SAN ANTONIO - Marc Shapiro, president and chief executive of Texas Commerce Bancshares, says his unit of Chemical Banking Corp. has discovered the three keys to successful community development lending.

Partnerships with community groups, collaboration with other banks, and a knowledgeable, specialized staff are indispensable, he says.

Mr. Shapiro made his comments at a recent conference on the Community Reinvestment Act sponsored by the Federal Reserve Bank of Dallas.

Regulatory pressure is forcing bankers to improve efforts to reach out to with loan products to low-income and moderate-income people. Developing strong relationships with community activists has emerged has an important element of CRA success.

Survey Findings a Surprise

"The reality is that banks must play a role on a larger canvas," Mr. Shapiro said. "We need to access the expertise that already exists in community lending, redevelopment, and affordable housing, and find partners that know how to get the dollars into the community."

In a recent survey at a community credit fair. Texas Commerce was surprised to learn that residents didn't want new products or services, just more useful information on the products the bank currently offers. So the bank teamed with a community group to strengthen its consumer education.

"What the overwhelming majority asked for was help in accessing existing products," he said. "The bottom line was that they needed an education on how to repair their credit."

Similarly, Mr. Shapiro says he believes bankers must team up to develop innovative services and products that meet the needs of low-income and moderate-income communities.

"Sometimes one bank cannot get anything done without the cooperation of other banks." he said.

|We Could Not Fill This Void Alone'

Texas Commerce, along with other area banks, has developed what Mr. Shapiro says is that largest bank-led community development corporation of its kind. The Houston Small Business Equity Fund provides equity for established companies planning expansion or acquisitions or pursuing new contracts.

"We knew we could not fill this void alone, but we could do something about it working in tandem with other banks." Mr. Shapiro said.

Finally, experience has taught the bank that wholehearted effort demands full-time, devoted, knowledgeable staff.

"Without the right people in the process - people who understand the process of community lending - nothing will get done," he said. "Community lending is not a business you can do halfway and expect to do well."

After hiring staff with knowledge in small-business lending, for example, Texas Commerce was able to step up its Small Business Administration lending from just a handful a year to five or six a month, he said.

Mr. Shapiro offers a caveat to his three keys to success: Without leadership from the top, community lending ultimately will fail.

For banks to be successful in their community lending initiative, they have to be led, and this calls for strong leadership from someone with a real commitment to the effort," he said.

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