NationsBank Chairman Says Industry's Effort Fall Short
WASHINGTON - NationsBank Corp. chairman Hugh McColl gave qualified support on Monday to the Clinton administration's proposal to create a network of community development banks.
"I will be supporting President Clinton's community banks proposal," Mr. McColl said at a Bank Administration Institute conference.
"But I will not provide that support without also providing what advice I can about what Mr. Clinton will quickly find is a very complex endeavor."
The outspoken chairman of the North Carolina-based company said commercial banks could be allowed to create a secondary market for loans originated by community development banks.
Moreover, any involvement by commercial banks in the community development entities should be credited toward the banks' Community Reinvestment Act ratings, he said.
Mr. McColl added, however, that bankers should not complain about the Clinton administration effort.
|We Have Failed'
The community development banking concept has "drawn a great hue and cry from those who believe this amounts to government competition for business that banks should handle," said Mr. McColl.
"But these opponents have overlooked one important point: We as an industry haven't handled it, we have failed to reach all of our communities. And that point is not lost on the President."
Mr. McColl, urging that banks of different sizes stop their infighting, called on them trade some of the security of deposit insurance for powers to help them compete with nonbanks.
"We are all trapped by insured deposits and the sway that system gives Congress, the White House, and our regulators over us," he said.
"In other words, we've all got an ox in the same ditch. . . . Our industry must quit spending all of its energy defending what little ground it still commands. We must throw away old-fashioned banking traditions and define on our own terms how to serve the role of broad financial-services providers."