Local bankers give thoughts on federal regulations
Last week, U.S. Representative Jo Ann Emerson met with bankers and realtors and members of the small business community to address concerns regarding federal regulations that are affecting them. The meeting was held as Emerson begins preparation of a financial appropriations bill. She is currently serving as the chair of the appropriations subcommittee on financial services and general government, which oversees the U.S. Treasury, the Internal Revenue Service and other federal regulatory agencies.The roundtable discussion took place in Cape Girardeau, Mo., at the Chamber of Commerce office and many of the concerns voiced at the meeting are some of the same concerns facing banks in our local area.
According to bankers in the meeting, over regulation by the federal government is overriding many of the common sense practices that have been used by community banks in Southeast Missouri for years.
One banker in the meeting noted that there is hardly time enough to read the regulations, let alone implementing them.
After the mortgage crisis in 2009, new regulations were put in place by the Office of the Comptroller of the Currency. These regulations were aimed as more protection for the consumer. However, some bankers think these regulations are causing more harm than good.
When confronted with this question, some area bankers shared their thoughts on the issue.
Will Mobley, president of Senath State Bank said, "Every time a customer finances a home purchase or makes a new loan secured by a home they own already, they must receive detailed truth in lending disclosures 10 days before the loan is closed. The disclosure and waiting period were put in place so inexperienced borrowers could do their homework, ask questions and compare offers from more than one lender, which is a good thing."
Additionally, Mobley noted, "Many borrowers are well informed, have already done their homework and compared offers. Before the new legislation, our bank often closed home purchase loans in less than one week from the application date. That regulation slows things down, 'time is money.' There should be a way to waive the 10 day wait requirement."
Mobley spoke of a new requirement in which real estate taxes and homeowners insurance expenses are collected monthly by the lender and kept in an escrow account. He noted, however, that this is expensive and burdensome for the bank to provide escrow service for small loans ($25,000 or less).
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