WASHINGTON - While Community Reinvestment Act reform is hotly debated here, banks around the country are still being examined under the law.

How banks' reinvestment loans are measured is anybody's guess, said industry experts. Some examiners are using the proposed rules, some the current rules, and some a concoction of their own.

It is also uncertain when the rules, originally proposed in December 1992, then reworked and proposed again in September 1994, will be finished. The newest wrinkle is the possibility that Congress will hold hearings on CRA, which could delay final rules.

Amidst the chaos, bankers still have to defend their compliance with CRA.

Jo Ann Barefoot, president of Barefoot, Marrinan & Associates Inc., the Columbus-based compliance consulting firm, advises banks to make good CRA loans now.

"The measurement of volume is going to be the whole ball game," said Ms. Barefoot. "And you can't get those loans on the books overnight."

No matter what the new CRA rules look like, they will emphasize lending over outreach efforts, she said.

Ms. Barefoot said most bankers see the new CRA rules as something undefined and far off in the future.

"Examiners are using the new rules," Ms. Barefoot said. "Move quickly to imagining life under the new reg."

Implementation of the new regime before the rules are spelled out for bankers leaves them in a quandary, according to Jeanine Catalano, principal of Secura Group in San Francisco.

Bankers should now be analyzing their lending performance and should be prepared to talk with examiners about where they are making loans.

"Banks need to be prepared to talk about market share," she said.

Many bankers are trying to comply with both the current and new rules.

Karen Tolvstad, vice president of U.S. Bancorp, Portland, Ore., said her bank's CRA program follows the 12 assessment factors laid out in the current rule, but also has an advanced geocoding system.

"The examiners are already operating under the reform and so are we," said Ms. Tolvstad, whose bank received an outstanding rating after its last exam.

That exam concentrated on the assessment factors of the current rule, but also had a stronger emphasis on geographic placement of credit, a main part of the new rule, she said.

NationsBank is expanding the way it measures CRA lending on two fronts: by tracking the loans it makes and by finding other good markets to pursue, said Catherine Bessant, senior vice president.

NationsBank quantifies its reinvestment loans with in-house software that is also used for marketing.

These are business decisions, said Ms. Bessant, not reactions to new rules. "Doing it this way enables us to worry less about how CRA reform will shake out," Ms. Bessant said. But, she admitted, such decisions are easier for a bank of NationsBank's size and technological capability.

Stephen M. Cross, deputy comptroller for compliance at the Comptroller of the Currency's Office, said measuring CRA performance loan-by-loan is exactly what the best banks have been doing for years. Such analysis would make good business sense whether or not CRA reform was underway, he said.

"I don't think that CRA reform is intended to totally reinvent the wheel," Mr. Cross said.

He also disagreed that examiners are already working under the reformed CRA. "Our banks are not being examined under the new rules," he said.

Still, banks are looking for new ways to gauge market penetration.

In the past few months, several banks, including Chevy Chase Federal Savings Bank, Md., Fleet Financial Group, Providence, and Bank of Boston, have turned to software produced by New York-based Financial Modeling Concepts.

"Everybody agrees there needs to be a quantifiable measurement," said Ned Brown, managing partner of Financial Modeling Concepts.

Financial Modeling Concepts takes the bank's originated mortgages and compares them with the total percentage of mortgages in the area. The information quantifies the potential for loans in a region, and shows how much of the market the bank is reaching.

Although regulators are careful not to endorse software vendors, both Mr. Cross and Paul Sachtleben, director of compliance and consumer affairs at the Federal Deposit Insurance Corp., said such products are useful.

"Examiners are going to increasingly rely on software to help them do analysis of an institutions' loans," said Mr. Cross. But, he said, the OCC will not expect all banks to do computer analysis themselves. "What matters is the result of the analysis, not how it has been done," he said.

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