The largest in-market bank merger in years, between Fleet Financial Group and BankBoston Corp., seems destined to result in dramatic realigning of the banking industry in New England and significant layoffs. Those two probabilities have an array of community groups already planning their opposition.

Ray Neirinckx, coordinator of Rhode Island Community Reinvestment Association, said his group is planning to voice its opposition to the mergers with regulators as well as rally other community groups. He added he believes the projected 5,000 cut jobs is a major issue.

"We are extremely concerned because job loss is a reinvestment issue. The devastation has a multiplier effect on local economies so we clearly see job losses as a CRA issue, Neirinckx said. He added that the current projection of 5,000 layoffs will likely increase. "A year later, when contracts expire, people are not renewed, they are reorganized, whatever the buzzwords are for ‘you’re out of a job.’"

In addition to the economic effects of layoffs, the merger is anticompetitive even after the newly-formed behemoth’s planned divestiture of $13 billion in deposits, said Matthew Lee, a consumer advocate attorney for Inner City Press/Community on the Move. The group, which has been active in pressing merging financial institutions, including the recently-formed Citigroup, on Community Reinvestment Act obligations and other consumer concerns, posted a Fleet Bank page on its Web site. The group is highly critical of the proposed merger, and calls for the Federal Reserve Board to deny approval. It describes the merger as anti-competitive and paints Fleet as a "fair lending rogue."

"Fleet has had long-term concerns," Lee said, citing a settlement the bank made in May 1996 with the Department of Justice on charges of discrimination for systematically overcharging minorities in the New York-area mortgage offices. Lee said that his group has monitored the bank’s mortgage lending operation in New York and New Jersey for some time and found no improvement. He noted in Long Island, N.Y., statistics for Fleet Real Estate Funding in 1997 showed 31% of denied applications to refinance mortgages were from African Americans, versus only 14% from whites–a 2.21 denial-rate disparity. It’s "much worse than the industry average in (statistics)," according to the Web site.

Lee cited other examples of disparities in New York and New Jersey, and said the bank’s CRA record alone is grounds for denial of the merger by the regulators.

The group also calls the merger anti-competitive due to its sheer size and concentration in the northeast.

"This is as classic (antitrust) as you can get," he said, noting that by law in Massachusetts and Rhode Island no bank can control more than 30% of the state’s deposits. The new bank would have 37.61% in Massachusetts and 51.63% in Rhode Island. While significant divestitures are planned, Inner City Press contends that the competition issue will remain because, practically speaking, there will be no other superregionals left in New England.

"What competition is really going to be left? A small bank with 10 more branches? It’s still not a credible competitor to Fleet. There’s one market for regional and superregional banks, and one for small banks, but they don’t compete. They won’t have the same products or the same turnaround time. It actually hurts access to credit on a fair basis to have no competition," he said.

Lee added that his group will also work with the Massachusetts Affordable Housing Alliance to oppose the merger by writing letters to regulators and testifying at hearings.