WASHINGTON - A prominent community group is proposing a new method of measuring how well banks serve minority communities, and at least one large bank is applauding its approach.

The San Francisco-based Greenlining Institute wants banks to file enhanced Home Mortgage Disclosure Act reports that will supplement controversial rejection rate statistics with data about the number of loans actually made.

In particular, the group wants banks to report the number of loans to minorities per $1 million of assets. Also, it wants banks to report the percentage of loans to minorities, to low-income communities, and to families with income below 80% of the median.

"We are trying to get more banks to aggressively enter the inner city," said Anthony Reese, a project manager at the Greenlining Institute. "So we need the banks who are there aggressively to get the credit they deserve."

One of the ironies of the current system is that banks that aggressively seek low-income borrowers may end up with a higher rejection rate than those which do not. That's unfair, said Bob Gnaizda, the institute's general counsel.

"It is a discouragement to doing the right thing and a dis'couragement for making a profit in the inner city," Mr. Gnaizda said.

Catherine Bessant, a senior vice president at NationsBank, said the Greenlining Institute's focus on comparisons between total loans and loans to the poor and minorities is a big step forward.

"Comparative measures are the right way to go," said Ms. Bessant, the Charlotte, N.C.-based bank's top Community Reinvestment Act officer. "I'm quite pleased to see that some leading community groups are starting to see that as well."

Other industry representatives were less enthusiastic.

"A shift away from an emphasis on disparities can be useful," said Steve Zeisel, senior counsel at the Consumer Bankers Association. "But I can't see that this will add a great deal. A lot of the information they are talking about already seems available."

Also, the data collection could create an emphasis on volume regardless of safety and soundness concerns, he said.

"We don't want to create a drive for sheer numbers," he said.

Banks started publicly reporting their HMDA numbers four years ago. Currently, they disclose the rejection rates for whites and for blacks, Hispanics, and other protected groups. They also disclose total loans to each group.

During the first two years, most analysts focused on a nearly 2-to-1 rejection rate disparity between whites and minorities. While the rejection rate disparities remained steady, loans to minorities have skyrocketed. HMDA data released last week show loans to blacks jumped 54% and those to Hispanics increased 42%.

Several banking industry officials embraced the group's goal of emphasizing comparative data. But they questioned how the new requirement would work.

NationsBank already conducts in-house comparative studies, looking at loans per 100 households, Ms. Bessant said. "They are a much better indicator than rejection rates," she said.

Don Mullane, executive vice president for community reinvestment at Bank of America, said the bank has discussed the problem of rejection rates with the Greenlining Institute for several years. The group's proposal, which the bank is not endorsing, rewards banks that seek out low-income and minority borrowers.

"Most financial institutions have done a great deal of outreach and they deserve to be proud," he said.

Officials at the Greenlining Institute said publication of this data will reward institutions like Bank of America. "The publication of declination data without this key bottom line data is a disservice to the truly outstanding institutions that reach out to minority and inner-city communities," said Ortensia Lopez, the group's co-chair and executive director of the California Hispanic Chambers of Commerce.

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