WASHINGTON - President Clinton unveiled his community development lending program Thursday with a show of political strength that suggested banks may have trouble gaining regulatory relief through the legislation.

Surrounded by Vice President Al Gore, Cabinet secretaries, a large congressional delegation, regulators, bankers, and community activists, the President called for a $382 million fund for community development lenders over the next four years.

Mr. Clinton also asked the four bank and thrift regulatory agencies to review the Community Reinvestment Act, with an eye toward reducing paperwork and increasing lending in low-imcome communities.

By involving the regulation in CRA, the President may have preempted industry efforts to have Congress ease CRA and other regulatory requirements through amendments to community development legislation.

Congress members "have indicated to us that they are looking for a vehicle for regulatory relief, and this could be it," said Edward L. Yingling, executive vice president of the American Bankers Association.

Quick Action Indicated

However, the sheer magnitude of the ceremony on the White House's south lawn, which ran for nearly an hour, indicated the administration and congressional leaders want to move the package through quickly and without amendments.

"In all the years I've been lobbying, I've never seen so much horsepower behind a banking bill," said Jim Butera, who represents several financial institutions.

The Senate Banking Committee began work on the bill Thursday afternoon, little more than an hour after President Clinton finished speaking. Rep. Henry B. Gonzalez, D-Tex., chairman of the House Banking Committee, said he would hold hearings July 21 and 28.

Speeding the Process

The chairmen of the three House subcommittees that would have jurisdiction over the bill agreed to permit consideration by the full committee - a step that will expedite the process considerably.

The most significant challenge to the Clinton plan could come in the Senate, where Republicans have more leverage.

Alfonse M. D'Amato of New York, the Senate Baking Committee's ranking, Republican, argued that unless commercial banks are given incentives to participate' the President's plan "is only a Pipe dream."

Not What He Promised

The program announced Thursday is considerably different from Mr. Clinton's campaign promise to create a network of 100 community development banks.

In a brief interview after his speech, Mr. Clinton's said he had learned since the election "that there is a whole, huge network of people out there interested in doing this work, and we didn't want to reinvent the wheel in every community.

"So we will be creating some new community development banks in some areas, and we may even have some big banks wanting to use some of their community reinvestment funds to provide funding," he said.

"But if you've got a bank that's operating, you got a credit union, you got some other eligible institution that you can dramatically increase the capacity of, it might be better to expand the capacity of an existing institution than create a new one."

President Clinton thus sided with community groups that had argued against giving banks financial incentives to participate in the program.

Lightening the Load

"With a year of record profits, banks don't need a bribe," said Deepak Bhargava, bank, lobbyist for the Association of Community Organizations for Reform Now, or Acorn.

The Clinton program promises some relief from the paperwork burden of CRA, though neither the administration nor the regulatory agencies have said specifically how the "performance over paperwork" goal might be met.

In testimony before the Senate Banking Committee Thursday, Comptroller of the Currency Eugene Ludwig said performance-based standards would not be tied to rigid numerical targets.

"But between a rigid system of numerical targets and the system we have today, there is considerable room for improvement," he said.

Concern over the Tone

Although bankers attended Mr. Clinton's announcement and at least one commercial banker spoke, a number of industry representatives expressed concern over the tone of the event, particularly over criticisms of bank lending practices.

"There was a pretty good air of bank bashing," said Joe Belew, president of the Consumer Bankers Association.

NationsBank Corp. chairman Hugh McColl delivered a strong endorsement for the program. He said the CRA reform would leave "no excuses" for banks failing to provide credit to low-income borrowers. A law "that sets tougher, more objective, more quantifiable standards would send the clear message to banks that we will be measured by our results, he said.

|Remarks Criticized

Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America. was sharply critical of Mr. McColl after the ceremony, saying his endorsement gave away the industry's bargaining power.

"We are just sitting down to negotiations," said Mr. Guenther, noting that many banks still hope the bill can be reshaped to include funds for commercial banks and some measure of regulatory relief. "Hugh McColl should know by now that you don't give away the banking industry's negotiating position in advance. "I don't know how he can say he speaks for the banking industry."

Mr. McColl declined to comment on the criticism.

President Clinton's legislative package would create a fund to provide assistance to community development financial institutions. Money would be available to all kinds of community development tenders but not to the vast majority of commercial banks, thrifts, and credit unions not engaged primarily in community development lending.

The money will be available if matched dollar for dollar with private sector contributions up to a maximum of $5 million for insured institutions and $2 million for other lenders.

Although the program provides only $382 million over four years, Treasury estimated that leverage will result in up to $2.5 billion in new credit for low-income communities.

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