First Union has joined several of the nation’s large banks in opposing a rollback of Community Reinvestment Act mandates contained in a version of financial modernization legislation passed by the Senate Banking Committee last month.

The bank’s letter, sent to all members of the Senate Banking Committee (and different from the one mentioned in the previous story), undermines the position of Sen. Phil Gramm, R-Texas, chairman of the committee. Gramm included several CRA rollback provisions in financial modernization legislation reported out of his committee March 11. These provisions include a one-year safe harbor from additional scrutiny of a bank’s CRA compliance record when applying for approval of a merger or acquisition if the institution has a satisfactory or outstanding CRA rating. The bill also exempts institutions with assets of less than $100 million from CRA compliance.

“It is the position of First Union National Bank that a strong bank cannot exist in a weak community,” said Jane N. Henderson, a First Union corporate official based in Charlotte, in a letter to all members of the Senate Banking Committee. A similar letter was written several weeks ago by officials of Bank of America. “Moreover, the bank realizes that lending to low and moderate-income customers can be profitable.”

It adds that, “First Union also has a core corporate principle that it must be a leader in the communities in which it serves. Such leadership is manifest through creative and innovative lending, investing, services, contributions and volunteerism.”