America's Community Bankers has put its stamp of approval on a partnership program meant to help members make subprime loans.

The Bank Alliance Program from American Business Financial Services Inc. of Bala Cynwyd, Pa., will let thrifts farm out customers that do not meet their loan specifications.

Processing Service Center Inc., an American Business unit, will underwrite and process the loans and close them in the thrift's name.

Processing Service Center will then help the thrift find a buyer for the loans-often selling them to another unit of American Business, Uplands Mortgage.

The partnership will let thrifts gain Community Reinvestment Act credits and retain customers while keeping risky loans off their books, American Business said.

"Community banks are carefully watched" by regulators, said Anthony J. Santilli, the company's chief executive. "Every loan in their portfolio has to fall within certain standards."

He said American Business will provide a full range of services, which could include training for employees or putting Processing Service representatives in branches.

American Business hopes to originate $50 million in subprime loans through the partnership program this year.

Michael Potter, chief operating officer of the trade group, said it spent nine months looking at such partnerships before endorsing American Business.

Participating thrifts need not worry that the company will try to steal their customers, Mr. Potter said.

American Business has no other consumer loan programs and has agreed not to compete with participating ACB members for customers, he said.

The company "manages and processes more intelligently than other players," Mr. Potter said.

Community banks have been searching for a way to make subprime loans, but typically they "don't have the volume needs to develop internal solutions," he said, so they have to turn away potential borrowers.

Processing Service Center offers a 24-hour turnaround on credit applications and can close loans within 10 days, American Business said.

Several finance companies have tried to form bank partnership programs, with mixed results.

Money Store Inc. was about to introduce such a program before it was bought by First Union Corp. year.

United Cos. of Baton Rouge, La., also has a bank alliance program.

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