Federal regulators are beginning to wrestle with a decidedly tricky question posed by the merger boom: how to apply the Community Reinvestment Act to the new megabanks.

The Office of the Comptroller of the Currency-the primary regulator of proposed megabanks such as Citigroup and BankAmerica-plans to assess a national bank's community reinvestment efforts continuously.

Rather than sending in an army of examiners every other year, a small cadre of examiners will be assigned to the institution and move from state to state or region to region, rating CRA compliance. Once all the states are covered, the agency will issue the institution a national CRA grade.

For a combined NationsBank-BankAmerica, with $572 billion of assets and operations in 22 states, it would take examiners about 24 months to finish the cycle.

The examiners would then return to the first state reviewed and start over. This means the bank would be under continuous CRA supervision, much like large national banks are under continuous safety-and-soundness oversight.

"We are going to look at individual states or contiguous states on a rolling basis," said Stephen M. Cross, deputy comptroller for community and consumer policy. "The idea is over 18 months to 24 months to cover the whole institution."

The agency plans to try the idea first on NationsBank. If continuous supervision works, Mr. Cross said the Comptroller's Office may roll it out for other banks, including Fleet Financial Group, Wells Fargo & Co., Union Bank of California, Banc One, PNC Bank, and Star Bank.

"This could allow us to do a more complete job of evaluating an institution's record in each state," Mr. Cross said. "It might be difficult to take on 17 states all at once. That might be a bit too big to chew. But taking on three states in a particular region and then moving on to another few states, allows us to look more completely."

Catherine P. Bessant, president of community reinvestment at NationsBank, said she is wary of the new system.

"It is not anyone's preference to be in a continuous exam mode," she said. "But we recognize the complexity of the issues so we have been supportive of the process."

The four banking and thrift agencies have also begun conducting joint CRA exams on larger banking companies with Fleet as the test case. Mr. Cross said he expects joint reviews to increase consistency among the agencies, which should ensure that the same standards are applied to the biggest and smallest banks.

While regulators are pushing new exam formats, activists are split on whether megabanks should commit to national CRA commitments.

At one extreme is National People's Action, which argues that a megabank should have to reinvest over 20 years an amount equal to half its assets.

Decisions on specific projects would be decided by regional groups consisting of six bankers and six National People's Action representatives, said Gale Cincotta, the group's national chairperson.

"There would just be one national agreement that all the cities would buy into," Ms. Cincotta said. "The banks would be pretty smart if they did this. Otherwise they really will have a holy war all over the country."

Jo Ann S. Barefoot, a partner at the consulting firm KPMG Barefoot Marrinan in Columbus, Ohio, said such national deals could reduce CRA headaches by identifying model reinvestment initiatives that could be easily replicated in each market where a bank operates.

"If they can have a meeting of the minds with a key group and put some issues to rest, there could be some value to doing it," she said. "I wouldn't rule it out."

But other community development advocates said reinvestment deals should be cut and administered locally. "You need to have an agreement that relates to individual geographies and relates to the credit needs of local communities," said John Taylor, president of the National Community Reinvestment Coalition. "Otherwise it is irrelevant."

"The details need to be worked about between the bank and its community," agreed Allen J. Fishbein, general counsel at the Center for Community Change.

Ms. Bessant of NationsBank said national CRA commitments do not make sense.

"The institutions might be nationwide, but we function in local communities," she said. "There is no such thing as nationwide customers. There are individual consumers and businesses in each market."

Agnes Bundy Scanlan, Fleet's managing director of corporate community development, said size should not matter. "There is a fear out there that CRA is lost with a national bank," she said. "But I believe CRA will be conducted as business as usual. It has become something that banks do as a good business where there is profitability to be gained."

While the Comptroller's Office is testing continuous exams, the Federal Reserve Board, the other regulator of the new megabanks, is still studying whether to change its CRA exams, according to Griffith L. Garwood, director of consumer and community affairs.

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