There is a clear trend toward the greater use of technology in banking, from the expansion of automated teller machine networks to the development of home banking.

This trend is driven by consolidation in the industry, and by the cost benefit to banks - $1.07 for a teller- assisted transaction compared to only $.27 for an ATM transaction.

As consumers, bankers, and regulators prepare to deal with the increased use of technology in banking, there is agreement that a primary issue to be addressed is the safety and security of such systems.

In this vein, the FDIC held hearings in September on the subject of stored value cards and other electronic payment systems. The concern of the FDIC is whether or not its role is critical to the public having confidence in these payment systems and the safety and soundness of the banking system.

In anticipation of these sorts of discussions taking place, I went to France this June to study the French Teletel system and French banks in general. This offered an excellent opportunity to understand both the positive and negative impact of electronic technology in banking on low- and moderate-income communities, considering its widespread use in France.

The Teletel system is used in 35% of French households and smart cards (or stored value cards) in 100% of French households. French companies control 35% to 40% of the worldwide smart card market.

Our research revealed that most demographic groups use the Teletel system in numbers proportional to their representation in the overall population. Obviously, the French have been able to balance market demands with accessibility and affordability. The organization which I head is concerned about how to ensure that low- and moderate-income consumers have access to credit and capital in such a changing environment

Since 1990 we have made tremendous progress in facilitating greater access to financial services for low- and moderate-income families. Bank branches have relocated in communities from which they've been absent for generations, and ATMs have been installed as well. There are several policy considerations that must be addressed if that access is to be ensured, given the increased use of technology in the financial services industry.

*How do we ensure that a tangential stream of financial services does not develop to solely service low- and moderate-income communities, such as the infamous check-cashing stores did in providing bank-type services in the absence of banks?

*How do we mitigate against the cost of technology-assisted transactions unfairly and unduly penalizing the poor, thus making services less accessible?

*How do we ensure the necessary access to the hardware and education on its use so that low- and moderate-income people are able to access the financial information highway?

The way we mitigate against the poor being ghettoized in a separate electronic financial services network is to keep banks central to the delivery of financial services to low- and moderate-income communities.

This is particularly relevant regarding the matter of stored value cards, i.e. cash cards. Aside from specialty stored value cards, such as phone cards or mass transit cards, the franchise to issue general cash cards should be the sole province of banks.

Banks are in most communities, and such a move would encourage the establishment of branches in those that lack them.

Because the system is in place to insure deposits, the question of the integrity of the stored value cards is resolved because they could be insured by the FDIC just as other deposited funds are insured.

And because banks already issue credit and debit cards they have in place a process and infrastructure to issue stored value cards in the most cost effective manner for themselves and consumers. This is relevant for the second broad policy question, the relationship between cost and access.

Access to the world of electronic banking for low- and moderate-income people is going to be significantly affected by the amount of the fees charged for such services. If banks have the primary franchise for "electronic banking," the fee structure should be developed in a way that deals with cost to the bank for providing these services but should not be viewed as another major profit source for the bank.

If banks have the primary franchise for stored value cards, they can apply the same fee structure used for on- line and off-line debit transactions that result in fees for the merchant but not the consumer. The lower the fee, the more affordable - and thus the more accessible - the technology is to low- and moderate-income people.

A short-term response ensuring the poor have access to the hardware, software, and the know-how to use both might well entail banks' supporting community computer-banking centers and programs for donation of computer equipment.

The centers could be located in the facilities of community-based organizations. The equipment could be distributed to members of the community through such organizations for free or at a minimal cost.

A longer-term response would require a massive marketing effort by banks and the computer industry to educate the community on the importance of having and using this technology.

This effort would be similar in size and scope to that mounted over four decades ago to make a television set a fixture in every home.

Banks are following the example of the rest of corporate America (and in some cases taking the lead) in moving toward greater automation.

Even though a major premise underlying these moves is to increase the accessibility and availability of these services, our nation's low-income communities are being sacrificed.

To this point, corporations and banks have not begun to create comprehensive plans for their low-end customers. Technology is going to increasingly determine the character and quality of life for people as we move into the next century. Unless action is taken now, the gap between the haves and the have-nots will soon be insurmountable.

Mr. Stith is president of the Organization for a New Equality, a national civil rights group.

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