The Star-Ledger

Wachovia Allots $8 Billion For Loans In Jersey

The Star-Ledger — Tuesday, August 15, 2006

Star-Ledger Staff

Wachovia has agreed to commit $8 billion in loans and investments to New Jersey during the next five years, including $2 billion in a mortgage program for low- and moderate-income homebuyers, and $5 billion in loans to small businesses.

Wachovia is already a major player in small-business lending in New Jersey, "and this is a significant commitment that would be a stretch goal in comparison to what we would normally do," said Beverly Stewart, who is a community development manager at Wachovia's headquarters in Charlotte, N.C. She said government figures show Wachovia was the largest small-business lender in New Jersey in 2004, with a portfolio of $1.3 billion in loans under $1 million.

The $8 billion lending and community development goal is an agreement with the consumer advocacy group New Jersey Citizen Action, and it comes against the background of Wachovia's pending acquisition of World Savings Bank, which has 13 branches in New Jersey. Regulators require that banks seeking government merger approval must also demonstrate compliance with the Community Reinvestment Act, a law requiring banks to invest in the communities where they gather deposits.

The mortgage program "will include down-payment assistance, which is a real need in all of our markets," Stewart said, explaining that there will be grants to help with the downpayment, in addition to below market rate mortgage financing.

For small business, Wachovia's goal is for 40 percent of the $5 billion to be loans of $50,000 or less, and go to companies with less than $1 million in revenue. "This will be very challenging, but we hope to do some fabulous numbers," Stewart said.

The bank also plans to step up its lending via the government-guaranteed Small Business Administration's express program, an expedited approval process for loans of less than $100,000.

James Kocsi, New Jersey district director for the SBA, said he has been meeting with Wachovia officials and encouraging them to increase their lending in New Jersey, and he said the bank's announcement, "is very good news."

Wachovia, with 329 branches, is the second largest bank in New Jersey after Bank of America.

Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, said Wachovia's $8 billion goal, "reflects a real commitment to New Jersey."

The Wachovia commitment includes consumer loans and community development investments and donations, and the bank has agreed to build two model branches that are fully accessible to the physically challenged, and to improve the accessibility of its existing branches.

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