Two regulators shot back at Senate Banking Committee Chairman Phil Gramm this week in a mounting war of words over community reinvestment requirements for financial institutions.

Both Office of Thrift Supervision Director Ellen Seidman and National Credit Union Administration Chairman Norman E. D'Amours responded in writing to recent attacks by Sen. Gramm, a critic of the Community Reinvestment Act.

Ms. Seidman defended a June speech in which she questioned the value of geography-based CRA exams for institutions that deliver banking services via the Internet, the mail, or other nontraditional means. Her speech suggested focusing CRA compliance on the location of an institution's customers instead of its branches, but Sen. Gramm later accused Ms. Seidman of overstepping her authority.

"My purpose was to propose neither an extension nor retraction of CRA," she wrote Sen. Gramm on Wednesday but "to ensure that CRA works for all the institutions to which it currently applies."

Sustaining the crossfire, a spokeswoman for Sen. Gramm responded that he was "unimpressed" by Ms. Seidman's statements. "If OTS is looking for a broader definition of immediate communities, they need to obtain that from Congress," the aide said.

Meanwhile, Mr. D'Amours denied Sen. Gramm's criticism that his recent proposal to impose a "low-income member service" rule on federal credit unions would create a needless and costly CRA-like program.

Under the plan, which the NCUA chairman is to formally release in mid- September, failure to meet goals for serving the poor could be held against a credit union if it sought permission to expand.

"Simply asking a credit union to include language (in its business plan) on serving low-income members ... is not unreasonable or onerous," Mr. D'Amours wrote Sen. Gramm on Monday. He added that his proposal is less extensive than one Congress rejected last year and would be justified by an upcoming academic study.

But in announcing plans for a yet-to-be-scheduled Senate Banking Committee hearing, Sen. Gramm responded, "He just doesn't get it."

Credit union trade groups are siding with Sen. Gramm. Daniel A. Mica, president of the Credit Union National Association, said Mr. D'Amours' plan is unneeded and would "drown" the nonprofits in paperwork.

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