NR 98-72
July 16, 1998

OCC Advises Industry to Explore Creative Approaches 
to Meeting Minority Small Businesses' Banking Needs
                                 
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency
(OCC) today issued Advisory Letter 98-9 -- Access to Financing
for Minority Small Businesses -- to the national banking
industry, identifying some of the approaches national banks have
used to successfully meet the financial needs of the minority
small business community.

"A positive attitude is the hallmark of the banker who sees
minority small business lending not as a legal  compliance' or
political responsibility, but as a business opportunity waiting
to be seized upon.  In other words, bankers who are successful
treat minority small business loans as a profit center, not as a
compliance cost," said Acting Comptroller Julie Williams.

The Advisory Letter includes information shared with the OCC by
national bankers, small business owners and business development
officials who participated in outreach meetings last year in
eight cities throughout the United States.  The OCC conducted
these meetings to develop a mutual understanding of the barriers
that restrict minority-owned small businesses' access to credit
and financial services.  The meetings also provided insight into
successful approaches some banks are already using to tap the
growing minority business market.  Some examples of these
approaches are:

     developing account officer relationships with minority small
     business owners and business groups;

     creating partnerships with community-based development
     organizations;

     implementing targeted outreach programs;

                                
     providing written materials in the predominant languages of
     communities served;

     staffing small business lending areas with loan officers
     from diverse backgrounds and vesting them with appropriate
     lending authority;
                                
     using low documentation loan authority to identify an
     "exempt portion" of small- or medium-sized business and farm
     loan portfolios to help expand credit to minority owned
     firms;

     developing receivable financing products and innovative loan
     structures like small business lines of credit accessed by
     check drafts;

     seeking out minority small businesses to use as the bank's
     own suppliers and contractors;

     using government guarantee programs to mitigate risks;

     partnering with (or referring potential borrowers to)
     agencies and organizations that provide technical support
     and assistance;

     participating in equity and subordinated debt investments in
     minority businesses through a variety of investment
     vehicles.

"National banks are employing many strategies to serve the
financing needs of the growing minority small business market
sector, and establishing prototypes for other financial
institutions," added Acting Comptroller Williams.  "The goal of
full economic opportunity for all, including minority small
businesses can, and will be, accomplished safely and soundly
through continued innovation and adaptation."

Advisory Letter 98-9 can be obtained from the OCC's web site,
http://www.occ.treas.gov, or by calling the OCC's Information
Line at (202) 479-0141.

                              # # #

The OCC charters, regulates and examines approximately 2,600 national banks
and 66 federal branches and agencies of foreign banks in the United States,
accounting for 58 percent of the nation's banking assets.  Its mission is to
ensure a safe, sound and competitive national banking system that supports the
citizens, communities and economy of the United States.