Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas July 9-10, 1998
Public Meeting Transcripts
Public Meeting Regarding NationsBank and BankAmerica
Thursday, July 9, 1998
Transcript of Opening Remarks
2 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, 3 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 . 4 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 . 5 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. . 6 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 . 7 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 . 8 1 later in the day.
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