of Chase Manhattan Corp., Chemical Banking Corp. on Wednesday committed $18.1 billion to a five-year community reinvestment initiative. Of the total, the bank would devote $13.5 billion to affordable mortgage programs offered nationwide through the planned Chase Residential Mortgage Co. Another $3.4 billion was pledged for loans to small businesses and nonprofit groups, while $1.2 billion would fund economic development projects. Although Chase would offer the program nationally, New York City - the $300 billion-asset bank's home - would be the largest beneficiary, receiving $3.2 billion. The bank also agreed to open two new inner-city branches there. "This commitment is consistent with our business strategies and exceeds overall what community groups advised us we should be doing," said Thomas G. Labrecque, Chase's chairman. "It is not a ceiling, however, and if demand in the market is there, we will make every loan that meets our credit standards." The announcement came just a few days after the Federal Reserve Board and the New York State Banking Department said they will conduct a public hearing on Nov. 16 into what effect the merger would have on the convenience and needs of the community. Activists expressed disappointment Wednesday. Sarah Ludwig, director of the Neighborhood Economic Development Advocacy Project, said the announcement doesn't resolve her concerns about how the bank would meet neighborhood lending needs. "There are a lot of groups that plan to testify before the Fed," she said. "There are a lot of groups the bank hasn't met that have been reaching out." The Rev. Charles R. Stith, president of the Organization for a New Equality, said Chase's commitment pales in comparison to a pledge last month by two Japanese-owned banks in California. Union Bank and Bank of California pledged 4.5% of their combined assets for the next decade to community reinvestment. "If a Japanese bank can make a commitment of 4.5% of its assets, then certainly what would become America's largest bank should be able to do at least that," Mr. Stith said. Carol Parry, a managing director at Chemical, called Mr. Stith's demand "ridiculous," saying it would require the bank to commit more than $135 billion in community reinvestment lending. "They are talking about 100% of the banks loans going to community development," Ms. Parry said. "That is not really an appropriate request. What we have done here is aggressive and totally appropriate for the largest bank in the country." Mr. Stith and officials from the two banks will meet Nov. 7 to discuss his group's demand. The San Francisco-based Greenlining Institute joined the list of community groups protesting the Chase acquistion Wednesday. Robert Gnaizda, the group's general counsel, said it will object to Chase mortgage company's record of serving low-income borrowers in Los Angeles, Boston, and Washington, D.C. Chemical and Chase are aiming to complete their $10 billion merger during the first quarter of 1996. In other merger-related news, the Justice Department on Tuesday approved Fleet Financial Group's purchase of Shawmut National Corp. The department said Fleet's plan to sell 64 branches with $300 million in commercial deposits in four states satisfies the government's antitrust concerns. Fleet officials said the Justice Department announcement clears the way for Federal Reserve Board approval. Fleet expects to complete its merger with Shawmut this year.

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