Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, August 11, 1993 TAG: 9308110159
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: LEIGH ALLEN and DANIEL HOWES STAFF WRITERS
DATELINE: LENGTH: Medium
At a meeting with bank executives Tuesday night, about 150 Southeast residents said the possible closing would be a blow to those who can't drive to other banks, the closest of which is more than a mile away.
"We need this bank," said 60-year-old James Hewitt. "There are numerous elderly citizens here who don't have vehicles. They can't walk to Vinton or downtown to do their banking."
Crestar Bank recently closed its branch in the area, leaving Dominion the only bank with a presence in Southeast.
First Union's intent was made public last week when the company said it would consider closing the least profitable branches it acquired as part of its purchase of Roanoke's Dominion Bankshares Corp.
Officials last week said the 9th Street branch's operations would be absorbed by the downtown office if they ultimately decide to close the branch.
However, Byron Yost, Dominion's Roanoke-area president, said that because Dominion has branches in Vinton and downtown Roanoke, closing the Southeast branch would not isolate customers in that area.
Yost told residents packed into the old No. 6 firehouse on Jamison Avenue that his bank had not decided whether to close the 9th Street branch. He said that branch is being considered for closing because its "financial performance has not met our expectations."
Charlotte, N.C.-based First Union is considering closing as many as 125 of its recently inherited branch offices. The majority of those branches are in the Washington, D.C. area, where First Union now has some branches across the street from one another.
In addition to the 9th Street branch, First Union is considering merging branches on Peters Creek Road and Melrose Avenue in Roanoke.
"There will undoubtedly be branches we've announced we're studying that we're not going to close," said Benjamin Jenkins, president and chief operating officer of First Union National Bank of Virginia.
The possible closings have raised questions in some quarters about the bank's commitment to serving lower-income neighborhoods. But the possible closings also underscore the balancing act facing bankers: How to operate a profitable business while also serving less-affluent areas of their community, as required under federal banking laws.
Under the federal Community Reinvestment Act, banks are urged to provide loans and banking services to low-income neighborhoods. Periodically, nationally chartered banks such as First Union and Dominion are graded by federal regulators for compliance with the act.
Regulators look for two things: a disproportionate concentration of branches in high-income areas and complaints by neighborhood groups dissatisfied with service and lack of community presence.
The Office of the Comptroller of the Currency, the federal agency charged with enforcing the act, rates bank compliance on four levels: "outstanding," "satisfactory," "needs to improve" and "substantial non-compliance."
Last year, Dominion's Roanoke-based bank received a "satisfactory" grade. First Union National Bank of North Carolina received a "satisfactory" in 1990 and an "outstanding" in 1992. Yost said he considers maintaining those marks one his company's highest priorities.
Poor evaluations do not lead to "specific penalties," according to an OCC spokeswoman in Washington. But poor grades can make mergers and expansions requiring federal approval more difficult.
Spokesmen for the Southeast Action Forum, an ad hoc group of city residents that organized the Tuesday meeting with bank officials, say the possible closings likely would catch the attention of the OCC.
Forum President Dale Allen - whose wife, Brenda, works as secretary to First Union-Virginia Chairman Warner Dalhouse - said groups like his will do their part to let federal regulators know when they believe their neighborhoods are being discriminated against.
Complaining to the OCC is "a loaded pistol lying on the shelf that we could pick up in the future," he said. "The bank is well aware of the regulations. We want to see what they have to say."
The meeting Tuesday night was part of First Union's efforts to gauge public reaction to the possible closings. Allen told First Union officials that rather than personally representing the Southeast Action Forum, he wanted residents to meet directly with bank officials.
First Union intends to announce the closings within three weeks, Yost said.
by CNB