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.

Jorge Corralejo, a board member with the Latin Business Association, said the concessions have raised the bar for other financial institutions. "California, unlike some other states, is well organized. We were able to tackle these issues and these giants," he said. "We wouldn't have seen those concessions if the banks hadn't merged."

That's not to say the mergers have not come without hardship.

Los Angeles County had 61,000 banking employees as of May 2001, down from 97,300 in 1990, according to the California Employment Development Department.

Alan Fisher, executive director of the California Reinvestment Committee, a San Francisco advocacy group for the poor and minorities, said recently merged companies tend to have a lot of debt, and they're often under pressure from Wall Street to perform. As a result, they often ignore poor and minority customers because the return on investment isn't as great.

"What it means is that loans that are riskier or just profitable and not highly profitable are unlikely to be approved," he said.

Fewer loans

When Bank of America was headquartered in California, it was the leader in Small Business Administration lending. Since its merger and the subsequent move to Charlotte, the bank dropped to number five on the list.

The SBA confirms that in fiscal 1997-98, BofA made 665 SBA loans worth $34.8 million. By the 1999-2000 fiscal year, the bank made just 99 loans worth $12.3 million.

"It does concern us," said Alberto Alvarado, director of the SBA's L.A. district office. "We held them up on a pedestal as a model for what other lenders should do."

Alvarado said he met with the bank's local executives and they vowed to increase SBA lending. As of March 31, the bank had made 104 SBA loans, placing it on track to double last year's output.

But overall, BofA and the other banks say they're more than living up to their commitments.

Bank of America says it has honored $69.3 billion of its $350 billion commitment to community development in the past two years. About $24.1 billion of that went to California and $9.4 billion of that went to Southern California in the form of small-business lending and loans for affordable housing and economic development, said Juliet Don, a company spokeswoman.

The Bank of America Foundation donated $20 million in Southern California from 1998 through 2000. "I think the numbers speak volumes about how we honor our commitments," she said.

Washington Mutual has increased its cash and in-kind charitable contributions in Los Angeles County from $971,220 in 1998 to $5.8 million in 2000, according to company records. Companywide, it donated $41.8 million to charities in 2000.

Wells Fargo, meanwhile, has exceeded its commitment of $45 billion in community lending in the 10-state territory once served by First Interstate, said Mary Trigg, a company spokeswoman. About $6 billion of that went to Los Angeles.

Villegas bristled at the suggestion that his company would be more involved if it were headquartered here.

He noted that the company's president and chief executive, Kerry Killenger, has been to L.A. three times in the past year or so to serve as dinner chair at events that raised $1 million, $600,000 and $300,000.

Washington Mutual worked with Haas' organization, meanwhile, to create a pilot program to save welfare recipients from the high fees associated with check-cashing outfits. "We thought it was the right thing to do," said Villegas.

Wells, with $9 million in donations last year, is one of the largest corporate donors left in Los Angeles, and one of the largest property holders downtown, with 3.5 million square feet of office space either owned or leased.

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