Across the street from the landmark Central Carolina Bank building in downtown Durham, a mural on the wall of a vacant edifice asks, “Where is the Love?” It’s a question fair-lending watchdogs have been posing for months as federal regulators considered the merger of CCB’s parent company, National Commerce Financial, and SunTrust Banks of Atlanta. Two weeks ago, the feds approved the $7 billion merger, which will give SunTrust the fifth largest market share in North Carolina and the second in the Triangle.

At regulatory hearings and shareholders meetings, members of the Community Reinvestment Association of North Carolina (CRA-NC) criticized the record of both banks regarding lending to minorities and in low-income neighborhoods.

“We’re here because we’ve had a long-term relationship with CCB as community partners, customers and now shareholders,” said Peter Skillern, CRA-NC’s executive director, at a Sept. 15 shareholders meeting in Atlanta. (His group owns 91 shares of NCF). “We’ve seen a move from a bank we had a relationship with to a bank that wants to maximize its fees.”

Activists have been concerned about lending practices at CCB, whose roots in Durham go back to 1903, since the bank was bought by Memphis-based NCF in 2000. Skillern says the bank failed to live up to an agreement it signed with CRA-NC that year to increase lending to minority and low-income households, as well as the number of women and minorities on bank advisory boards. “You’ve bought the obligation of those promises,” he told SunTrust shareholders.

Specifically, Skillern cited NCF’s “two-tiered” loan pricing, under which borrowers are charged a higher interest rate for loans under $75,000, as a practice that disproportionately affects African Americans who are more likely to apply for smaller loans. CRA-NC and the North Carolina Fair Housing Center ran ads last month in black newspapers across the state calling the practice a violation of fair lending laws–a claim NCF has rejected but which regulators will review.

Skillern also criticized the $17 million in cash bonuses and more than $30 million in stock options NCF officials stand to collect as a result of the merger. Richard Furr, who is currently chief operating officer for NCF and will soon be head of SunTrust’s Carolinas Banking Group, is among the executives who will receive an average of $2.9 million in cash and $283,333 in stock options, according to filings with the U.S. Securities and Exchange Commission.

Officials from both banks say the bonuses have no connection to their Community Reinvestment Act ratings, which are “outstanding.” And they disagree with CRA-NC’s claims about lending to minorities, insisting their own figures show little variance in the percentage of loans to blacks and whites.

“Our percentages are very close,” says Keith Turbett, NCF’s community investment officer. “We feel like we have fulfilled our agreement.”

NCF has increased its community development lending in North Carolina from $5 million when the agreement with CRA-NC was signed to about $24 million in 2003, Turbett adds. Among its larger loans was $10 million in 2002 to the Self-Help Ventures Fund, which supports small business development in low-income communities.

Bank officials also recently met with community leaders in Southeast Raleigh to talk about more investment there. State Rep. Bernard Allen (D-Wake), who says he called that meeting because of concerns constituents had expressed to him about the merger, says he felt good about the “open dialogue.”

As to the two-tiered pricing on smaller loans, NCF spokeswoman Eileen Sarro insists the practice is common in the industry and “is not based on race. It’s based on creditworthiness and income.” Besides, she says, NCF will adopt SunTrust’s “model,” which doesn’t include two-tiered pricing.

The Federal Reserve Board has forwarded CRA-NC’s comments on the practice to the Office of the Comptroller of the Currency, the agency responsible for enforcing fair lending laws.

On Sept. 14, the same day federal regulators approved the $7 billion bank merger, CRA-NC put the finishing touches on the downtown mural. A comment pad beside the painting registers local opinion on the subject: “Make this building into something useful and positive–yes!” says one; “CCB became SunTrust three days ago. Give them time,” says another; “By the way, we are losing our jobs,” says a third. Several miles away in the parking lot outside CCB’s big customer service center on Hillsborough Road, nobody’s talking much about jobs–or anything else related to merger.

“We can’t say anything about that,” says a woman with a clipboard in her hand. “You have to go to the front office.”

Two men with employee ID tags dangling from their shirts say they’ve heard that some departments will be closed, but the local service center will stay open. For details, they refer me to NCF headquarters in Memphis.

A woman who’s worked for the bank for 24 years says she was unhappy when she got the proxy statement at home that mentioned big bonuses for executives. “They wouldn’t be where they are without us,” she says. “I wish they’d pay us something.”

We were just beginning to talk about that when another man with ID tags approaches us and wants to know, “What’s going on here?” Again, I’m referred to headquarters.

NCF officials say there will be layoffs related to merger, but they can’t say how many until the deal is completed in October. As for protests by fair lending groups, bank officials say there are some things that could be improved–the scarce number of women and minorities on advisory boards, for one. But overall, they feel they are moving in the right direction.

“A lot of the issues that CRA-NC is raising are well taken,” says Turbett. “But they are going away. We’re doing a great job.”

Skillern agrees there has been progress on some issues. But since CCB was purchased by NCF that movement has stalled, he says, and fair lending advocates have been given no sign it will pick up again under SunTrust. At meetings held over the summer, bank officials refused to sign any specific agreements on lending and hiring practices.

“The two-tiered pricing, the drop in community partnerships and excessive executive compensation merits commentary,” Skillern says. “We continue to provide a social witness and a reminder to the bank of their responsibility to the community.”

So, the protest mural will stay up and the pressure will stay on until concerns about the community impact of merger are addressed.

“No one really covers that side of things,” says Stella Adams, director of NC Fair Housing. “Every bank looks good right before a merger. But what happens to people who can’t get loans and the neighborhoods where branches are closed? This is what we should be talking about.”

For more information on the bank merger, visit these Web sites:, and