THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, May 8, 1996 TAG: 9605080565
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 67 lines
In a report on its community-reinvestment efforts in Hampton Roads, NationsBank said Tuesday that its lending in low-income and moderate-income areas last year was almost three times what it lent in 1994.
The Charlotte-based bank said it lent $91.91 million during 1995 in Hampton Roads census tracts with low-income and moderate-income residents. That amount was up from $33 million the previous year.
The bulk of this lending - slightly more than $69 million - consisted of business and commercial real estate loans. The remaining $12.4 million took the form of home mortgage loans, home-improvement loans and other consumer loans.
But NationsBank's lending data indicated that the approval rate for minority applicants seeking home loans in Hampton Roads last year fell from the average approval rate for 1992 through 1995.
NationsBank said it approved slightly more than 60 percent of the applications from local minority-group members in 1995. That was down from a 63.94 percent approval rate for minority applicants during the 1992-1995 period, the bank said.
Charles R. Henderson Jr., NationsBank's community investment coordinator in Hampton Roads, attributed the falloff to the bank's aggressive effort to solicit more home-loan applications in underserved areas.
Community activists and housing advocates have called attention to disparities between the loan-approval rates for white applicants and those for minority applicants. But in their efforts to generate new loans in lower-income communities, some banks have seen their rejection rates climb along with the rising number of loan applications.
For Hispanic applicants seeking home loans in Hampton Roads from NationsBank, the approval rate tumbled to 66.67 percent last year from a 79 percent average for the 1992-1995 period, according to the lending data released Tuesday.
The approval rate for African-American applicants in the region registered a more modest decline. NationsBank said it approved 60.04 percent of home-loan applications from African Americans last year. That was down from an average of 63.01 percent for the 1992-1995 period.
NationsBank said it approved slightly more than 79 percent of the home-loan applications received from non-minorities last year, That rate had edged up from a 78.48 percent average for the 1992-1995 period.
NationsBank's community-reinvestment report was a follow-up on a 1991 promise to lend $10 billion in underserved parts within its nine-state market.
When NationsBank predecessors NCNB Corp. and C&S/Sovran Corp. sought approval from federal regulators in 1991 to merge, housing and community groups tried to block the merger, arguing that the two companies had failed to make adequate credit available in blighted neighborhoods. The Community Reinvestment Act requires federal regulators to take into account a bank's lending performance when evaluating a merger application.
Faced with the possibility of continued delays in their merger application, NCNB and C&S/Sovran promised to lend $10 billion to low-income and moderate-income areas over the next 10 years.
In its latest report on community-reinvestment activity, NationsBank said it reached the $10 billion level during 1995, six years ahead of schedule. The bank said it will continue its lending program but did not disclose what dollar goals have been set. by CNB