* Bank of America announces the affordable-home lending program as it gears up for its planned acquisition of FleetBoston Financial Corp.
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Bank of America announced the commitment of $6 billion to a Boston-based affordable-home lending program yesterday as the company braces for public criticism of its planned acquisition of FleetBoston Financial Corp.
"Helping families buy homes is one of our favorite tasks," Bank of America chief executive officer Kenneth Lewis said as he pledged the money at a Boston news conference.
The $6 billion will be earmarked for distribution by the Neighborhood Assistance Corporation of America, a Boston nonprofit that operates a no-down-payment mortgage program for low- and moderate-income borrowers. The loans are offered at below-market interest rates with no closing costs or private mortgage insurance.
The money is part of a larger $750-billion, 10-year community development program announced by Charlotte, N.C.-based Bank of America last week as it prepared for this week's regulatory hearings on the Fleet takeover. Of that, $100 billion has been targeted for the Northeast region now served by Fleet, which is New England's largest bank. Bank of America has declined to give a state-by-state breakdown.
That reluctance to give a detailed account has prompted opposition to the Fleet-Bank of America deal from Rhode Island housing activists.
"Until we get some answers to what this means for Rhode Island, we're going to continue to oppose that," said Steve Fishbach, of the Rhode Island Community Reinvestment Association.
The association is one of the groups planning to testify against the Bank of America takeover at a public hearing being held in Boston tomorrow by the Federal Reserve Board.
A second hearing is scheduled for Friday in San Francisco.
The head of the Neighborhood Assistance Corporation of America, or NACA, lauded Lewis and Bank of America repeatedly for the commitment and its record of lending in low-income communities.
"Through this program, a hard-working person who makes $20,000 a year will have the same opportunity to buy a house and have a mortgage that is affordable as somebody who makes a million dollars a year," NACA executive director Bruce Marks said.
Marks tangled with Fleet throughout the early 1990s, accusing it of predatory lending practices. Fleet and former CEO Terry Murray finally quelled the criticism by agreeing to make affordable loans through the organization.
The $6 billion Lewis agreed to lend through NACA expands on the $3.5 billion that Bank of America previously committed to the group.
NACA has grown from a local union-based group headquartered in Boston to a national organization with 30 offices across the country and operates home-lending programs with money provided by Bank of America, Fleet and other banks.
The group currently has no office in Rhode Island and does no lending here. Marks said yesterday that the organization is planning to open one in the Providence area within the next two months.
Fishbach, of the Rhode Island Community Reinvestment Association, said it is "all fine and good" to pledge $750 billion to community development around the country, but more detail is needed for Rhode Island.
He said community groups met yesterday with Fleet Rhode Island CEO Neil Steinberg, looking for more information, but got no answers.
"Clearly, Bank of America is talking to people in other states, but it's not happening here," Fishbach said.
Lewis said at yesterday's news conference that Bank of America traditionally refrains from giving out ahead of time what he called line-item detail. Instead, it meets with community groups to assess needs and then provides an accounting at the end of the year.
"We just do it after the fact," Lewis said. "We can demonstrate what we've done."
In anticipation of winning regulatory approval for the merger, Fleet and Bank of America yesterday announced that they have scheduled shareholder meetings on March 17 for votes on the deal.
The Fleet meeting will take place in Boston; the Bank of America one will be in Charlotte.
Fleet and Bank of America announced a deal in October that will pay Fleet investors .5553 shares of Bank of America stock for each Fleet share. At Bank of America's closing price of $78.50 yesterday, the deal was worth about $46 billion.
