A roar of protest at a Federal Reserve hearing Wednesday on the proposed merger of Fleet Financial Group and BankBoston Corp. may have convinced the two companies to increase a pledge to lend in poor neighborhoods.

Speaking outside the hearing room, where Boston's mayor and New York activist Rev. Al Sharpton registered opposition to the deal, Fleet chairman Terrence Murray admitted that he and BankBoston chief Charles Gifford were "flexible" about a five-year plan to make $14.6 billion in loans to small businesses and low-income neighborhoods.

"I think the overall package is exceedingly generous," Mr. Murray said. "But the pieces can be rearranged."

"There are a number of specifics that do need more discussion," Mr. Gifford added.

The two chairmen led off the hearings defending the $16 billion deal. They maintained that the $14.6 billion pledge for small-business and low- income lending should have allayed concerns.

But politicians and community activists were openly hostile. "I have yet to hear why this merger is a forward step," Boston Mayor Thomas M. Menino said, to loud applause. "I cannot offer my city's support."

Critics were largely concerned that the new Fleet Boston Corp., with territory stretching across the Northeast, would not devote the attention to New England that its predecessors have.

In addition, those testifying demanded to know whether a viable competitor could take on the merged entity, which would have $180 billion of assets. The bankers said their planned divestiture of $12.5 billion of deposits and 292 branches should preserve banking market competition.

The Boston Fed's auditorium was packed throughout the morning, with nearly 400 attendees, many of them waving signs that read, "Stop Fleet from Redlining," "Fleet Fleece is a Baaaad Deal," and "Show MA the Money."

For the most part, Fleet was portrayed as the villain, swallowing up the much-admired BankBoston, which has long-standing ties to community groups and the mayor's office.

Asked after his testimony if the hostile mood of the assembly bothered him, Mr. Murray said it was part of the process. "You come to the table and work on these issues."

"I am not surprised by the tone," Mr. Gifford added. "With two large banks there is a lot of emotion involved. But we have worked very closely with the mayor for many years, and I expect that will continue in the future. I think he's telling us not to forget that."

The two companies' $14.6 billion pledge to satisfy Community Reinvestment Act requirements was especially controversial. Many at the hearing demanded that Fleet increase the amount, and accused the bank of having a history of turning off the credit spigot in low-income neighborhoods after a merger.

"Fleet has a troubled lending record," Mayor Menino said. "The question is whether they will adopt a 'take it or leave it' attitude. That troubles me."

Fleet's director of corporate community development, Agnes Bundy Scanlan, acknowledged during her presentation that the company had a decline in mortgage lending after its 1995 acquisition of Shawmut National Corp. But she attributed the downturn to increased competition, branch divestitures, and management turnover in Fleet Mortgage.

"We are prepared to be held publicly accountable," Ms. Scanlan said.

Mr. Murray said Fleet would adopt BankBoston's approach to community development. "BankBoston has done a better job from a public relations standpoint. That's why we are embracing their model."

Community leaders also contended that the $14.6 billion pledge-which includes $7.5 billion in loans for small businesses, $4 billion for affordable-housing mortgages, $2 billion for community development, and $1 billion for consumer loans-was less than what the two banks have committed separately.

"I encourage you to block this merger until a respectable proposal is made," said Rev. Sharpton, president of the National Action Network and a well-known New York politician. "We have no problem dealing with Fleet Bank but we do have a problem being fleeced by Fleet Bank."

Divestitures were also hotly debated. Massachusetts politicians are split on whether the banks should be forced to sell the deposits, assets, and branches in a single block to an out-of-state competitor or whether they should be parceled out among a handful of smaller regional banks.

Tom Reilly, Attorney General for Massachusetts, which has worked closely with the Justice Department on the divestiture issue, said his primary concern is that middle-market companies would not have a viable credit alternative to the new Fleet. He urged the Fed to demand the sale of divested deposits, assets, and branches to a single large buyer.

"That ensures competition in this region," Mr. Reilly said. "I support community banks, but they don't serve the middle market."

However, Sen. John Kerry, D-Mass., said in a statement read by a representative that he would support the sale of some of the divestitures to local banks, particularly to minority-owned institutions.

"We are opposed to a single package sale," Sen. Kerry said. "You must encourage local competition."

Mr. Murray said the banks will spend the next two to three weeks combing through the "dozens" of bids submitted.

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