WASHINGTON - To remedy inner-city decay and the sagging savings rate, Congress is considering the individual development account, a new savings vehicle aimed at low-income people without bank accounts.

Under legislation being pushed by Sens. Rick Santorum, R-Pa., and Joseph Lieberman, D-Conn., people making 80% or less of their area's median income would qualify for the accounts.

A bank that agrees to open the accounts would have to match every dollar deposited, up to $500. However, 90% of the bank's contributions, up to $100 million, would be tax-deductible.

Other contributors, like private foundations, could also match deposits but would receive only a 50% tax credit, up to $500 per account or $10 million overall.

Depositors could make withdrawals to buy a house, start a business, or pay tuition, and they would be required to complete a financial planning course.

The legislation is part of the Community Renewal and New Markets Empowerment Package, which is designed to increase access to financial services. In May, President Clinton and House Speaker J. Dennis Hastert endorsed a comparable House package, labeled the New Markets Initiative, but that program did not include individual development accounts.

Banking organizations and institutions are still learning about the legislation, but some officers said it could be an opportunity to increase deposits.

"Anything that creates a potential customer relationship and can bring money into banks is always good," said Tom Sheehan, president of Grafton State Bank in Wisconsin. "The only concern I have is the amount of paperwork or the regulatory burden that would accompany legislation."

Leon Peace, legislative counsel for the American Bankers Association, said the legislation "has been gaining momentum over the last week or two. We're active in trying to get behind it if we can, but we're still looking at specifics."

"We support any proposal to increase savings among the American people,'' said Steve Bartlett, president of the Financial Services Roundtable. But, he said, "financial institutions should not be expected to subsidize legislation. The government should provide matching funds."

Similar programs exist in 250 communities nationwide. In 1997 the Corporation for Enterprise Development, a private group that promotes consumer asset-building, began a six-year pilot program to design, organize, and implement Downpayments on the American Dream Policy Demonstration, or ADD accounts.

Funded by state and local governments and private foundations, the program is working with 13 banks, credit unions, and community groups to recruit and administer the accounts.

Bankers involved in the trial programs said individual development accounts make sense.

"The public discourse has shifted from community development to helping people develop their own assets. These programs do that," said Janet Thompson, vice president of community reinvestment at Citigroup, which runs development account programs through several nonprofit organizations. The implementation was not hard, she said. "It just required people working at the customer level to adapt existing accounts to fit different needs."

Citigroup is counting on the program's customers to continue using the bank, Ms. Thompson said. "When they are ready to buy a house, we hope they come to us for a mortgage, or when they are looking to start a small business, they come here for a line of credit."

Bank of Oklahoma, which runs the largest ADD program as well as its own such accounts, is happy with the results.

"We're not making money now, but one day we will," said Vicki Peters, vice president of community development. After the participants withdraw their money, "we hope to be their bank of choice."

Banks providing retail banking through these accounts can receive credit under the Community Reinvestment Act service test. Those offering matching dollars or helping to fund programs can get credit under the CRA investment test.

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