NEW YORK (CNNfn) - Five months after agreeing to combine in what was then the largest bank merger in history, First Union Corp. and CoreStates Financial Corp. consummated their $16.6 billion deal Tuesday, paving the way for the largest banking network on the East Coast. 
The Federal Reserve Board, which adjudicates all such mergers, gave its seal of approval to the deal on April 13.  But a 15-day waiting period is required for final approval under Federal law. 
In the interim, the banks satisfied a final condition outlined in a prior agreement reached with the Justice Department that they divest 32 branches in order to pass regulatory muster. 
On Monday, Sovereign Bancorp.,  Pennsylvania's third-largest bank, agreed to pay $185 million for 95 branches in CoreStates' vast Philadelphia-based network.  That purchase, according to Gary Burton, a First Union spokesman, effectively removed the final potential stumbling block in the deal. 
The combined company born of the merger has a network of 3,400 automated teller machines from Connecticut to Florida, and oversees 2,400 branches serving 16 million customers. 
Green and white First Union signs, the adopted logo of the combined new entity, are expected to go up at CoreStates branches in November, once computer operating systems are converted.  First Union is currently based in Charlotte, N.C.
The combined company will have assets of $220 billion and total stockholder equity of $16 billion. 
First Union said customers would see a few immediate tangible benefits from the deal: starting May 15, First Union said, its own customers and those currently using CoreStates branches will be able to use the combined bank's 3,400 ATM machines without paying a cross-over service charge. 

More services for more customers? 

Good intentions aside, the wave of consolidations sweeping the financial sector has raised hackles among some consumer advocates, who fear the mergers may portend higher fees and worse service for consumers - especially those in low-income areas. 
Gene Kimmelman, the co-director of Consumers Union, a Washington-based advocacy group, is concerned that the mega-mergers may create a banking scenario in which "everyone in the middle and on down, gets nickel-and-dimed." 
For that reason, Kimmelman said he is seeking a commitment from big banks to provide low-cost options for basic services, such as checking and savings accounts, as they pursue greater efficiencies in their business operations. 
Indeed, many residents of Lehigh Valley and its vicinty, where CoreStates and First Union have in the past competed in close quarters, voiced concerns early on about lost jobs as branches close after the merger.  While massive lay-offs do not appear to be in the immediate offing, it remains to be seen how customers - and the banks - will adjust to the new, some would say less personalized, arrangement. 
To help allay such concerns, First Union agreed to set up a $100 million regional foundation to service the CoreStates market as a condition of the merger.  It will also launch a $14 billion program to provide loans and services to low- and moderate-income neighborhoods in Pennsylvania, New Jersey and Delaware. 
"Today marks not only the completion of the largest merger in our company's history, but the beginning of a partnership with our new employees, communities and 2 million customers," said Edward Crutchfield, First Union's chairman and chief executive officer. 
CoreStates customers will have access to expanded financial services, including First Union's asset-management accounts that fold checking, money market accounts and brokerage activities into a single account.  CoreStates patrons also will have access to First Union's wide array of mutual fund services, including the Evergreen Funds family of 76 funds. 
The First Union-CoreStates merger is the first in a series of more recent mega-deals to win final approval from regulatory authorities.  Those deals -- including a proposed $60 billion marriage between Citicorp and Travelers' Group that would be the largest corporate link-up ever -- have eclipsed the First Union-CoreStates transaction in size and scope. 
Shares of First Union (FTU) were down 3/8 at 60-3/8 in composite trading Tuesday afternoon on the New York Stock Exchange.