Acorn Won't Challenge NCNB Deal
WASHINGTON -- A powerful consumer group, the Association of Community Organizations for Reform Now, will not challenge NCNB Corp.'s merger with C&S/Sovran Corp.
The group, known as Acorn, is expected to announce today that it has worked out with NationsBank, as the merged companies will be called, ways to structure its $10 billion loan commitment to low- and moderate-income borrowers.
Community groups have been threatening to oppose many bank megamergers in the hope of persuading the banks to increase their lending commitments to low-income communities.
Indeed, the Atlanta Legal Aid Society Inc. will file a community reinvestment challenge against the merger Friday, despite the Acorn deal, according to Dennis Goldstein, a lawyer with the group.
The Community Reinvestment Association of North Carolina, also will file a challenge Friday, said Irvin Henderson, the group's president. Community groups in Virginia and South Carolina are expected to object to the merger formally as well, he said.
Acorn said NationsBank would set up three programs: a lease-purchase housing plan that allows renters to buy their homes, a purchase-rehab program that lets borrowers buy and fix up abandoned housing, and a plan to let people pool home loans into financing for multifamily housing.
"We helped them focus their efforts," said Acorn spokesman Brian Maney. "We had concerns that they had such a broad agenda."
In addition, Mr. Maney said, NationsBank would be working with Acorn's Dallas, Houston, and District of Columbia offices to help borrowers through the lending process.
NationsBank has agreed to various breaks that will help borrowers get loans, such as interest rates one percentage point below market levels and 5% down payments.