A Milwaukee fair-lending group is trying to derail a merger agreement that would create Wisconsin's largest mutual savings bank.

The Fair Lending Coalition last week filed complaints with the Office of Thrift Supervision in Chicago opposing the merger of Milwaukee's $952 million-asset North Shore Bank and $273 million-asset BadgerBank. The group is also seeking a public hearing on the merger.

"We're doing it because North Shore has such a poor record" on lending, said David Balcer, the coalition's executive director.

In the organization's complaint, Mr. Balcer wrote that North Shore has the fewest residential loans in numbers and dollars in Milwaukee's low- income neighborhoods, compared with other thrifts its size. He also said that North Shore has been below industry averages on lending to African- Americans.

His group wants to make sure "the good performance of BadgerBank and its employees will not be destroyed by the poor community reinvestment strategies of North Shore Bank," he wrote.

North Shore Bank president James F. McKenna did not return telephone calls for comment.

BadgerBank's president, John C. Patzke, declined to comment on the protest.

In August, the two savings banks announced a merger deal that was expected to be completed by yearend. The terms of the transaction were not disclosed.

Current BadgerBank president Richard M. Brophy would become North Shore's executive vice president, and Mr. Patzke would become senior vice president.

In its protest, the Fair Lending Coalition also recommended that North Shore open a new office in a heavily minority part of Milwaukee and that BadgerBank not shutter a loan office slated to close if it opens a planned new bank office.

The coalition, founded in 1990 to combat lending discrimination, has protested the mergers of several Milwaukee-area financial institutions, Mr. Balcer said.

Though none were prevented, he said he believes that regulators have taken the coalition's protests into account when they issued conditions to their application approvals.

He hopes that will be the case again if the North Shore-BadgerBank merger is authorized, he said.

At the least, he would like to see the OTS "ask North Shore to redo their delineated (lending) area and encourage them to lend more in the central city and lend more to minorities," Mr. Balcer said.

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