NAACP Criticizes NCNB Lending, Threatens to Stall Merger Plans
WASHINGTON -- NCNB Corp. began polishing its image with one community activist group over the weekend, only to find itself the target of criticism from the NAACP on Monday.
NCNB officials met Saturday with the Association of Community Organizations for Reform Now, or ACORN, which has threatened to challenge the North Carolina banking company's merger with C&S/Sovran Corp. because of NCNB's alleged poor record of community lending. Both sides described the talks in positive terms.
However, the National Association for the Advancement of Colored People warned that it may try to block the merger because of its concerns about the banks' lending patterns.
Underwriting Standards
"If we are not able to negotiate something equitable with the banks then we will attempt to hold up the merger, or at least stall them," said William F. Gibson, chairman of the NAACP.
Chris Lewis, legislative director of ACORN, said his organization is not seeking a commitment from NCNB to lend a specific dollar amount in low income communities. Rather, ACORN is trying to get NCNB to change its underwriting standards.
Mr. Lewis said banks like NCNB use job continuity -- a record of staying in one job over an extended period of time -- as a criterion for granting credit. But "low-income people tend to move between jobs, even though they may stay at the same income level," he said. "So we would like for them to stress income continuity, rather than job continuity."
Ellison Clary, a spokesman for NCNB in Charlotte, declined comment on the negotiations with ACORN or the possibility of talks with the NAACP.
About two weeks after the July 22 merger announcement, NCNB and C&S/Sovran pledged to make $10 billion in community development loans over 10 years.
