Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas June 25-26, 1998
Public Meeting Transcripts
Public Meeting Regarding Citicorp and Travelers Group
Thursday, June 25, 1998
Transcript of Panel Thirteen
362 4 MR. LONEY: Before we begin, we are 5 trying to organize the open microphone 6 testimony for this afternoon, and we have a 7 list of people who have signed up, and I would 8 like to find out if they are, in fact, here. 9 If you hear your name called, would 10 you go out to the registration desk and make 11 sure that they know you are in fact here and 12 still want to talk. 13 Miguel Miranda, Hector Ramirez, 14 Constantina Jones, Lionell Ouellette, Lloyd 15 Bethune. If you will go out and make yourself 16 known to the folks at the registration desk, I 17 would appreciate it. 18 The next panel is Panel Thirteen. I 19 understand only one person is here representing 20 the East Fulton Street Group, and that is James 21 Daniel. Mr. Daniel, if you would come forward. 22 Are there two people? I guess 23 Reverend Dillon is here and James Daniel, who 24 is the son of Reverend Daniel, who was 25 originally scheduled to testify. . 363 1 2 Since you are on my list first, 3 Reverend Dillon, maybe you should start first, 4 if you are ready to go. 5 One thing, if you will notice we have 6 a timekeeper here. We are giving everybody 7 five minutes. We give you a two-minute warning 8 and then a final times-up notice. 9 REVEREND DILLON: I thank you very 10 much, and I am certainly grateful for the time 11 to share this testimony, this information. I 12 am Reverend Dennis Dillon, the publisher of the 13 New York Christian Times. We publish a 14 newspaper that serves the black church 15 community here in the City of New York. 16 The reason for our participation in 17 support of the 21st Century Partnership is our 18 information that we have developed over the 19 years relative to the treatment of the black 20 community by Citibank. 21 I would like to draw our attention to 22 a report that came out in the New York Daily 23 News the 20th of April, 1997. The report 24 states that despite the fact that Citibank made 25 quite some loans to the community here in New . 364 1 2 York, that only one out of every three blacks 3 were considered for those loans. 4 There is a report also that I would 5 like to bring to our attention, and that is a 6 report by Congressman Charles Schumer, and the 7 report states that for the first quarter of 8 1997, Citibank received a total of 8,000 9 applications from the white community compared 10 with 2,000 applications from the Hispanic 11 community and only 665 applications from the 12 black community. 13 It concerns us greatly that here we 14 are in a city we call New York where the black 15 population is a fair one-third of the city, the 16 black population deposits $13 billion in 17 Citibank every year, and Citibank is only able 18 to walk away with 665 applicants for mortgages 19 in our community. 20 We've been pretty focused on looking 21 at how this impacts upon the economics of our 22 community, and we have discovered that the fact 23 that, with the HMDA data, the fact that this 24 information is made public, the numbers are so 25 pitiful relative to mortgages we cannot begin . 365 1 2 to imagine what the numbers look like relative 3 to Citibank making loans to black businesses 4 that are looking to make progress in our 5 community. 6 The end result is that the United 7 States Department of Commerce came up with a 8 report and study that shows that in 1996, 9 despite the fact that we have a total of almost 10 40,000 black-owned businesses in the City of 11 New York, the average black-owned business in 12 this city does less than $43 million a year in 13 gross business. 14 I think we are at a critical point as 15 we look to the 21st century, and banks that are 16 so serious about investing in the global 17 market, such as a Citibank, need to seriously 18 look at where their deposit base is coming from 19 and need to seriously deal with how we reinvest 20 in our community in a real sense. 21 In conclusion, it appears to me that 22 there is a facade, Citibank is presenting a 23 picture, as they have worked hard last year, 24 knowing of the merger, to present a good 25 picture, to present a positive picture to the . 366 1 2 regulators. But the end result, gentlemen, 3 ladies, is that we have a bank that is showing 4 a picture that is not true because they are not 5 truly serving the black community, and I'm 6 concerned that our deposits are ending up in 7 Asia, across North America, and elsewhere, and 8 it is not ending up in Harlem, Bedford 9 Stuyvesant, and in our communities across this 10 city. 11 I thank you very much for your time, 12 and we shall leave you some documents. 13 MR. LONEY: Thank you Reverend 14 Dillon. 15 Mr. Daniel. 16 MR. DANIEL: Unfortunately, because 17 of a conference, my father is not able to make 18 it, so I will be delivering his statement on 19 behalf of him and the East Fulton Street Group 20 21st Century Partnership. 21 First let me state that the biggest 22 merger in American history should be closely 23 scrutinized before being passed. 24 We of the 21st Century Partnership 25 have had a relationship with Citibank for over . 367 1 2 ten years and believe that they mean well in 3 their efforts to meet the credit needs of their 4 service area; however, meaning well and doing 5 well are distinctly different. The bank's CRA 6 ratings need to improve. 7 Because the merging financial 8 institutions have not at this point given any 9 indication of how this proposed merger will 10 serve the public interest and, more 11 particularly, low- to moderate-income 12 communities, the investment alliance believes 13 consideration for approving the merger should 14 be considered only based upon a definitive 15 community reinvestment plan with a definitive 16 action plan and a time line created in 17 consultation with community organizations and 18 elected officials from the impacted 19 communities. 20 We call upon the government bank 21 regulators, members of the United States 22 Congress and Senate to look more closely at 23 this merger. 24 This merger at face value does very 25 little to expand credit and other needed . 368 1 2 financial services within inner city 3 communities. Right now it only increases the 4 value of Citicorp and Travelers stock. 5 It is important to note that Citicorp 6 has a less than exemplary CRA record among the 7 major banks. Salomon Brothers and Smith Barney 8 have never developed any community investment 9 plans, and Travelers Insurance is a redliner 10 with little presence in low-income communities. 11 One can only hope that if this merger 12 goes through that before it does there will 13 have been a plan developed, in cooperation with 14 the broader community, that succinctly details 15 how the bank will do better than it presently 16 does. 17 Our concerns with these findings and 18 Citibank's lack of substantiative involvement 19 in support of community programs lead us to 20 believe that if government regulators were to 21 earnestly assess Citibank's reinvestment record 22 they would rate them with a need to improve and 23 stipulate such that before any merger is 24 approved their rating must substantially 25 increase. . 369 1 2 I at this time would like to raise 3 another point. This country already has enough 4 crime, and in a number of circles it is 5 believed that this merger is illegal. The 6 illegality stems from a notion that Alan 7 Greenspan, the Federal Reserve chairman, in a 8 closed-door weekend meeting with Citicorp, 9 tentatively agreed to give Citicorp an 10 exemption from the law without approval from 11 Congress. One can only hope and trust that 12 such allegations are just that, allegations. 13 When we hear that the chairman of 14 Travelers made over $208 million on the day the 15 merger was announced, just from the 16 announcement of the merger, and that this 17 amount is more than his company contributed to 18 minorities over its entire history, we hope 19 that such enormous amounts of money can somehow 20 find their way back into areas where poverty 21 still reigns. 22 These are the issues as we now see 23 them. Alan Greenspan and/or Secretary of the 24 Treasury Robert Rubin can delay or stop this 25 merger if they want, and they should if as is . 370 1 2 alleged under present law the merger is illegal 3 and if we accept that as a fact that something 4 that starts out illegally is more than likely 5 to end up the same. 6 Last, consider the following: If the 7 merger deal is successful, Merrill Lynch and 8 Wells Fargo would most likely disappear as 9 separate entities. Chase Manhattan Bank could 10 consider purchasing Merrill Lynch, and even 11 Bank of America could become a thing of the 12 past if this proposed merger is approved, and 13 after that, why not Fleet Bank, American 14 Express or Allstate? 15 We have laws against monopolies and 16 with this merger leading the way, can America 17 afford a monopolized banking industry under the 18 guise of more efficient and low-cost financial 19 services? If the answer is yes, what 20 assurances will low-income communities have 21 that they will be better served because of 22 these mergers, and will any of the alleged cost 23 savings reach undeserved communities through 24 greater access to credit? 25 While we would like to believe this . 371 1 2 will happen, without a definitive plan as to 3 how, we believe that any approval of this 4 merger should be associated with a definitive 5 plan worked out in consultation with the 6 effective communities and in advance of any 7 approval of the applications. 8 While the 21st Century Partnership 9 has enjoyed the support of Citibank and it 10 would welcome the expansion of our 11 relationship, we call upon them to act in a 12 more responsible and accountable manner than 13 what is exhibited in their present efforts 14 concerning this merger and, more particularly, 15 to commit to getting an outstanding CRA rating. 16 There must be a direct correlation 17 between what Citibank and Travelers do and put 18 on paper and what they invest in communities 19 through lending and philanthropy. Presently we 20 don't see that happening with this merger. 21 In closing, we choose to believe that 22 Citibank and Travelers want to do the right 23 thing and if the merger's approved as is or in 24 a modified state, we will work with them, to 25 the degree it becomes possible, to assure that . 372 1 2 the delivery of quality financial products and 3 financial services to the underbanked and all 4 people in general is a reality. We call upon 5 the bank regulators and elected representatives 6 to help them do just that. For too much is at 7 risk to do anything else. 8 Thank you very much. Signed, the 9 21st Century Partnership. 10 MR. LONEY: Thank you very much, 11 Mr. Daniel. 12 Are there any questions? If not, I 13 will thank you very much for coming.
Last update: December 3, 2010