WASHINGTON — Many bankers and consumer advocates who predicted the Gramm-Leach-Bliley Act’s “sunshine” disclosure requirement would cast a dark cloud over community reinvestment activities are revising their forecasts.

As they file their first annual reports under the 1999 law today, bankers are acknowledging that the mandatory accounting of certain Community Reinvestment Act agreements is more flexible than first thought. What is more, few regulators or lawmakers are looking too closely over their shoulders.

“It turned out to be much simpler than people thought,” said Stephen Davey, community development head of the $8 billion-asset Valley National Bank in Wayne, N.J.

Under the law, every quarter, starting April 1, banks must publicly disclose loans of more than $50,000 and grants of more than $10,000 to groups or individuals that have expressed an opinion about the institution’s CRA record. The banks’ annual reports must also describe the communications and activities that led to the loan or grant.

The law also requires community groups to detail annually how the loans or grants are used.

Financial services industry lobbyists and pro-consumer Democrats grudgingly accepted the provisions after then-Senate Banking Committee Chairman Phil Gramm, R-Tex., held the reform legislation hostage. No sunshine, no Gramm-Leach-Bliley, he said.

But then bankers complained that the rule written to carry out the requirement was too open-ended, and they feared regulators would enforce it heavy-handedly. Community groups decried it as an unconstitutional intrusion on freedom of speech and too burdensome on small operations.

As a result, CRA sunshine was the topic for a while. But now a combination of factors has converged to shove it behind the clouds, so to speak.

Though congressional hearings on the issue once seemed a certainty, they appear unlikely now that Democrats have taken control of the Senate and Sen. Gramm no longer leads the banking panel. A spokesman for the senator said he has not looked at any of the agreements filed so far and is busy with other issues.

Regulators also seem to have bigger things to worry about, such as credit quality. Never big fans of the rule, supervisors do not appear likely to enforce the law with a heavy hand, observers say.

“I don’t think it’s going to be high on their list of things they have to do,” Valley National’s Mr. Davey said.

After surviving the first quarterly disclosure April 1, many bankers say their anxiety about enforcement was overblown.

“We’re making the best effort,” said Vickie Tassan, Bank of America Corp.’s senior vice president for community development banking here. “I don’t think the regulators want any more than that,” she said at a recent American Bankers Association conference.

As bankers from institutions of all sizes quizzed her on the ins and outs of complying with the law, it was obvious that each bank is doing its own thing.

While Bank of America disclosed 39 CRA-related agreements in the first quarter, at least one of the nation’s five largest banking companies disclosed none, according to Ms. Tassan.

Flipping through some of the agreements filed with the Office of the Comptroller of Currency, a huge, detailed report from First Union Corp. stands in stark contrast to the simple letter from MetroBank, a small institution in Houston.

Some bankers are confused about what, if anything, to disclose. One bank submitted an explanation of its CRA investment fund and accidentally included information about an individual’s investment in that fund, complete with bank account number.

“The first round of disclosures was rough,” said Karen Callahan, First Union’s community programs and services manager. “It took over my job for about a month.”

Both Ms. Callahan and Ms. Tassan said the key is educating bank employees and developing a system.

“We’re developing a process, which has made it easier,” Ms. Callahan said. “Everyone knows what to look for. … Now it takes just a few days a quarter.”

Not all activists are willing to comply. Take Bruce Marks, the combative head of the Neighborhood Assistance Corporation of America in Jamaica Plain, Mass.

“We’re not disclosing anything,” Mr. Marks said. “If the regulators want to make us an example of us, I welcome that opportunity.


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