A nationwide megapledge for community development is not in the cards for the combined Banc One Corp. and First Chicago NBD Corp., First Chicago chairman Verne G. Istock said.
"Do these mega-announcements amount to much? I don't think so," Mr. Istock said of the recent spate of Community Reinvestment Act lending pledges made by big U.S. banking companies seeking approval of merger plans.
"We think you ought to develop plans with the community groups," said Mr. Istock, who is expected to be chairman of the new Banc One, a $230 billion-asset company that is to result from the Banc One-First Chicago combination.
Mr. Istock said in an interview this week that he feels no pressure to match the community reinvestment commitments of his peers.
NationsBank Corp., in conjunction with its pending merger with BankAmerica Corp., has pledged $340 billion over 10 years. Citicorp announced a $115 billion plan in the wake of its Travelers Group merger announcement, and Washington Mutual Inc. pledged $120 billion related to its acquisitions of Great Western Financial Corp. and H.F. Ahmanson & Co.
Norwest Corp., which has a merger deal with Wells Fargo & Co., has so far declined to be specific about its plans.
"We intend to continue every community reinvestment program we have in place," said a spokesman.
First Chicago NBD has been focused on the local level. It has announced multiyear pledges of $4 billion with an activist group in Chicago and $3 billion in a deal with a Detroit group. The company is still negotiating pledges with another Chicago group and with one in Indiana.
First Chicago officials have declined to state the total they would ultimately offer and have insisted that their community reinvestment goals are in line with those of Banc One.
But community activists see differences between these merger partners.
One group, Association of Community Organizations for Reform Now, or Acorn, is up in arms about what it called a snub by Banc One. Acorn has asked the Federal Reserve for public hearings on the proposed First Chicago deal, and the group's national housing director, Michael Shea, said it may challenge the merger after being unable to negotiate a national commitment.
After meeting with Mr. Istock late last month, Acorn activists felt pretty good about their chances of getting a nationwide Banc One community development pledge, said Mr. Shea.
But after Julia Johnson, Banc One's senior vice president and head of community reinvestment, canceled a meeting with the group, Acorn officials realized something was up. The group then was told there would be no national deal and First Chicago would continue seeking agreements with local groups, Mr. Shea said.
Mr. Shea said he believes Banc One officials had overruled First Chicago. "Istock is not a bad guy, but he doesn't have the authority to deliver," Mr. Shea said.
Mr. Shea said Banc One is "playing a game, letting First Chicago talk to all the groups in Chicago" but not making a meaningful national commitment.
Not every community activist is convinced megapledges are truly meaningful. Gail Cincotta, a veteran Chicago activist who is credited with influencing the 1977 Community Reinvestment Act, said pledges only work when they are monitored by local groups.
The Federal Reserve Board has not said whether it will hold a public hearing on the merger, which would give critics a chance to air their grievances.
Two Democratic members of Congress from Chicago, Jesse Jackson Jr. and Danny Davis, among others, have urged hearings.
