SAN FRANCISCO No matter what the measure, Bank of America keeps winning glowing Community Reinvestment Act ratings.
The San Francisco-based giant has been through federal regulators' new CRA test including a four-month fair-lending review covering 2,750 loan files - and lived to brag about another "outstanding" rating.
"In the past, we talked about programs we had going," said Susan Howard. the BankAmerica unit's CRA officer for California. "But in this exam, by far, the most important piece was volume in terms of actual products. actual performance.
"Market share and what we do in terms of generating share and loan volume is what's most important now."
Ms. Howard and Mike Mantle, president of the institution's Community Development Bank and their boss, Donald A. Mullane, an executive vice president explained in an interview how the bank consistently earns the best CRA grades - even as exams evolve.
Mr. Mullane, a 36-year Bank of America veteran and the company's point man on all things CRA, said everyone who works at the bank understands the importance of earning the top CRA rating.
"Usually, I have to hold people by the belt rather than kick them in the butt," he said
One key to this success is Richard M. Rosenberg. The bank's 1994 CRA exam report singles out the chairman and chief executive's "very prominent role ... in encouraging banks to be creative in viewing their responsibilities under the Act."
Bob Gnaizda, head of the San Francisco-based Greenlining Coalition and a BankAmerica cnuc, gives Mr. Rosenberg credit for stressing the importance of getting CRA right.
"Rosenberg and B of A were the first in the country to say CRA ts good for business," Mr. Gnaizda noted. "It's that type of CEO comnutment that encourages middle managers to do a good job."
The bank's CRA effort is founded on three programs. The star is Neighborhood Advantage. Using flexible underwriting standards. the bank has made $6. billion in mortgages to people living in lower-income areas since its inception in 1990.
"We make more real estate loans to minorities in California than all the other banks combined," Mr. Mullane said.
Neighborhood Advantage was created after the bank brought in community activist Sylvia Maranez to analyze its lending patterns for possible discrimination.
"Most people said. That's crazy. You're letting an activist come in and look at your patterns?'" Mr. Mullane recalled. "But we needed to know."
To cover other types of consumer credit, the bank often its B.A.S.I.C. program. The bank made 5,400 installment loans worth $123 million last year. That's up from $9 million in 1992.
Finally, the Advantage Business Credit makes loans for as little as $2,500 to the smallest of businesses. ABC loans nearly doubled last year, putting $101 million in the hands of 3,300 small-business owners.
"This performance reflects the ability of B of A to inove forcefully, but prudently, "into leadership positions in very specialized markets," the bank's CRA exam report said.
B of A created the ABC program in 1992 after community activists, protesting its merger with Security Pacific, argued for smaller dollar loans with quicker approvals.
In addition to starting the small-business lending program, the bank in 1992 raised its multiyear reinvestment commitment to $12 billion over 10 years.
Another reason the bank is a CRA stand-out ts its Communit? Development Bank. The subsidiary. a national leader in using tax-credit financing for lowincome rental housing, has financed more than 12.000 units worth $400 million.
Although CRA reform is still being debated in Washington. Bank of America was one of the regulators' guinea pigs, being examined under the new plan to focus on performance rather than paperwork.
Examiners found the bank's market share of home loans in low- and moderate-income neighborhoods in California was higher than its share in highincome neighborhoods.
Home Mortgage Disclosure Act data for 1993 show that the bank increased lending to minority group members by 18%, even as overall mortgage lending dropped 9%.
Examiners reviewed 2,750 home loan applications to make sure that no rejected minority application had the same characteristics as loans approved for low-end whites. The bank passed muster because every employee takes compliance seriously.
Once a year, all branch employees get CRA training and are required to pass a certification exam .testing their knowledge of the bank's reinvestment products. Fair-lending compliance training is done twice a year.
In 1992, the bank's board dictated that all 10 banking units would earn and keep "outstanding" CRA scores.
While six of the company's 10 banks are still graded "satisfactory," B of A's flagship in California has never had anything but the best CRA grade.
Which is no easy feat considering that Bank of America has 1.000 branches spread throughout one of the nation's most ethnically diverse states.
The bank "has shown an abil- ity to serve community develop- ment needs in a wide range of ways not orinarily assoicated with the credit-granting process," the exam report noted.
A great example of that was its response to the April 1992 riots in Los Angeles. Bank of America poured money and manpower into the center of the strife-torn neighborhood.
More than 500 businesses in South Central Los Angeles got 524 million in unsecured- no interest loans and all the help they needed.
"Not only did they get the money, we've got four full-time people holding their hands and making sure everything is going OK," said Mr. Mantle. the Community Development Bank president.
This is all part of the parent bank's preemptive strategy, Mr Mullane said. "We are never responding;' he said. "We have done things in advance."
For example. the bank began mapping its loans by census tract in 1991. It justifies its minority turndowns so that those rejections are accompanied by an explanation.
The loans B of A makes to meet its CRA obligations are performing as well as or better than other loans, according to Mr Mullane.
"CRA is good business," he said. "We don't have any CRA loans that aren't doing well."