The Clinton administration on Thursday launched a $20 million pilot program to fund three "community empowerment banks."

The banks will offer small-business loans and home mortgages to residents of Washington, Baltimore, and six rural Mississippi counties.

Local residents and businessmen will own the banks, purchasing shares for up to $30 each. The government's investment will serve as seed money to get the three institutions up and running by early next year.

"The community empowerment banks will fill a critical need in low-income areas, making loans to residents and businesses that have trouble qualifying for loans from conventional banks," said Henry G. Cisneros, secretary of the Department of Housing and Urban Development. "Established banks will work with community empowerment banks and will loan them money."

Industry officials endorsed the program. "Community banks support the added investment in the community that these programs represent," said Judith E. Knight, director of housing and community development of the American Bankers Association.

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