Leaders of two community groups recently asked regulators to hold CIT Group accountable for a strong Community Reinvestment Act plan as a condition of its acquisition of OneWest Bank. Regulators should also hold these and other community groups accountable for disclosing the contributions they receive from banks involved in M&A activity.

Such disclosures are exactly what the Greenlining Institute requested earlier this year, claiming that OneWest "bought" support for the merger by pledging funding to community groups and, worse yet, threatening to withhold contributions to groups that opposed it. "We fear these threats have in fact increased public support and muted public opposition to the proposed merger," said Orson Aguilar, Greenlining's Executive Director in a March letter to the Federal Reserve and Office of the Comptroller of the Currency.

Greenlining warned that such contributions set a dangerous precedent: "If left unchecked, more CEOs will use corporate dollars to skew public participation and render the entire public comment process a sham." The group properly asked the Fed and OCC to investigate the alleged "pay to play" scheme, including which nonprofits OneWest had solicited for support and all current, pending and planned grants by OneWest to nonprofits. Greenlining also requested a formal pledge from OneWest's CEO "not to punish groups who opposed the merger or who did not comply with his request for public support."

The Los Angeles Times confirmed that OneWest had offered funding to community groups, reporting that "numerous representatives from minority, church and community groups […] said they had been promised substantial assistance and welcomed it."

Two community leaders with the National Diversity Coalition, which brought 225 community leaders to the hearing to support the merger, disagreed with Greenlining's investigation request. They argued that the proposed scrutiny of bank contributions could jeopardize community groups' funding sources — an unusual perspective, since community groups typically push for greater regulation.

But the great irony is that Greenlining did the exact same thing it accused other community groups of doing some 20 years ago.

With all due respect to Greenlining and all the good things the group has done over the years, it was one of the few community groups to support Wells Fargo's 1995 hostile acquisition of local rival First Interstate Bancorp. (In all fairness to Greenlining and Wells Fargo, both are now under different management.)

This was the second-largest merger ever at the time and one of the deals that helped "make" Wells Fargo. Most community groups and analysts, including the author, opposed this deal on the grounds of both antitrust laws as well as the statutory convenience and needs requirement, arguing instead for the white-knight bid of Minneapolis' First Bank Systems.

My case study of this deal found that Greenlining was responsible for 120, or nearly 90%, of the 135 commenters supporting the merger, compared to over 600 who opposed it in writing or in person at one of seven different public hearings in January 1996. Puzzled as to why one community group would support this merger when almost every other one opposed it, I learned from public nonprofit tax filings that Greenlining had received significant contributions from Wells Fargo.

The Fed and Wells Fargo refused my repeated petitions to disclose these contributions, and Greenlining volunteered nothing. The Fed's 1996 order approving the deal specifically rejected my recommendation that they should discount comments from supporters of the merger that had "received grants or other services from Wells Fargo."

So what is the solution to this CRA public-policy problem? It's understandable that cash-starved community groups will try to get what they can from banks in a merger. Likewise, can you blame bank CEOs for trying to appease such groups to get their deal approved?

The real problem here is that the Fed has refused the disclosures I recommended 20 years ago — the same ones now being recommended by Greenlining.

Janet Yellen, one of the four Fed governors who approved the 1996 Wells Fargo merger, recently said that the regulator is "looking at CRA and will continue to look to see whether there are ways in which implementation can be improved." By requiring sunshine on bank contributions to community groups, she would not only disinfect the Fed's merger hearing process — she would also help end community group in-fighting and avoid putting merging bank CEOs in difficult positions.

Kenneth H. Thomas, an independent bank consultant and economist, is the author of The CRA Handbook and was a lecturer in finance at the University of Pennsylvania's Wharton School for over 40 years.