Are Community and Consumer WatchDogs Right In Opposing the Bank One – Morgan Chase Merger?
On May 25th, shareholders will vote on proposed merger between J.P. Morgan Chase and Bank One. The merger is opposed by an array of consumer and community watchdog organizations. Many of the complaints center around concerns that both financial institutions have track records of engaging in actions that harm minority, rural and low income consumers.

Fairness in Rural Lending, a Wisconsin-based watchdog, has "complained that both J.P. Morgan Chase and Bank One had been involved in loans to rural families that ended in foreclosure." The organization believes "that it is important for both of these banks to explain this record before they are allowed to merge."

Inner City Press/Fair Finance Watch explained at a Federal Reserve hearing on the merger that J.P. Morgan has closed a dozen branches in the South Bronx while financing a check cashing business that charges fees for cashing paychecks. The group contends that both banks have financed hundreds of check cashing businesses, pawnshops and payday lenders while closing branches in lower income neighborhoods.

The Delaware Community Reinvestment Action Council (DCARC) has opposed the proposed merger and seeks "a thorough fair lending evaluation of each bank's predatory partners and practices." The group, which is affiliated with Inner City Press, also seeks "a public hearing in each community affected by these banks predatory practices."

In Cincinnati, two community watchdog organizations, Communities United for Action and WIN Action Organizing Project, claim that the two banks have unusually high rates of foreclosure and denial of mortgages to African-Americans and low income residents of the Cincinnati area.

The Woodstock Institute, a Chicago-based community development research and advocacy organization, expressed concern that, since the combined institution would be headquartered in New York, the result in the Chicago area would be a "job loss, less civic interest and commitment, and less detailed knowledge of the local community."

The President of the Association of Community Organizations for Reform Now (ACORN), a national organization with over with over 150,000 member families organized into 750 neighborhood chapters, stated that combining "these two enormous institutions would have a tremendous impact on the American financial industry." and that "the Federal Reserve should carefully evaluate the merger's potential impact on the availability of financial services in underserved communities."

Winston takes note of the fact that different groups around the country are expressing similar concerns about the proposed merger. However, Winston is not sure whether the complaints are valid or if the watchdog groups have made a compelling case for preventing the Bank One – Morgan Chase merger. All that is clear to this watchdog right now is that the proposed merger is an issue worth closely watching.