WASHINGTON - A national association that represents check-cashing businesses claims that FleetBoston Financial Corp.'s proposed acquisition of Summit Bancorp of Princeton, N.J., would violate the Community Reinvestment Act.
In a protest of the proposed purchase filed with the Federal Reserve Board, the Financial Service Centers of America argued that Fleet's recent decision to terminate all accounts maintained by check cashers violates the CRA because it denies service to low- and moderate-income consumers.
"The issue is that FleetBoston has made a 'corporate decision' to close all check casher accounts without having any legitimate reason," William Siegel, the chairman of check cashers group, said in a press statement.
"It is clearly discrimination against a class of business and the communities that they serve," he said. "They must believe that since that have largely abandoned these neighborhoods and have not had to comply with CRA regulations, that they will be able to get away with this."
Fleet's $7 billion deal for Summit was announced in October.
Fleet spokesman Jim Schepker said Wednesday that the company ended its relationships with the check cashers because the banking company could not adequately monitor their transactions.
"For the purposes of preventing money laundering, we are required to understand the customer's business and nature of the transactions, and we could not monitor that in this case," he said. "Fleet has many products and services dedicated to low- and moderate-income consumers, and we are fully engaged in serving those communities."