NASHVILLE -- Commercial banks that team up with minority-owned institutions may get credit when the Community Reinvestment Act is reformed next year, Comptroller of the Currency Eugene A. Ludwig said on Wednesday.

Minority bankers gathered here for the 66th annual National Bankers Association convention said they think CRA should be revamped to reward majority banks for investing in minority-or woman-owned banks directly, or simply participating in their loans.

In a speech to the bankers, Mr. Ludwig said CRA reform will be proposed by mid-November, about a month behind schedule.

Complicated Job

President Clinton directed the bank regulators to overhaul CRA compliance by Jan. 1. Mr. Ludwig, as the only Clinton-appointed agency head, has been thrust to the fore of the debate.

The delay is not being caused by any particular snag, he said. Rather, it is just a big job.

"It's a big process to do right," Mr. Ludwig said. "It requires a real careful job."

The National Bankers Association is the trade group for the country's 108 minority- and women-owned banks. Many of its members complained that majority-owned banks are cherry-picking their best customers now that there is so much pressure to lend more under CRA.

Strictly Rivals

Curtis Williams, a director at American State Bank in Portland, Ore., said the bank has lost 20% to 30% of its market to large banks that are undercutting its prices.

Fellow director Booker Lewis said rival majority banks used to make loans with American State Bank. But not any more.

"We're strictly in competition now," he said.

Mr. Ludwig said he heard the same complaints during the seven CRA hearings that regulators concluded last month. He said he understands that the increased competition hurts minority banks.

After his speech, Mr. Ludwig refused to be pinned down, but he left a strong impression that CRA reform will encourage majority- and minority-owned banks to work together.

"We are aware of these concerns, and we certainly are doing our darndest to make certain that, in an effort to do good, we don't do a disservice to those institutions which have served low- and moderate-income areas," Mr. Ludwig said.

"A one-size-fits-all strategy simply will not work."

While it may be late, Mr. Ludwig made clear that he is still very much committed to changing CRA.

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