BofA Promises $5 Billion in Low-Income Loans : Banking: Community groups had pressed for a commitment by protesting against the San Francisco bank’s bid for failed Bank of New England.

In an about-face from its previous policy, Bank of America on Thursday publicly committed to providing at least $5 billion in housing and community development loans over 10 years for low- and moderate-income areas in California.

The announcement, the largest such commitment ever made by a U.S. bank, defuses a potentially sticky issue for the bank’s parent, BankAmerica Corp., while it is vying to buy the failed Bank of New England from federal regulators. Community groups in California and New England have been turning up the heat on the bank to commit to specific goals of providing credit to low- and moderate-income areas, as called for under the federal Community Reinvestment Act (CRA) of 1977. To put pressure on the bank, the groups in February filed a preliminary protest with the Federal Deposit Insurance Corp. to block any BankAmerica bid on Bank of New England.

The bank’s executives have long resisted efforts by public interest groups to pressure them into putting in writing and making public their goals, arguing that the bank sets its goals internally and that its record should speak for itself. They also have noted that the U.S. Comptroller of the Currency in October gave the bank its top rating for CRA work.

But community groups have proved tenacious in seeking to force BankAmerica and other major banks to publicly state their goals so they can be held accountable for meeting them. Other major California banks that have announced similar loan programs include Wells Fargo & Co., Security Pacific Corp. and Union Bank.

Executive Vice President Don Mullane, who heads Bank of America’s corporate community development department, said in an interview that public disclosure of its goals was the only real issue in the protests and that it “took that out of play” Thursday with its announcement.

“We have a very aggressive program, but we have been reluctant to post multi-year goals, as we are in any financial disclosures. We have never posted long-term goals,” he said.

BankAmerica is one of four companies that have bid on Bank of New England, the nation’s third-largest banking failure. The others are Fleet/Norstar Financial in combination with Kohlberg Kravis Roberts & Co., a group led by Bank of Boston and an investor group, New Main Bank Associates. The winner is expected to be announced April 24.

Leaders of community groups in California and New England praised Bank of America’s commitment and said that they would withdraw their protest related to the Bank of New England bid.

“We believe that our protest was influential in encouraging the bank to make a long-term CRA commitment, but we believe the bank also recognized that this would be of benefit to the bank, its shareholders and the community,” said Robert L. Gnaizda, general counsel with the San Francisco-based Greenlining Coalition, one of the protesting groups.

Mullane said economic conditions may affect the year-to-year amount of loans, but the bank plans to meet its goals and probably exceed them over 10 years.