Interstate branching, CRA not burning issues.

THE COMMUNITY Reinvestment Act and interstate branching, the 800-pound gorillas of Washington banking policy, don't register on the public opinion meter.

Both CRA and interstate banking are favored by pluralities of the banking public, according to the American Banker consumer survey. But those numbers are overwhelmed by the number of people holding no opinion: 64% on CRA and 54% on branching. "It's a big yawn," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.

It appears lawmakers won't be looking over their shoulders to see how the folks back home might react to a vote on either issue. So Mr. Guenther hopes Congress will view his consumerist and small-business allies as proxies for public opinion on interstate branching, which he opposes.

On the plus side for interstate advocates, customers of merged institutions are slightly more favorably disposed toward interstate branching than consumers in general: 34%, compared to 29%.

On CRA, survey respondents favored the law by 27% to 10%, virtually identical to the 26%-10% margin in 1992.

Deepak Bhargava, banking lobbyist for the Association of Community Organizations for Reform Now, thinks the survey underestimates support for the law requiring banks to meet local markets' credit needs.

"If you phrase the question with, |CRA requires banks to lend in the neighborhoods in which they take deposits,' the answer you would get would show majority support," Mr. Bhargava said.

The question asked was:

"As you may know, a federal law known as the Community Reinvestment Act requires banks to meet the checking and credit needs of all residents of their community, including those with low incomes and those residing in low-income neighborhoods. Even if providing banking services to these people and neighborhoods is less profitable to the bank, are you in favor of this law, are you opposed to it, or don't you know enough to have an opinion?"

In one other area, consumers appear to think they are falling behind the curve in the way they use banks: borrowing too much and saving too little.

Asked if they are trying harder to save than they were a year ago, 71% answered yes, and 59% agreed strongly with that proposition. Both numbers were up two percentage points from 1992.

Eighty-two percent of those surveyed agreed -- and 69% strongly agreed -- that "consumers have taken on too much debt." The total agreeing was virtually unchanged from 1991 (81%) and 1992 (83%).

However, saving rates continue on a long-term downward spiral, and consumer credit is back on the rise.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER