Everyone talks about Community Reinvestment Act problems, but few bankers work on them systematically.

For community banks, meeting CRA goals requires thoughtful response to every loan request from minority applicants.

It also requires attention to what is being done to aid the community, with an emphasis on how the bank can play a role in these programs.

But Broad National Bank, Newark, N.J., wanted to go further. It was particularly worried about one community it serves, Perth Amboy, because of dramatic economic and social change that had taken place there recently.

Broad National hired the community relations firm of Zinn, Graves & Field, Florham Park, N.J., to get some recommendations on serving the community better. Here are some of them.

Know your community. It's not enough to know what's happening (sort of) and who's in charge (maybe) and then hop on the bandwagon with one foot dragging.

In the case of Perth Amboy, it was imperative to understand the historical dynamic (the waves of immigration, the eroding manufacturing base, the changing political power structure) behind the dramatic social change that has occurred.

The consultants recommended formation of a community board to advise the bank on a continuing basis.

Know thyself. Know and appreciate the extent and the limitations of your human and financial resources.

It was agreed that Broad National's Perth Amboy branch could not duplicate the outreach or spectrum of credit products offered by the bigger banks operating in the city.

Once that determination was made, it was then possible to be very creative, drawing on the bank's strong points and searching out innovative ways to exploit them.

For example, ways were found to exploit one of the bank's main assets - location.

The bank, adjacent to a major supermarket at a busy intersection and serving a multilingual community, could greatly enhance its services by installing a bilingual ATM inside the supermarket and improving both signage and access to the bank through the supermarket.

Know your customer. Zinn Graves recommended several ways - surveys and other data-gathering techniques - for the bank to update its retail and commercial customer profiles and obtain demographic and credit data about its customer pool. Broad National will be able to market its existing credit products while gathering market data for designing new ones.

Give your community relations and CRA goals real weight from the very beginning. Weaving CRA goals into your marketing strategy early makes them part of a durable fabric of bank programs and services. Products and programs patched in later rarely work.

Think boldly and strategically - but deal in specifics. When your homework is done, there must be something concrete to show for it: a new product, a new program, or at least a sense of direction plus contact names and numbers with which to begin.

For example, in researching business development problems and prospects in Perth Amboy, Zinn Graves saw opportunities in small-business development and identified organizations with which Broad National should consider collaborating.

Following up on those leads - the consultant supplied contact names and phone numbers - has led Broad National to extend more credit to small businesses in Perth Amboy.

Find a focus. The smaller the institution, the more important it is to develop a focus upon which to build a coherent program of community relations efforts and related credit products and services.

The scattershot approach wastes time and resources for meeting CRA requirements.

Mr. Nadler is a contributing editor of American Banker and professor of finance at the Rutgers University Graduate School of Management.

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