Workshop on CRA's challenges has one of its own: poor attendance.

ST. LOUIS -- Like most small-bank presidents, Bob Seed would change Community Reinvestment Act standards if he could.

"If I could do it myself, I would eliminate probably half of the reporting requirements and the documentation," said the president of the Bank of Casey, a $100 million-asset bank in Illinois.

"In a small institution, that [paperwork] becomes costly."

Mr. Seed attended a workshop on the challenges of CRA and fair lending at the 103d annual convention of the Illinois Bankers Association. The conference here drew nearly 300 bankers, but Mr. Seed was one of just three at Monday's 7:30 a.m. CRA session.

Changes in Revamp Outlined

Other sessions also had low attendance, a situation convention organizers attributed to late activities the night before, preparation for an afternoon golf outing, and television coverage of D-Day ceremonies.

Chris Bryant, a senior consultant with Professional Bank Services, Louisville, Ky., outlined in the CRA session the latest developments in the proposed revisions to the law.

Under the proposed rules, banks with assets exceeding $250 million in assets would face tough new standards, and they would face onerous reporting requirements.

Smaller banks would be exempted from much of this review, if they meet a handful of basic requirements.

In addition, regulations have proposed allowing all banks the option of submitting "strategic plans" to the regulators that detail their CRA agendas. Regulators would approve the plans in advance, guaranteeing lenders a specific CRA rating if the plan's aims are met.

"The strategic plan is the closest I think we will get to a safe harbor," Mr. Bryant said in an interview. On the other hand, "The strategic plan might require so much paperwork and documentation that it would become a burden to a small bank."

He said can take steps to improve CRA performance and avoid lending discrimination.

One idea bandied about in the session concerned employing a second-look system for loans that have been denied.

Exploring Review Plans

Mr. Seed, whose bank received a "satisfactory" rating in its first CRA exam last year, said small banks often don't have the staff or funds for such programs.

Nonetheless, he has been inexploring the use of second-look reviews as an additional step to ensure fair lending.

"I think we have no choice," he said.

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