BankAmerica Corp. and other large institutions have pledged billions of dollars to community lending in the past year after announcing big takeovers. But such mega-pledges often have a lot more sizzle than steak, according to some regulators and consultants.

"We look at them more as publicity, in many cases," said Ronald N. Zimmerman, a vice president at the Federal Reserve Bank of Atlanta. "We recognize that a lot of what [banks] say they're going to do, they're already doing. I guess they're hoping to avoid protests that way."

There is no question that the commitments have helped pacify activists whose protests threatened to delay big mergers.

The Federal Reserve Board is required to assess community lending activities before approving a major merger, and community groups have learned to launch Community Reinvestment Act challenges while the applications are under review.

Precedents Established

"The banks will set aside subsidized funds, the protest is withdrawn, and the application is ultimately approved," said Jo Ann S. Barefoot, a consultant based in Columbus, Ohio. Once the precedents are set, of course, there's more and more pressure for others to follow them."

But she and others aren't thrilled that the precedents are being established.

The pledges are a "corruption" of the CRA process because they "reinforce the notion that CRA loans are special, are different, and cannot make it through the normal credit-granting process," said Ms. Barefoot, who served on the staff of the Senate Banking Committee that helped draft the Community Reinvestment Act in 1977.

The banks, for their part, stoutly deny that their pledges are related to mergers.

BankAmerica, for example, had a $5 billion commitment before it acquired Los Angeles-based Security Pacific Corp., which itself had budgeted $4 billion. As the California banks were lobbying to get their merger approved, BankAmerica announced a $12 million commitment over 10 years.

Existing Programs Expanded

"Our thinking was, this bank was going to be considerably stronger than the two banks separately, so we made an increase in our goals commensurate with that," said BankAmerica spokesman Russell Yarrow.

But much of the hoopla involved in the billion-dollar pledges covers up the fact that the banks have not made large incremental commitments. Most of the pledges are extensions of programs that are already under way.

The banks' announcements also do not mean that a specific fund has been set aside for CRA activities. The purpose, rather, "is to set goals so that the line people involved in this business have an idea of what they're shooting for," Mr. Yarrow said.

The regulators realize that, of course.

These programs "are not really as big as they sound when they're announced," said Mr. Zimmerman of the Atlanta Fed.

Appearance of Arm-Twisting

Some lawyers said banks that make splashy pledges run the risk of appearing to do so under duress from regulators.

"Obviously, when banks do this it raises the question of whether this is being, in a sense, pushed by the Federal Reserve," said H. Rodgin Cohen, a lawyer with Sullivan & Cromwell in New York who specializes in bank acquisitions. "But the Fed has consistently said that this type of program is totally in the bank's own discretion, and that this is not an essential way of resolving CRA issues."

Columbus, Ohio-based Banc One Corp., which has added $33.5 billion in assets through 27 acquisitions in the past year and a half, has done so without a major CRA pledge. And it has never suffered a significant delay on an acquisition because of a CRA challenge.

The reason: 14 Banc One subsidiaries have received "outstanding" CRA ratings from federal regulators, while 28 are "satisfactory." The grades on 14 other Banc One banks have not yet been made public.

A Jump on the Competition

Julia Johnson, Bank One's vice president for community reinvestment, said Banc One subsidiaries are instructed to make an extra effort to meet CRA goals. In Milwaukee, for example, Banc One advertises in Spanish even though only 4% of the population there is Hispanic.

"I would expect Banc One banks are out there now doing all those things that other institutions say they're going to do in the future," Ms. Johnson said.

Ms. Barefoot agrees with the approach. Banks should have such a strong CRA performance record that no one can force them to announce huge lending commitments, she said. "But to do that, you have to start working on it a long time before the protest arrives."

Barnett Banks Inc. upped the ante in mega-pledges last month with a commitment to lend more than $2 billion over five years to low- and moderate-income families.

The announcement came one month after the Jacksonville-based bank said it agreed to purchase First Florida Banks Inc.

Barnett's program appears to be dwarfed by the $12 billion, 10-year commitment made by San Francisco-based BankAmerica Corp. But it is the most expensive one yet announced on a relative basis, according to Kenneth H. Thomas, a Miami-based consultant.

Mr. Thomas, who is writing a book on community reinvestment lending, calculates that Barnett's commitment represents 1.04% of its post-merger assets on an annual basis. That contrasts with 0.63% at BankAmerica.

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