To Smooth Merger Path, Fleet Pledges Over $200M For Massachusetts

In the second such pact in less than a week, Fleet Financial Group has committed itself to commit $210 million in mortgage and business funding in Massachusetts in exchange for state endorsement of the planned merger with Shawmut National Corp.

The accord, announced Thursday, followed by three days Fleet's $207.5 million settlement with Connecticut. That state's attorney general, Richard Blumenthal, had been threatening an antitrust action to block the merger.

Massachusetts officials did not go quite so far, although they made it clear that an agreement was necessary for the deal to get a nod from the state's attorney general, Scott Harshbarger.

A demonstration of Fleet's commitment "was part of our antitrust investigation of the merger," said George Weber, chief of the Massachusetts attorney general's consumer protection and antitrust division. But the funding package "wasn't forced on them."

Instead, over the past few months, representatives from Fleet and the attorney general's office met to hash out a mutually acceptable plan. "They disagreed with some aspects, and we worked to resolve them," Mr. Weber said. "They deserve a lot of credit."

Fleet and Shawmut also have considerable presence in other states, including Maine and New York.

So far, officials in these areas appear to be satisfied with lending programs the banks already operate. "We have not received any (other) formal proposals" for economic aid, the spokeswoman said.

She added that Fleet is keeping the state executives apprised on various merger matters.

Indeed, the bank is being careful not to slight any constituencies as it seeks approval for the $3.7 billion deal. The Federal Reserve Board, after three public hearings, is reviewing the proposal, which would create one of the country's largest banking companies.

As part of the commitment to Massachusetts, Fleet is earmarking $35 million for three programs to fund mortgages and home rehabilitation loans.

The attorney general's office envisions funding for needy inner city residents in Boston, Springfield, and New Bedford, among other communities.

"There are many people in low- and moderate-income areas that need a boost to get the kind of housing they want," Mr. Weber said. "This will help hundreds of families."

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