The planned merger of Chemical Banking Corp. and Chase Manhattan Corp. could provide New York's 30 community development credit unions with new opportunities for expansion.
The merged institution is expected to close 100 branches, and some might be in poor parts of the city. The new Chase could receive Community Reinvestment Act credit by donating such branches or leasing them at favorable terms to financial cooperatives.
"We do see it as an opportunity," said Cliff Rosenthal, executive director of the National Federation of Community Development Credit Unions. "There have been a number of instances when banks have donated their former facilities or leased them on concessionary terms."
"It's pretty inevitable that branches will be closed in our neighborhoods," he added. Mr. Rosenthal said he and members of his group plan to meet with some bank leaders this fall.
If the credit unions to take advantage of vacated space, the tiny institutions would need assistance in operating them, said Mr. Rosenthal and credit union managers. Chase could be a source financial assistance, he said.
"In general, a credit union would need $500,000 in support over two to three years," he said. "I think that's a bargain. That's cheaper than the losses of staying there."
Central Brooklyn Federal Credit Union, in the borough's gritty Bedford- Stuyvesant neighborhood, has benefited from a past Chemical merger: Its office was once a Manufacturers Hanover branch that was slated for closing after the 1991 merger.
Chemical sold the branch to Central Brooklyn Federal for $1, credit union president Mark Griffith said.
Mr. Griffith and the other leaders of Central Brooklyn Federal have dreams of expanding the $4.1 million-asset institution. Adding another branch fits into their long-term plans.
"Whatever happens, we feel the branches should be put to community use," he said. The shouldn't wind up as "99-cent junk stores, the way other (former) bank branches have."
