N.Y. to weigh Clinton CRA plan before revising its own rules.

It' too early to tell if New York State, which has proposed to ease Community Reinvestment Act rules for small banks will fall in line with a similar proposal issued last week by the Clinton administration.

In October, the New York Banking Department proposed a formula that would spare state banks holding up to $150 million of assets from having to undergo a rigorous, quantitative review of their lending.

Last week, Treasury Secretary Lloyd Bentsen proposed a similar exemption for banks holding up to $250 million of assets.

Claire Sykes, speaking for the New York banking agency, said it's premature to weigh the relative merits of the proposals, because the state package is still open for comment.

But Warren Traiger, a New York lawyer who advised the agency's Community Reinvestment Act panel, said both proposals are groundbreaking.

"They're giant steps forward in terms of basing your CRA rating on the amount of money reinvested in a community, instead of ... on |soft' factors like marketing or director involvement in communities," he said.

Under New York's proposal, a small bank would be granted a "satisfactory" rating if 65% of its deposits were in loans and 65% of the loans were local.

The rating would remain in effect unless the ensuing qualitative exam showed the grade should raised or lowered.

The federal package would guarantee a "satisfactory" rating to banks that, among other things, have 60% loan-to-deposit ratios, issue most of their loans locally, mix their loans among various income groups, have not not shown evidence of discrimination, and have not drawn the fire of community groups.

The New York proposal will remain open for comment until Dec. 24. The federal proposal, which has not been published for comment, might be issued as final as early as June. Mr. Traiger said small banks would fare well under either of them.

John L. Pritchard, executive director of the Independent Bankers Association of New York, said he would like banks with more than $250 million of assets to qualify for the exemptions.

He added that he would prefer the state plan if the federal package extended to small banks one of the requirements proposed for big banks. The requirement is that they submit a measure of their relative market share in census tracts of people with moderate income or less.

"It would mean being judged by an unknown standard that might sway you against a small-business asset outside a certain census tract -- even if that's the loan that's most prudent, or helpful to a community," Mr. Pritchard said. The Clinton plan "sounds like they are trying to mandate some social engineering."

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