Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, November 2, 1995 TAG: 9511020076
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
Hoping to smooth the way for their merger, Chemical Banking Corp. and Chase Manhattan Corp. have earmarked $18.1 billion in loans and grants for low-income consumers, one of the largest such commitments ever made.
The five-year program announced Wednesday, which was expected, is an aggressive step by two of the nation's largest banks to combat concerns that huge bank mergers will make it more difficult for poor people to get loans and other services widely available to middle and upper-income customers.
A wave of big bank deals this summer have been attacked by activists, who claim that institutions doing the deals discriminate against poor people. The mergers will exacerbate the problem, they say. The groups are trying to block some mergers through lawsuits and filing protests with regulators.
Eight groups already oppose the Chemical-Chase deal, the biggest bank merger to date. Chemical, the nation's fourth-largest bank, and Chase, No.6, plan to merge by early next year in a $10 billion deal.
With $297 billion in assets, the combined entity - to be called Chase - will be the largest U.S. bank, the nation's third-largest home lender and the fourth-largest credit card bank.
Community groups generally praised the program, which covers home and small-business loans, job training, loans and grants to nonprofit organizations and a new branch in the South Bronx. They said it shows that banks can't ignore low-income community needs, even as they grow larger through megamergers.
But some groups criticized the timing, saying it's aimed at swaying public and regulators' opinion in favor of the merger. Some activists said the $18.1 billion commitment, which represents 6 percent of the merged bank's total assets, is vague and too small for a bank the size of the new Chase.
Chemical and Chase will face regulators and citizens' groups Nov. 16 at an unusual public hearing on their merger.
by CNB