To settle a legal challenge by a community group, Bank South has agreed to chip in another $5 million in home loans at low interest rates in Atlanta's black and working-class areas.
In return, the community group says it will drop its challenge to the bank's first interstate merger.
The tentative agreement was reached at a negotiating session Wednesday, according to bank officials and leaders of ACORN, the Association of Community Organizations for Reform Now. They plan a joint announcement Thursday.
The bank also has agreed to consider making a large deposit in a community credit union ACORN says it might establish in Atlanta.
The $5 million will increase Bank South's contribution to the Atlanta Mortgage Consortium to $7.35 million. That makes it the largest supporter of the pool formed in May. The pool now has $25 million, in addition to $47 million in loan programs set up by larger Atlanta banks, for a total of $72 million.
The programs were set up after The Atlanta Journal-Constitution disclosed in May that banks and savings and loans made five times as many home loans to white areas as to blacks.
ACORN cited the articles in its challenge before the Federal Reserve Bank of Atlanta. The group asked the Fed to delay or deny Bank South's application to buy C&P Bank Corp. of Pensacola.
"I think we're going to withdraw our challenge based on the $5 million," said ACORN organizer Grant Williams. "I don't think we can get much more, based on our experience and their hard line. We may be selling short, but I don't know."
ACORN leaders said the bank refused to attend a negotiating session ACORN proposed to hold with federal authorities present.
Bank South already has announced changes addressing other points raised by the newspaper articles: statements of non-discrimination, at least one new Southside supermarket branch, new Saturday hours at two Southside branches, renovation of three Southside branches, advertising targeted at minorities, hiring of minority real estate appraisers, a new Southside mortgage application center, a new department for small business loans and seminars for small business.
ACORN had asked for other items, including $100,000 in contributions to groups like ACORN.
"I told them that was highly unlikely," said Bucky Kimsey, a bank senior vice president.Go to the next article or back to the Color of Money index or Power Reporting
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