Senate Banking Committee Chairman Phil Gramm blasted Office of Thrift Supervision Director Ellen Seidman on Wednesday for suggesting alternative ways of enforcing the Community Reinvestment Act.

"Your proposed alternatives-which include using 'customer-based' assessment areas, requiring strategic plans, or expanding the scope of the community development test-seem to suffer from a serious problem: a lack of statutory authority," Sen. Gramm wrote.

"You should not, however, put yourself or your agency in the place of Congress and seek to make laws."

The fiery letter suggests Sen. Gramm remains committed to his position that the CRA is too burdensome. In the financial reform bill before Congress, the Texas Republican is trying to exempt small banks from the reinvestment law and prevent community groups from pushing banks into big- dollar investments.

Sen. Gramm's letter was prompted by a speech Ms. Seidman made June 17. She questioned how geography-based CRA exams would work as more financial institutions deliver services by mail, over the Internet, or through networks of insurance agents. She suggested CRA compliance could be redefined to focus on the location of an institution's customers rather than its branches.

But Sen. Gramm called that idea "contrary to the statutory language and legislative history of the CRA," which requires banks to meet the credit needs of their local communities.

Ms. Seidman was out of town Wednesday, and her spokesman declined to comment.

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