Community Reinvestment Act ratings hit an all-time high in 1994.

An overwhelming 94% of the 5,592 banks examined under the CRA last year received either outstanding or satisfactory ratings, according to the editors of CRA/HMDA Update, a Bethesda, Md., newsletter.

Just 17 banks were given a "substantial noncompliance" rating, while 298 received "needs to improve."

These are the fewest low ratings given since the CRA evaluation system was started in 1990. High ratings have been growing steadily over the past few years. In 1993, 93% of the 6,094 banks examined under CRA received the top two ratings, up from 90% in 1992.

Even though banks are meeting CRA standards in regulators' eyes, the agencies are working to reform the reinvestment rules.

New rules were proposed in December 1992, but had to be revamped in September 1994 after bankers swamped the agencies with critical comment letters. The government had been aiming to issue a final rule in late February, but that deadline may be pushed back, now that Congress is considering holding hearings.

The Federal Reserve Board handed out the most favorable ratings, putting 97% of the banks it examined in the top two categories. A full 19% of the Fed's CRA ratings were "outstanding."

Even though 91% of its ratings were in the two higher categories, the Office of Thrift Supervision gave out more of the lower ratings than any other agency.

The newsletter, which maintains a data base of all CRA ratings issued since 1990, also found that six states had no institutions with less than a satisfactory rating.

Michigan, Oregon, Utah, Wyoming, Maine, and Montana have the best CRA records in the country.

The worst ratings went to institutions in California, Maryland, and New Jersey. California has the most CRA problems, with 18.3% of its ratings less than satisfactory.

New Jersey had the worst results last year, with 26.8% of its ratings below satisfactory. Although the Garden State is still the third worst, it improved over the past year, with 17.5% of its banks scoring in the lower ranks.

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