Community activists filed a protest Tuesday against State Farm Insurance Cos.' bid for a thrift charter, accusing the insurance giant of discrimination.
In a seven-page letter sent to Treasury Department and Office of Thrift Supervision leaders, three community groups-the Greenlining Institute, the Organization for a New Equality, and the Twenty-First Century Partnership- said they "are prepared to prove that State Farm is a redliner and engages in subtle discriminatory practices."
A State Farm spokesman declined to comment Tuesday, saying the company had not seen the protest letter. "We have been very active in urban areas," he added. "We are partnering with a variety of organizations to help preserve and improve the conditions of some of our inner-city areas."
The activists asked regulators to hold public hearings on the application and require State Farm's thrift to produce a long-term strategic plan for community reinvestment. If State Farm wins a thrift charter, regulators should confine it to a small geographic area for five years and scrutinize its performance every six months, the protest letter said.
Competitors such as Allstate Corp. and Farmers Insurance Group of Cos. have much larger presences in inner cities and larger percentages of black and Hispanic customers, according to the protest letter. State Farm has not targeted minority small businesses, and its investments in underserved areas are "well below the norm," the letter added.
In July 1996, State Farm settled complaints about its underwriting of home insurance in Toledo with two fair-housing groups and the federal government.
State Farm Mutual Automobile Insurance Co., based in Bloomington, Ill., applied to the OTS on June 30 to form a unitary thrift holding company. It would offer home, automobile, and consumer loans as well as checking and other deposit accounts.
Most of these services would be confined to Arizona, Illinois, and Missouri in the first three years of operation, but some deposit products would be offered nationwide, a spokesman said.
The thrift would not open branches; products would be sold through State Farm's network of 17,000 agents in the United States and Canada.
The comment period closed Tuesday; the OTS has 60 days to rule on the application.
