National banks risk having their safety-and-soundness ratings downgraded if they do not improve the accuracy of Community Reinvestment Act data, a senior regulator warned Monday.

Inaccurate data may affect the management component of such a bank's Camels score, said Nanette G. Goulet, director of community and consumer policy in the Office of the Comptroller of the Currency.

"CRA data should be accurate just like any other data in the bank," Ms. Goulet said in a short interview after a speech to a Consumer Bankers Association conference. "If a bank doesn't have accurate data, we consider it a management issue."

Regulators revised the CRA law in 1995 to focus more on actual lending and less on paperwork compliance. To better judge performance, the rules require banks with more than $250 million of assets to collect data on small-business lending. Much initial data was entered manually, and errors were frequent. More recently, regulators have begun challenging decisions by banks to classify refinancings or renewals as loans.

Banks with data quality problems also could be hit with civil money penalties and cease-and-desist orders, Ms. Goulet said.

The regulatory agencies have punished banks with inaccurate Home Mortgage Disclosure Act data, but a 1994 legal interpretation from the Justice Department appeared to preclude the use of enforcement powers in connection with CRA data. The Justice Department concluded that the banking agencies may enforce CRA only through merger rejections or approvals.

"We are hoping we don't have to test this" in the courts, Ms. Goulet said.

However, Paul A. Smith, senior federal administrative counsel at the American Bankers Association, quickly questioned whether the OCC would be overstepping its legal authority.

"The Justice Department letter is pretty clear," Mr. Smith said. "There is only one thing they can do, and that is take it into account during consideration of a merger."

But one official from a big bank questioned whether a fight would be worth it. "If they need quality data, then someone should give it to them," he said. "There is a mutual interest in ensuring they are getting data they should be getting."

Ms. Goulet said inaccurate CRA data was a major problem examiners encountered during a pilot program intended to make application of the CRA more consistent. This often delayed exams for up to two months as banks hurried to correct data, she said.

To prevent delays, examiners are starting to meet with bankers three to six months before an exam to review the internal controls used to ensure data are accurate, she said.

If examiners detect weak controls or find significant errors, they will require the bank to correct the flaws, she said. This could force the agency to delay an exam, she added.

Steve Zeisel, the consumer banking group's senior counsel, said the regulators have not provided clear enough guidance to show banks how to classify loans accurately. For instance, the differences between loan renewals and refinancings are unclear, he said.

"A lot of these data integrity errors have more to do with a disconnect over what the rules call for," he said.

Help is on the way, Ms. Goulet said. The Federal Financial Institutions Examination Council is to propose guidelines this week answering some of the most frequently asked CRA questions.

The document is to suggest either banning banks from counting both refinancings and renewals or letting them count up to one renewal or refinancing per loan per year, Ms. Goulet said. Regulators are not expected to adopt the guidelines until next year, she said.

The OCC also is field testing CRA examiner guidelines in three banks, she said. This document will require "significant editing" and will not be made public any time soon, she said. She did not discuss what it includes.

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