GMAC Mortgage Corp.'s application for a thrift charter is drawing fire from community activists, who say that the company's CRA commitment is inadequate.
In late August, GMAC Mortgage, a Horsham, Pa., unit of General Motors, filed with the Office of Thrift Supervision to form a federal savings bank. The bank, which would be headquartered in Wilmington, Del., would let GMAC Mortgage "become a stronger community member," a company spokesman said then.
But GMAC plans on limiting its Community Reinvestment Act responsibilities to Delaware, activists said, despite the fact that GMAC Mortgage makes loans nationwide.
GMAC's thrift charter application came as regulators are watching nonbanks more closely.
"It's an emerging issue," said Matthew Lee, executive director of Inner City Press/Community on the Move, Bronx, N.Y. The organization is pushing GMAC to change its CRA commitment to resemble those of Household International Inc. and Travelers Inc. The two recently revised their commitments to minority borrowers after Inner City Press protested proposed acquisitions.
After prodding from Inner City and other activists, Household has promised to commit $3 billion to low- and moderate-income borrowers and to refer more creditworthy customers to lower-rate loans. Travelers promised to train employees and monitor sales practices of all finance units.
The Office of Thrift Supervision has granted a request by Inner City Press to extend the comment period for GMAC's thrift application and to meet with Inner City. Comments will now be accepted through Oct. 7.
A GMAC Mortgage spokesman said the company did not want to comment.
Nonbanks may be increasingly applying for thrift charters to preempt state laws, Mr. Lee said. They will also be able to secure a lower cost of funds. u