Coalition of Groups Threatens NCNB-C&S/Sovran Merger
Community groups that have voiced informal objections to the South's biggest banking merger are banding together, laying the groundwork for a possible unified challenge.
The groups say the proposed merger of Charlotte-based NCNB Corp. with C&S/Sovran Corp., Atlanta, could lead to neglect of the banking needs of low-income people.
Recently, several North Carolina groups joined forces to coordinate their actions even as a more radical group led a protest in front of C&S/Sovran's main branch in Washington.
Banding together under the name Southern Reinvestment Alliance, about 10 groups met for the first time on Aug. 26 in Charlotte to plot their strategy.
Leaders of this coalition said members want to share information and coordinate strategies. They have not yet decided if they will make a formal challenge to the merger.
Longer Comment Period Sought
"We all have the same worries about what a very large institution could mean for low-income communities in the South," said Debby Warren, of the Raleigh-based Community Reinvestment Association of North Carolina, one of the groups joining the coalition.
Some of the member groups, including the Charlotte Organizing Project, last week petitioned the Federal Reserve Board to extend the public comment period on the merger, which commenced Aug. 21, to 90 days from the normal 30 days.
The Charlotte group, joined by the Association of Community Organizations for Reform Now, also asked the Fed for public hearings on the proposed merger.
|Unprecedented . . . Impact'
"This proposed bank merger is unprecedented in size and impact on financial markets, the general public, and our nation's economy," Acorn's national president, Maude Hurd, wrote to Federal Reserve Board Chairman Alan F. Greenspan.
The proposed new NationsBank would create a Dixie behemoth with assets of $118.2 billion and would be the fourth-largest bank in the country.
"We plan to close this transaction by yearend, and I haven't seen anything that's going to keep us from doing that," said Catherine Bessant, NCNB's director of community reinvestment.
The activists, meanwhile, are beginning to test NCNB and C&S/Sovran's cool. A group led by Acorn, which is not a member of the coalition, staged a rally outside C&S/Sovran's main branch in Washington last week. The demonstrators demanded a meeting with top bank officials.
Major bank mergers hinge on the approval of regulators, who assess efforts to revitalize poor communities within the merging partners' region. In recent years, the Fed has delayed several mergers on CRA grounds and scotched at least one.
NCNB and C&S/Sovran have received "satisfactory" CRA ratings from federal regulators, the second highest of four possible scores. But in an apparent effort to head off challenges, NCNB and C&S/Sovran last month announced a $10 billion community development lending program. The commitment, to be spread out over 10 years, is the largest ever made under a 1977 law requiring banks to serve the credit needs of all customers.
Activists are complaining that they were not consulted before the banks unveiled their plan. And they are criticizing the banks for refusing to provide details about the program.
"It's only a general commitment for the whole NationsBank area," said Dennis Goldstein, a housing specialist attorney for Atlanta Legal Aid Society Inc.
Ms. Warren, from the Raleigh CRA group, also expressed concern with the plan. "CRA is essentially a local concern, and there are different issues involving different credit needs," she said.
NCNB's Ms. Bessant said the two banks will soon release a more detailed outline of their lending plan. But, she added, they do not intend to provide specific dollar commitments to individual localities.
"In terms of the merger," she said, "we're prepared to stand on our record as it is."
She also downplayed fears about the alliance, noting that NCNB has faced activist coalitions before.