WASHINGTON - Nonbanks benefit so much from government assistance programs that they should be subject to a community reinvestment requirement, according to an economic policy group.

The Southern Finance Project, in a 131-page report, proposed creating a National Reinvestment Fund to be financed with assessments on nonbank lenders.

The fund would capitalize community development financial institutions, which would supply credit to distressed neighborhoods. The fund also would provide credit enhancements and financial guarantees.

Mortgage banks, insurance companies, finance companies, securities firms, hedge funds, and related institutions would be covered. Banks, thrifts, and secondary-market institutions would be exempt.

"It is intended to be broad because the goal here it to make as much of the playing field as level as possible," Southern Finance Project director Tom Schlesinger said.

Mr. Schlesinger said he doesn't expect the Republican-controlled Congress to embrace the report.

"(But,) I think it is important to keep this conversation going and to expand the thinking out there," he said.

The proposal did not draw much support from the financial services industry.

"It is just unnecessary baggage that is only going to increase the cost of providing credit by putting in another layer of government interference," said Stanford Kurland, president of Countrywide Funding Corp.

Mortgage banks already help low-income communities by participating heavily in the government-backed mortgage programs, he said.

"It strikes me as grossly misinformed and its recommendations grotesquely perverse and misdirected," said Warren Lasko, executive vice president of the Mortgage Bankers Association.

The community fund approach doesn't make sense for mutual fund companies, said Erick Kanter, a spokesman for the Investment Company Institute. "Any tax in essence would be paid by the shareholders of the funds," he said. Also, mutual funds already invest in communities by buying municipal bonds, he said.

Even some bank industry representatives, who might be expected to support expanding the CRA to include their competitors, questioned the proposal.

CRA requires banks to work with communities to find development projects, while nonbanks only would pay a community reinvestment tax, said Karen Thomas, director of regulatory affairs at the Independent Bankers Association of America.

"You need to keep them as similar as possible to keep them fair," she said.

The Southern Finance Project said nonbanks benefit as much from the government's help as banks benefit from deposit insurance. For example, nonbanks reap $500 million a year in tax discounts, and they originate 84% of mortgages insured by the Federal Housing Administration and Veterans Administration, the policy group's report said.

The 12 Federal Reserve banks would administer the fund, collecting premiums based on an institution's assets or pretax earnings. The assets and earnings of nonfinancial subsidiaries would not count.

The premiums should not hurt nonbanks any more than CRA investments damage banks, the report said.

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