Magazine article American Banker

44% of West's Small Banks like Clinton CRA Plan

Magazine article American Banker

44% of West's Small Banks like Clinton CRA Plan

Article excerpt

Community banks in western states aren't thumbing their noses at President Clinton's plan to reform the Community Reinvestment Act.

Fourty-four percent of community banks surveyed by the trade group Western Independent Bankers said they would support the Clinton plan with some improvements.

Of the 58 banks surveyed, 18% said they wanted "major changes" to the proposal, 17% said they would retain the current CRA rules, and 12% said they would maintain the current rules but focus on better procedures and examiner education.

"I was surprised that there was as much support for it as there was," said Nancy Sheppard, executive director of the Western Independent Bankers, which conducted the survey of banks in nine western states. "There is still not support for some of the specific parts of it."

Ms. Sheppard's group has 250 community banking members. The sample represents 10% of its membership with assets less than $1 billion.

'Streamlined' Examinations

The Clinton plan would allow community banks with assets of $250 or less to qualify for so called "streamlined" examinations providing they meet several criteria. For instance, a bank must make the majority of its loans in its service area; it must have a "good" loan mix; and it must maintain a "reasonable" loan-to-deposit ratio, which the administration pegs at 60%.

Fifty-seven percent of the western bankers surveyed said using a loan-to-deposit ratio benchmark was unacceptable, while 40% said it was acceptable. …

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