While officials of H.F. Ahmanson & Co. continue its takeover battle for Great Western Financial Corp., the Irwindale-based thrift announced a $70 billion commitment to community based investing over the next 10 years.
But there’s a catch. The $70 billion is contingent on Ahmanson winning its hostile bid to buy Great Western, which would create a combined institution with $93 billion in assets.
If Ahmanson loses, it would still probably commit to nearly half the $70 billion, according to spokeswoman Mary Trigg.
Ahmanson officials worked with the Greenlining Institute, a group that promotes lending activity in minority and underserved areas, to craft the terms of the lending commitment. The commitments extend beyond the requirements under the Community Reinvestment Act.
Members of the Greenlining Institute encompass a broad array of minority community groups in L.A., including the Latin Business Association, Asian Business Association and the First African Methodist Episcopalian Church.
Trigg said Ahmanson had been in discussions with the Greenlining Institute prior to launching its bid for Great Western in February, though she acknowledged that the pace of talks picked up considerably after the bid was announced.
“When the announcement came out, (CEO Charles Rinehart) approached Greenlining (about speeding up the process). He knew what needed to be done to garner community support,” said Greenlining spokeswoman Remi Mullins.
The $70 billion announcement, officially made by Ahmanson’s operating company, Home Savings of America, specifies three major lending areas.
The biggest are $45 billion for home financing and $12 billion for consumer lending in minority and low-income communities. Another $10 billion has been earmarked for small business lending and credit lines, and nearly $4 billion was set aside for construction loans and mortgages for multi-family housing.
Mullins said Greenlining’s decision to partner with Ahmanson represents its de-facto endorsement of the Ahmanson bid over the rival bid by Washington Mutual Inc.
She added that Greenlining also approached Washington Mutual about a partnership, but Washington Mutual was reluctant to make specific lending commitments.
“This announcement would probably preclude any further discussion with Washington Mutual regarding this merger. But they had ample opportunity (to win our support),” she said.
Washington Mutual is still committed to putting together a CRA investment plan of its own, said spokeswoman Libby Hutchinson.