glenfed/17"/dt1st/mark2nd

DOUGLAS YOUNG

Staff Reporter

A coalition of community groups has launched a campaign to delay Glendale Federal Bank's pending acquisition of TransWorld Bank, in a bid to draw attention to Glenfed's poor record of lending to minorities and low-income families.

But Glendale-based Glenfed fired back that its minority-lending record, while far from stellar, is hardly worse than many of California's other major thrifts.

The Greenlining Institute of San Francisco, which is leading the campaign, last week requested a public hearing from the U.S. Office of Thrift Supervision concerning Glenfed's minority lending practices.

The OTS is currently considering whether to approve Glenfed's intended $63 million acquisition of Sherman Oaks-based TransWorld, which has 12 branches.

The Greenlining Institute, which advocates improved business services for minorities and underserved urban areas, was joined by the First African Methodist Episcopal Church, the Black Business Association and the Latin Business Association.

Among other things, the Greenlining Institute pointed out that Glenfed made only 11 home loans statewide in 1995 to African Americans earning under $35,000, and only 85 such loans to Latinos.

The coalition's intent in taking action now was not to derail the TransWorld acquisition, but rather to address Glenfed's poor record of lending to minorities, said Remi Mullins, banking implementation fellow at the Institute.

"The only time we can make a sound presentation for those who need to hear it is at times of mergers and acquisitions," Mullins said.

She added that the Greenlining Institute has approached Glenfed Chairman Stephen Trafton several times over the last 18 months to talk about improving the thrift's minority lending record. However, contacts to date have "never gone anywhere," she said.

Glenfed spokesman Ken Preston conceded that the Institute's data about its minority lending practices is accurate. Still, he pointed out that its selective use of data "distorts the performance of the bank" by giving the impression that Glenfed is one of the state's worst thrifts in terms of its minority lending record.

According to the Institute's own data, compiled from information obtained under the Home Mortgage Disclosure Act, Glenfed's minority lending record is roughly the same as most of California's biggest thrifts.

For example, 3 percent of Glenfed's home loans went to African Americans in 1995, compared with 3 percent for California Federal Bank, 2 percent for First Nationwide Bank (which acquired Calfed earlier this month), 3 percent for Great Western Bank, and 4 percent for Home Savings of America.

Mullins conceded that Glenfed is hardly the only thrift guilty of a poor lending record to minorities and low-income families.

"This is the time for (Glenfed). In order to get some behavioral change, you have to choose your point," Mullins said.

She explained that Glenfed was singled out because of its pending merger with TransWorld, which carries with it the opportunity for a public hearing.

In fact, a true public hearing is unlikely, though the OTS could schedule an oral argument to discuss the matter, according to OTS spokeswoman Laurie Lavaroni.

"We don't have the process for a public hearing. But we can grant an oral argument, which is usually a (closed) three-hour meeting where both sides can present information they've previously provided to us," she said.

Lavaroni said the OTS is still reviewing the request from the Greenlining Institute and will probably schedule an oral argument in the next one to two months, if it determines a meeting is necessary.

If the agency finds that Glenfed's lending performance is lacking, it could impose conditions on the institution aimed at improving or correcting its lending practices before granting final approval for the TransWorld acquisition.

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