Norwest turns CRA into a marketing tool.

Five years ago, Norwest Corp. came to grips with the fact that the Community Reinvestment Act was not going to go away.

At the time, the company was at $18 billion of assets, on its way to over $40 billion. Organized along super community lines, Norwest was committed to maintaining its community roots.

CRA compliance provided the company with an opportunity to reaffirm that commitment. In keeping with the rules and spirit of CRA, Norwest management pledged to better understand the communities it serves and meet their needs more effectively.

It has developed a detailed process for community needs assessment, much like the credit process and other structured processes around the bank that were put in place. This was done through a manual of policies and procedures that were to be implemented throughout the bank's subsidiaries.

Part of Strategic Plan

Although the process -- Community Market Initiative -- included compliance, that was only a piece of the program. CMI is a community need identification program and a step-by-step process to identify community needs and meet as an organized marketing initiative.

Every Norwest bank has to identify through the CMI process the sources of information it needs and will be using to identify community needs. Then the needs of the community are assessed and additional data sources for need assessment and fulfillment are identified. CMI targets are incorporated into each bank's strategic plan and annual budget.

In most cases, target loan production numbers are not provided for the banks, since volumes are determined by community need. CMI performance targets may include instead the number of ads in various publications, number of educational brochures, number of calls on housing agencies in the community, and individual responsibility for all the tasks.

CMI is very process oriented, with clear step-by-step instructions to program development. It implies overall community involvement, not only CRA compliance. Low-income and minority housing are just a part of the total marketing for the community. Norwest serves all segments of the community, from the disadvantage to the rich, and marketing initiatives must be developed for all segments served.

Periodic Audits

CMI is an integrated approach to each community and a blue-print for the implementation of that approach. The resultant marketing plans are blessed by the law and by the regional presidents. They are also audited on a periodic basis by the holding company internal audit staff, much like the credit review process.

There is continuous follow-up by senior management at the bank and at the holding company to ensure that CMI is not just a paper document, but that it becomes reality.

Norwest is an extremely effective super community bank despite its size. Commitment to community banking is evident throughout the bank system, and CMI is but one of the corporate initiatives that ensure the closeness of Norwest community bankers to their customers.

CMI is an example of turning a regulatory burden into an opportunity and using compliance as a stepping stone to the development of an integrated marketing approach to the community served.

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