A recent column of mine, saying Community Reinvestment Act requirements were near the top of the list of most bankers' concerns, drew a questioning letter from one of the CRA's staunchest defenders, Frederick M. Manning.

Mr. Manning has been vice president and community affairs officer of the Federal Reserve of Philadelphia for more than 16 years. He set up the first department at any Fed bank to tackle community affairs issues.

Mr. Manning's response to my column airing the bankers' CRA fears was this:

"One wonders whether the law's critics aren't themselves straining at gnats and swallowing horseflies. Consider the following:

"1. Ninety-eight percent of all the banks in the country 'passed' their CRA exam last year. Those ratings are clearly credible and now speak to substantive performance by the industry and its regulators.

"2. All over the country banks have learned (finally) how to do business-profitably-in low-income communities.

"3. In our Federal Reserve district the market share of home mortgage loans originated by banks and thrifts in each Metropolitan Statistical Area and in the low/moderate income areas of each major city in the MSA in 1995 and 1996 exceed the comparative shares by specialized mortgage lenders not covered by CRA.

"4. Many bank executives have long since become believers about the responsibility."

Now, how can we reconcile Mr. Manning's views with the bankers' fears?

Frequently the attitude and policies of management differ radically from the actions taken down the line.

The famous (or infamous) Boston Fed study on discrimination showed that a basic reason that many banks grant fewer loans to minority applicants than to others with similar finances is because the officer is more willing to work with someone of his own background to make the request bankable.

To help institutions test themselves on their own CRA culture, the Philadelphia Fed offers a 10-question self-test.

Here are five questions from the test:

Would a majority of the personnel in your bank agree with this statement? "CRA is for large urban banks and doesn't really apply to us."

Would management of your bank agree with this statement: "Our bank already knows and serves our community and does not need a formal program and paperwork to ascertain community needs."

Have you ever heard a loan officer, manager, or customer contact employee of your bank make any statement that could be interpreted as a bias against women or any minority group present in your market?

Do you train loan officers in CRA's requirements?

Does your top management play a leadership role in working with government officials to attract and retain businesses in the area?

The other questions query whether banks have a written nondiscrimination policy, have a board and management that understand CRA, and training for all personnel.

The survey suggests that if your employees score more than three "wrong" answers out of a possible 10, your bank needs work on its culture.

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