BANKING & FINANCE - April 20, 1995

Regulators Adopt Rules Aimed at Expanding Credit: The Federal Reserve Board, Office of Comptroller of the Currency and Office of Thrift Supervision, as expected, approved a compromise plan aimed at expanding loans to needy communities and minorities as it eases the paperwork burden on banks. The action is the result of an overhaul President Clinton ordered two years ago in the Community Reinvestment Act of 1977. In one key change, regulators scrapped 12 largely subjective criteria and replaced them with three broad categories to determine whether lenders are meeting terms of the law. The new rules dropped a proposal that lenders be required to list the race and sex of all small-business borrowers. Instead, only larger banks will compile information on loans made to specific areas, using census data as a guide to whether low- and moderate-income areas are getting equal treatment. The Fed also proposed that banks be allowed to gather data about race and sex from customers willing to provide it.