WASHINGTON - Small banks that don't have a satisfactory loan-to- deposit ratio can still earn a passing Community Reinvestment Act grade, regulators said during a nationally televised conference Thursday.

Offering a first glimpse of how examiners will judge small banks, regulators said their examiners will review five different aspects of the bank's lending record.

They are the loan-to-deposit ratio, percentage of loans in the assessment area, distribution of loans among economic classes, geographic disbursement of loans, and response to written complaints.

Excellent performance in one category can compensate for weaker results in another area, said Timothy Burniston, assistant director for compliance policy at the Office of Thrift Supervision.

In another first, regulators said small banks do not have to invest in community development projects to secure an outstanding grade.

Mr. Burniston also said the agencies will not allow a bank to beef up its loan-to-deposit ratio with purchased mortgage-backed securities. The agencies previously said they might make technical adjustments to account for this.

Regulators also settled another lingering dispute. They said they will judge a bank on loan originations rather than the number of outstanding loans.

Steven M. Cross, the deputy comptroller for compliance management, said examiners will share economic data they gather about the community to compile the so-called performance context. Bankers had feared examiners would try to keep the information confidential.

In addition, examiners will look at different data for different banks, he said. "Examiners absolutely will have to exercise some judgment," Mr. Cross said. "It does not make a whole let of sense for us to try to fit this rule into each institution in the same way."

Regulators also gave some of the first hints about how they will approach wholesale and limited-purpose banks. To qualify for the streamlined CRA exams, these banks must keep their product offerings narrow and may only offer retail loans infrequently, according to Glenn Loney, community affairs officer at the Federal Reserve Board.

Regulators said they plan to release examination guidelines for large banks, small banks, and wholesale institutions by yearend.

The comments came during a teleconference sponsored by the American Bankers Association, Independent Bankers Association of America, and America's Community Bankers. It was broadcast live to sites in more than 27 states.

The new CRA rules take effect for small and wholesale banks on Jan. 1. Banks with more than $250 million in assets have until July 1, 1997, to comply.

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