NR 96-100
September 17, 1996

                            Remarks by

                         Eugene A. Ludwig
                   Comptroller of the Currency

Before the                       

                Detroit Economic Development Tour
                        Detroit, Michigan

                        September 17, 1996

Today, we've had the opportunity to see first-hand how Detroit's
empowerment zone and its financial institutions are  revitalizing
this historic city and offering new opportunities for your
citizens and communities.  Everyone who calls Detroit home can be
proud of the efforts that are underway in places like Parkside
Homes and Virginia Park.  It's been an absolute delight to talk
to new urban homeowners and hear how excited they are to see
their dream of homeownership become a reality ... to learn about
the homeownership counseling services that the Church of the
Messiah is making available ... and now to help open this
renovated warehouse space for Detroit Discount Distributors,
which is bringing jobs, excitement and -- I'm sure -- great food
to the people of Detroit.

We saw on this tour both the possibilities and the challenges. 
Much work remains to be done, but we now know how it must be
addressed.  We must work together in strong public-private
partnerships  -- bankers, government, community groups, business
owners, residents and community leaders -- to revitalize
neighborhoods and make Detroit's renaissance real for all of its
citizens.  I know that the members of the zone's banking
consortium have the same sense of pride a new homeowner feels. 
They have the thrill of accomplishment that comes when tough
problems are tackled in partnership with others who share a
common hope.  It's a tribute to the members of this consortium --
Michigan National Bank, First Federal of Michigan, First of
America, First Independence National Bank of Detroit, Comerica,
the First Nationwide, and Standard Federal --  that of all
designated empowerment zones, Detroit has the most active formal
participation of private banks and thrift than any other
designated empowerment zone.  Your stellar consortium has made a
$1 billion commitment to lend in the Detroit empowerment zone
over the next ten years.  Your commitment means you are bringing
$100 million annually to this area -- an investment that will
reap untold benefits for the 100,000 citizens who live here and
the 9,000 businesses that serve them.

As Comptroller, I also have to say that I take pride in what the
Office of the Comptroller of the Currency (OCC), its people and
the national banks we supervise have been doing to lead in this
important area.  In the last three years, we have seen a dramatic
increase in lending and investments by banks to low- and
moderate-income areas and areas designated by government for
redevelopment.  Here in Michigan, home purchase loans to minority
households increased 125 percent from 1992 to 1995 -- more than
double the rate for the market as a whole.  The number of loans
made in the state's low- and moderate-income census tracts also
outpaced the rest of the market by a similar rate.  These figures
demonstrate the progress made in ensuring fair lending and
eliminating discriminatory practices from credit decisions.

In addition, since 1993, national banks and their community
partners have made over $3 billion of investments in community
development corporations and CD projects across the country. 
This money is geared primarily to providing housing, services and
jobs for low and moderate income people and to provide equity and
special debt for small businesses.  And when we look to the
future, we have seen a huge increase in loan commitments.   For
example, in the last three years the commitment has been $100
billion.  This figure represents 70 percent of all commitments
made since the Community Reinvestment Act was enacted in 1979.

When I became Comptroller of the Currency in April of 1993, I set
four priorities for the Office to pursue, one of which was to
work closely with the industry and community leaders to ensure
that all creditworthy Americans had fair and equal access to
credit.  Our work has taken many forms, from revising the
Community Reinvestment Act rule to make it more effective and
less burdensome, to improving the quality and quantity of our
fair lending examinations, to hiring community development
specialists -- assigned to each of our OCC district offices -- to
work with the industry and community leaders to foster greater
cooperation and results.  Earlier this year, we hosted a
conference in Washington to focus attention on the profitable
business opportunities that community redevelopment represents
for all of us.  And as we prepare to cut the ribbon on this
sparkling facility, I should also note that the new CRA's
emphasis on small business lending -- along with its support of
Small Business Administration programs -- encourages the type of
investment we see here this morning and is an example of how
sensible regulation can help stimulate community redevelopment in
Detroit and throughout the United States.

Today, I'm pleased to announce another step we're taking to
support banks and their communities.  Today, we're making it
easier for national banks to use their community development
investment authority to help improve the quality of life in
economically distressed neighborhoods. We have submitted for
publication to the Federal Register our revised Community
Development Investment regulation.  Part 24, as the rule is
called, is the OCC's regulation governing national banks'
investments designated primarily to promote the public welfare. 
The revision to Part 24 will enhance banks' authority to make
investments in the public welfare, promote partnerships between
banks and the communities they serve and reduce burden on banks.

The cornerstone of Part 24 is the requirement that all
investments made under this rule benefit low- and moderate-income
individuals, low- and moderate-income areas, or areas that have
been designated for redevelopment by local, tribal, state or
federal government.  Part 24 expressly authorizes investments in
Federal Enterprise Communities and Federal Empowerment Zones.  By
doing this, the OCC sends a strong signal to the over 2,800 banks
we supervise that targeted redevelopment is good policy and good
business.

We hope to see even more of the innovative approaches already
being developed and put in place in empowerment zones and
empowerment communities throughout the midwest and across the
country.  First National Bank of Chicago, for example, has a
$100,000 pilot program to provide downpayment grants of up to
$1500 to qualified homebuyers in their city's empowerment zone. 
This initiative -- part of the bank's $240 million commitment to
lend to consumers and businesses in the Chicago empowerment zone,
will make it possible for between 75 and 100 families to buy a
house.  Along the shores of another Great Lake, eight banks in
Cleveland are working with the Small Business Administration to
promote small business lending in Cleveland's empowerment zone. 
Down the road from Cleveland, five banks in Akron have each
offered $1 million to promote the SBA's low-doc loan program and
provide financing to over 90 businesses in that city's
empowerment community this first year alone.  And in Wilmington,
Delaware's empowerment community, businesses located in that
designated area or those companies that hire residents of the
empowerment community can receive below-market rate loans made
possible by a new tax-exempt bond financing program a local bank
is underwriting.  The revised Part 24 will give others greater
incentive to follow these kind of leads.

While we've made Part 24 more flexible for banks, we've also
retained a component that we believe is absolutely vital -- the
requirement for community support for and participation in bank
community development investments.  The rule encourages a variety
of community partnerships such as:

-    Community representation on community development
     corporation boards of directors

-    The establishment of community advisory boards for banks'
     community development activities

-    The formation of formal business relationships with
     community-based organizations

I want to stress that Part 24 is not just another bureaucratic
maze that we're requiring banks to negotiate or paperwork that
produces eye-strain, headaches and frustration for all involved. 
No, the OCC listens when banks and community groups tell us they
need simplified, streamlined rules.  When published, the text of
the rule will occupy less than three pages in the Federal
Register.

In those three pages, we have provided banks two very clear
options for dealing with our agency.  The first option, available
for most banks and most investments, is called "self-certification," which we've allowed for the
past two years, but
are now expanding this concept even more.  Self-certification
eliminates the time-consuming application processes banks had
previously confronted.  The new streamlined process permits a
bank to work closely -- and with flexibility -- with its
community partners, making direct commitments to structure needed
financing for affordable housing, small business loans, micro-enterprise lending and many other
critical activities that are
essential to underserved communities.  The bank is required to
simply notify us 10 days after making the investment, describing
the investment and certifying that it complies with the
requirements we've set forth.

The second option applies to banks and investments that are not
eligible for self-certifications.  Under this process, a bank
need only submit to the OCC a letter -- much like the one used
for self-certification -- prior to making an investment.  Unless
notified otherwise by the OCC within 30 days, the bank may
proceed with the investment.

These simple regulatory options reflect my belief that banks and
their community partners are in the best position to determine
what approaches make best sense for the places in which they
live, work and do business.  We're going to make sure that Part
24 is part of the solution in communities like the ones we
visited today.

I'm confident that the type of reinvestment and revitalization we
saw today and celebrate with this ribbon-cutting will continue to
make cities like Detroit better places to raise a family and
realize the American Dream of continued achievement.  You're
achieving great things here in this empowerment zone -- here and
throughout the metropolitan community.  Your efforts, while never
easy and never without struggle, are crucial to this city's and
this country's future.  And with each success -- with each new
home, new business opened and new job created -- you are
demonstrating that people who care and come together can make a
profound difference.

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