E-Regs Comment letter

Posted By: Bear Collector, CRCM

E-Regs Comment letter - 05/24/01 11:53 AM

I have been asked by our General Counsel to draft a comment letter to the Fed regarding the e-regs. This is something I have not done before, so I wondererd if anyone out there in Compliance Land could give me some pointers or share a letter they have written that I could "tweak" for our use. I know ABA has guidance on their website, but I need something more specific, like an actual letter. Any suggestions?
Posted By: La. Lady

Re: E-Regs Comment letter - 05/29/01 08:02 PM

That makes 2 of us. I've never written that type of letter either.

How about it guys?

Posted By: Andy_Z

Re: E-Regs Comment letter - 05/30/01 02:16 AM

I don't know that the ABA's comment letter is ready yet. You could post a message on their board asking for a copy and also contact your state association.

Bear in mind that the guidance you'll get from a "how to" article such as is published from time to time, is just about as good as it gets if you want to write a genuine letter.

You can get someone else's and make small changes to customize it. But that doesn't mean that one letter is better than the other. If you got one from the ABA, one from BAI and another from your favorite state association, the three would look different. Appearance, while important, is eyewash compared to the content. That, your ideas, is what counts.

Read the proposal, ID what issues you have, what works, what doesn't, why, can you qualtify what would your compliance cost be, did they ask specific questions you want to answer, etc? Even if you have several issues but can address only one, go for that one.

Your opinion counts. You don't have to form your letter after someone else's to make it count. (This isn't a Presidential election.)

Andy Zavoina
Opinions stated are not necessarily that of my employer.

Posted By: Richard Insley

Re: E-Regs Comment letter - 05/30/01 10:59 AM

Warning--long, but thoughtful, post ahead!

Andy's on the mark with his suggestions--your comment letter doesn't have to be a polished legal brief, just solid facts. Rulewriters are charged with a balancing act: effect changes that will accomplish the goals of the law without creating undue burden for those who must comply. They will hear plenty from the intended beneficiaries of the law, so it's up to you to paint the dark side of the picture.

Comment quality matters. Rulewriters already know that you won't like additionalal expensive regulations, and they discount comments lacking substance. They asked for public comments because they don't understand the implications of their proposal. It's up to you to supply the details of costs and burdens that will result from the proposal.

All change is bad - at least from the cost perspective. Your bank will suffer the cost of implementing ALL new rules, even those you support. Tell the regulator the types of costs you will incur and your best estimates of amounts. Again, this isn't rocket science. Reasonable estimates are perfectly acceptable.

With few exceptions, new rules will create or increase costs in most of all of the categories listed below. Mention as many as you can and provide a rough estimate of time and costs by category. Don't forget to indicate opportunity costs if you can forcast losses in revenue that will result from a regulatory implementation project.
- Research (time to read the regs, seminars, travel, phone calls, consultants)
- Management (meetings to develop implementation plans, drafting of policies & procedures, establishment of quality controls to assure compliance, performance of QC & disposition of exceptions)
- Systems (modifications to legacy software systems, new software, longer run times, manual exception handling, additional record retention)
- Forms & calculations (development of form content, printing & distribution costs for paper forms, development & deployment costs for e-forms, modification or development of calculations & similar processes)
- Training of appropriate staff (almost always a major cost)
- Audit (same research & training costs as management, time to develop or cost of acquisition of work programs, time to conduct necessary audits & follow-up)

Remember: only the regulated party can comment about costs and efficiency. If your regulator hears nothing from the industry, it assumes you will experience negligible cost increases due to the proposal, and that you are happy!

Consumer groups will extoll the perceived benefits of most proposals, but reality is often another matter. Yesterday's "can't-live-without-it" reg eventually becomes tomorrow's information overload. What's YOUR assessment of the likely outcome of the proposed reg? Will it make life simpler and easier for your customers, or will it backfire and complicate your relationship? (Take note of media reports of consumer reactions to the current avalanche of privacy disclosures.) If you can suggest better ways for the regulator to carry out the legal mandate (no agency can ignore a clear Congressional mandate), your comments will be heard. You can have more impact in cases where there is no specific mandate (the e-Regs are such a case; so was the ill-fated "know your customer" proposal.)

Finally, there's the body count. If the pile of "for" comments is fatter than the "against" pile, the agency will be tempted to conclude that benefits will outweigh costs & proceed with the rule.

All comments matter, and it usually doesn't take much time to identify one or two of the major disadvantages of any proposal. With a bit of additional effort, you can arrive at a rough cost estimate--one that's at least close enough for government work. Take the time to be heard. Participation in rulemaking activities can save your bank money in the long run and can ease your "learning curve" for what will eventually become a requirement of some description.

[This message has been edited by Richard Insley (edited 05-30-2001).]

Posted By: Bear Collector, CRCM

Re: E-Regs Comment letter - 05/30/01 11:31 AM

Thanks everyone! I took Andy's suggestion and asked for a prototype from the MD Banker's Assoc., and also found some good ideas on the Internet using Google.com. The letter is going out today; it may not be a masterpiece of journalism, but I wrote about the cost and the concers we have about timing. My General Counsel seemed pleased with my efforts, and actually approved it with no changes!! So thanks for your advice and assistance...Richard your response was great! I will keep a copy for future reference.