NEW YORK -- A regulatory proposal unveiled Thursday would require man banks in the state to increase their loans to minorities in order to retain a "satisfactory" rating under the Community Reinvestment Act.

Under the plan, which the New York State Banking Department put out for comment, CRA ratings would be based on a formula that compares the dollar amount of CRA-related loans to total deposits.

Bankers immediately criticized the proposal, which is much more rigid than current rules.

To receive a satisfactory rating -- which the vast majority of New York institutions currently hold -- a retail bank tinder the new rules would have to make CRA-related loans equal to 20% to 30% of deposits.

CRA lending at many banks with a satisfactory rating now falls below that measure, said Derrick D. Cephas, superintendent of banks.

Some banks will lose their rating if they don't beef up low-income lending, he added. Banks need to maintain a satisfactory rating to gain regulatory approval on various matters, such as making acquisitions.

'Have to Make More'

"On an aggregate, industrywide basis, to maintain the scores they have now, banks will have to make more CRA investments," he said at a briefing following the banking department's monthly board meeting.

For a bank to achieve an "outstanding" rating -- the highest of four categories -- CRA loans would have to total 30% or more of deposits.

The requirements for wholesale banks -- institutions that do not accept deposits of less than $ 1 00,000 -- are more than 8% of deposits for an "outstanding" rating and 5% to 8% for a "satisfactory" grade, the second-highest rating. The regulation would, apply to banks and trust companies, insured foreign bank branches, savings banks, and savings and loan institutions.

About 80% of New York's 168 state-chartered banking, institutions have a"satisfactory" rating, while 10% have an "oustanding" rating and 10% have one of the two lowest ratings -- "needs to improve" or "substantial noncompliance."

Bankers oppose the use of a numeric formula for CRA ratings. "We don't think a blanket formula should be applied to banks of all different sizes," said Michael P. Smith, executive vice president of the New York State Bankers Association.

Carol Parry, managing director of the community development group at Chemical Banking Corp., said the formula is flawed because it measures CRA lending against total deposits. Chemical maintains large deposits of corporate customers, which should be excluded for the purposes of CRA evaluations, she said.

Bankers' Reform Measure

Banks have until Dec. 15 to comment on the proposal.

Chemical and the New York Bankers Association have proposed a CRA reform measure that would allow banks to create their own CRA plans and investment goals based on their assessment of community needs.

The new grading system is a radical change in the way the state banking department assesses compliance with CRA regulations. Currently, there is no standard formula for determining banks' CRA ratings. The grades are based on the subjective analysis of the state's 11 CRA examiners.

Varions CRA Credits

In determining the dollar amount of a bank's CRA investment, the banking department proposal would weigh various types, of CRA-related credits. Loans that benifit low-income, census tracts and grants to nonprofit organizations that address the needs of low-income people would be given greater weight than other types of loans.

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