WASHINGTON - Two neighborhood housing advocates have declared war on First Union Corp., vowing to derail the North Carolina bank's $5.56 billion merger with First Fidelity Bancorp.

Bruce Marks, executive director of Neighborhood Assistance Corp. of America, said First Union is an "invisible bank" to low- and moderate- income people.

He asked the Federal Reserve Board Sept. 8 to reject the merger, and to hold a public hearing on First Union's Community Reinvestment Act record.

In the second action, Matthew Lee, executive director of Inner City Press/Community on the Move, filed a protest Monday charging the deal will lead to branch closings and disparate lending. He noted that First Union closed 91 branches after acquiring more than 260 branches from Dominion Bankshares in 1993.

"As we look into it, we get more concerned," Mr. Lee said.

The merger also would disrupt recent reinvestment programs that First Fidelity has instituted, Mr. Lee contended.

Mr. Marks said his group will picket First Union Chairman Edward Crutchfield's home and flood Fed Chairman Alan Greenspan's mailbox with postcards condemning the bank's record.

Neighborhood Assistance also may disrupt public events that Mr. Crutchfield attends, Mr. Marks said.

"We've got to target the person who is making the decisions," he said. "We are going to make him live with it just like these families have to live with it 24 hours a day."

First Union spokesman Jeep Bryant took strong exception to Mr. Marks' charges, saying the bank can't fathom why it was targeted. First Union, whose lead bank received a satisfactory grade on its most recent CRA exam, has lent more than $5 billion in low- and moderate-income areas, he said. "Our record is a strong one," he said.

But Mr. Marks said First Union's record is much worse than the bank or regulators maintain.

"The Fed's CRA examination may not uncover the equivalent of the Mark Fuhrman tapes," Mr. Marks said in his complaint. "But the facts show unquestionably that First Union is guilty of racist lending practices."

Mr. Marks included six pages of tables showing that the bank makes considerably more loans to whites than to blacks with similar incomes. The tables also noted that the bank makes at least five times more loans to upper-income whites than to upper-income blacks.

Mr. Marks led a four-and-a-half year battle against Fleet Financial Group's purchase of Bank of New England. That fight ended in 1994 when Fleet launched an $8 billion community reinvestment initiative.

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