West Coast Merger Plan Draws Activist Response
There's nothing like a big bank merger to stimulate local community activists.
The Hispanic Task Force of Stanislaus County, a group representing Latinos in Modesto, Cal., asked the Federal Reserve Board last month to block the planned merger of BankAmerica Corp. and Security Pacific Corp. because of failure to meet Community Reinvestment Act requirements.
Four other California coalitions are applying pressure in direct talks with leaders of the two banks. Though many of their leaders express satisfaction with the banks' past efforts, they are pushing for new commitments.
Objection on Lending
The Hispanic group charged that BankAmerica has not made enough loans to Spanish-speaking Californians.
BankAmerica, through a spokesman, said it has "taken extra steps" to meet the credit needs of Hispanics statewide.
BankAmerica's flagship bank in San Francisco has received the highest possible CRA rating from federal examiners. Security Pacific has not yet been graded.
But activists know they wield their greatest power when bank mergers are pending. Regulators are required to consider community reinvestment when reviewing merger applications.
Other Actions Likely
"We may challenge and other groups may as well," said Robert Gnaizda, a lawyer for San Francisco's 18-member Greenlining Coalition.
Just last week, community groups in the Southeast convinced the Federal Reserve Board to schedule public meetings on the proposed merger between NCNB Corp. and C&S/Sovran Corp.
Leaders of some California community groups profess admiration for BankAmerica chairman Richard M. Rosenberg's personal interest in social concerns. But, they pointedly note, he made no commitment to carry out their new proposals when he met with some of them last month.
The community groups, in fact, are making some unusual demands that come outside the scope of CRA. The Greenlining Coalition, for example, is pressing for a program to protect bank workers from layoffs.
The California Reinvestment Committee, another coalition, is urging BankAmerica to keep branches open in underserved minority and low-income neighborhoods.
Some groups want a firm commitment from BankAmerica to maintain Security Pacific's Focused Funding program, which provides low-priced mortgages to nonprofit developers of low-cost housing.
BankAmerica has promised to reply to community groups by early October.