September 8, 1995

Activist Targets First Union-First Fidelity Merger

By ROB WELLS

Community activist Bruce Marks is back, this time with First Union Corp. in his sights.

The self-described "banking terrorist" said Friday his Neighborhood Assistance Corp. of America plans to file a challenge with the Federal Reserve Board against First Union Corp.'s $ 5.4 billion merger with First Fidelity, one of the largest bank mergers announced this year.

Marks claims Charlotte, N.C.-based First Union has an unacceptable lending record in moderate and low income communities. He plans to announce a new campaign against First Union at a rally Saturday in Jacksonville, Fla.

First Union spokesman Jeep Bryant said the bank's lending record in low and moderate income communities "is a strong one," with more than $ 5 billion in loans in such neighborhoods.

Federal bank regulators can block or force revisions to bank mergers if they find banks violated the Community Reinvestment Act, a key fair-lending law. While regulators rarely block mergers on these grounds, objections by community groups can result in costly delays.

Marks gained fame through an aggressive campaign against Fleet Financial Corp. of Providence, R.I., that involved disrupting annual meetings and confronting executives about the lending practices of a finance company unit. In 1994, Fleet announced an $ 8 billion community lending initiative, and signed up Marks to help run a $ 140 million affordable mortgage program.

Money from the Fleet settlement, as well as fair-lending deals with other banks, enabled Marks to expand his Boston-based fair-lending group to open offices in Jacksonville and several other cities.

Marks said his group's research shows First Union's lending record is lacking in the Washington, D.C., area. He said First Union approves 152 percent more loans in predominantly white neighborhoods than in minority neighborhoods in the Washington region.

Bryant said he hasn't seen Marks' research and declined to comment on the figures.

"We are very disappointed that Mr. Marks has not tried to contact us directly with his concerns," Bryant said. He added First Union received an "outstanding" rating in its Community Reinvestment Act reviews for its North Carolina operations, while it drew a "satisfactory" rating in other states.

Bryant provided figures showing First Union extended $ 13.8 million in loans for affordable housing in Washington, Maryland and Virginia.

First Union's merger with Lawrenceville, N.J.-based First Fidelity would create a banking company with $ 123.7 billion in assets and about 2,000 offices from Connecticut to Florida.

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