A plan by First Union Corp. to commit $2 billion by 2001 to community reinvestment in Virginia, Maryland, and the District of Columbia has not satisfied local community groups critical of the company's deal for Signet Banking Corp.
For several weeks First Union has been trying to convince merger opponents and regulators that it will not abandon low- and moderate-income areas after its merger with Richmond, Va.-based Signet closes at yearend.
Officials of the Charlotte, N.C.-based banking company and the protesters plan to meet again Monday. But the community groups say many issues must be resolved.
"We're not impressed at all," said Martin Jeffries, a spokesman for the Roanoke Community Reinvestment Coalition. The $2 billion plan "is a quick and dirty response so regulators can approve this thing."
Mr. Jeffries said the plan lacks specific commitments to local markets, avoids answering questions about branch closings and employee layoffs, and spreads too little money over too broad a region.
In an interview Wednesday, a First Union spokesman defended its three- year proposal. "We feel it is a very strong and aggressive community reinvestment plan," said spokesman Ken Darby.
The commitment for 1998, 1999, and 2000 calls for $668 million of lending each year: $175 million in mortgages and $150 million in consumer loans to people in low- and moderate-income areas; $200 million in small- business and farm loans; and $125 million in community development loans. Three community development lending officers are to be assigned to the market, and First Union is to introduce a nonprofit construction line.
In addition, the plan offers a total for the three years of $25 million in low-income, affordable-housing tax credits and $25 million in construction, bridge, and conduit debt.
First Union is also pledging to make about $1.5 million of community reinvestment contributions and other investments over the three years, including a commitment to honor Signet's CRA multiyear pledges, which total $508,000.
The meeting with community organizations is scheduled as anxieties over the merger are high. Newspapers have reported that five of six departments at a 350-employee customer service center in Richmond would be eliminated after the merger is completed.
First Union has service centers handling many of the same functions in Roanoke, Va., and Raleigh, N.C.
First Union officials would not confirm plans to cut any of the departments, and spokeswoman Laurie Hedrick said the company had not yet determined how many people would ultimately lose their jobs.
First Union's acquisition of Signet has been approved by the Federal Reserve but awaits action by the Office of the Comptroller of the Currency.
