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Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Thursday, July 9, 1998

Transcript of Opening Remarks

 
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         1   July 9, 1998                                     8:00 a.m.

         2

         3                     P_R_O_C_E_E_D_I_N_G_S
                               _ _ _ _ _ _ _ _ _ _ _

         4                           ---o0o---

         5            MS. SMITH:  Good morning.  I think we're ready to

         6   start.  So let me start by welcoming you to this important

         7   meeting on the application of NationsBank Corporation to

         8   acquire BankAmerica Corporation.  The meeting will last

         9   two days.  I'll start by introducing myself.  I'm Dolores

        10   Smith, Director of the Division of Consumer and Community

        11   Affairs at the Federal Reserve Board in Washington, D.C.

        12   I'll be the presiding officer for this meeting.  And our

        13   other panelists are, to my left, Bob Frierson who is the

        14   Associate Secretary of the board.  To my right -- to my

        15   immediate right, Ken Binning who is Director for

        16   Applications and Financial Analysis in the Division of

        17   Banking Supervision from the Federal Reserve Bank of

        18   San Francisco.  And to his right, Trish Nunley who is

        19   Assistant Counsel from the Federal Reserve Bank of

        20   Richmond.

        21            We are here today because NationsBank Corporation

        22   of Charlotte, North Carolina has applied for approval to

        23   acquire BankAmerica Corporation San Francisco, California.

        24   When the Federal Reserve System considers one of these

        25   applications, we look at a number of factors under the

        26   Bank Holding Company Act.  These include financial issues,

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         1   managerial issues, competitive issues, and the convenience

         2   and needs of the communities affected.

         3            In doing so, we particularly look at the record

         4   of performance of the parties under the Community

         5   Reinvestment Act.  The Community Reinvestment Act requires

         6   the board to take into account an institution's record of

         7   meeting the credit needs of an entire community -- of its

         8   entire community.  The NationsBank application transaction

         9   also involves the proposed acquisition or retention of

        10   non-banking companies engaged in activities permissible

        11   for bank holding companies.

        12            The board must determine whether the proposed

        13   non-banking activities can reasonably be expected to

        14   produce benefits to the public that outweigh possible

        15   adverse effects such as undue concentration of resources,

        16   decreased or unfair competition, conflicts of interest, or

        17   unsound banking practices.

        18            The purpose of the public meeting today and

        19   tomorrow is to receive information regarding these

        20   factors.  We will be seeking to elicit this information

        21   and to clarify factual issues related to the application.

        22            We are very pleased that so many have been

        23   willing to come and testify at this public meeting.  We

        24   will have about 200 groups and individuals represented

        25   over the two days.

        26            I'd like to talk a little bit about the
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         1   procedures.  First of all, this is what is called an

         2   informal public meeting.  Members of the panel may ask

         3   those who are testifying about their testimony.  This is

         4   not, and I'll repeat not, a formal administrative hearing

         5   so we are not bound by rules regarding evidence,

         6   cross-examinations and some of the formal trappings of

         7   that kind of proceeding.

         8            As you can see from the agenda, we need to stick

         9   to the schedule very carefully so that everyone who has

        10   asked to offer oral testimony will have a chance to say

        11   what they would like to say.  We are going to ask the

        12   witnesses today to be mindful of the needs of others and

        13   to help us stay on schedule.  The panels have been given a

        14   certain period of time and they will be expected to keep

        15   within their alloted times.  I'll tell you about the

        16   signal system.  We have two time keepers and they will be

        17   giving you signals as witnesses.  When you have -- is it

        18   two minutes or one minute?

        19            TIME KEEPER:  One minute.

        20            MS. SMITH:  When there is one minute remaining to

        21   speak and then another signal when the time is up.  They

        22   will start by holding up a card with that information on

        23   it.  Sometimes witnesses may not be paying -- or may be

        24   engrossed in their testimony and may not notice the card

        25   and so what we have is a second signal.  If the -- well,

        26   the time expired signal.  When the time expired signal is
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         1   held up and if the witness doesn't notice it, then we have

         2   our second time keeper, Ariel, who is going to give you a

         3   musical nudge.  It will be very gentle.

         4            There may have been some individuals who were

         5   unable to sign up in advance, and to the extent possible,

         6   we will want to give them a chance to speak, as well.  At

         7   the end of the meeting today -- tomorrow, not today, at

         8   the end of the meeting tomorrow, we will make the mike

         9   available to anyone who would like to make a presentation,

        10   time permitting.

        11            I'll also mention that witnesses may submit a

        12   written supplement to their oral testimony by next Friday,

        13   July the 17th, and then the record will be closed.  Any

        14   written supplements should be directed to Jennifer J.

        15   Johnson, Secretary of the Board, Board of Governers of the

        16   Federal Reserve System, Washington, D.C. 20551.  This is

        17   information that I think you have already received.  But

        18   if you need to have it in writing, we will be glad to

        19   provide it.  The supplements, written supplements, must be

        20   received by 5:00 p.m. EDT on July 17th.  You may fax your

        21   submission to area code (202) 452-3462.  Also, if you

        22   haven't turned in copies of your written testimony or if

        23   you have any other written statements to put into the

        24   record, please leave them with the Federal Reserve staff

        25   at the registration desk.  It is important that we get

        26   this information for the record.
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         1            A transcript of the meeting will be available by

         2   July the 14th through the Federal Reserve Bank of

         3   San Francisco and the board.  In addition, the official

         4   transcript will be available by close of business on July

         5   the 15th on the board's public web site on

         6   www.bog.frb.fed.us, technology willing.  And with that,

         7   we'll begin our proceedings and we will start with a

         8   presentation from the applicant.

         9            MR. GNAIZDA:  Good morning, Ms. Smith.  On behalf

        10   of 36 of the protestors, we have one procedural matter

        11   which we think will help expedite matters and it's a

        12   letter that we sent to Chairman Greenspan and the members

        13   of the Board of Governers yesterday.  And what it relates

        14   to is your ability to evaluate who is testifying because,

        15   as you will note, the Federal Reserve often lists the

        16   number of people speaking for and against.  I'd like to

        17   present you with the letter.

        18            MS. SMITH:  I might note, for the record, that

        19   Mr. Bob Gnaizda from the Greenlining Institute has passed

        20   out a letter to all of us on the panel and to the

        21   presenting panel, as well.

        22            MR. GNAIZDA:  Let me just make one brief comment

        23   and then we can get a ruling on this.  This letter is

        24   entitled Big Bank Bucks Buy Votes.  What it relates to is

        25   this, that out-of-town people have been prejudiced if they

        26   wish to protest at this proceeding, that is, they must pay
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         1   their own way no matter where they live, 3,000 miles away,

         2   to come here for three minutes in San Francisco.  The

         3   parties have raised the issue that the hearing should be

         4   across the country.  The banks have not supported that.

         5   What the banks have done is they have paid the way for

         6   those who will support their merger.

         7            MR. FRIERSON:  Mr. Gnaizda, thank you very much

         8   for the letter.  We're going to enter this into the

         9   record.  And we will request, based on the scheduling of

        10   the individual panels, you will be given time at the

        11   beginning of your panel to make your remarks, but we would

        12   like to move on with the schedule that we have.  And this

        13   letter is part of the record.

        14            MR. GNAIZDA:  Thank you very much.  We just have

        15   one procedural matter which you may wish to rule on and

        16   this is this.  We are not asking that people who the bank

        17   paid to testify ought not to testify, they're welcome and

        18   we wish to hear them, but they should identify themselves

        19   as having received expenses.

        20            MS. SMITH:  I think I can interrupt right now and

        21   say that we will not be asking the witnesses to give that

        22   indication.  So we will note your objection for the

        23   record.  And with that, I think we will proceed with our

        24   first panel this morning.

        25            MR. GNAIZDA:  Thank you very much.

        26            MS. SMITH:  Thank you very much and we'll see you
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         1   later in the day.
Last update: December 3, 2010