EVERY EMPLOYEE AT tiny Bank of Commerce knows the Community Reinvestment Act inside and out -- even the janitors.

In August 1990, after receiving regulators' second lowest CRA rating, the Auburn, Calif.-based bank set out to turn itself around. In just nine months, the $56 million-asset bank with three branches won an "outstanding" rating after improving in 21 areas.

"This was a massive effort," said John Briner, president and chief executive. "I wasn't surprised at the turnaround -- I was gratified."

Mr. Briner didn't hire a consultant to guide him through the turnaround. Rather, he appointed himself as the CRA officer.

"We started with intensive training," he said. "There isn't anybody in this bank who doesn't know what CRA is."

The bank moved quickly to establish a written CRA program with goals and objectives. It also increased its outreach efforts among community leaders, directly and through radio and direct mail advertising.

"Everyone had to take the test," he said. "Everybody -- even the janitors."

Mr. Briner said every employee was tested because of the bank's corporate commitment to the regulation. "I don't think any program is worthwhile unless everyone is on board," he said.

And the tests arc extensive.

The training regimen begins with viewing a training videotape. After employees watch the video, they are tested and have to score a minimum of 75%. They are also required to review the CRA public file, a 21 page report that details the bank's CRA activities, its CRA policies and goals for the year, and the board of directors' CRA committee minutes -- all 12 months' worth.

"We don't mess around with this thing," Mr. Briner said. "It's not very meaningful if only one or two people in the bank know what this is about."

Mr. Briner said employees sit down with a supervisor to read the material so questions can be answered quickly.

Commerce originally received a "needs to improve" rating, largely because of documentation shortfalls. Mr. Briner said the bank was, indeed, making loans in low-income and moderate-income areas but never kept a log. He said it spent about $50,000 to overhaul the program.

"It's been a profitable program for the bank," he said. "I can't quantify it, but ... it's a factor when we loan any dollar."

Kenneth H. Thomas, a Miami-based banking consultant, was so impressed he included the bank's story in his recently published book, "Community Reinvestment Performance."

"They truly did what they set out to do," Mr. Thomas said. "The most important factor was that they really cared, from the top down. These were not just token efforts."

Mr. Thomas said the bank disproved the notion that banks have to be big, and spend a lot of money, to comply.

Mr. Nielsen is an intern at the Institute on Political Journalism.

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