SAN ANTONIO -- Bank regulators hoped to hold public hearings to gather constructive advice on reforming the Community Reinvestment Act, but at their second hearing last week, they got a lot of grief instead.

The four agencies asked community groups, public advocates and industry officials for specific recommendations on how to refocus the law on actual lending, on what new objective factors should be included, and on what consideration differences in bank size and community should be given.

What did they get? You didn't tell us soon enough you were holding this meeting... You haven't allotted us enough time to speak our minds... if you really wanted to make a difference you wouldn't have met in this upscale hotel... This just proves you aren't serious about reform.

Some Meaningful Suggestions

Surely, the regulators have heard some meaningful, informed, and substantive suggestions from many of the meeting participants.

But the harsh criticism and verbal attacks they have suffered left some regulators wondering whether they might have caught less flack if they had gone about their reform in a more private manner.

The second of seven CRA hearings was held Wednesday at the Wyndham Hotel, about twenty minutes outside of downtown San Antonio. A conference hall there was packed with several hundred onlookers, at least for the first few hours.

The agencies were represented by Fed governor Lawrence B. Lindsey, acting chairman of the FDIC Andrew C. Hove, special advisor to the Comptroller Konrad S. Alt, and deputy director for regional operations of OTS John Downer.

Cheers and Jeers

The four men sat together at a table directly facing the panelists. on a dais before long tables of spectators.

Throughout the meeting, community' representatives cheered their panelists -- and even occasionally jeered the regulators.

Many of the bankers -- some who had just attended a Federal Reserve CRA conference in the same room -- sat, arms crossed, stony-faced while the public advocates spoke, and enthusiastically applauded their own, when the bankers' turn came.

After being flooded with requests to testify the agencies heard testimony from 44 people -- only a quarter of them bankers -- in just under four hours. Allowing time for the 14 panels to set up, that left only three to five minutes for most speakers.

Several of the panelists spent most of their allotted time chiding the regulators for their inaction and lack of concern. They complained about the location, saying that instead of meeting with "the elite" the should have met in the inner city.

They complained that the hearing was at 2 p.m., when most people were at working. And they groused that the regulators don't reach out to the inner-city groups.

Lou Miller, chairman of the African American Chamber of Commerce, even complained that the regulators were not looking interested enough in what he was saying -- a tough task for anyone over the course of four long hours.

Short on Time

One banker, Michael L. Allen, wrote in from Carrizo Springs, Tex., saving he was too busy making loans to come to the hearing. After his statement was read by a stand-in, community activists complained that this was typical of bankers' not taking CRA seriously.

In response, during his alloted five minutes, J. Pat Hickman, president of Happy Bancshares, Inc., said he was proof that the industry cared: he had spent $400 on airfare and $150 on charts just for the meeting.

Even those with constructive advice had problems. As John Hennenberger, director of the Texas Low-Income Housing Information Service learned, three to five minutes only leaves enough time to get through about four of your 12 recommendations without being cutoff.

A Weighty Question

The regulators painstakingly enforced the time limits, relying on a timekeeper to flash warning signs to the participants ("two minutes remaining" ... "one minute remaining"). They were so concerned about keeping the meeting moving, in fact, they asked almost no questions.

The first substantive question wasn't asked until the 13th panel. And that came after the panelist chastised the regulators for not asking any.

When they started, the agencies thought the tough part of planning the seven hearings would be picking the dates and the cities, and coordinating the top regulators' busy schedules. But with two meetings down and five to go, that may have turned out to be the easy pat.

A No-Show Makes a Big Impression With Cautionary Note for Regulators

WASHINGTON -- The regulators heard from 44 people in San Antonio last week, looking for advice on reforming the Community Reinvestment Act. While they heard from a diverse group, bankers responded perhaps most enthusiastically to an absentee. Michael L. Allen, president of Union State Bank in Carrizo Springs, Tex., was scheduled to testify during the second panel. He never showed up, but asked a fellow banker from Happy, Tex., to present his testimony. Mr. Allen wrote:

"I see from the tentative agenda that I am one of the very few bankers you have to listen to today. Also, I note that I represent the smallest bank.

|Please, Be Careful'

"Please take note that the vast majority of banks that you gentlemen regulate are small community banks. Community banks with only one bank and one community to succeed or fail with their respective community.

"Where are they? I am not with you, nor are all those other community bankers, because we are in our banks, making loans to the people of our communities.

"We do not have the time to come to your hearing during banking hours. We do not enjoy big staffs or specialized people to deal with your regulations.

"Your regulations [including CRA] are an increasing problem for today's community banker.

"So please, be careful -- we community bankers are the scurrying mice and you regulators are the dancing elephants."

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