WASHINGTON — Federal and state regulators on Thursday approved Citigroup Inc.’s acquisition of Associates First Capital Corp. without the strict conditions that activists had urged.

The New York State Banking Department, Federal Deposit Insurance Corp., and Office of the Comptroller of the Currency signed off on the deal. Though other state regulatory approvals are required, these were the principal agencies with jurisdiction over the purchase.

Community group officials were bitterly disappointed by news of the approvals.

“This is a terrifying moment for the whole movement against predatory lending,” said Sarah Ludwig, executive director of the Neighborhood Economic Development Advocacy Project in New York.

“This is beyond scandalous and sends out a message throughout the whole country that the regulators are in essence sanctioning predatory lending. They are saying that it is fine to engage in documented practices of predatory lending and that there is no accountability, neither corporate nor regulatory.”

Citigroup said that voluntary reforms that it had announced previously had answered those opposed to the deal.

“When we announced the Associates transaction, we indicated that we hoped to use this event as an opportunity to lead the market and set the highest standards in the consumer finance industry,” a company spokeswoman said in a news release. “We look forward to swiftly and effectively implementing policy enhancements and pilot programs as soon as the deal closes.”

As part of the state approval, Citigroup agreed to stop selling single-premium credit life insurance in New York for 90 days to give it time to obtain approval for sales of monthly credit life insurance. Once approvals are obtained, Citigroup plans to implement an 18-month pilot test program to measure consumer acceptance of the monthly versus single-premium products. Results must be reported to state officials.

The company also agreed to a test program that would promote subprime borrowers with good payment records to prime status, more detailed foreclosure review measures, and a lower broker and lender point structure on some refinancings.

“We are confident the agreement reached will provide increased consumer protections for subprime borrowers and will help to raise lending standards in the subprime residential lending market,” said Barbara Kent, the New York Banking Department’s director of consumer services and financial products.

Industry critics complained that the strictures did not go far enough. They have described single-premium credit insurance — which is sold to cover a loan in the event a borrower dies — as a sure sign of predatory lending. They argue that it is often slipped in without the knowledge of the borrower, financed at high rates, and not written to cover the entire life of the loan.

“We are disappointed,” said Matthew Lee, executive director of Inner City Press/Community on the Move. “They aren’t even saying not to sell credit life insurance in New York. They are just saying not to sell it until you can offer another product besides it. The whole point with this product is that it is confusing to consumers.”

Mr. Lee said “it is heartening” that New York was able to wring further concessions out of Citigroup than those promised in a Nov. 7 letter from the company, “but they didn’t require enough.”

Federal regulators had recently extended their deadline on deciding whether to object to the deal to Dec. 16. Under the Change in Bank Control Act of 1978, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. had the authority to object to the deal, but could not impose any conditions on the purchase.

Community activists, who have assailed the deal since it was announced in September, had argued that the federal regulators had discretion to take some kind of action even if they decided not to object to the acquisition. In hearings last month, they argued that both Citigroup and Associates charged excessive prepayment penalties, hid costs and fees, and engaged in other predatory practices.

Federal regulators defended their decision, citing a pledge by Citigroup that it would institute several operational changes. Most of the reforms were included in a Nov. 7 letter from the company, and it was unclear if any new promises were made to federal officials.

New York regulators had considerably more latitude under state law on how to approve the Associates First purchase, but their conditions are only applicable in that state.

Community group leaders had been hoping against hope that regulators would use the deal as a poster child in the fight against predatory lending.

Indeed, Rep. John J. LaFalce of New York, the ranking Democrat on the House Banking Committee, stressed the symbolic nature of the case earlier in the day, before any approvals were released.

Rep. LaFalce vowed to reintroduce legislation to toughen federal laws against predatory loans.

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