The Community Reinvestment Act, which turns 20 years old this month, remains every bit as controversial as when adopted.

"CRA is an issue about which there were polarized views in 1977," said Stephen M. Cross, deputy comptroller for community and consumer policy. "Today, what community groups criticize and applaud, bankers applaud and criticize."

According to bankers, the law is superfluous and burdensome.

"CRA is unnecessary overkill," said John R. Munn, senior vice president for lending at $214 million-asset First National Bank of York, Nebraska. "If you are a community bank not serving your community, then you don't have a bank."

Big banks make the same claim. "We wouldn't change what we are doing if the law went away tomorrow," said Catherine P. Bessant, president of community investment at NationsBank Corp.

Redlining laws and the Home Mortgage Disclosure Act already force banks to serve people of all incomes and races, she said. "For a company like us, public disclosures and fair-lending laws are sufficient," she said.

Activists, however, contend that CRA has worked well.

"The benefits have absolutely outweighed the costs," said Jack Gilbert, vice president for marketing at Neighborhood Housing Services in Tampa. "This is about making money and being philanthropic at the same time."

There is no denying that CRA has had an impact.

The banking industry's share of the mortgage market has plummeted. Banks originated 81% of mortgages in 1977, compared with 43% in 1996, according to data compiled by the American Bankers Association. Nonbanks, by contrast, have seen their share rise to 57%, from 19% in 1977.

Still, home mortgage lending to blacks has nearly tripled from 1990 to 1996, while lending to Hispanics more than doubled, according to HMDA data. In Chicago alone, the number of multifamily loans jumped 250% from 1983 to 1993, according to the Woodstock Institute, a think tank on community development issues.

Banks have pledged $200 billion during the past two decades to fund loan programs for low-income and minority consumers, according to data compiled by the National Community Reinvestment Coalition.

CRA has worked miracles in some communities. For instance, Chase Manhattan Corp. helped transform the North General Hospital neighborhood in Harlem. In the place of abandoned buildings now stand two low-income housing cooperatives, a nursery school, several restored brownstones, a Pathmark supermarket, and several small businesses.

"CRA is about spreading capitalism to working poor communities," said John E. Taylor, president of the National Community Reinvestment Coalition. "The major import of the law is that run-of-the-mill working-class folks can access capital and build their individual net worths."

Activists charge that banks would do even more if regulators did not give 98% of all institutions either a satisfactory or outstanding CRA grade.

"What we need now is enforcement of CRA," said Kenneth H. Thomas, a Miami-based author on CRA compliance. "If we can just get proper ratings, we would then see results that show we have a long way to go."

Mr. Thomas, who has reviewed more than 1,500 CRA exams for an upcoming book, said more than half of all CRA ratings are inflated by at least one grade, such as a bank with a needs improvement rating receiving a satisfactory score.

"We are a long way from where we need to be," he said. "There is a definite need for across-the-board CRA improvement."

Surprisingly, Mr. Thomas's view is shared by some regulators.

"I didn't anticipate we would end up with a system where such a high proportion of banks would be given passes on their exams," said Alan Herlands, director of licensing policy and systems at the Office of the Comptroller of the Currency and an author of the original CRA rules. "I expected only the best would get high ratings. Instead, everybody is either satisfactory or outstanding so it doesn't matter."

Bobbie Jean Norris, national coordinator of consumer and community affairs at the Federal Deposit Insurance Corp., said she is constantly badgering examiners to carefully consider a bank's achievements, telling them that many communities are dying from a lack of credit.

"I find it hard to look at the state of our cities and believe that all of our financial institutions are doing as good of a job as our ratings indicate," she said. "This is what I tell our examiners."

Still, few expect any short-term changes. Regulators do not appear inclined to stiffen enforcement, especially with Republican lawmakers periodically threatening to repeal the law.

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