How Should the Community Reinvestment Act Process - Either the Law or Enforcement and Administration - Be Changed?

Article excerpt

Donald A. Mullane Executive vice president Bank of America, San Francisco

First, financial institutions that earn a rating of "outstanding" for their CRA programs -- and currently that is less than 10% of the banks in the country -- ought to be rewarded. The regulatory agencies must find ways to offer banks and thrifts incentives to achieve an "outstanding" or the rating will simply lose its value.

Second, Congress should consider broadening the umbrella of the CRA so it covers the hundreds of nonbank financial service companies that perform the same service as banks without any obligation to meet the credit needs of low-and moderate income citizens.

Norman Tice Executive vice president Boatmen's National Bank, St. Louis

I don't have any problems with the CRA. We at this institution have strong feelings that we are only as good as the communities in which we operate and that we have an obligation to work to make those communities better.

I am, however, concerned about the regulators' constantly raising the threshold of what the private sector has to do as housing affordability becomes a bigger problem.

And, although this doesn't affect us, I think community banks, say those with less than $100 million in assets, ought to be exempt, or at least have a different set of rules. They just aren't the same as a $10 billion bank and should not be held to the same criteria.

Gilda Haas Organizer Communities for Accountable Reinvestment, Los Angeles

The need of a community should be central to a bank's business plan. Regulators and banks have managed to marginalized the community's needs by putting this activity into a separate section of the bank.

In addition, there is no real emphasis by the regulators on lending, and that should be changed. …