Magazine article American Banker

NCNB and C&S Make $10 Billion CRA Pledge

Magazine article American Banker

NCNB and C&S Make $10 Billion CRA Pledge

Article excerpt

NCNB and C&S Make $10 Billion CRA Pledge

Attempting to stymie any protests of their planned merger, NCNB Corp. and C&S/Sovran Corp. pledged Tuesday to make $10 billion in community development loans over 10 years.

The commitment is the largest ever under the Community Reinvestment Act, which requires banks to serve their local markets. The previous record, $5 billion, was set by BankAmerica Corp. this spring when it bid for the Bank of New England franchise.

By filing CRA protests with regulators, community activists can threaten to stall or block merger applications. The pledge from NCNB and C&S/Sovran is intended to pave the way for a smooth combination into a new entity known as NationsBank by yearend.

Pledge Is Hard to Gauge

Activists in NCNB's hometown of Charlotte, N.C., and C&S/Sovran's base in Atlanta had said previously they planned to file CRA challenges to the $4.3 billion merger, which would create the nation's third-largest banking company.

Though the pledge is significant, community leaders said Tuesday they could not yet gauge whether it would meet community needs and forestall challenges to the NCNB and C&S/Sovran marriage.

"In general, these banks have been much better at promising rather than delivering on these types of programs," said Thomas Schlesinger, director of the Southern Finance Project, Charlotte. "There is more sizzle than steak."

Combined, the two banks already extend $600 million to $800 million annually under CRA programs.

Seeks to Satisfy Communities

In announcing the $1 billion-a-year pledge, NCNB chairman Hugh McColl said he expects the effort to satisfy community groups and to assist individuals and communities that have been left out of the region's growth.

"We think $10 billion will take care of almost everybody," said Mr. …

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