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Federal and state banking regulators Thursday approved Citigroup Inc.’s acquisition of Associates First Capital Corp., but activists have not given up efforts to stop the $25 billion deal. The orders from the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the New York State Banking Department were released after the markets closed. A Citigroup spokeswoman said the company expects to close the merger this month. All three agencies rejected efforts by community activists to stop the deal. Activists have charged that Associates engages in predatory and discriminatory lending. They also alleged that Citigroup has such a poor record of serving low-income and minority areas that it should not be allowed to buy Associates. The FDIC and OCC noted in their orders that the Change in Bank Control Act bars them from considering the community reinvestment records of either Citigroup or Associates. The New York agency said it conditioned its approval on Citigroup abiding by a consumer finance initiative it proposed on Nov. 7. This initiative includes a 90-day moratorium on single-premium life insurance sales in New York and a pledge to try to move customers with good credit from the finance company to the bank. “This agreement is a positive step in the right direction toward preventing predatory lending practices from taking place,” said Barbara Kent, director of consumer services and financial products. Matthew Lee, executive director of the Bronx, N.Y.-based Inner City Press Public Interest Law Center, said he was “very disappointed” by the decisions and vowed to continue the fight. He said his group filed an appeal in Missouri Thursday challenging a decision by that state’s insurance commissioner to transfer licenses from Associates to Citigroup. The complaint alleges that the insurance commissioner made procedural errors in approving the license transfers. A legal challenge to the FDIC, OCC and New York banking department rulings also is possible, he said. Copyright (c)2000 TDD, LLC. All rights reserved.

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