Hoping to fill a niche and boost its revenues at the same time, UMB Financial Corp. has created a subsidiary to provide consulting services on regulatory issues.

With a staff of seven, UMB Consulting Services Inc. is targeting the smaller banks of the Midwest, with assets of about $15 million to $150 million.

"We do a lot of business for correspondent banks in the Midwest, and it sure seems that compliance is a hot topic," said Charles D. Lewis, the subsidiary's president. "That size bank doesn't have the resources or the time to devote someone full-time to compliance."

UMB Consulting has its roots in a simple fact: Its parent, according to Mr. Lewis, was receiving 40 to 50 telephones calls a week about compliance matters.

An introductory seminar held last week was attended by executives from some 200 midwestern banks. Half of them have made follow-up calls for more assistance.

UMB Financial will concentrate on the Community Reinvestment Act, fair lending, consumer lending, and reporting and deposit issues with a combination of on-site visits, telephone service, and a newsletter, Mr. Lewis said.

Analysts said that kind of service, provided now by accounting and consulting firms, is needed by smaller banks. A good number of those institutions require their officers to monitor compliance in their own divisions.

The bigger banks, like UMB, have their own compliance executives or units.

"I don't think they bring anything to the table that a large bank doesn't already have," said Fox-Pitt Kelton analyst Denis LaPlante. "But I suspect they clearly see a need with smaller banks and think they have the expertise."

Mr. LaPlante said he does not see the venture as a big money-maker. "I suspect that if they can manage to bring in enough revenues to counter their own cost of compliance then they'd be achieving something," he said.

But Mr. Lewis seemed confident that the subsidiary would prove profitable. "Sure, we're hoping it makes earnings. We're not giving the product away," he said. "We feel a niche there, and so we're going after it. If it takes off, it will make earnings."

UMB Financial, based in Kansas City, has $6.1 billion in assets. It operates 16 banks, with 124 offices, in Missouri, Kansas, Oklahoma, Colorado, and Illinois.

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