Thirty witnesses testified last night before the State Board of Bank Incorporation in opposition to the First National Bank Corporation's (FNBC) petition to merge with the Haverhill National Bank. The witnesses claimed the FNBC was in violation of the 1977 Community Reinvestment Act (CRA).

The CRA requires banks to meet investment needs in their communities, including home mortgages and business loans. The witnesses accused the FNBC of "red-lining" many areas by denying individuals loans because they live in certain low and lower middle income communities. FNBC is the largest bank in Massachusetts.

The testimony opened with a letter from State Representative Paul White of Dorchester, who labeled the FNBC's history of community investment as "atrocious."

State House and Ways Committee Chairman John Finnegan then asked the bank to refuse the petition because of FNBC's lack of investment in certain low and middle income communities over the past five years.

Most of the other witnesses were community activists, several of whom cited the fact that the FNBC had loaned only $23,000 in the Fenway area of Boston in the past five years.

Yet other banks whose assets are far less than the $13 billion held by the FNBC had loaned over two million dollars in the area in the same time period, according to a spokesman for the Fenway Project Area Committee, a community group trying to encourage the development in the Fenway Area.

FNBC spokesmen and lawyers followed the community leaders' testimony. The absence of home mortgages in certain areas was the result of "a backlog" because of the large demand for home mortgages, according the the FNBC attorney.

In addition, the attorney claimed that the FNBC had served community needs by taking over banks that were operating at a deficit.