WASHINGTON - Compliance officers may be the biggest losers in the recent shift to performance-based Community Reinvestment Act rules.
They no longer can meet their bank's community reinvestment obligations by organizing summit meetings with civic leaders and leading CRA discussions at board meetings.
Instead, compliance officers must focus on the number, size, and distribution of loans to low-income and minority segments of the community.
"The average CRA officer's job has just been rewritten," said Charles Grice, executive director of the Community Reinvestment Institute, San Francisco.
Regulators adopted a performance-based system last month at the behest of bankers, who complained that the old rules required reams of paperwork. The new system bases nearly half a bank's CRA grade on its lending record. The other two components are investment and service in the community.
Previously, lending was just one of 12 assessment factors that regulators considered. Others included how well banks documented their community outreach and how they met procedural requirements, such as completing various reports.
Mr. Grice, whose company trains bankers, said compliance officers became experts at meeting the 12 assessment factors. About 95% of all banks scored at least a "satisfactory" grade on their CRA exams, he noted.
But the new rules make that expertise moot, he said. Now compliance officers must learn a new set of skills. Some may have to work with loan officers - or even, at times, become loan officers - to meet the new emphasis on lending.
Bankers back that up. Catherine Bessant, senior vice president at NationsBank Corp., said she plans to move administrative employees into community loan production. "I don't anticipate a loss of jobs," she said. "But we'll have the opportunity to align skills with community needs as opposed to aligning skills to paperwork needs."
Mr. Grice said compliance officers can take at least two quick steps to transform their jobs.
First, he said, compliance officers must convince their banks to analyze lending patterns, looking for areas in the community where the bank is not making loans. Second, compliance officers must form task forces - comprised of loan officers and other bank officials - to fill those gaps before the new rules take effect Jan. 1, 1997.
