• Flood
Hazard Insurance – The value of the land
should be taken into consideration of flood insurance
requirements, even if located in a flood zone.
If the value of the land exceeds the amount of
the loan, the borrower should be able to opt
out of purchasing flood insurance. Also, if the
loan is on vacant land, in a flood zone, we are
required to advise the customer. Vacant land
cannot be insured therefore this requirement
should be eliminated. Because of the Regulators
strong stance on this requirement, banks are
at a competitive disadvantage with non-regulated
mortgage companies. Bank customers would also
benefit from this requested change.
• 12
CFR 202 (Reg. B) – Equal Credit Opportunity – Monitoring
information – If a customer does not wish
to disclose this information, the loan officer
must complete it through visual determination.
We should not be required to do this, which is
against the customer’s wishes. In some
cases the accuracy of visual determination might
be questioned. Making this requested change would
protect bank customer’s privacy.
• RESPA,
HUD (Reg.X) – Servicing transfer disclosure:
Our bank retains servicing on all residential
mortgages loans that we originate. We have never
sold any loans. Only lenders with a history of
transferring servicing should be required to
disclose their practice. Bank customers would
benefit by having one less disclosure to deal
with.
• 12
CFR 226 (Reg. Z) – Truth In Lending – 3-day
Right Of Rescission. This should be eliminated
entirely. The intent of the original law was
not for banks and should not apply to bank mortgages.
Bank borrowers do not need a “cooling off
period” to consider their decision to take
a mortgage. Bank customers would benefit greatly
from this requested change.
• CRA
and HMDA – The threshold for reporting
banks should be raised to $1 Billion with respect
to CRA and HMDA.
• Consolidate
exams by combining Safety and Soundness, Compliance,
IS exams and CRA concurrently. Banks are asked
for a lot of the same information during these
separate exams, which is a duplication of work
for the bank.
• Examine
a well-run bank every 2 years for Safety and
Soundness, Compliance, IS exam and CRA concurrently.
Since the bank’s Call Report data is available
quarterly and customer complaints are available
on an on-going basis, well-run banks could be
monitored with increased outreach between examinations.
• Require
each field office to enforce FDIC regulations
the same. We have a disclosure requirement from
the Maryland field office that my research has
determined, is unique to that office alone. “Examiner
discretion” creates many unique burdens
for banks.
• Reduce
the quarterly and annual regulatory filing burden
for smaller bank holding companies. The following
should be combined or made uniform: FFIEC Call
Reports (banks only), Federal Reserve reports
(parent company and consolidated), and SEC quarterly
filings (consolidated)). A small bank holding
company might be one with consolidated assets
of $1 billion or less.
• As
a side issue, we implore the FDIC to continue
it’s strong support of adequate loan loss
reserves, which have recently come under scrutiny
by the AICPA and SEC. This matter is very important
to the safety and soundness of our industry and
should not be subject to influence by non-banking
regulators.
