2 community groups oppose NationsBank-MNC merger Shareholders vote tomorrow on merger

June 09, 1993|By David Conn | David Conn,Staff Writer

The proposed merger between MNC Financial Inc. and NationsBank Corp. could take at least a month longer than expected because two community groups have filed formal protests about the deal with federal regulators.

The Maryland Alliance for Responsible Investment (MARI) and the Virginia Coalition for Community Reinvestment (VCCR) sent letters June 3 to the Federal Reserve Bank of Richmond, which is evaluating NationsBank's application to buy MNC.

MNC's shareholders are scheduled to meet tomorrow morning to vote on the deal.

After a slight delay to gather more information from NationsBank, the Richmond Fed bank formally accepted the application Monday. That started the clock on a 30-day processing period, according to A. Linwood Gill III, the Fed examining officer overseeing the MNC merger.

But the adverse comments from the public will force the Fed bank to send the application to the Federal Reserve's Board of Governors in Washington for a second 30-day review, assuming the Richmond bank recommends the merger be approved, according to Mr. Gill.

After that, the U.S. Department of Justice will have 30 days to examine the antitrust implications of the deal.

While not explicitly suggesting the merger be denied, MARI Chairman George Buntin Jr. said his group had concerns. NationsBank's top community investment executive assured MARI two weeks ago that the Charlotte, N.C.-based company would live up to the obligations of MARI's 6-year-old agreement with Maryland National Bank.

NationsBank agreed to honor the Maryland National agreement until it expired in 1995, but made no promises beyond that, according to Mr. Buntin. "NationsBank's unwillingness to move toward signing a new community reinvestment agreement is of concern to MARI," he wrote.

The Virginia group was more direct. "The community feels its attempts to work in partnership with NationsBank have been futile," its five-page letter said. The banking company's "contributions to self-sufficient political subdivisions [and] insensitivity to community participation in public forums reinforce [our] members' skepticism about NationsBank's commitment to meeting the credit needs of lower-income Virginia communities."

Catherine Bessant, NationsBank's community investment executive, said the company has worked with both groups and views their letters and "all community input as good information for us to have."

"We'll obviously file responses to these," she said, "but I have no reason to believe the comments will slow the merger down."

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