lending machines from Affinity Technology Group was based on positive reviews other banks have given the technology. Banco Popular bought the machines - Affinity's largest order to date - without a single test, said Larry Kesler, an executive vice president with the $15 billion-asset bank. "This is one more way that people can access our services at odd locations and at odd hours," Mr. Kesler said. The decision to buy the software and hardware - the terms of the deal were not disclosed - followed visits to Affinity's Columbia, S.C., headquarters and subsequent dialogue with other banks that already had machines operating. Most were surprisingly forthcoming in sharing their positive information, Mr. Kesler said. Early versions of Affinity's terminals - which are similar to automated teller machines except that they are designed to make loans - have been installed at several banks, including Banc One Corp. and Mellon Bancorp. The ALMs guide customers through a loan application process using touch- sensitive screens. Once a loan application is complete, Affinity's software delves into the customer's credit bureau records on-line, and renders a decision in as little as 10 minutes, officials said. If a loan is approved, a customer can have funds deposited electronically into a designated account, or else receive a printed check on the spot. Affinity collects a fee for every transaction. Banco Popular intends to install the machines in as many as 120 of its branches in Puerto Rico. The remainder will be in the bank's offices in New York, New Jersey, and Chicago. The bank has asked Affinity to enable the ALMs to make secured loans based on customer collateral maintained at the bank, such as individual retirement accounts and certificates of deposit. Jeff A. Norris, Affinity's chief executive and developer of the ALM, said the largest loan his patent-pending machine has processed was for $10,000. But he expected the amounts to grow soon. "We've got secured loan projects going on right now with Deposit Guaranty (Miss.), Mellon, and several others," Mr. Norris said. Mr. Kesler said secured loans will be an important upgrade for the ALMs, which have, until now, only communicated with Affinity's central computers to process unsecured loan applications. Secured loans will require additional interfaces with Banco Popular's systems to validate account information, Mr. Kesler said. Banco Popular will build the added communication links to give its ALMs access to the bank's customer information files and mainframe systems. This enables the ALMs to check savings account balances and payoff figures for loan renewal applications, and to verify other account information. Banco Popular will cap its unsecured loans at around $7,000, and will charge roughly 14% interest. Secured loans will be for "$25,000 or more, and on the renewal loans, it may be something like $10,000," Mr. Kesler said. The bank will start installing the machines within six months, and expects the project to be completed in 1997. William S. Hummers, an executive vice president at Carolina First Bank, Greenville, S.C., which uses ALMs from Affinity, said although some of the bank's seven machines perform only three unsecured loans a week, others - which have been placed in more heavily trafficked areas - generate nearly two a day. "We're real pleased with it," Mr. Hummers said. "It's been a pleasant surprise, and we are optimistic about how it will do in the future." He also said the software can be used for more complex loan transactions. "We think it can do other things like take the first pass on a mortgage loan application, or find a way to approve indirect auto paper quicker and more economically than we do right now," Mr. Hummers said.

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