New Jersey's largest consumer coalition is working with the state's biggest bank on a $65.8 million plan to stimulate investment in low-and moderate-income neighborhoods.

First Fidelity Bancorp. has pledged to New Jersey Citizen Action to lend the money over a period of three years. The citizens group is coordinating a series of programs aimed primarily at community housing needs.

Program Seen as Milestone

The First Fidelity program is being touted by the groups as the largest allocation of resources by any bank in New Jersey.

"This is the first time that a lending institution in New Jersey has voluntarily signed an agreement committing financial resources to CRA programs when no merger was taking place," said Patrick Morrissy, chairman of the activist group's housing and banking committee and executive director of Hands, a nonprofit housing development organization.

Mr. Morissy said the Hackensack-based consumer coalition has been working on Community Reinvestment Act issues for the past five years.

"We are happy to see the banks taking CRA more seriously and, in the case of First Fidelity, offering leadership and commitment," he added.

Historically, he said, banks did not begin to work with communicaty groups on low-income mortgage and economic development programs until they were in the process of a merger or planning one in the near future. Federal regulators can halt expansion plans if banks have poor records in meeting CRA requirements.

Includes Grants to Nonprofit Groups

First Fidelity, which has $29.2 billion in assets, is "proud to be the first lending institution to reauthorize resources four our special mortgage, home improvement, and community development initiatives," said Jerome Greco, senior vice president of public affairs and government for the bank holding company.

The $65.8 million commitment includes $26 million for residential mortgages and $9 million for home improvement loans.

Most of the remaining funds are being used for related programs and grants to nonprofit groups.

|To Revive Struggling Communities'

The money "can allow working families to buy homes, nonprofit organizations to build more affordable housing, and empower people to work to revive struggling communities," Mr. Morrissy said.

First Fidelity's commitment was announced in late April, and the programs have begun to be implemented, said Phyllis Salowe-Kaye, executive director of the community coalition. "We are monitoring its progress."

Mr. Greco, the bank's CRA coordinator, said that an advisory board meets quarterly to make sure the program is on course.

"Several mortgages are being prepared, and we have completed others," he said.

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