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Bank of America hopes to use Indian mortgage programs

WASHINGTON - Bank of America, responding to stinging criticism of its lending efforts in Indian country, is reviewing the government guaranteed mortgage programs for American Indians and "hopes" it will start using them in the next quarter.

The bank, which is undergoing scrutiny by the Federal Reserve Board in connection with its deal to buy Boston-based FleetBoston Financial Corp., answered a critical comment letter to the Fed on the acquisition by the National American Indian Housing Council here and acknowledged "while we are pleased with these [current Indian country] efforts, we realize there continues to be opportunity for improvement."

The Community Reinvestment Act requires banks to serve all of the groups in their target areas, and in the past community groups have challenged big bank mergers on grounds that the institutions have not met their CRA obligations. In some cases, the banks have concluded lending agreements in the billions of dollars to settle these claims.

Scott A. Cammarn, associate general counsel for Bank of America, which is based in Charlotte, N.C., wrote to Federal Reserve Bank of Richmond Vice President A. Linwood Gill III that "currently Bank of America is in the process of reviewing the Section 184 HUD Guarantee Mortgage product, USDA 502 loan program, and similar government loans programs in an effort to broaden the scope of permanent mortgage loans available to Native Americans wishing to reside on Trust Lands."

Cammarn added, "It is our hope that we would be able to employ the use of these loan products in the second quarter of 2004."

Cammarn's letter included a list of 11 projects the bank said it has helped finance in Indian country.

Russell Sossamon, NAIHC chairman, thanked the bank for its response but said "we believe it would be appropriate for the Federal Reserve to expect a clear action plan from Bank of America regarding its outreach to Indian country."

He urged the Fed to continue to scrutinize not just Bank of America "but other financial institutions, ensuring that they meet their obligations to adequately serve all communities and in particular, those that are underserved."

In addition to the letter, which said that neither party to the merger has effectively served Indian country, an NAIHC representative testified at a Boston hearing set up by the Fed to take the pulse of the community there on the big merger.

At a press conference on the "unbanked" here, former NAIHC chairman Chester Carl, executive director of the Navajo Housing Authority, noted the pending merger between Bank of America and FleetBoston, and said that BofA, while operating adjacent to the reservation, should establish branches on the Navajo.

Cammarn in his letter commented "housing, economic development and access to financial services are fundamental needs within Indian country and critical for their continued health. Bank of America's goal is to be a leader in providing financial solutions to tribal governments, businesses and organizations to develop sustainable communities for Native American tribes and their tribal members."

He pointed to these investments by BofA as examples:

*$2 million for the construction of 30 low-income housing units at White Sands Village on the Pojoaque pueblo in New Mexico.

*$2.8 million for construction of 24 single-family homes on the Lummi reservation in Washington state.

*$3 million plus for construction of 30 low-income elderly and single-family homes on the Salt River Pima-Maricopa Indian community in Arizona.

*$2.6 million for the construction of Jay Senior Housing in Jay, Okla., to develop 40 affordable housing units.

*Unspecified construction financing of a health care facility serving a consortium of tribes in California.

*$3.9 million to develop a charter high school for the Gila River Indian community in Arizona.

*Participation in a coalition of lenders financing the Salt River Phoenix Cement Co., a tribally owned business at Salt River.

*Refinancing a loan to the San Juan Pueblo Authority in New Mexico, for a wasterwater facility.

*A land loan to the Confederated Tribes of Umatilla, to help them buy 20 acres.

*Planning to provide an automated teller machine on the Salt River Pima-Maricopa reservation, located in the Phoenix metropolitan area.

*Providing a Banking Center to the Tohono O'odham nation in Sells, Ariz. BofA said it has provided this service for more than five years.