WASHINGTON - A fair-housing advocacy group has filed a protest against the planned $33 billion merger of Chase Manhattan Corp. and J.P. Morgan & Co., claiming that Chase engages in predatory lending and fails to offer adequate retail banking services in low- and moderate-income neighborhoods.

Inner City Press/Community on the Move criticized Chase for closing branches after its acquisition by Chemical Banking Corp. in 1996 and after an earlier merger. The group also claimed that Chase denies prime credit to qualified minority borrowers but targets minority communities for subprime loans through its Chase Funding subsidiary.

"Chase has rolled up three New York banks and now turns away from normal-interest-rate business in the communities it was chartered to serve in favor of standardless subprime, global, and investment banking business," said Matthew Lee, the group's executive director and general counsel. "There should be hearings, and the applications should be denied."

The group delivered its 63-page protest Monday to the Federal Reserve Board and the New York State Banking Department, both of which must approve the deal.

A Chase spokeswoman declined to comment.

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