PACB Letter to Representative Evans & Secretary Schenck

December 10, 2004

The Honorable Dwight Evans
Democratic Chairman, House Appropriations Committee
Room 512-E-3 Main Capitol
Harrisburg, PA 17120

The Honorable William Schenck
Secretary
Department of Banking
16th Floor, 333 Market St.
Harrisburg, PA 17101

RE: Comments on Outline of the Task Force on Working Families

Gentlemen:

PACB has been pleased to take part in the Task Force on Working Families convened by Governor Ed Rendell last spring to help working families during difficult times.

As you know, community banks are intimately involved with their communities and customers and we believe it is important for us to be part of discussions and deliberations on how Pennsylvania’s state government in partnership with many entities may improve the outlook for our working families.

We do believe it is necessary, however, to react to the bombast and rhetoric of several members during the recent meeting of the Task Force to discuss the outline of the report. While it may be popular sport to lambaste the banking industry, we firmly believe that if there is financial abuse occurring in the marketplace, which we abhor, we are not part of such abuse. As institutions highly regulated by the state and federal governments and regulated by our own standards of acceptable community conduct, if abuse is occurring in the marketplace, it is our position that the state and federal governments should use its full enforcement authority and the plethora of laws and regulations already on the books to go after the “bad guys” who may be abusing consumers.

At this point we cannot agree to the suggestion of several Task Force members that the final report should call for a “legislative outcome” on predatory lending. We have laws in place. What’s needed is aggressive enforcement and coordination among the state and federal authorities and better education of consumers.

The outline of the report, up to this point, appeared to make sense in its general direction and outcomes. We know you agree that it would be counterproductive for what has been a cooperative, consensus-building process to deteriorate into something else.

PACB reiterates its commitment made to the Secretary in our meeting in September, followed by the enclosed correspondence, to be part of the ongoing dialogue on these critical issues. We firmly believe, however, that any report issued by the Task Force needs to make a clear distinction between responsible financial institutions and other parties in the marketplace and existing laws need to be better and more forcefully utilized before we begin discussing or calling for more legislation by the General Assembly.

We applaud the Secretary for the strong steps he has taken to beef up the department’s enforcement and examination roles and applaud both of you for the leadership you have provided on this issue.

We ask that you consider our comments, as the draft report is prepared and welcome the opportunity to discuss this further

Sincerely,

Frank A. Pinto
President/CEO

David R. Hunsicker
Immediate Past Chair, PACB

Enclosure

Cc: Hilary Hunt, Department of Banking
     Paul Wentzel, Department of Banking
     PACB Executive Committee
     PACB Legislative Committee