Mercantile Bank was one of the first large banks to be examined under new Community Reinvestment Act rules, and the St. Louis- based institution still has not received its rating.

It has been seven months since activists used the new exam procedures to challenge the bank's reinvestment record, leading CRA experts to question whether Mercantile's "outstanding" rating was downgraded.

"If a financial institution has long period of time from the examination date to when it receives a public evaluation, there's good chance a bad rating is coming," said Francis X. Grady, a partner in the Cleveland law firm Grady & Associates, who specializes in CRA issues.

Patrick Woodall, a policy analyst at the Association of Community Organizations for Reform Now, said Acorn officials suspect Mercantile is appealing its rating. "The time frame is so long it's not possible anything else is going on," he said.

Spokespeople for the Office of the Comptroller of the Currency and Mercantile Bancorp, the $7 billion-asset bank's parent, declined to comment.

The battle is significant because activists have targeted Mercantile as a test case for new procedures that encourage community groups to confront regulators during exams rather than protest merger applications.

Acorn officials complained to regulators in June that Mercantile provides mortgages primarily to white and upper-income borrowers, makes it difficult for inner-city residents to apply for mortgages, and rejects black borrowers more frequently than whites.

A drop in Mercantile's rating would demonstrate that the new rules requiring regulators to solicit comments from neighborhood groups give activists more leverage to increase low-income and minority lending, according to Mr. Woodall. "This is a pretty important bank to us-because of its size and because of the new rules," he said. "It would be a real victory to have an impact on one of the biggest banks in St. Louis."

Warren Traiger, a principal in the New York law firm Butler, Fitzgerald & Potter, cautioned that it is too soon to predict a downgrade, but conceded that a lower rating would demonstrate that the new rules have provided activists additional opportunity to pressure banks.

"So far community groups have not really played a major role in individual examinations, and that's not something banks are anxious for," he said.

Mr. Woodall said the secrecy of the appeals process is unfair to the neighborhoods that CRA is meant to protect. "If banks are allowed appeals that completely squeeze out community groups, the new rules have not changed anything-they just take longer," he said.

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