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BANKING REGULATORS ARE HANDING OUT HIGHER CRA RATINGS IN 1993, NEW ANALYSIS REVEALS

 WASHINGTON, July 19 /PRNewswire/ -- Despite indications that federal banking and thrift regulators are cracking down on mortgage lending discrimination and increasing their efforts to enforce the Community Reinvestment Act, a larger percentage of banks and thrifts received the top two CRA rating grades during the first half of 1993 than in any previous year.
 According to a new analysis of CRA ratings by CRA/HMDA Update, a Bethesda, Md., newsletter, a record-high 93 percent of the ratings issued in the first half of 1993 fell into either the "outstanding" or "satisfactory" rating category. Only 10 institutions received a rating of "substantial noncompliance." This represents less than 1 percent of the total ratings issued in 1993. The remaining institutions were rated "needs to improve."
 In 1992, 90 percent of the ratings fell in the top two categories and in 1990-91, 89 percent of ratings were "outstanding" or "satisfactory." CRA ratings were first made public in July 1990.
 "There are two possible explanations for the higher CRA ratings this year," said Guy D. Cecala, publisher of CRA/HMDA Update. "One is that most of the country's banks and thrifts are simply doing a much better job of local community lending, especially to minorities and lower- income borrowers, than they were as recently as a year ago.
 "The other possible explanation is that despite a lot of tough talk, federal regulators are still taking a fairly loose approach to measuring CRA compliance at most institutions. The truth is probably somewhere in between these two extremes," added Cecala.
 CRA/HMDA Update found that the Office of Thrift Supervision was the toughest regulator with 87 percent of the ratings issued to thrifts falling in the top two categories. At the other end of the spectrum, 95 percent of the ratings issued by the Federal Deposit Insurance Corporation to banks were either "outstanding" or "satisfactory."
 On the state level, Wisconsin and Iowa had the highest percentage of top CRA ratings with 99 percent falling in either the "outstanding" or "satisfactory" categories in the first half of 1993. Meanwhile, Maryland had one of the worst CRA records this year with 35 percent of the ratings issued in the state coming in the "needs to improve" category.
 CRA/HMDA Update is a monthly newsletter published by Inside Mortgage Finance Publications, Bethesda, Md. For a complete copy of the analysis of CRA ratings in 1993 or more information, contact Guy D. Cecala, editor and publisher, or John J. Lewis, managing editor, at 301-951-1240.
 -0- 7/19/93
 /CONTACT: Guy D. Cecala or John J. Lewis of CRA/HMDA Update, 301-951-1240/


CO: Inside Mortgage Finance Publications ST: Maryland IN: PUB FIN SU:

TW-DC -- DC004 -- 2880 07/19/93 08:33 EDT
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Date:Jul 19, 1993
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