First Chicago NBD Corp. and Banc One Corp. lag other banking companies in lending in low-income Chicago neighborhoods, according to a community group based here.

Woodstock Institute of Chicago said it has the data to prove the companies' deficiencies and will use the information to press the two companies for a significant pledge to reinvest in the neighborhoods.

The threat came on the heels of the announcement last month that First Chicago and Banc One would merge to form a $230 billion-asset company that would take the Banc One name.

The companies generally scored below-average for lending to small businesses in low-income neighborhoods and for residential lending in those areas, Woodstock said.

Only First Chicago's American National Bank and Trust Co. scored slightly above average for making small-business loans in low-income areas. However, American National, a specialty business bank, would no longer exist as a separate entity in the new Banc One.

First Chicago vice chairman David J. Vitale, who is slated to hold the same post in the combined company, told a gathering of community activists this week that the new Banc One would make good on any prior reinvestment agreement.

"Any commitment we made, we will live up to," he said, noting a six- year, $2 billion pledge First Chicago made two and a half years ago. "We are in tune with the same objectives" as the community groups, he added.

Richard J. Lehmann of Banc One, who has also been designated a vice chairman of the merged company, said at the same meeting that the new Banc One would be sensitive to community issues. "We take our role in helping develop communities we serve very seriously," he said.

But both men stopped short of committing the company to a new community investment program.

Woodstock said it would try to negotiate a community reinvestment commitment from the two companies for an as-yet-undetermined period.

Pressure is to be put on the two companies both on the national level and in Chicago where community activism is particularly strong. A New York group, Inner City Press/Community on the Move, has already challenged the merger before the Federal Reserve Board.

But Mr. Lehmann refused to comment on whether the companies would make a new pledge.

Daniel Immergluck, a Woodstock vice president, said his group hopes to negotiate a deal that includes specific dollar amounts for commitments to housing, availability of financial services, and economic development.

First Chicago has had generally good relations with community groups, according to activists and the bank.

But a recent report by Woodstock gave First Chicago and Banc One mixed report cards on community lending, particularly to low-income residents.

Banc One had a slightly better record in home lending to low- and moderate-income Chicago residents, according to 1996 figures provided by the group. It scored higher than First Chicago on lending for home purchases, home improvements, and mortgage refinancings. The data covered residential lending by all subsidiaries of both companies.

Likewise, Woodstock officials said, smaller Chicago banks do a much better job of serving small businesses in poor areas. Banco Popular, which had $400 million of Chicago assets at the end of 1996, made more small- business loans in low-income neighborhoods that year than First Chicago's lead bank, First National Bank of Chicago, which had $52 billion of assets in the Chicago area at the time.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.