WASHINGTON - National banks would be able to keep the profits generated from community development investments under a proposal issued Wednesday by the Office of the Comptroller of the Currency.

Currently, national banks must reinvest these profits into other public welfare projects.

"There has been some concern that the rule created a disincentive to make these kinds of investments by dictating how banks use their profits," said Janis Smith, a spokeswoman for the Comptroller's office.

The agency also is concerned that the reinvestment requirement could reduce an institution's overall operating income, Ms. Smith said.

The rule was created to ensure that national banks investing in community development projects were acting in the public interest - not simply speculating in low-income real estate.

Allen Fishbein, general counsel for the Center for Community Change, said the reinvestment limitation "has served a sound purpose."

"I haven't heard that it was an obstacle to banks," he said.

The plan to drop the requirement will be published in today's Federal Register; Mr. Fishbein said his group could not take a position until it has read the proposal. The agency is accepting comments until Nov. 26.

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