Charter One Financial of Cleveland said Friday that it has agreed with a coalition of community groups to lend $9 million in poor Chicago-area neighborhoods over three years.

The bank holding company also agreed to make 900 mortgage loans -- some of which might count toward the dollar target -- in such neighborhoods.

The pact with the Chicago CRA Coalition comes three months after Charter One said it would buy St. Paul Bancorp, the city's largest independent thrift, with $6 billion of assets.

Anthony Sisto, senior vice president of Charter One Bank, said the agreement has set some standards for the company's foray into Chicago and fits with its business strategy. To have tangible numbers and goals to work toward - to us that was a good place to start, he said.

Under the agreement's terms, Charter One plans to make $3 million in community redevelopment loans annually for three years. The $24.9 billion-asset bank holding company also said it would make 284 home loans in low- to moderate-income neighborhoods in 2000 and would increase the number of loans it makes in the two subsequent years by 10%. The parties will review that mortgage agreement annually, however, to adjust for changes in demand for home loans nationwide.

Charter One also agreed to keep open all of its branches in lower-income neighborhoods for at least three years, unless the branches are within a mile of each other.

In addition, the bank holding company plans to upgrade its withdrawal-only ATMs to include deposit-taking capabilities if the machines process more than 5,000 transactions per month.

The Chicago CRA Coalition and Charter One plan to establish targets for the company's small business lending in November 2000, a few months after Charter One introduces its small-business products into former St. Paul branches.

Malcolm Bush, president of the Woodstock Institute, a member of the Chicago CRA Coalition, said Charter One was open to the agreement and has a good track record with community reinvestment issues in its Midwest and Northeast markets.

They're very used to doing CRA lending, so they were very used to the (agreement's) concept, he said.

The pact with the activists is based on a complicated market share formula, which has become a popular method for gauging banks' commitment to reinvestment. According to the agreement, Charter One is to make the same percentage of loans and offer similar services in low-income areas as it does in wealthier neighborhoods.

Last month, Old Kent Financial Corp. of Grand Rapids, Mich., made a similar agreement that is to go into effect in September, after it completes its acquisition of Pinnacle Banc Group of Oak Brook, Ill.

It is the second such agreement for Old Kent. It signed the first last year, when it acquired First Evergreen Corp. of Evergreen Park, Ill.

Bank One Corp., Chicago's largest banking company, also operates under such an agreement. It signed a deal with the coalition last year, after the new Bank One was formed from the merger of Banc One Corp. and First Chicago NBD Corp.

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