A group of community organizations have challenged NationsBank Corp.'s deal to buy Barnett Banks Inc., claiming the merger raises antitrust concerns and would probably hurt minority groups' access to credit.
"If antitrust laws had any meaning, this merger would be precluded," said Matthew Lee, executive director of Inner City Press/Community on the Move, a Bronx, N.Y.-based community and civil rights organization. "It's totally anti-competitive."
The organization filed petitions Oct. 22 with the Federal Reserve, the Office of the Comptroller of the Currency, the U.S. Department of Justice, the Florida Division of Banking, and the Florida Attorney General's Office. The petitions were filed in conjunction with the Fair Housing Continuum of Brevard County, Fla.
Mr. Lee said that the protest is aimed at squelching NationsBank's purchase of Barnett or at least forcing increased branch sales by NationsBank in Florida. Protesters are also calling for public hearings on the planned merger.
"We're proud of our community investment record," said Scott Scredon, a NationsBank spokesman. "We look forward to responding to their complaints." He added that the bank's latest CRA rating in Florida was "outstanding."
The community groups have compiled information indicating that NationsBank would control more than 30% of deposits in at least 15 Florida markets after it buys Barnett, including a 50% share in Columbia County and 45% in the Key Largo area. The deal is scheduled to close in January.
The protesters said that NationsBank's track record suggests that such market dominance would negatively affect minorities. They cite lending information indicating that in Jacksonville, Fla., NationsBanc Mortgage Corp. has denied mortgages to African-Americans and Latinos four times more often than to whites. They also said that in Brevard County, Fla., in 1996, NationsBank made 432 mortgage loans to whites and nine loans to African-Americans.
"If (NationsBank) only had 10% of the market, who cares? Borrowers can go somewhere else. But when they have 40%, their performance" becomes more important, Mr. Lee said.
NationsBank announced Aug. 29 that it planned to buy Barnett. The deal would move the $240 billion-asset NationsBank from No. 3 to No. 1 in market share in Florida, considered one of the strongest banking markets in the nation. The deal would also make NationsBank the third-largest banking company in the country.
The protest is similar to one filed by Inner City Press and local groups against the proposed First Union Corp. acquisition of Signet Banking Corp. in Virginia. The Federal Reserve approved that deal without delay, but the OCC is still considering it. The OCC has met with Mr. Lee's group and appears to be paying attention to its concerns, Mr. Lee said.
But he remains frustrated with regulators, particularly with the Federal Reserve, Mr. Lee said, and acknowledges that he is not optimistic his group's protests will succeed.
"There's arisen a bulletproof atmosphere for the largest bank holding companies," he said.