Maybe the best place to do community reinvestment is in federal banking regulators' backyard.
NationsBank Corp., Crestar Financial Corp., Riggs National Corp., and First Union Corp. have all placed branches in Anacostia - a poverty- stricken, crime-ridden section of Washington that three years ago was home to just one bank.
Chevy Chase Federal Savings Bank and Industrial Bank of Washington also have plans to enter Anacostia in 1996.
What's the lure? Visibility.
By opening offices in Washington's worst neighborhood, these banks are getting noticed.
"The sign is pretty clear to regulators driving by," said Lucy Griffin, a Washington-area compliance consultant. "Going in with an ATM is not the same as going in with people."
Because they must invest where they have branches, the banks need to find Community Reinvestment Act projects in Anacostia.
NationsBank is leading the pack. It is expected to be a major equity investor in two of the largest development projects Anacostia has ever seen.
Because neither deal is final, NationsBank will not disclose details. But Christopher LoPiano, vice president of NationsBank Community Development Corp., made clear in an interview that the bank is being motivated by CRA and the chance to make a profit.
"Banks are realizing there's a lot of money to be made in Anacostia," he said.
The area is prime for expansion, according to Mr. LoPiano, because so much of it needs to be redeveloped. Last year, NationsBank funded a study by the Urban Land Institute on ways to improve Anacostia.
The main project outlined in that study will bring a town square to the community, including restaurants, shops, and offices. Construction on the "Gateway to Anacostia" is slated to begin in 1996.
NationsBank likes the gateway project because it will be a large, high- profile development, which means positive press and CRA credit, Mr. LoPiano said.
Anacostia, home to 70,000 people who live east of the Anacostia River, also is one of the bank's three target areas in D.C.
"We are going to make a good deal of our investment in Washington and we tend to target neighborhoods," Mr. LoPiano said.
NationsBank entered the Washington market in 1991 with the purchase of C&S/Sovran Corp.
Finally, the gateway project is attractive because it is only a couple blocks from NationsBank's Anacostia branch. Mr. LoPiano said the bank likes to focus community development projects near its branches so that borrowers have access to small business loans.
The other Anacostia project NationsBank is eyeing is a 96,000-square- foot shopping center, anchored by a Safeway grocery store. Ground breaking for "The Good Hope Marketplace" will begin this year.
The marketplace is designed to boost retail sales in Anacostia, which has been losing business to the Maryland and Virginia suburbs for years. The project also will create more jobs for area residents.
Both of these endeavors will help improve the public's now-negative perception of Anacostia, Mr. LoPiano said.
The president of the nonprofit group coordinating the two projects is thrilled by the influx of financial institutions. Albert "Butch" Hopkins Jr., who has been running Anacostia Economic Development Corp. for 20 years, said an unprecedented 14 development projects are now in the works in the community.
Areas like Anacostia have benefited by applying CRA to the banking industry's many mergers and acquisitions. Community groups use the comment period tied to any acquisition application to lodge protests under CRA, he said.
"CRA has had a big effect on the D.C. market," Mr. LoPiano said.
Regulators' pressure on banks to serve their whole market also has spurred more branching into Anacostia. First Union clearly had that in mind when it announced the opening of its Anacostia branch last month.
"The U.S. Justice Department in recent months has placed a national spotlight on the problem of lower-income neighborhoods that lack adequate banking services," First Union said in a release.
The new branch will offer a reduced down payment mortgage for lower income residents of Anacostia. It also will link Anacostia's small businesses to First Union's lending unit, which usually gives answers to loan requests within 24 hours.
"This will be a branch that serves both individuals and business owners in the Anacostia community," said Angela Jeffers, manager of the branch.
While community activists need banks to finance redevelopment, Mr. Hopkins insisted that banks operating in Washington have a responsibility to the whole city, and that includes Anacostia.
"Banks can't just come to Anacostia and take deposits and not make mortgage loans and not get involved in major development projects," he said.
But Mr. Hopkins also realizes that banks must make money on these deals. Banks must think of investing in Anacostia as good business, not charity, he said.
Although Mr. Hopkins credits CRA with a lot of Anacostia's revitalization, each part of the community must have a hand in the development, he said.
"It takes grass roots at the community level, it takes the city, and it takes the banks to make this all work," he said.