Frustrated with the brevity of their public hearings on community reinvestment, bank regulators have taken to the streets.

In New York last week, they spent so much time touring a Queens neighborhood that they were late for their federal hearing on reforming the Community Reinvestment Act. More than 30 witnesses and a courtroom full of spectators cooled their heels for 20 minutes.

Comptroller of the Currency Eugene Ludwig, Federal Deposit Insurance Corp. acting Chairman Andrew Hove, and Jonathan Fiechter, acting director of the Office of Thrift Supervision, had spent a wet morning with Rep. Floyd H. Flake, D-N.Y., touring the urban neighborhood he has redeveloped.

|This Is the Model'

Through the Allen AME Church where he is pastor, Rep. Flake has built seven nonprofit and two for-profit corporations that generated combined revenues of $27 million last year. The enterprise even includes a credit union with assets exceeding $500,000.

"This is the model for future partnerships between banks and communities," Mr. Ludwig said. as the regulators headed to Manhattan for the hearing in Rep. Flake's car. "You can't say this is unsafe and unsound lending."

Regulators have now held six public hearings throughout the country on improving the CRA. They want to get banks to lend more in poor areas and are trying to reduce the amount of red tape facing the industry.

Listening to the Critics

They are scheduled to give a status report today before Rep. Flake's House Banking subcommittee. While the administration wants the reform to be regulatory, Rep. Flake is shepherding his own bill through Congress.

Throughout the regulators' hearings, critics have hounded both regulators and bankers for not getting out into their communities seeing what can be done. Apparently, they have convinced the agency chiefs.

"Ultimately, we have to take more responsibility as regulators," Mr. Ludwig said. "We've got to get ourselves involved more, get out of the office more and see what the situation is."

Stares from Schoolchildren

While in Queens, the group visited a neo-natal clinic where mothers and infants get comprehensive health care and a fifth-grade class at the Allen Christian School - where children in yellow shirts and tartan uniforms stared curiously at the "important men from Washington" Rep. Flake introduced.

Regulators also got a glimpse of a neighborhood shopping district developed by the church.

And they toured a street full of newly built duplex homes being readied for sale to neighborhood residents.

After 90 minutes of trudging to and from cars and in and out of buildings in the intermittent rain and greeting residents and developers, the visitors from Washington seemed impressed by Rep. Flake's enterprises.

|More Meaningful Experience'

"We've had a more meaningful experience in this 1 1/2 hours than we probably will in five hours of testimony." Mr. Hove said. Indeed, the regulators would spend the longer period of time later in the day in a courtroom near City Hall in Manhattan. There, they heard from nine panels of bankers and neighborhood groups - each witness having only five minutes to speak.

"Yes, testimony is helpful and meaningful, but you just got to see it [underserved neighborhoods]," Mr. Ludwig said.

The banking regulators are not the only distinguished guests to have toured Rep. Flake's district, President Clinton visited during last year's campaign.

Second Chance for Lindsey

Federal Reserve Governor Lawrence Lindsey, the fourth regulator leading the CRA reform effort, did not join his colleagues on the early morning tour last week. He apologized at the public hearing for missing the outing. And it looks like he may get an opportunity to atone by taking his own tour of Rep. Flake's neighborhood.

"I'll give you another chance," the minister/congressman told him while testifying before the regulators. "I'm in the business of redemption."

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