February 9, 1994

Fleet To Announce a $ 8 Billion Loan Program

By ROB WELLS

Fleet Financial Group Inc., attempting to resolve an extended controversy about its lending practices, plans to announce an $ 8.5 billion lending program for low- and moderate income borrowers, people familiar with the agreement said today.

The program would be one of the largest ever in the banking industry and takes a comprehensive approach to addressing credit needs of distressed communities, said Bruce Marks, executive director of the Boston-based Union Neighborhood Assistance Corp., or UNAC.

Details of the lending program were first reported in Wednesday's editions of The Wall Street Journal. Fleet has scheduled a press conference for Thursday in Washington to unveil the program, a Treasury Department spokeswoman said.

Treasury Secretary Lloyd Bentsen was invited to the event but cannot attend because of previous commitments, she said. Fleet spokesman Tom Lavelle confirmed a press conference was scheduled with bank chairman Terrence Murray and unnamed "political and community leaders," but declined to discuss further details.

The impetus behind the agreement is Fleet's desire resolve, once and for all, persistent questions about its mortgage lending practices. In doing so, the bank seeks to minimize opposition to its merger plans, according to attorneys who have followed the company.

Fleet has been dogged by allegations that its finance company business, Fleet Finance Inc. of Atlanta, targeted low income African-Americans with second mortgage loans that carried excessive fees and interest rates.

In December, Fleet settled an investigation with the Georgia Attorney General's Office, agreeing to a $ 115 million program of affordable loans and interest rate roll backs. Fleet Finance admitted no wrongdoing in the settlement.

Several community groups have vowed to oppose Fleet's applications to merge with other banks until it announced a major fair lending initiative and agreed to aid borrowers they claim were victims of unfair lending practices.

Fleet has announced plans to acquire the small Sterling Bancshares of Waltham, Mass.

Few details of the new lending program were available.

"I applaud Fleet," said Jack Long, an Augusta, Ga.-based attorney who filed a class action discrimination lawsuit against the finance

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