Banc One Corp., Mellon Bank Corp., and several other institutions are buying automated loan terminals developed by Affinity Financial Group of Columbia, S.C. Affinity reported that 15 of its ALMs, the automated lending equivalent of automated teller machines, are installed. Another 63 are on order, and new purchasers are negotiating to take 27 more. The machine guides users through transactions on a touch screen. Applicants answer questions typically found on traditional loan forms. The machine renders a decision, usually 10 minutes after on-line inquiries into credit bureau records, and if the loan is approved it will issue a check or deposit funds electronically into a designated account. The terminal - manufactured by Affinity, which collects a fee on each transaction - cuts the time to process and approve a variety of unsecured and secured consumer loans according to criteria set by the bank. Over the last three months, Carolina First Bank, Greenville, S.C., has installed seven ALMs in various locales, including grocery stores. The bank issues an average of nearly two unsecured consumer loans of $1,000 to $5,000 a day, at interest rates of 14% to 16%. "It's intriguing," said William S. Hummers, executive vice president. "We want to expand on this." Mr. Hummers said the $262 million-asset bank will add a mobile ALM later this fall and may raise its limits to include larger, secured loans for big-ticket purchases such as automobiles. Equity-based loans get "appraisals on line," said Jeff A. Norris, chief executive officer of Affinity and developer of the ALM. "It depends on the institution's tolerance for how far they want to go." The machine, on the market since last year, generated some skepticism among bankers who initially viewed it as an aid in dealing only with existing customers whose information was already on file. But Chip Morton, a senior vice president with Mellon in Pittsburgh, said he believes the automated loan machine is at the same point where ATMs were 30 years ago, with equivalent potential. "We intend to work with it and see where it carries us," Mr. Morton said. He tells naysayers to "take the time to experience it on your own terms."

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