EDS Corp. has announced the release of a new service designed to help banks comply with the Community Reinvestment Act.
Officials of the General Motors Corp. subsidiary said the service was developed to help financial institutions make sure they spread their lending activities throughout the communities in their markets, including low-income areas, as required by law.
Recent changes in 1977's Community Reinvestment Act require banks to publicly disclose their loan and deposit distribution. The service makes it easier to compile, read, and analyze this kind of information, EDS officials said.
Not Just Software
The service is the newest offering in EDS' regulatory and compliance product line, which includes software for reporting and for disaster-recovery planning.
Unlike most compliance products, Community Reinvestment and Distribution Analysis isn't simply software. EDS handles the task of pulling extracts of an institution's deposits and loans from a host system according to institution-defined criteria.
These extracts are then run through geographic-coding software to produce maps and reports. Lending and deposit activity are divided by county, zip code, census trace, or landmarks.
In addition, banks can request maps showing various levels of detail, including total target area, loan-to-deposit ratio, median household income, deposits only, and loans only. Loan types can be analyzed and loan denials-to-applications can be recorded.
In the past, collecting this kind of information and then mapping it out was a time-consuming process that most banks did by hand.
EDS said its service can produce maps in sizes and colors that make the data easier for regulators and bank executives to understand.
$2,400 and Up
According to Betty Runkle, EDS manager of regulatory compliance support, 15 banks have begun to use the service. Prices begin at $2,400.
Ms. Runkle also said banks are finding additional uses for the kind of information generated.
"Banks can use the maps for comparative analysis," she said. "They can analyze the information to determine where to open new branches or which branches to close. They can accurately track the success of marketing initiatives in different areas."
Ms. Sullivan is a freelance writer based in New York.
