Group Accuses American Savings of ‘Redlining’ : Thrifts: The S&L; denies claims by the Greenlining Coalition that it has a poor lending record in minority areas.

A San Francisco minority and consumer group said Wednesday that at a congressional hearing in two weeks in Los Angeles it will criticize American Savings Bank for engaging in “redlining.”

The Greenlining Coalition of San Francisco said it will cite the institution as an example of a major thrift that has redlined minority neighborhoods throughout the state by failing to make enough mortgage and other loans to blacks and Latinos.

Redlining is the refusal to make loans in a particular neighborhood solely because of deteriorating conditions. The practice violates federal laws and is considered by civil rights advocates as symptomatic of racism.

American Savings, which has operational headquarters in Stockton but whose administrative offices are in Irvine, vehemently disputes the group’s claim.

The thrift says it has had a good lending record in minority areas in the past two years. Company officials also said it has a good record of hiring minorities and helping the communities near its 176 branches statewide.

Dianne S. Nelson, a spokeswoman for American Savings, said the Greenlining Coalition is criticizing the institution using outdated figures from the S&L;’s predecessor firm, the failed American Savings & Loan.

She also said the group is ignoring the major strides the thrift has made at reaching out to minorities and poorer communities. In August, American Savings said regulators gave it the top rating for its Community Reinvestment Act efforts.

The redlining issue is important not only for American Savings’ image but also for its standing with regulators, who are enforcing compliance with CRA standards. The 1977 law requires financial institutions to come up with a plan to meet the needs of low- to moderate-income customers in their communities.

The CRA was given renewed emphasis in the 1989 federal law that restructured the thrift industry. The House Banking, Finance and Urban Affairs Committee is scheduled to hold a hearing in Los Angeles on Jan. 17 on how financial institutions are complying with the CRA.

The Greenlining Coalition says that, based on information prior to 1989, American Savings’ record of making loans to minorities is poor. The group said the institution will not provide it with more current information.

“American’s CRA activities are relegated mostly to public relations gimmicks rather than making systemic changes,” said John Gamboa of the Greenlining Coalition. “American had less than 1% of its loans going to black communities and less than 2% going to Hispanic communities.”

The coalition wants American Savings to set aside a sizable percentage of its loan funds for mortgages in minority areas. It also wants the thrift to hire or promote minorities to high-level, policy-making positions--”not just public relations jobs”--and to contract more with minority firms for outside work, Gamboa said.

The group already has such agreements with Union Bank and Security Pacific National Bank, Gamboa said. The coalition now is talking with Wells Fargo Bank and Bank of America about similar agreements.

American Savings was acquired in late 1988 by the Robert M. Bass Group of Ft. Worth with $1.7 billion in government assistance. The revitalized institution, which has assets of $17.3 billion and total loans of $8.8 billion, earned $174.7 million in the first nine months of 1990.

Nelson said American Savings has a very aggressive CRA program that goes beyond the requirements in some of the agreements the coalition has won from the banks and other companies.

During the past year, the thrift opened offices in East Los Angeles and South-Central Los Angeles. “They are the first financial institution to open new offices in those areas in a long, long time,” she said.

In addition, more than 32% of American Savings’ new loans since the Bass acquisition have gone to families in low- and moderate-income areas, she said. The loans represented 28% of the total dollar amount of all loans funded.

And a Community Outreach program has provided bilingual brochures, loan information and advertising. It also has provided about $1 million in grants and contributions to charitable and civic causes, mostly in economically disadvantaged areas, Nelson said.

The S&L; also has identified 150 female and minority employees for a fast-track program that gives them training and opportunities for promotions.

Mario J. Antoci, American Savings’ chairman and chief executive, set up the CRA and outreach efforts when he was hired by Bass to run the institution. “He hasn’t set a specific goal because he feels he would exceed any goals he set,” Nelson said.