WASHINGTON -- Financial institutions lending in low- and moderate-income areas are making money, according to the 1994 Community Reinvestment Act Study released this week.

The Bank Insurance Market Research Group, a for-profit survey company based in Mamaroneck, N.Y., reported that only 5% of the 42 institutions queried classified CRA-related lending as a "burden" to their balance sheets.

Nearly three-quarters of the institutions, spread across 22 states, said they either make money off low- and moderate-income loans, expect to make rn0ney, or break even.

The company also found that nearly 73% of the institutions reported making more CRA-related loans during the last 12 months than during the preceding year. Only 10% reported making fewer loans.

But 27% of the banks surveyed, which included institutions with $2 billion to $10 billion of assets, reported safety and soundness fears impeded CRA lending.

Bob Hawkins, chairman of Southern Commercial Bank in St. Louis, said the study confirmed firmed his impressions.

Safety and soundness concerns surface, he said, because bankers have CRA pushing in one direction and examiners pushing from another.

Chris Lewis, banking and housing director at the Consumer Federation of America, said the study supported his worry that bankers are backing away from good loans so they don't have to deal with questions from examiners.

"It is unfortunate and disturbing that that might be a barrier," he said.

Matthew Roberts, the Comptroller of the Currency's special counsel for community and consumer law, conceded that it might be a problem.

But, he said greater examiner education should solve it.

Mr. Roberts added that the study proved his agency's repeated claims that CRA-related lending is profitable are true.

"Banks are trying to reach out to these areas and that is what we are encouraging," he said.

The survey also reported market-share information.

This information carries particular weight because proposals to reform CRA seek to base more of a bank's rating on its market share in low-income areas.

Half the banks said their low-and moderate-income market share was greater than their competitors. Another 35% said their share equaled their competitors.

Less than 3% confessed that their share was smaller.

Also on market share: One-third of the banks said their share of the low- and moderate-income market equaled their share of the rest of the market.

Less than 20% said they conducted more business in low- and moderate-income areas and the rest reported conducting less business.

Other survey highlights:

* Almost all banks use less-restrictive underwriting procedures in low- and moderate-income areas. Less than 10% of banks surveyed said they used the same standard.

* Most banks do not." investigate their own loan officers to ensure that they are not discouraging minority loan applicants. One-third of institutions said they instituted mystery-shopper programs advocated by federal regulators.

* Nearly nine out of 10 banks review all rejected loan applications. But only a quarter of the institutions provide an independent advocate to investigate rejected applications on behalf of consumers.

Half the banks do conduct formal reviews of all minority applications.

* Three-quarters of banks work with community groups to develop CRA plans.

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