A televised outreach program developed by Mechanics Bank, Worcester, Mass., shows the potential for small banks to play a big role in underbanked neighborhoods.

That's the opinion of John Taylor, president of the National Community Reinvestment Coalition.

"Damn, I'm impressed," he said upon learning about Mechanics' "cable classroom" for Latinos.

Mr. Taylor's nonprofit umbrella group works with bankers and activists to spur Community Reinvestment Act lending. informed that Mechanics' parent, Multibank Financial Corp., Dedham, Mass., was taken over July 10 by Bank of Boston, Mr. Taylor said he hopes the $10 billion-asset bank studies and expands Mechanics' program.

An |Outstanding' CRA Rating

There's no financial reason not to. Mechanics, a $482 million-asset bank with an "outstanding" CRA rating,.has spent just $7,000 on First Step Credit programs - which has enabled the bank to enter a market whose population, 17,000, would make it the eighth largest among Worcester County's 60 municipalities.

A joint effort by Mechanics and Greater Media Cable Co. First Step Credit is made up of three half-hour Spanish-language programs that explain the fundamentals of personal finance and banking to recent immigrants from Latin America..

Mechanics rewards creditless viewers with a free checking account, without a minimum balance, and a $250 line of credit if they fill out and send in a workbook based on the programs.

"To my knowledge, no else in the country has anything quite like it," said Mechanics CEO Richard B. Collins.

First Step Credit is an outgrowth of the Lend-a-hand seminars pitched to Spanish-speaking people by Mechanics during the first half of the year.

"We weren't reaching enough people," said James W. Blake, senior vice president of the bank.

Mechanics initiated outreach efforts because "saw a natural fit with our market area, and we view the Latino market as a growth area for us," Mr. Blake added.

"Other banks haven't targeted Latinos, and with interest rates and real estate values weak, we would hope to interest more of them in buying their first homes."

Real estate values in Worcester are 25% below their peak, and the city (pop. 170,000) has been hit by industrial shutdowns.

However, Mr. Collins said the problems shouldn't be overplayed. "Real estate values are stable, and we might not make |the barbed wire that tamed the West' anymore, but we still have wiring harness and optical fiber plants, which are hiring entry-level people."

Holding a full-time or part-time job is required to qualify for First Step Credit rewards.

After the first, three-week cycle of programs ended last month, Mechanics received 18 applications for checking and lines of credit. That's not very many, but the bank, which picked up 230 accounts through the earlier seminars, is pleased.

"We've known all along that it'll take five years before we know if we've really taken hold of the Latino market," Mr. Blake said . "This was a strategic decision, not a one-shot deal."

Greater Media is donating air and advertising time for the programs, which are scripted by Mechanics. "They're filmed to high standards," Mr. Collins said. "All the actors are professionals, and we've got great props."

Bank of Boston also has an "outstanding" CRA rating, and it also is impressed with Mechanics' program. "We asked Jim Blake to come in and explain it to us, and we're studying it very closely," said Jeffrey T. Graham, director of government affairs and community investment for the bank.

"We think it's a very desirable combination of education and accessibility, and we're taking a look at expanding such a program to other groups. It's just a question of the demographics in our service areas, the availability of cable, and so forth."

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