Activist Groups Challenge Wells' Alaska Deal
WASHINGTON - Two community groups are challenging Wells Fargo & Co.'s proposed $907 million acquisition of National Bancorp of Alaska.On Monday, Inner City Press/Community on the Move and the Alaska Public Interest Research Group filed a 24-page protest of the companies' merger application to the Federal Reserve Board. The two groups argued that Wells has a history of targeting minority group members for high-interest-rate credit products and doing business with predatory lenders, including finance companies Delta Funding and First Alliance.
"It is imperative that the Fed finally scrutinize Wells' subprime lending in this proceeding," Matthew Lee, executive director of Inner City Press, said in a prepared statement.
The activists also contended that the post-merger company would have an anti-competitive and anti-consumer effect on Alaska. Among other things, the groups asserted that National, which is the only bank in many rural Alaskan communities, would close several remote branches if the deal goes through.
Deadline Set for Predatory Lending Data
WASHINGTON - Rep. Marge Roukema, chairwoman of House Banking's financial institutions subcommittee, has given federal and state regulators a May 8 deadline for information on predatory lending.In a letter addressed to the heads of the four major banking agencies, the National Credit Union Administration, and the Conference of State Bank Supervisors, the New Jersey Republican asked for suggestions to address weaknesses in current law and regulations that give an opening to predatory lenders. Rep. Roukema also said she wants to know what steps each agency is taking on the issue and whether evidence exists of a rise in predatory practices.
In addition, Rep. Roukema expressed concern that the Home Ownership and Equity Protection Act of 1994 is not preventing predatory lending as Congress intended.
Separately, the National Housing Conference said Friday that it will weigh in on the predatory lending debate. This year the housing advocacy group's Single Family Task Force is to submit a white paper to the President-elect's transition team on making homeownership more affordable.
Regulators Offer Ideas for Helping Poor
WASHINGTON - Federal bank regulators sounded off on community reinvestment issues Monday at a conference sponsored by the Federal Reserve Bank of San Francisco.Fed Governor Edward M. Gramlich called on community groups and banks to bridge the "digital divide" separating low-income and minority people from the economic and educational benefits created by the Internet. He suggested programs that would give underserved communities computer access and training.
Ellen Seidman, director of the Office of Thrift Supervision, encouraged bankers to enter the subprime market. Creating more competition for these loans would help combat lenders who prey on elderly and minority communities with high-cost loans, she said.
- Kevin Guerrero