July 16, 2001

Jonathan G. Katz
Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549-0609

RE: File No. S7-12-01

Dear Mr. Katz:

I would like to thank the commission for the opportunity to respond to the above-referenced rules. We believe they will adversely affect our ability to do business, especially as it pertains to the trust functions and networking activities of Vista Bank.

As a $700 million community bank located in Phillipsburg, New Jersey, the testing and compliance for the 10% exemption would result in an undue regulatory burden as well as an economic hardship for an organization our size. For a small trust division with $60 million in assets under management, the calculations and testing to comply with the exemption will result in a disproportionate expense relative to our size. Furthermore, should our sales compensation exceed the 10% exemption limit (from possible sources such as 12b-1 fees), we would have to consider the cost and appropriateness of licensing personnel. As a community bank, we would have to weigh the costs associated with the licensing, education and supervision of personnel, as well as the cost of having multiple regulators, against the benefits of engaging in activities that generate sales compensation. These issues will give insurance companies and brokerage firms a competitive advantage over banks.

Limiting the amount of referral fees to non-licensed personnel will put us at a significant competitive disadvantage. One of the most effective tools available to community banks is cross-selling our existing clients. An excellent way to promote such referrals is by providing a tangible incentive to our employees. Limiting such fees to approximately one hour of compensation will effectively eliminate our referral sources. Furthermore, basing the amount of the referral on the employee's compensation appears to be discriminating in favor of the higher compensated personnel. It would appear that providing a referral fee based upon the quality of the referral rather than income of the referrer is more equitable. In any event, reducing the referral fee to one hour of compensation would not provide an adequate incentive to our employees thereby eliminating a valuable referral source.

I urge you to consider the detrimental impact these rules will have on banks, especially community banks such as ours.


Bruce D. Greenspan
Senior Vice President
Trust and Investment Management Services

Cc: Barbara Harding, Chairman, President and CEO, Vista Bank
William F. Keefe, Executive Vice President and CFO, Vista Bank
305 Roseberry Street
P.O. Box 5360
Phillipsburg, NJ 08865-5360