A nonprofit group intends to feed the credit-starved inner-city neighborhoods of the District of Columbia by starting a community development bank.

The group recently filed a charter application with federal regulators and hopes to open its doors by December with two locations, calling itself Community First Bank of D.C.

"This bank will be playing a role that the traditional commercial banks are not focused on playing," said John M. Hamilton, who would be chairman of Community First. "That is to improve the health and well-being of these neighborhoods. We will be very close to the ground and doggedly determined to succeed."

It seeks $7 million in capital from a private placement this fall, once it receives regulatory approval.

Community First would be modeled after the pioneer in the community development bank field, South Shore Bank of Chicago, which was founded in 1973. The president of that bank would be one of Community First's directors. Another director would be Paul Homan, former chief executive of Riggs National Bank, the largest bank based in the district.

Following South Shore's lead, at least three other community development banks have sprouted up across the country - in Brooklyn, Durham, N.C., and Arkadelphia, Ark. Efforts are also reportedly underway in San Diego, Los Angeles, Oakland, Calif., and Portland, Ore.

The Community First effort is not the first attempt to start a community development bank in the district. In the late 1980s and early 1990s, a start-up group ran up against a sluggish economy, had difficulty raising money, and abandoned the plan.

"I think the climate is more favorable now for this," said Thomas S. Dann, a lawyer in the district who was one of the leaders of the earlier effort. "They've done an excellent job in building ties to the community and to funding sources. I'm very optimistic that they'll be successful."

Despite increased attention in recent years from the big banks, Mr. Hamilton said studies show that the district's low-income and moderate- income neighborhoods are still vastly underserved. For example, lower- income residents received $500,000 less in mortgages than upper-bracket residents in 1993, taking into account the differences in home values, according to the group.

The bank plans to ask Speaker of the House Newt Gingrich and President Clinton to deposit their paychecks in the bank, as a way of backing up their recent comments about revitalizing the city.

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