WASHINGTON -- Despite a lack of public clamor, the Federal Reserve Board voted Friday to hold public hearings before deciding whether to approve the merger of BankAmerica Corp. with Security Pacific Corp.
Hearings will be held in Los Angeles, San Francisco, and Seattle the week of Jan. 13. They will focus on compliance with the Community Reinvestment Act - though local advocacy groups have not called for an opportunity to air grievances and BankAmerica has an "outstanding" CRA grade.
Mullins Casts Only 'No'
Fed Vice Chairman David W. Mullins Jr. was the only one of five governors present who voted against holding the hearings. But others, including Chairman Alan Greenspan, expressed concern that the hearings would undercut the credibility of BankAmerica's high CRA rating, received in a September 1990 exam.
Security Pacific is rated "satisfactory," the second-best of four CRA grades.
The Fed has not adopted a uniform hearing policy on current spate of proposed megamergers. It has held hearings on the NCNB Corp.-C&S/Sovran application but declined to on the Chemical Banking Corp.-Manufacturers Hanover merger.
Now that hearings will be scheduled on the Bank America deal - on dates to be announced-community activists will likely come forward, said Griffith L. Garwood, director of the Fed's division of consumer and community affairs. As the biggest bank merger in U.S. history, it deserves a thorough airing, he said.
Mayor Tom Bradley of Los Angeles had written to the Fed requesting an extension of the deadline to file comments on the merger.
Closing Delayed 2 Months
Bank America Corp. officials said last week that they anticipated closing the Security Pacific purchase in April - two months later than originally hoped, because of delays in regulatory procedures. Shareholders of both companies approved the deal Thrusday. The merger would create the second-largest U.S. banking company, with about $200 billion in assets.
Fed governors and staff members insisted Friday that they do not want hearings to delay consummation of the deal.
Mr. Mullins said, "I wonder if we shouldn't husband our resources to focus on things that have legitimate reasons to require this process."
Governor Wayne D. Angell voted for the hearings despite saying he is worried that the Fed is undercutting itself by forcing a bank with an outstanding CRA rating to undergo hearings on a merger application.
"Do you think holding a hearing would in a sense serve as a punishment for having an outstanding rating?" Mr. Angell asked.
"I'm very much concerned that we can depreciate the efforts we put in on CRA," Mr. Greenspan said. "If we are going to disregard [CRA ratings], then a great deal of effort is wasted."