less than
some predetermined, reasonable threshold.
2. HMDA - Our Community Bank of 34 Million Dollars has recently
become subject to the Home Mortgage Disclosure Act. We are located in the town
of Maringouin, La.,which has a population of approximately 1100. We have 1
branch in the neighboring town of Grosse Tete, La., which has a population
of approximately 480. We are located approximately 20 miles from Baton Rouge,
La., which is the nearest MSA. The vast majority of our loans are local and
at this time we only have 2 or 3 loans within the boundaries of the nearest
MSA (only because existing customers moved from our area into Baton Rouge,
but wanted to continue to do business with us). It appears unnecessarily burdensome
for us to be subject to HMDA reporting requirements, when we are located in
a farming community. Perhaps the size and location of small community banks
could be considered individually whenever counties or parishes are being included
in MSA's.
Please accept these comments as possible ideas to aid in reducing the regulatory
burdens to community banks, which can be expensive but not always helpful to
the consumer.
As always, your consideration and guidance is very much appreciated.
Sincerely,
Bank of Maringouin
Melvin L. Chustz
President & CEO
