NationsBank, under attack on minority lending, said it approved a smaller percentage of mortgage applications from lower-income borrowers last year than in 1994.

But the percentage was down for wealthier applicants too, the bank said.

A spokeswoman said the bank was satisfied with its low-income efforts. She attributed the drop in approval rate to higher interest rates and a smaller pool of creditworthy borrowers.

"We have made dramatic improvements in the segment of the market we have targeted," especially minority-group members and lower-income families, said Monica McDaniel, senior vice president in the bank's community development group.

Some community representatives, however, were critical. This month, a civil rights group filed a class action alleging that NationsBank had discriminated against black mortgage applicants in Washington.

The suit was a second volley from the Washington Lawyers Committee for Civil Rights and Urban Affairs, which had filed a fair-lending suit against the company in September.

Both lawsuits allege that NationsBank treated black applicants differently than whites with similar incomes, debt ratios, and credit histories.

Mortgage applications rose 2% last year at the Charlotte, N.C., to 156,745. But approvals dropped to 67.96%, from 74.34% in 1994.

Approvals for minority applicants fell to 56.74%, from 66.07% in 1994. In a breakdown of minority borrowers, 54.55% of applications from African- Americans were approved in 1995, compared with 63.44% the year before.

Hispanic applicants were approved 58.30% of the time last year, compared with 60.39% in 1994.

Low-income borrowers were approved 56.30% of the time in 1995, compared with 65.60% the year before. Approvals for moderate-income borrowers fell to 61.31%, from 71.12% in 1994. Low-income and moderate-income households are those at or below median income for their area - in other words, half of all households.

Ms. McDaniel declined to comment on the suits. But an executive at the bank said privately that NationsBank, as a giant lender, is a lightning rod for criticism, including unfounded lawsuits.

NationsBank is "doing things to continue to improve" its lending to low- income and minority borrowers, Ms. McDaniel said.

The banking company is sponsoring classes and providing learning materials to community groups. NationsBank is also forming partnerships with churches.

The goal is to make prospective borrowers comfortable in dealing with a bank. "Most of these people have never had a relationship with a bank," Ms. McDaniel said. "And they're scared to death about being told 'no.'"

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