L.A. lost many of its premiere banks and savings and loans in the last decade Security Pacific, Great Western, First Interstate, Home Savings, to name a few.

Each time an out-of-town bank snapped up a homegrown institution, activists decried the loss of local control and predicted poorer banking services, higher fees, stricter lending policies and diminished philanthropy.

But even local activists concede that their predictions of a wholesale deterioration of banking services were a little overblown. If anything, industry deregulation has everyone from banks to credit unions to mortgage companies clamoring for the same customers.

"Now you've got the big banks arguing over whose checking account is freer," said Gilda Hass, executive director of Strategic Actions for a Just Economy, a South Central advocacy group for poor and minority banking customers.

The commitments of the merged banks to community lending and philanthropic activities are more difficult to gauge. Members of banking watchdog groups say there is no way an out-of-town bank can be as responsive or as involved as a local institution when it comes to community lending and charitable giving.

"Southern California was better off in terms of philanthropic activities and CEO involvement when you had institutions like American Savings, Great Western and Home Savings," said Robert Gnaizda, director of the Greenlining Institute, a public policy center in San Francisco that monitors the banking industry.

But the banks insist that L.A. is better served today than it was before the mergers, and they are just as giving and just as involved in the community as the institutions they acquired.

"We've not only been able to maintain our relationships (with the community) but also increase them in both lending and charitable contributions," said Peter Villegas, who oversees L.A.-area community development operations for Seattle, Wash.-based Washington Mutual Inc.

Influence of groups

Players like Washington Mutual, Wells Fargo & Co. and Bank of America Corp. (which was acquired by NationsBank in 1998) had no choice.

In order to appease watchdog groups and win regulatory approval for their mergers, all three committed to providing billions of dollars for community lending, low-income housing and charitable causes. Specifically, Washington Mutual committed to providing $120 billion for community lending over 10 years as part of its mergers.

Bank of America, headquartered in Charlotte, N.C., committed to $350 billion in community development loans over 10 years, and Wells Fargo committed $45 billion to community lending and $300 million to philanthropic causes as part of its acquisition of First Interstate Bank in 1996.


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