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Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Thursday, July 9, 1998

Transcript of Panel Four

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         5            MR. MOSLEY:   First of all, I'd like to thank 

         6   the Federal Reserve for allowing me to come and submit 

         7   testimony on behalf of Congresswoman Maxine Waters who 

         8   would have loved to be here.  However, other business has 

         9   taken her away.  I'd like to read her statement into the 

        10   record if I might.  Once again, my name is Kevin Mosley 

        11   and I represent Maxine Waters, chair of the Congressional 

        12   Black Caucus.

        13            "Good morning.  As a member of congress 

        14   representing the 35th Congressional District and as the 

        15   chair of the 39-member Congressional Black Caucus, I am 

        16   pleased to have the opportunity to submit testimony to 

        17   you today regarding the proposed merger between 

        18   NationsBank Corporation and Bank of America Corporation. 

        19   I believe this merger will have a significant effect on 

        20   the people I represent.

        21            "I testify today as one of many individuals who 

        22   will be raising questions about this merger.  Many 

        23   consumer groups, community activists, and business 

        24   persons are worried about the inevitable closure of bank 

        25   branches, layoffs, the proliferation of evermore costly 

        26   bank fees, and a basic inability to have direct contact 
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         1   with local bankers.  

         2            "I have been struggling with these issues for 

         3   quite some time.  I am even considered to be an irritant 

         4   to many CEO's and top bank managers in this country.  I 

         5   believe, however, that my first responsibility is to 

         6   represent consumers who expect their elected officials to 

         7   protect them from public policies that create hardships 

         8   in their lives and have constantly challenged the banking 

         9   community to pay attention to inner cities and rural 

        10   communities.

        11            "In January of this year, I took the 

        12   extraordinary step of hosting Chairman Alan Greenspan, 

        13   former comptroller of the currency, Eugene Ludwig, and 

        14   director of the Office of Thrift Supervision, Ellen 

        15   Seidman, in my district to interact with members of 

        16   congress, senior bank officials, community bankers, 

        17   community-based organizations, and small business 

        18   owners.  This occasion afforded the captains of the 

        19   industry and the regulators the opportunity to interact 

        20   with people of my community who are desperate to 

        21   strengthen ties to the banks in order to grow and help 

        22   our communities.

        23            "I believe that those in attendance got the 

        24   message I constantly irritate them about.  We need 

        25   capital, we need investment that will eliminate blight, 

        26   create businesses, create ownership, create a new 
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         1   generation of entrepreneurs, and create a better life for 

         2   those who have been denied access to comprehensive 

         3   banking services.

         4            "In 1995, the Federal Reserve paid the national 

         5   average of banking officers per 10,000 residents at 3.4.  

         6   The average in South Central was only 0.3 offices per 

         7   10,000 residents or one branch for every 41,700 

         8   residents.  In 1996, Federal Reserve data showed South 

         9   Central Los Angeles received only 1.6 percent of loan 

        10   dollars for small business lending but represented 2.5 

        11   percent of small businesses.  White-owned businesses 

        12   still received three times more loan dollars per dollar 

        13   of equity than do African-American businesses with

        14   identical borrowing characteristics.  In the construction 

        15   industry, this disparity increases from 3.1 to 15.1.

        16            "As we participate in the hearing today, the 

        17   federal government is implementing a new system of 

        18   payment for welfare and social security recipients.  

        19   These citizens will be receiving their grants and 

        20   payments via electronic transfer.  Many of these citizens 

        21   have never had a bank account or access to any banking 

        22   services.  In addition, we're discovering many banks do 

        23   not provide them with the services they need to receive 

        24   their electronic transfers.

        25            "There are banks that also have arrangements 

        26   with check cashers to keep citizens, many of whom are new 
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         1   citizens to this country, out of their banks.  These 

         2   people who lack access to banking services must resort to 

         3   check cashers, who charge absorbent fees for cashing 

         4   checks and often do not provide other needed services.

         5            "Although branches have been closing down 

         6   everywhere as a result of other mergers, branch banking 

         7   has never adequately served urban and rural communities.  

         8   When we add to all these concerns the lack of capital to 

         9   deal with deteriorated and underdeveloped inner cities 

        10   and rural communities, you can then understand why we 

        11   question all mergers.

        12            "We do not oppose mergers for the sake of 

        13   opposing mergers.  We have real issues.  Although there 

        14   have been some improvements in home lending and the 

        15   provision of home mortgages -- in fact, total home 

        16   lending in South Central actually increased 28 percent 

        17   from 1995 to 1996 -- it has not been enough to allow many 

        18   families in low-income communities to achieve the dream 

        19   of home ownership.

        20            "Are we to expect this colossal merger is going 

        21   to correct any of the concerns I've delineated here 

        22   today?  The conventional wisdom in my community is as 

        23   banks become bigger, a greater distance is created 

        24   between the institutions and the communities they're 

        25   supposed to serve.  In other words, they'll truly be too 

        26   big to be bothered.
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         1            "My question today is what will this merger do 

         2   to ensure the communities will not be worse off?  What 

         3   can we do to insure CRA will be honored, that capital 

         4   will be made available, and access to banking services 

         5   will be made more likely.

         6            "Perhaps these questions can be answered.  

         7   Perhaps mergers can be used to bridge the gap between 

         8   banks and communities.  But what plans are banks placing 

         9   before our communities that will inure to our benefit?  

        10   We're very much aware of so-called commitments that have 

        11   been made in the past.  We're aware of the 45 billion 

        12   dollar commitment from Wells Fargo, their 140 billion 

        13   dollar commitment originally committed by Bank of 

        14   America, and the $75 billion committed my Washington 

        15   Mutual.

        16            "I now understand this new merger between 

        17   NationsBank and Bank of America has created a 350 billion 

        18   dollar commitment.  We have not seen the results of 

        19   earlier commitments, which makes us suspicious of the 

        20   present commitments.  We don't see tracking systems in 

        21   place that will tell us where, when, how, and to whom 

        22   this money goes.

        23            "Perhaps there is a plan that's worthy of my 

        24   support and the support of others who will testify 

        25   today.  If there is, then it's time for the banks to roll 

        26   it out.  It is time for the banks to create and implement 
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         1   a concrete, straightforward, verifiable plan with 

         2   specific commitments that will deal with all aspects of 

         3   the problems that I've repeatedly identified.

         4            "I'm not here today asking for a gift from the 

         5   banks.  We expect banks to get a reasonable return on 

         6   their loans and investments.  We believe that banks that 

         7   lend money in our communities can make a profit on those 

         8   loans and do it safely and soundly.

         9            "I testify as a public policy maker and support 

        10   federal deposit insurance for banks to have a continued 

        11   safety net.  I testify as a member of congress who has 

        12   witnessed the federal government bail out both savings    

        13   and loans and banks with taxpayer money, and I'm here to 

        14   insure that taxpayers receive the support and respect of 

        15   the banks that we insure and protect.

        16            "How can we work together to increase home loans 

        17   and introduce new products and investments that help the 

        18   average wage earner own a home?  I conclude my testimony 

        19   by making an appeal to the banks in this merger to 

        20   respond to all the issues that I and others have and will 

        21   discuss today and to work with elected officials, 

        22   community organizations, community lenders, and consumers 

        23   in ways that will help to develop well-rounded 

        24   communities with decent housing, commercial enterprises, 

        25   and entrepreneurial opportunities.  Thank you.  

        26            MS. SMITH:    Thank you very much.  
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         1            MR. GNAIZDA:   Thank you very much for this 

         2   opportunity.  Before I begin and we take our time, I just 

         3   want to let you know we have approximately ten speakers 

         4   who will be taking about approximately three minutes each 

         5   and then we have approximately 12 others who will try to 

         6   keep their remarks to approximately a minute.  And we'll 

         7   try to be within the 50 minutes.

         8            And before I use my time, I just want to express 

         9   a sentiment that many panelists have expressed, and that 

        10   is where are the CEO's to hear us?  Where are they?  

        11            I'm only going to respond to the largest 

        12   absentee landlord statements, and I'll restrict myself to 

        13   that.  And these are concerns expressed by three 

        14   congresspersons today, Waters, Alford, and Lee.  And I 

        15   preface it with this:  There's no data.  There are no 

        16   goals.  The achievements are modest and particularly 

        17   modest in comparison to their competitors, Wells Fargo, 

        18   Union Bank, and WaMu.

        19            And one thing has been lost here by Mr. McColl 

        20   and Mr. Coulter.  They intend to be the largest bank in 

        21   the world.  They can't just be average.  They must be the 

        22   best, the best.  And they're not.  

        23            First, McColl says they're great on charity.  

        24   Why doesn't he tell you they have the lowest percentage 

        25   of pre-tax earnings directed to charity of any of the

        26   major banks, just under one percent?  Wells has two 
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         1   percent.  Why don't they tell you that only ten to 20 

         2   percent is directed at the community?  Wells Fargo last 

         3   year directed 85 percent or more than eight times more as 

         4   a percentage.  And why don't they tell you that their 

         5   executive compensation every year for the top officers 

         6   exceeds their total charitable contributions?  And why 

         7   don't they tell you about their Golden Parachutes?  They 

         8   will exceed by five-fold the total amount of charitable 

         9   contributions that the B of A will make.  Compare that 

        10   with their competition.  

        11            On diversity, they're high on diversity, but 

        12   they won't release their data and they won't set any 

        13   goals.  Washington Mutual has set goals and is releasing 

        14   its data.  Their goals are to reflect this panel and this

        15   audience, not an all white male panel.  Minority 

        16   contracts, they won't release their data.  They can't 

        17   it's so low.

        18            The real statistic for NationsBank if you look 

        19   at all contracts just for minorities, not minorities and 

        20   white women, is just about four percent, meaning a little 

        21   over one and a half percent for each of the minorities.  

        22   B of A it's two percent for African-Americans.  Compare 

        23   this with Washington Mutual's goal of 40 percent for 

        24   minorities.  

        25            Minority business loans, this is what they fear 

        26   the most.  And they have every reason to.  The moment 
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         1   Alan Greenspan says, "I want the Federal Reserve to 

         2   scrutinize the business loans," this merger cannot be 

         3   approved.

         4            Considerably less than one percent of the dollar 

         5   volume of all business loans made by NationsBank in any 

         6   year in its history or B of A in its history went to 

         7   African-American-owned businesses.  Similarly for Latino 

         8   and Asian-American businesses.  Why don't they produce 

         9   that data?  

        10            And they talked about two billion in lending in 

        11   low-income areas.  Why doesn't the Federal Reserve look 

        12   at that data and see that 90 percent want to white-owned 

        13   businesses, including a huge amount around the World 

        14   Trade Center.

        15            Lastly, they say they got the best goal in 

        16   America.  That's untrue.  Adjusted for size, Washington 

        17   Mutual has easily beaten them.  They've committed six 

        18   percent of their assets.  Washington Mutual has committed 

        19   eight and they're specific.  The OTS will be able to 

        20   effectively scrutinize them.  

        21            Lastly, one comment by CEO Coulter, whom we have 

        22   great respect for and we're very sad that he will be 

        23   departing.  Because that is the feeling, he will be 

        24   departing.  That's why Greenlining and other groups from 

        25   all other the country serenaded him yesterday with a 

        26   Mariachis band.  We're sorry he's going.
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         1            But, Mr. Coulter, we have to tell you this:  

         2   That B of A has lent far more in South Korea than it lent 

         3   in South Central in the last 50 years.  And it's lost far 

         4   more in South Korea, 3.1 billion, than it ever lost in 

         5   the black community, the inner city, the Hispanic 

         6   community, and the Asian community.  

         7            Gail Smith from our coalition presented a letter 

         8   earlier to Mr. McColl and Coulter as they fleed the 

         9   scene.  It asked for a community meeting today so that 

        10   they can hear these concerns.  We invite all of you if 

        11   the B of A will respond.  Thank you.

        12            We now have our guest from the furthest away, 

        13   from Texas, if she'd begin.

        14            MS. CAMPBELL:   Thank you.  Thank you for the 

        15   opportunity to appear today.  I am Angelique Campbell, 

        16   and I'm from the Texas Office of Consumers Union and I 

        17   represent the Texas Community Reinvestment Coalition.  

        18   And I come today on behalf of TCRC to discuss our 

        19   concerns about the merger's impact on low-income 

        20   consumers and persons of color in Texas.  

        21            We believe our position in this merger is unique 

        22   since NationsBank and Bank of America are two of our 

        23   state's largest financial institutions, NationsBank being 

        24   the largest in Texas.  If the merger is approved, the new 

        25   bank will control an even larger share of the Texas 

        26   market.
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         1            As the only statewide community reinvestment 

         2   group in Texas, TCRC's interest is ensuring that the 

         3   credit needs of our local communities in Texas are not 

         4   ignored.  But unfortunately, our most recent HMDA study, 

         5   which is "Access to the Dream, Home Mortgage Lending in 

         6   Texas," which you all have a copy of, shows that there 

         7   are problems with NationsBanks and Bank of America's 

         8   lending performance in low-income communities and 

         9   communities of color in Texas.

        10            If the merge bank is to lead the financial 

        11   industry in community lending as it asserts that it will, 

        12   then the board should delay this merger for two reasons, 

        13   to address unresolved questions about the bank's current 

        14   performance and to require conditions prior to approval 

        15   to assure that all communities credit needs are met.  

        16            Without a detailed plan, the 350 billion pledge 

        17   is hollow.  And based on the two banks' performance in 

        18   under-served communities in Texas, TCRC questions the new 

        19   bank's ability to meet this pledge.

        20            The bank needs to make firm, binding geographic 

        21   income and ethnic specific commitments, and the 

        22   regulators need to monitor and enforce those commitments 

        23   in the following areas:  We ask that no branch closings 

        24   occur in low-income communities and communities of 

        25   color.  In Texas, when we suffered from 40 percent of the 

        26   NationsBank failures in the 1980's, it was our low-income 
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         1   neighborhoods that were affected most by the bank 

         2   closures.  As banks moved out of those neighborhoods, 

         3   higher cost non-bank institutions moved in.

         4            It concerns our coalition that of the total 

         5   number of NationsBank branch openings and closings that 

         6   occurred in 1996, upper and middle income areas received 

         7   40 new branches while low and moderate income communities 

         8   only received ten.

         9            We are also asking for improved lending 

        10   performance to persons of color.  In Texas, according to 

        11   our study, African-American and Latino borrowers are two 

        12   to three times as likely to be denied for a home loan by 

        13   NationsBank than a white borrower.  Data also shows 

        14   NationsBank disproportionately loaned 86 percent of their 

        15   dollars for home loans to white borrowers.

        16            In some Texas cities, the disparity is worse.  

        17   In the Beaumont-Port Arthur MSA, two majority 

        18   Africa-American cities, NationsBank made only four loans 

        19   to black families, and only one of them in a black tract 

        20   census area, yet NationsBank holds nine percent of the 

        21   deposits in that particular MSA.

        22            In San Antonio, NationsBank holds 14.5 percent 

        23   of all deposits in the city while Bank of America 

        24   controls another 5.5 percent, yet NationsBank made only 

        25   1.7 percent of San Antonio's home loans.

        26            And in the Fort Worth-Arlington MSA, another 
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         1   majority African-American city, NationsBank made only two 

         2   loans in a black census tract area, yet its depository 

         3   share in that city is 15.1 percent.  

         4            We are also asking for the development of 

         5   desirable affordable housing products.  The most recent 

         6   HMDA data shows Bank of America disproportionately 

         7   targets Texas low-income consumers and persons of color 

         8   with manufactured housing loans.  The interest rates on 

         9   these home loans have ranged as high as 13.25 percent, 

        10   substantially higher than the average seven percent rate 

        11   for a 30-year conventional loan.

        12            Since Bank of America's recent decision to sell 

        13   its manufactured housing unit, Bank of America has not 

        14   offered an alternative affordable housing plan which 

        15   meets their community reinvestment obligation, 

        16   particularly in Texas.  

        17            We watch these changes in the banking industry 

        18   with deep anxiety for the effects the mergers will have 

        19   on our communities.  Loss of competition, higher fees, an 

        20   erosion of CRA come to mind.  The single most important 

        21   step that must be taken in the wake of these bank mergers 

        22   is to increase accountability of our lenders to our 

        23   communities' un-met banking and credit needs.  And it is 

        24   not only the right thing to do.  It is the law.  

        25            We trust that the board will do what is 

        26   necessary to ensure that our -- that the banks remain in 
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         1   compliance with our fair housing and fair lending laws 

         2   and accountable to our credit needs.  Thank you.  

         3            MR. OBLEDO:   My name is Mario Obledo.  I'm the 

         4   president of the California Coalition of Hispanic 

         5   Organizations.  And I'm also representing the League of 

         6   United Latin American Citizens, otherwise known as 

         7   LULAC.

         8            We feel that the merger has been approved.  

         9   Without any disrespect whatever, if it had not been 

        10   approved, Alan Greenspan would have been here chairing 

        11   the meeting at the headquarter cities of Bank of 

        12   America.  Instead, they have sent a lower level 

        13   bureaucrat to conduct this very, very important meeting.  

        14            NationsBank is fully aware of the request of the 

        15   Greenlining Coalition.  Whether they will respond or not 

        16   is up to them.  Our quarrel is not with the Federal 

        17   Reserve Bank.  Our quarrel is with NationsBank and Bank 

        18   of America.  If they do not meet their commitment to the 

        19   people of color of the state of California -- and, by the 

        20   way, the Greenlining Coalition represents the majority of 

        21   the people of the state of California -- we are going to 

        22   demurrage the merger.  We will act as our own Federal 

        23   Reserve board.  We will close down the branches and we'll 

        24   ensure their failure in California.

        25            We're not going to stand for any disrespect by 

        26   corporate America.  The people of color are people of 
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         1   pride and honor and courage, and we will teach them a 

         2   lesson.  This is going to be a street fight and we're 

         3   prepared to engage in it.  Thank you.  

         4            MR. NGUYEN:   Good morning.  My name is Philip 

         5   Nguyen.  I'm the executive director of the Southeast 

         6   Asian Community Center.

         7            Now, we all agree that the American has 

         8   experienced an unprecedented booming economy.  The good 

         9   thing is that the rich become richer and the poor -- the 

        10   bad thing is the poor become poorer.  The gap between the 

        11   rich and the poor is greater than ever.

        12            Now, as the greatest nation at work, as the 

        13   people, and we so suggested we cannot afford it.  Now, 

        14   that isn't why the congress enact the 1977 CIA.  

        15            Now, many people here believe that the deal has 

        16   been cut.  The merger will be approved regardless of what 

        17   we're going to say.  I tried not to believe so.  I tried 

        18   to believe that the merger will be approved with certain 

        19   condition.

        20            Now, one of the conditions is that the CIA.   

        21   The merger, the NationsBank, and the Bank of America 

        22   promise to have $350 billion for the CIA, but it don't 

        23   say anything.  As my colleagues point out, these are 

        24   hollow commitment.  When they don't have any specific on 

        25   how much they help the poor, how much they help the 

        26   minority, and how much they have the women and the 
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         1   low-income, the low area.  We would love very much that 

         2   the NationsBank and the Bank of America spell out 

         3   specifically what they want to help, the poor, the 

         4   minority, the women, and how to improve the low-income 

         5   minority.  

         6            The second condition -- and I'd like to point 

         7   out is if there's a merger, it should be tried to have 

         8   the minimum branch go out, the minimum -- I mean, 

         9   employee be laid off.  The better is nobody would be laid 

        10   off, no branch be closed down.

        11            Now, these are the two minimum requirement and 

        12   we would like the NationsBank and Bank of America to 

        13   commit to this one.  They should follow the example of 

        14   the Western Mutual.  They may be even better, therefore, 

        15   because they're bigger bank.

        16            Now, if these minimum requirement has not been 

        17   met, they choose to ignore it, please convey our message 

        18   to Mr. Greenspan stop the merger.  Thank you.  

        19            MR. GLOVER:   Good morning.  My name is David 

        20   Glover.  I'm the executive director of the Oakland 

        21   Citizens Committee for Urban Renewal and board member of 

        22   the Greenlining Institute.

        23            Unlike many who may feel that this is an 

        24   absolute fait accompli, I would hope that the review 

        25   panel and others are receiving the appropriate education 

        26   and the appropriate facts this morning that may be 
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         1   opening some eyes.  

         2            I stood alongside members of the Gionini family 

         3   just a couple months ago at a founders day at an East 

         4   Oakland outlet at Eastmont Mall celebrating the remaining 

         5   branch of 30 years in that community, and I only wonder 

         6   in light of this proposed merger what will happen to that 

         7   branch and certainly what that symbolizes in terms of the 

         8   original principals of the Bank of Italy and lending in 

         9   the alternative way and serving the under-served as the 

        10   institution believed.  

        11            We are clear on the fact that even though the 

        12   film "It's a Wonderful Life" may have been financed by 

        13   the bank, it is not a wonderful life in Oakland.  It is 

        14   not a wonderful life in San Francisco, LA, Richmond, and 

        15   a number of other communities in the California area.  

        16   Urban centers are suffering from the lack of lending, 

        17   credit, branches, access, et cetera.  We have to deal 

        18   with the critical issues that face California in light of 

        19   the loss of this partner, this community lender.  Feels a 

        20   little bit like the Cleveland Browns.  You know, even 

        21   they received compensation when Art Modell pulled out of 

        22   town.

        23            We are looking at the testimony from Florida, 

        24   from Texas, from North Carolina, and we see that we are 

        25   not inviting a good neighbor into this marriage.  And we 

        26   can't really call it a marriage.  It's really an 
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         1   acquisition.  There are things about this 350 billion 

         2   dollar pledge that, as Stella said earlier, are scatter 

         3   gun and we like to call it hollow.  In many ways it's 

         4   regressive.

         5            The Greenlining Institute has set alongside many 

         6   CEO's and negotiated agreements that really 

         7   quantitatively speak to the goals for California and the 

         8   goals for the low-income community, the goals for 

         9   minority lenders, the goals for those who have to survive 

        10   at management level and at line staff level.  And we 

        11   don't see any of that disclosure here.  We see none of 

        12   that good faith.

        13            It is important to talk about California 

        14   compensation, it is important to talk about the 

        15   principals by which we have to survive in this community 

        16   and other inner cities around the country.

        17            I'm not encouraged by what I hear from Nations 

        18   as a partner.  I think it's important to look at welfare 

        19   reform and the impact it's having on this community.  

        20   It's important to look at 209 and the impact it's having 

        21   on this community and bring it back to lending and talk 

        22   about a partnership that has to be either approved or 

        23   disapproved based on its quantitative delivery for a 

        24   community that has no place to turn.

        25            And I appeal to not only the process being 

        26   broadened on a public hearing level but to you to not 
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         1   just consider this to be, as Kevin said, a golf course 

         2   deal that's already sealed.  Let's look at this list.  

         3   Let's open it up and let's examine it for all that it has 

         4   to be in order for citizens to be adequately served in 

         5   this community.  Thank you very much.  

         6            MR. HEAD:   My name is James Head, and I'm the 

         7   president of the National Economic Development and Law 

         8   Center, which is based in Oakland, California.  

         9            The center is a national nonprofit public 

        10   interest community and economic development technical 

        11   assistance provider.  I'm also on the board of the 

        12   California Reinvestment Committee here in California and 

        13   a board member of the California Economic Development 

        14   Lending Initiative, as well as a former member and 

        15   chairman of California Advisory Council of the Federal 

        16   Reserve.  And it's good to see you, Dolores, again  after 

        17   so many years.  

        18            MS. SMITH:    Good to see you.  

        19            MR. HEAD:   This week I received a telephone 

        20   call from a reporter with the American Banker Newspaper 

        21   in Washington D.C., and he wanted to know why I was going 

        22   to testify at this hearing.  And I found this question a 

        23   little odd, so I asked him sort of what was the basis of 

        24   the question.  And he explained to me that in light of 

        25   the fact that opportunities to present written comments 

        26   were available and that many people had done so, what 
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         1   would be accomplished by appearing in person and 

         2   testifying?  

         3            I responded to him that it is important for 

         4   those making decisions in matters like this to attach 

         5   faces and descriptive facts and antidotes to the issues 

         6   to be decided.  This gives context and hopefully some 

         7   grounding to the issues.  It's also important for those 

         8   who are making these unique decisions to understand that 

         9   there are a lot of issues related to unique states like 

        10   California and others who will be impacted by the 

        11   merger.  

        12            So my feeling is that a part of this process is 

        13   to help those who are deciding this matter shape the 

        14   information that they have, to look at it from the 

        15   standpoint of how this may impact the communities either 

        16   positively or negatively by the decisions that are made.

        17            My remarks are not going to focus on whether -- 

        18   whether this merger should or shouldn't be approved.  My 

        19   remarks will focus on a couple of key issues that I think 

        20   are critical to a decision about the merger.

        21            One of them is loans to minorities.  And you've 

        22   heard a lot about the facts and issues related to loans 

        23   to minorities.  I think there continues to be a continued 

        24   perception, if not reality, to the fact that, in general, 

        25   minorities are not getting loans in the same volume or at 

        26   the same levels as their white counterparts.  While these 
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                                                                     133


         1   perceptions are very difficult to either verify or 

         2   dismiss, there is information either antidotal or factual 

         3   that continue to support it.  

         4            I would point you back to a Wall Street Journal 

         5   poll that was done a number of years ago of several 

         6   hundred black business owners who found that 92 percent 

         7   of them said that they had been turned down by banks 

         8   while trying to finance their firms.  They stated that 

         9   lack of collateral, a paucity of black lenders and loan 

        10   officers, and a public perception that blacks lacked 

        11   business acumen was among the major reasons they felt 

        12   that they were not able to get this collateral.

        13            For all of those complaints, however, banks 

        14   are -- over 73 percent of these same firms indicated they 

        15   ultimately obtained their collateral.  When asked what 

        16   would be their preferred source or sources of capital, 63 

        17   percent responded that banks were their preferred 

        18   source.

        19            Does this mean that NationsBank and Bank of

        20   America are not lending equitably?  While I can't speak 

        21   to NationsBank's record of lending to minorities, my 

        22   experience with Bank of America is that they have made 

        23   great efforts and with a lot of success in expanding 

        24   their lending to minorities.  But if you hear from others 

        25   that this is an issue of concern and you accept the fact 

        26   that the generally perceptions continue to exist, you 
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                                                                     134


         1   should closely examine the records of these two 

         2   institutions regarding minority lending and should 

         3   determine whether the merger increases their capacity to 

         4   be responsive.  

         5            The next issue is equity capital for startup and 

         6   expansion businesses.  In an presentation at a community 

         7   investment and access to credit meeting in Los Angeles in 

         8   January of this year, Chairman Alan Greenspan suggested 

         9   that additional debt through loans might not be the most 

        10   effective solution to meeting the needs of communities 

        11   like South Central.  He suggested that equity investments 

        12   might prove to be more effective and key to immediate and 

        13   long-term economic revival.

        14            For a number of years now, California advocates 

        15   have been discussing and educating Bank of America staff 

        16   on the need for loan products that provide equity or 

        17   patient capital for new and expanding businesses.  This 

        18   need can serve the merging nonprofit sector that are 

        19   developing successful for-profit businesses to bring jobs 

        20   and goods to low-income communities, the emerging 

        21   entrepreneurs like, welfare recipients, youth, and 

        22   skilled, unemployed, and underemployed workers that are 

        23   identifying small business niches that can help them 

        24   become economically self-sufficient, and emerging and 

        25   expanding small businesses that are trying to continue 

        26   the creation of employment and economic stability in 
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                                                                     135


         1   low-income communities.  

         2            Our discussion with Bank of America has been 

         3   around strategies and mechanisms for developing loan 

         4   products that will address the credit needs of these 

         5   constituencies and also will allow the bank to make 

         6   money.

         7            We hope that you will question NationsBank and 

         8   Bank of America on their willingness and commitment to 

         9   continue to work towards addressing these critical 

        10   needs.  At the very least, we believe that the merged 

        11   bank should commit to being the leader in the development 

        12   of loan products that provide the kind of patient capital 

        13   that's needed.  This is cutting edge work, and it should 

        14   not be abandoned or delayed because of the application 

        15   for merger.  

        16            The last issue is one that is dear to me because 

        17   we put a lot of time in it.  During the first quarter of 

        18   '98, Community Economic Development leaders and Bank of 

        19   America staff collaborated to development an innovative 

        20   community economic development philanthropic initiative 

        21   called readiness for the 21st century to promote economic 

        22   readiness for individuals, communities, and 

        23   community-based organizations.

        24            We put a great deal of time into the development 

        25   of this initiative, which was tied to the bank's 140 

        26   billion dollar community lending commitment.  We would 
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                                                                     136


         1   hate to see this initiative either delayed or either 

         2   forgotten in the process of this merger.  We feel that 

         3   this is an appropriate approach to putting some meat to 

         4   the NationsBank 350 billion dollar commitment and hope 

         5   that you will consider it.  

         6            I've been told that my time is up, and I will 

         7   conclude with this by turning back to where I started.  

         8   Initially I'm convinced that it is important to 

         9   communicate these issues in person.  The various opinions 

        10   I've heard this morning only reconfirms to me that 

        11   opinion.  In business as in life, you gain more by direct 

        12   dialogue and debate than by indirect prose and 

        13   avoidance.  Also, words alone can sometimes lack impact 

        14   and emotion.  Imagine if we only had Dr. King's "I Have a 

        15   Dream Speech" in a written version rather than the 

        16   powerful presentation he delivered in Washington or 

        17   President Kennedy's promise of a man on the moon had been 

        18   only in an editorial in the Washington Post rather than 

        19   the inspired delivery we have all seen.  

        20            Lastly, even in the face of advancing technology 

        21   like the Internet, some of us are still more comfortable 

        22   making our point in a face-to-face discussion than 

        23   those -- with those responsible for making the final 

        24   decisions.  That is why I'm here to speak today and why I 

        25   hope you will create opportunities for us to have 

        26   continued face-to-face discussions with NationsBank and 
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                                                                     137


         1   Bank of America.  Thank you.  

         2           MR. WILLIAMS:   Good morning.  My name is 

         3   Clarence Williams, and I am here on behalf of the 

         4   Sacramento Black Chamber of Commerce and California 

         5   Capital Small Business Development Corporation and as 

         6   much as I serve in the capacity of president of both

         7   organizations.  In addition, I am a founding and current 

         8   member of the Bank of America Community Development Bank, 

         9   Community Development Bank Advisory Board.

        10            The Sacramento Black Chamber of Commerce is a 

        11   501C6 membership organization established more than 12 

        12   years ago for the purpose of mitigating and eliminating 

        13   arbitrary and discriminatory barriers which preclude 

        14   African-American-owned businesses from fully 

        15   participating in the marketplace.

        16            California Capital is a Northern California 

        17   based 501C3 corporation under contracts with the State of 

        18   California and the Sacramento Municipal Utility District 

        19   to provide loan guarantees on bank loans.  In addition, 

        20   we are contracted with the Solano County Organizing 

        21   Committee and with the Federal U.S. Department of 

        22   Agriculture and Rural Development Administration to 

        23   administer loans, several in rural areas of Northern 

        24   California.  

        25            The purpose of my testimony is to support the 

        26   cause of the Federal Reserve Bank and its continuing 
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                                                                     138


         1   obligations to the community development and 

         2   revitalization and to emphasize that as a condition of 

         3   the merger of these institutions, a specific negotiated 

         4   overall written commitment of dollars, products, and 

         5   services must be required for California and its 

         6   respective regions, with my concern focusing on the 

         7   Sacramento Valley.

         8            To date, these institutions have been unwilling 

         9   to make a specific written commitment to California.  

        10   Without such a commitment, under-served inner city and 

        11   rural communities must rely on a "trust us" commitment.  

        12            Consequently, we are being asked to acquiesce to 

        13   this merger on the basis of blind faith.  These 

        14   institutions are profit motivated, and their primary 

        15   concern is return on investment for shareholders.  

        16   Creating jobs, and community reinvestment is not 

        17   necessarily perceived as being in their primary economic 

        18   interest.

        19            However, our communities cannot remain silent 

        20   and inert as the number of financial institutions 

        21   continue to contract from as many as 25,000 to a 

        22   projected eight, six, or 4,000.  This contraction and a 

        23   debate thereof should not be restricted to an analysis 

        24   that only pursues the goals of increased efficiency and 

        25   global competitiveness if these goals are at the expense 

        26   of inner city and rural communities.
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                                                                     139


         1            We cannot accept costs such as increase in 

         2   unemployment and investment being shifted from the 

         3   balance sheets of banks to the banks of our communities.  

         4   If financial institutions and their shareholders are the 

         5   beneficiaries of consolidation, then our communities 

         6   should also realize substantive benefits and not only be 

         7   required to absorb the costs of this proposed 

         8   consolidation.

         9            Furthermore, it is obvious that these financial 

        10   institutions view negotiated written commitments as 

        11   mitigation to transfer negative cost impacts resulting 

        12   from consolidation.  If accepted as mitigation by the 

        13   community, we must assure that these scarce dollars and 

        14   resources are firmly committed in writing and reinvested 

        15   for the purpose of community growth and sustainability.  

        16            I am certain that my testimony at these hearings 

        17   will identify numerous -- I am certain that the testimony 

        18   at these hearings will identify numerous and specific 

        19   instances where the principals of this merger have been 

        20   unwilling to specify in writing the commitments necessary 

        21   for the approval of this application.  However, I shall 

        22   note for the record their failure to increase Bank of 

        23   America's 1997 70 billion dollar allocation to 

        24   California, to support nonprofit technical assistance 

        25   providers who assist small businesses, to make equity 

        26   investments and CDC's and SBIC's, to provide venture 
.
                                                                     140


         1   capital to minority and women-owned businesses located in 

         2   distressed areas, to purchase at least 25 percent of its 

         3   goods and services from minority and disabled-owned 

         4   businesses, and to make a written commitment maintaining 

         5   Bank of America Community Development Bank, along with 

         6   its institutional expertise with regard to community 

         7   reinvestment.  

         8            In closing, I am aware of the Federal Reserve's 

         9   specified authority to enforce and negotiate a 

        10   commitment.  Nothing precludes this panel from verifying 

        11   whether agreements made by the participants of this 

        12   merger represent either billions of dollars, smoke and 

        13   mirrors, or a substantive written covenant of commitments 

        14   involving long-term partnerships and relationships to 

        15   revitalize and to sustain inner city and rural 

        16   communities.  Thank you.  

        17            MR. CORRALEJO:   My name is Jorge Corralejo.  

        18   I'm on the board of directors of the Latin Business 

        19   Association.  The Latin Business Association is one of 

        20   the largest chambers of commerce in the United States.  

        21   We represent part of the largest or the faster growing 

        22   entrepreneurial segments in America.

        23            We know that any financial institution should be 

        24   interested in conducting business with us.  I think we 

        25   all know that all of us that represent all of the 

        26   organizations that are here today.  But what we see 
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                                                                     141


         1   developing here is a battle brewing.  And being a 

         2   business person, it's not in my interest to see this kind 

         3   of development occur.  I think that it's important that 

         4   we take a look at who is here, the depth, the depth and 

         5   the breadth of the people that are here expressing these 

         6   strong, strong concerns regarding this acquisition.  

         7            I have just a copy of an article from American 

         8   Banker, NationsBank making overtures towards Hispanics.  

         9   In this article, it states that, "Hispanic groups have 

        10   not formally protested the merger but they do have 

        11   concerns."  Well, this is wrong.  We are formally 

        12   protesting the merger.  Not just the LBA, but we're 

        13   working in concert with several other organizations, 

        14   statewide and nationally, including -- I'll give some of 

        15   the names -- American G.I. Forum, California Coalition of 

        16   Hispanic Organizations, California Hispanic Chambers of 

        17   Commerce, Chicano Federation of San Diego, Mexicana 

        18   National, ourselves, Latino Issues Forum, 

        19   Mexican-American Growers Association, and Los Angeles 

        20   Community Union.  That's just a small sampling of some of 

        21   the people who are organized in protest of this merger, 

        22   this acquisition.

        23            So I want you to take to heart the level of the 

        24   concern that is expressed here.  We understand that we 

        25   represent the majority of people and will become the 

        26   majority of businesses in the State of California.  How 
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                                                                     142


         1   can you approve the acceptance of a monopoly situation 

         2   without any kind of working agreement?  We in California 

         3   have a history over the last several years of working 

         4   with a majority if not almost all of the financial 

         5   institutions and have developed successful and profitable 

         6   businesses at our end, as well as their end.

         7            And I think that's a critical impact here, is 

         8   that we're looking to develop wealth in all of our 

         9   communities over a period of time.  And I think without 

        10   the kind of working relationship that we're seeking, 

        11   we're certainly requesting that you take some time.  And 

        12   I hate this discussions -- the discussions about this 

        13   being a done deal.  I hope that's really not the 

        14   situation.  That you postpone a decision to enable other 

        15   organizations to continue to express their concerns with

        16   what is at hand here.

        17            And, also, to take a look at perhaps proposing 

        18   the idea that they do, in fact, continue to work with us 

        19   to work on some goals.  We're not talking about enormous 

        20   goals that don't make sense.  We're talking about goals 

        21   over time.  Especially in our situation where we're 

        22   dealing again with a majority of Californians.  So we ask 

        23   at least that much, if not much more.  But please take it 

        24   from us.

        25            And like I said earlier, we are in concert with 

        26   several other organizations in protesting this merger.  
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                                                                     143


         1   So contrary to other evidence, let it be on record that 

         2   this is, in fact, the case.  Thank you very much.  

         3            MS. SMITH:    Thank you.  

         4            MR. RICHARDSON:   My name is Carlos Richardson.  

         5   I'm with Neighborhoods First Alliance.  I'm from San

         6   Antonio, Texas.  I'd like to give special thanks to 

         7   Angelique Campbell and Consumers Reports.

         8            What I have to offer this morning are simple 

         9   facts.  Based on the most recent HMDA data, it is 

        10   reflected NationsBank has redlined eastern San Antonio 

        11   community.  There were three loans made in our 

        12   neighborhood.  One loan was made to one Hispanic for 

        13   $14,000, another to one African-American $21,000, and one 

        14   undisclosed ethnic group for $26,000.  

        15            NationsBank began negotiations with 

        16   Neighborhoods First Alliance with this statement:  "We do 

        17   not sign agreements with neighborhood groups."  This is a 

        18   clear demonstration of the lack of will in making a

        19   commitment.  NationsBank also refused to agree to any 

        20   measurable goal or timetable to rectify problems, thus 

        21   refusing to be held accountable for its performance due 

        22   to such institutional policies as redlining the eastern 

        23   sectors economically deprived.

        24            The neighborhood is populated by the elderly and 

        25   working poor and has not been a participant under the 

        26   economic growth of San Antonio.  The area is besieged by 
.
                                                                     144


         1   warehouses, encroachment, tank farms, and hazardous 

         2   waste, and lack of mortgage and lending and is denying 

         3   the residents of the neighborhood, the type of investment 

         4   that -- this is the type of investment that destroys 

         5   living environment and ultimately the neighborhood 

         6   itself.

         7            After the Neighborhoods First Alliance requested  

         8   NationsBank incriminating HMDA data, an executive of the 

         9   bank discovered one of the members was employed by The 

        10   United Way.  The executive called United Way and the 

        11   leader involved was ultimately put on job probation.  

        12   This attempt to cripple our neighborhood leadership 

        13   demonstrates this corporation's arrogance and willingness 

        14   to use its power to step on the poor communities.  

        15            I'm also a member of the Housing Trust.  And 

        16   although I can't speak for them now, it is part of the 

        17   research I've done in that capacity that has shown that 

        18   this organization has been lying, nursing at the tip of 

        19   government while our elderly have burned to death in 

        20   their homes.  

        21            We're opposing this merger and we hope that we 

        22   can seek help from our federal government to see that it 

        23   doesn't happen.  That's all I have to say.  And thank 

        24   you.  

        25            MR. DILLARD:   Good morning.  First let me thank 

        26   you for the opportunity to address this vital and 
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                                                                     145


         1   important issue concerning the merger of Bank of America 

         2   and NationsBank.

         3            My name is Eddie Dillard, and I'm president of 

         4   the Oakland Black Board of Trade and Commerce, an 

         5   organization of small and midsize Oakland-based black 

         6   business owners.

         7            The Oakland Black Board of Trade and Commerce is 

         8   an advocate for small business growth and development.  

         9   We create employment opportunities in our communities and 

        10   contribute to a tax base of the city of Oakland.

        11            I'm also a member of the Economic Development 

        12   Advisory Commission for the City of Richmond and an 

        13   Oakland-based small business owner.

        14            With me today are four members of the Oakland 

        15   Black Board of Trade and Commerce, Mr. Bill Matthews, 

        16   owners of Uniform America, a clothing manufacturing 

        17   company, Mrs. TJ Robinson, owner of the Gingerbread House 

        18   and Restaurant, Mr. Garfield White, president of Select 

        19   Communications, a telecommunications company, and Mr. Ron 

        20   Carter, owner of FARC Construction Company and a member 

        21   of the board of directors of the Bay Area Black 

        22   Contractors Association.  

        23            Each of these Oakland-based black business 

        24   owners were denied financing by Bank of America.  Not 

        25   only have these worthy small black business owners been 

        26   denied access to capital, but the honorable mayor of the 
.
                                                                     146


         1   city of San Francisco, Willie Brown, and the honorable 

         2   mayor of the city of Oakland, Mayor Elihu Harris, were 

         3   denied a loan from Bank of America in an attempt to 

         4   purchase a radio station in the city of Oakland.  

         5            Over the past ten years, we've witnessed a 

         6   dramatic decline in the availability of access to capital 

         7   in the city of Oakland and the San Francisco-Oakland Bay 

         8   Area in general.  There are approximately 554 banks in 

         9   the state of California.  Only two of these banks are 

        10   African-American banks.

        11            The recent mergers of large banks is threatening 

        12   to create less competition and more Monopoly control of 

        13   the availability of credit to the black community.  Bank 

        14   of America's recent public relations campaign slogan, 

        15   "let's be neighbors," flies in the face of reality.  The 

        16   lack of small business growth in the black community can 

        17   be directly attributed to the downsizing of Bank of 

        18   America in the black community.

        19            The black community contributes substantial 

        20   revenues to Bank of America's bottom line.  For example, 

        21   of the 340 black churches in Oakland, 40 percent bank 

        22   with Bank of America.  That means that every Monday, 

        23   approximately 136 black churches deposit $400,000 into 

        24   Bank of America's system.  This represents approximately 

        25   $20 million annually.  Yet we've seen Bank of America 

        26   abandon our community, forcing our church members, small 
.
                                                                     147


         1   black business owners, nonprofit organizations, and 

         2   citizens to travel outside of our community for banking 

         3   services.

         4            Bank of America's market shares is approximately 

         5   40 percent of the 379 black individuals who reside in the 

         6   nine Bay Area counties.  Bank of America has been 

         7   unresponsive to the credit needs of the black community 

         8   while providing lip service to the black community 

         9   through sponsorships of high profile and special events.  

        10            We've seen Bank of America and other financial 

        11   institutions spend billions of dollars to reconstruct 

        12   countries like West Germany, Indonesia, Korea, and even

        13   Russia at the expense of American blacks.  Charity 

        14   begins at home.  

        15            For the past 50 years, we've seen a 

        16   deterioration of our communities to the point where today 

        17   many of our neighborhoods look like boarded out war zones 

        18   with boarded up commercial stores and severely 

        19   dilapidated housing.  In the past decade, we've watched 

        20   Bank of America expand in the suburbs and shopping malls 

        21   and grocery stores outside the inner city and provide a 

        22   wide range of financial services to the white communities 

        23   that remain unavailable to the inner city black 

        24   community.

        25            For example, in West Oakland, an area of 

        26   approximately 27,000 residents, Bank of America at one 
.
                                                                     148


         1   time had four branches.  Today there are none.  As a 

         2   direct result of this wholesale denial of credit, this 

         3   community has no pharmacy, no grocery store, and no

         4   bank.  Has the wholesale withdrawal of Bank of America 

         5   affected this community?  

         6            Most assuredly.  Another example is East 

         7   Oakland, an consisting of 48,000 residents.  Bank of 

         8   America at one time had seven branches.  Today there are 

         9   three.  Not only has this abandonment of our community 

        10   forced blacks to travel on average four miles for banking 

        11   services, but the reduction in employment has caused 

        12   undue hardship to many black families and the community 

        13   at large.  

        14            One black church member told me that for 50 

        15   years, she had a checking account and a savings account 

        16   with Bank of America.  When she retired from two 

        17   full-time careers, she decided to remodel her home, which 

        18   was estimated to cost $23,000.  With annual retirement 

        19   income of over $3,000 a month, she was denied a 

        20   refinancing loan by Bank of America.  Three weeks later 

        21   she qualified for a larger loan from another institution 

        22   with a more favorable interest rate and a payment 

        23   schedule that fit within her budget.  

        24            This is but one example of how Bank of America 

        25   has consistently denied blacks access to capital.  Bank 

        26   of America has raped the black community of our resources 
.
                                                                     149


         1   and transferred our savings and deposits to communities 

         2   that have no direct or indirect impact on the quality of 

         3   life in the black community in Oakland.

         4            For example, Bank of America provided the 

         5   financing for the Shorenstein Development Company to 

         6   purchase the city center project in downtown Oakland and 

         7   the amount estimated to be $23 million and reported this 

         8   financing under CRA as a loan to a minority.  Well, the 

         9   truth of the matter is the Shorenstein Company is one of 

        10   the largest white-owned office and shopping center 

        11   developers in the country, and how the financing can be 

        12   designated as fulfilling its CRA objectives is not only 

        13   misleading but boarders on fraud.  

        14            I'll close with saying that Bank of America has 

        15   not been loyal to the black community and it does not 

        16   advertise effectively or in any meaningful way.  The 

        17   withdrawal of bank services in our community has created 

        18   pockets of poverty, pockets which breed hopelessness, 

        19   anger, and despair.  Only when organizations such as Bank 

        20   of America and NationsBank fully realize and actively 

        21   partner with black institutions and organizations to 

        22   address these issues can we say we're building bridges to 

        23   the new millennium.  Thank you.  

        24            MR. HOBBS:   Good morning.  My name is Greg 

        25   Hobbs.  I'm the vice president of the National White 

        26   Business Council and I'd also like to recognize my 
.
                                                                     150


         1   chairperson of the National Black Business Council 

         2   sitting at the end of the table to show her support.  We 

         3   have 75,000 businesses across the country which we're in 

         4   contact with electronically.  

         5            Today specifically I'm representing one of our 

         6   affiliates from the state of Florida, the Coalition of 

         7   Black Businesses.  The Coalition of Black Businesses from 

         8   the state of Florida have concluded that an approval of 

         9   this acquisition without specific commitments to build 

        10   capacity for black-owned businesses will retard or 

        11   reverse the gains and capital access by black-owned  

        12   businesses in every state the bank operates.

        13            Florida, we think, presents the ideal case study 

        14   for accessing the impact of the economic well-being of a 

        15   state such as California which stands to lose a major 

        16   heritage bank to decision makers outside the state.  As 

        17   you know, Florida just lost its major headquarter bank,

        18   Barnett Bank, to NationsBank through an acquisition.  For 

        19   this reason, the coalition feels it is essential in 

        20   assessing the impact of this acquisition that the Federal 

        21   Reserve hold a hearing in the state of Florida.

        22            Upon information and belief, NationsBank has not 

        23   adequately provided capital for black-owned businesses in 

        24   the state of Florida.  Further, although reports -- 

        25   NationsBank reports not to track race data on business 

        26   loans, it is our belief that less than one percent of 
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                                                                     151


         1   NationsBank's Florida business loans are made to 

         2   black-owned businesses.

         3            We've requested the OCC do a random study of the 

         4   bank's loan portfolio as part of the CRA performance 

         5   evaluation to adequately determine what that number is.  

         6   However, there's a preponderance of evidence which 

         7   supports the coalition's claim.

         8            In 1985, Florida lawmakers created a unique 

         9   network to provide access to capital for black-owned 

        10   businesses in the state of Florida.  NationsBank, 

        11   previously NCNB, was one of the initial members of this 

        12   investor bank network.  The network via loan guarantees 

        13   and direct loans has been a primary source of capital for 

        14   black-owned businesses in the state of Florida, providing 

        15   more than 40 million in capital since inception.

        16            Prior to the acquisition of Barnett Bank, 

        17   NationsBank was the third largest member investor in this 

        18   network behind Barnett and First Union.  But over the 

        19   past 12 years, NationsBank has provided only ten loans 

        20   guaranteed by this network as compared to Barnett, which 

        21   has made 117 and Sun Trust, which has made 120, and First 

        22   Union, who's made 75.

        23            NationsBanks guaranteed loans amount to, over 

        24   the 12-year period, to $268,000 to black-owned businesses 

        25   as compared to Barnett Bank at 10.8 million, as compared 

        26   to Sun Trust of 9.3 million and First Union of 5.5 
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                                                                     152


         1   million.

         2            The network guaranteed loans by NationsBank 

         3   through the system represents seven-tenths or one percent 

         4   of the total funding provided through this network.  We 

         5   can go even further and take a look at SBA guaranteed 

         6   loans.  According to SBA guaranteed loan volume reported 

         7   by state and race, SBA guaranteed loans by NationsBank 

         8   for African-Americans in the state totaled zero in 1993 

         9   and 465,000 in 1994.  This number is important because 

        10   it's in our belief that 90 percent of the commercial bank 

        11   loans to black-owned businesses in the state of Florida 

        12   are provided with SBA guarantees.  Therefore, SBA 

        13   guarantees are a major reflection of the bank's loan 

        14   portfolio, particularly as it relates to black-owned 

        15   businesses.

        16            NationsBank SBA guaranteed loans for 

        17   African-Americans in 1994 would have represented 

        18   three-tenths of one percent of its small business loans 

        19   in the state of Florida as reported in its 1995 CRA 

        20   performance evaluation.  Total small business loans in 

        21   Florida for 1995, 1996, and 1997 were not available for 

        22   analysis.  However, it is our belief that this 

        23   insubstantial performance continued in these years as 

        24   well.  

        25            There's a significant group of black-owned 

        26   business owners, black business organizations, and black 
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         1   professionals in the state of Florida which have 

         2   expressed concern in NationsBank delivery of credit.  

         3   Moreover, of the seven institutions that make up this 

         4   unique network in the state of Florida, after being 

         5   requested to submit letters of support by NationsBank, 

         6   only one submitted a letter of support.  And it's 

         7   interesting to note that the one submitting that letter 

         8   of support for this acquisition, the president of that 

         9   institution is a member of the board and the chairman is 

        10   an area president of NationsBank.

        11            The bank's insubstantial delivery of capital 

        12   black-owned businesses in the state of Florida is not due 

        13   to any lack of demand, just an extremely conservative 

        14   lending policy that lacks an understanding and innovation 

        15   in meeting the capital needs of black-owned businesses in 

        16   the state of Florida.

        17            A lot has been said and I'm going to cut my 

        18   comments short by concluding that we, like many people 

        19   who have spoken earlier, strongly would like to express 

        20   that the Federal Reserve hold more hearings, particularly 

        21   in the state of Florida, but also that the Federal 

        22   Reserve compel NationsBank to sit down with community 

        23   groups to work out specific commitments for their CRA 

        24   investment within the very states which it serves.  Thank 

        25   you.  

        26            MR. NEREE:   Good morning, members of the board 
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         1   of governors and proactive community leaders.  My name is 

         2   Dufirstson Neree.  I'm here representing The Credit is 

         3   Due Project, a community development financial 

         4   institution in Miami, Florida, and the Little Haiti 

         5   Community Alliance, a coalition of 24 community-based 

         6   organizations and 1,028 residents united to fight 

         7   redlining in the city of Miami.

         8            I got here early this morning, 1:00 precisely.  

         9   The tickets was bought with the pooled savings of ten 

        10   local residents, each making solely $10,000 for the 

        11   entire year.  I'm sure if a public hearing was advertised 

        12   in the state of Florida, many other community groups 

        13   would have made the same type of effort.

        14            Not knowing the specifics of this public 

        15   hearing, I have prepared a 15-minute and a 30-minute 

        16   presentation, but out of respect for your time and 

        17   respect for local groups in San Francisco, I can 

        18   succinctly limit my presentation and just summarize 

        19   NationsBank record of poor lending, poor community 

        20   outreach, and failure to comply with the CRA and with the 

        21   following censuses.

        22            Two years ago, we had six different banks 

        23   operating in our community.  In the past, when our 

        24   residents faced local bank discrimination, we could take 

        25   our money elsewhere or we could use the CRA to protest 

        26   the poor services that we received.  Last year, with the 
.
                                                                     155


         1   merger of NationsBank/Barnett Bank, our community went 

         2   from having six local bank branches to having just two.

         3            Now what choice do we have in terms of where we 

         4   decide to do our banking and what choice do we have -- 

         5   what voice do we have in using the CRA to fight for more 

         6   access to capital in an area when we know that it's 

         7   common banking protocol to renege on CRA commitments?  

         8            In our community, the CRA is virtually useless.  

         9   The two banks who operate there now, Washington Mutual 

        10   and NationsBank, are two of the largest institutions in 

        11   the United States of America.  We don't expect a merger 

        12   anytime soon.  If you as our public officials do not 

        13   force these mega-banks to make enforceable CRA 

        14   commitments, low-income communities and minority 

        15   communities like mine will have no option but to become 

        16   the punching bags for mega-banks like NationsBank, who 

        17   have in the past showed very poor records of community 

        18   reinvestment act lending.  

        19            MS. SMITH:    Thank you.  I encourage you to 

        20   submit your 30-minute presentation for the record.  

        21            MR. WONG:   Members of the Federal Reserve, my 

        22   name is Dennis Wong, and I'm the president of the Asian 

        23   Business Association, Northern California.  We're a 

        24   nonprofit and we focus on economic development through 

        25   education.  As part of that, we sent nine of our members 

        26   to the White House conference on small business in 1995 
.
                                                                     156


         1   to address many of the issues that you hear before you 

         2   today.  We'd like to also lend our concerns to the 

         3   proposed merger by saying that without specific 

         4   commitments from the new NationsBank and without 

         5   identifiable measurable results, we are very concerned 

         6   that the effectiveness and the intent of CRA will be 

         7   greatly diminished.  Thank you.  

         8            MR. GNAIZDA:   Members of the panel, we now have 

         9   a series of one-minute speakers who will be using the 

        10   mic.

        11            MR. BETZ:   We promise to be extremely brief.  

        12   We're representing a number of organizations that wanted 

        13   to be here today but, because of the cost of getting to 

        14   San Francisco, were not able to.  So we'd like to make 

        15   brief statements on their behalf.

        16            I'm going to start with a statement from Leo 

        17   Avila, who's a member and former past chair of the 

        18   American G.I. Forum.  And he wants to go down on the 

        19   record the following statement:  "The American G.I. Forum 

        20   is our nations most prominent and largest Hispanic 

        21   veterans organization.  We oppose any merger that fails 

        22   to ensure that the Latino community, a community that put 

        23   America first in every war, fully and specifically 

        24   benefits from this merger.

        25            "We want home loans, we want business loans, and 

        26   we want the banks to move their charitable dollars from 
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         1   the ballet to the barrio.  Until there are specific 

         2   commitments, we say to Chairman Coulter, McColl, and Alan 

         3   Greenspan no merger.  Remember, the Latino community is 

         4   the future for California and any bank that operates 

         5   here.  Thank you."  

         6            UNIDENTIFIED SPEAKER:   Good morning.  I'm 

         7   speaking here on behalf of George Dean, the CEO and

         8   president of Phoenix Urban League.  The Phoenix Urban 

         9   League has had a very good relationship with the B of A.  

        10   However, we must, no matter what the risk, set forth our 

        11   concerns.

        12            First, NationsBank may not be as sensitive to 

        13   the unique minority cultures in Arizona.

        14            Second, all the major banks in the west have 

        15   recognized a multi-billion dollar potential of minority 

        16   markets and set specific goals.  Nations refuses to do 

        17   so.  We ask why.

        18            Third, although community groups appreciate 

        19   grants, it should not be noted -- it should be noted that 

        20   as a percentage of profits, the record of the new banks 

        21   is only half of its competitors such as Wells Fargo.

        22            Forth, this merger should be modified to require 

        23   specific minority lending and contract goals and a 

        24   substantial charitable commitment to the under-served 

        25   communities.  Thank you.  

        26            MR. GNAIZDA:   Members of the board, if you 
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         1   would allow us to make one little exception.  Maryann 

         2   Mitchell has just flown in from Washington.  She's the 

         3   national head of one of the largest black business 

         4   councils in the country, National Black Business 

         5   Council.  If she could make a brief observation, we'd 

         6   appreciate it.  

         7            MS. MITCHELL:   Good morning.  I think it's 

         8   still morning.  Again, I'm Maryann Mitchell.  I'm the 

         9   president of the National Black Business Council out of 

        10   Silver Springs, Maryland and a business owner.  And I 

        11   just want to say a couple of things.

        12            We absolutely positively as it stands today 

        13   oppose this merger for the following reasons:  The 

        14   lending practices and policies of Bank of America and 

        15   NationsBank, the contracting record.  I'm a business 

        16   owner and I get called to the White House all the time  

        17   for them to tell my success as being one of the most 

        18   successful African-American business owners in the 

        19   country.

        20            That is just -- it's outrageous that I prefer 

        21   doing business with the federal government rather than 

        22   Bank of America because it is absolutely impossible to 

        23   have access.  It is also impossible to do anything with 

        24   NationsBank as far as contracting because they have a 

        25   22-page survey on the Internet that requires a business 

        26   plan for you to do business with them.  This is
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                                                                     159


         1   outrageous.  It just cannot happen.  So you have Bank of 

         2   America and NationsBank doing business with other Fortune 

         3   500 companies and not the community businesses.

         4            I just want to also say to Bank of America and 

         5   NationsBank that we will advocate through our 75,000 

         6   members across the United States that they don't do 

         7   business with them, plain and simple.  We will also 

         8   advocate to our employees that they just don't have bank 

         9   accounts with Bank of America and Nations.  We will also 

        10   tell our employees to advocate to their families to just 

        11   close their accounts and go somewhere else because it 

        12   makes more sense.  We will do business with people who do 

        13   business with us.  

        14           MR. CALDERA:   Good morning.  I'll be reading a 

        15   statement from Steve Soto, who's the president and CEO of 

        16   the Mexican-American Growers Association, an organization 

        17   representing over 7,000 growers in California.  And my 

        18   name is Arquimides Caldera for the record.

        19            Our association's success is a harbinger of the 

        20   future of the state.  If we truly want California to be a 

        21   golden state again, banks must tap all of California's 

        22   minority resources, as much as Wells Fargo is attempting 

        23   to do.

        24            The B of A/Nations pledge fails to tap this 

        25   potential.  The result is likely to be a lack of lending 

        26   and economic development funds.  We urge NationsBank and 
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                                                                     160


         1   Bank of America to develop specific minority lending and 

         2   contract goals.  Until that is done, our support cannot 

         3   be secured and the new bank will not achieve its profit 

         4   goals.  

         5            Our association also protests the lack of 

         6   hearings in Southern California.  Thank you.  

         7            MS. VENERACIAN:   Good morning.  My name is 

         8   April Veneracian for the record, and I will be reading a 

         9   statement for Alex Esclamado, president of Filipino 

        10   Political Association.

        11            It seems almost incomprehensible, if not 

        12   ridiculous, for us to testify today on behalf of our 

        13   communities that Bank of America and NationsBank have 

        14   been less than forthcoming in their collective intent to 

        15   engage in a mutually beneficial partnership with our 

        16   communities.

        17            Minorities, including the Filipino-American 

        18   community, represent a significant potential consumer 

        19   base for B of A and NationsBank and yet we are here 

        20   before you to attest that they have not taken a 

        21   definitive and affirmative stance towards tapping our 

        22   communities.

        23            In studies of businesses discrimination 

        24   conducted across the country, institutional 

        25   discrimination has been pinpointed as the primary cause 

        26   of minority business failure and minority community
.
                                                                     161


         1   underdevelopment.  Financial institutions in particular 

         2   are at the heart of those discriminatory practices.

         3            We ask and urge the regulators not to allow Bank 

         4   of America and NationsBank to actively or passively carry 

         5   on this tragic legacy by not offering specific courses of 

         6   action for lifting and alleviating such institutional 

         7   barriers.  Thank you.  

         8            MS. THRASH:   Tunua Thrash, for the record, is 

         9   my name, and I'm reading a statement on behalf of Mark 

        10   Whitlock, who is executive director of economic 

        11   development for First AME Church in Los Angeles.  It's 

        12   one of the largest Africa-American churches here in the 

        13   state.

        14            "As the executive director of a major inner city 

        15   African-American church operating economic development 

        16   programs with 16,000 family constituents, I have grave 

        17   misgivings about an absentee landlord.  Our community has 

        18   suffered from generations of an absentee landlord 

        19   neglect.

        20            "You want to think about the fact when all of 

        21   the banks competitors, including Washington Mutual and 

        22   Wells Fargo, have made specific minority pledges, one has 

        23   to wonder as to the motives of the one who refuses.

        24            "Third, many members of our church would like to 

        25   testify but cannot be here today because the hearings are 

        26   held in San Francisco.  Please hold a Los Angeles hearing 
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                                                                     162


         1   as we previously requested.

         2            "The African-American market nationwide is over 

         3   $600 billion.  Those who ignore us do so at their peril.  

         4   We come not to the table to beg but with the desire to 

         5   create civil and a prosperous society.  Thank you."  

         6            MS. DIAZ:   Good afternoon.  My name is Haydee 

         7   Diaz, and I am reading a statement from Willis White, 

         8   California Black Chamber of Commerce.

         9            "I join with the National Black Chamber, the 

        10   Black Business Association, and the National Black 

        11   Business Council in criticizing a merger that abandons 

        12   the African-American community.  We have never shared in 

        13   either bank's loan pool or contract program, nor in 

        14   Golden Parachutes for senior, white males worth over $200 

        15   million, nor have we equitably shared in their economic 

        16   development projects.

        17            "Consider this:  Bank of America alone lent more 

        18   to South Korea, $3.1 billion to be exact, than the total 

        19   it has lent African-American-owned businesses over the 

        20   last 50 years.  And remember, B of A has lost $3.1 

        21   billion in South Korea and nothing in the inner city.  

        22   Until they show us the money and walk the talk, we will 

        23   criticize this merger."

        24            MS. VILLANUEVA:   My name is Trina Villanueva, 

        25   and I will be reading a statement from Mateo Camarillo, 

        26   who is the vice chair of the Chicano Federation of San 
.
                                                                     163


         1   Diego.  He could not fly up here today.

         2            "No bank mega-merger should occur without 

         3   specific minority and geographical pledges.  In San 

         4   Diego, over 40 percent of the county are minorities and 

         5   the majority of potential homeowners and small business 

         6   entrepreneurs are persons of color.

         7            "We in San Diego invite CEO McColl to visit us 

         8   and pledge that the new bank will set specific minority 

         9   lending and business goals just like Washington Mutual, 

        10   Wells Fargo, and the Union Bank of California.  Until 

        11   this is done, competition may decide the financial fate 

        12   of this merger.  Why should we do business with a bank 

        13   that ignores us when Wells and WaMu courts us?  Thank 

        14   you."

        15            MS. NGUYEN:   Hello.  My name is Vy Nguyen, and 

        16   I'm here to read a statement from Mai Cong, CEO of the 

        17   Vietnamese Community of Orange County, Incorporated.

        18             She writes, "The Vietnamese-American community 

        19   has been inadequately served by B of A's small business 

        20   lending and fears an absentee landlord with little 

        21   knowledge of our culture will do even worse.  Frankly, 

        22   only targeted minority marketing and goals as recently 

        23   set by B of A's competitors, such as Union Bank, can 

        24   correct this lack of capital to an emerging U.S. market 

        25   that is far greater than many overseas markets.  

        26            "On behalf of Orange County's 160,000 
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                                                                     164


         1   Vietnamese-Americans, I wish to deliver a personal 

         2   message to Chairman Greenspan with whom I recently met.  

         3   Don't forsake us.  Compel NationsBank to set specific 

         4   minority goals for small business lending and to promote 

         5   people of our community into senior management.  Thank 

         6   you." 

         7            MR. ROMERO:   Good morning.  I'll be reading a 

         8   statement on behalf of Reverend James H. Daniel, Jr., 

         9   chairman and CEO of 21st Century Partnership.

        10            "The 21st Century Partnership is a nonprofit 

        11   community development corporation concerned with many 

        12   issues pertaining to community development here on the 

        13   east coast.  Among them is the changing face of the 

        14   financial service industry.  As ministers and servants to 

        15   the community, we believe that mega-mergers must create 

        16   concrete results for the traditionally under-served.

        17            "The CRA record of NationsBank is a concern to 

        18   us.  Its lack of commitments to those who led the 

        19   struggle for economic justice as represented by Martin 

        20   Luther King, Jr. is appalling.  And we serving in the 

        21   interests and voicing the concerns of millions of 

        22   African-Americans decry the Federal Reserve's Board of 

        23   Governors refusal to grant us in a hearing in each state 

        24   in which NationsBank and B of A have failed to render 

        25   adequate financial services to the under-banked among 

        26   us.  Only a lack of funds has prevented us from 
.
                                                                     165


         1   personally testifying.

         2            "Respectfully, Reverend James H. Daniel, Jr."

         3            MR. CALDERON:   Gene Calderon.  And I'll be 

         4   reading in a statement from Burt Corona, the executive 

         5   director of the Hermandad Mexicana Nacional.

         6            "I offer this testimony on behalf of the nations 

         7   largest immigrant service center and advocacy 

         8   institution.  We have offices in Washington D.C., New 

         9   York, Illinois, as well as in California.  This merger 

        10   could be harmful to all communities.  It's particularly 

        11   so for low-income, immigrant, and minority communities.

        12            "Over the last six decades, we have witnessed 

        13   the danger of absentee landlords and those that view the 

        14   poor from afar.  I refuse to testify so that my personal 

        15   absence is evidence against Chairman Greenspan's decision 

        16   to prevent low-income persons from voicing their 

        17   concerns.  Unless they live in the San Francisco area or 

        18   have a rich uncle bank to fund their trip.

        19            "I also question the safety and soundness of a 

        20   bank which lacks the confidence of persons of color.  We 

        21   constitute two-thirds of Los Angeles county's population, 

        22   a population greater than that of North Carolina.  Thank 

        23   you."  

        24            MR. FERRAH:   My name is Freddie Ferrah.  I'm a 

        25   special project manager with the Greenlining Institute  

        26   and I wanted to just say with all the respect I can that 
.
                                                                     166


         1   I am amazed and appalled at the fact that the nations 

         2   largest two-bank merger -- I don't count Citi and 

         3   Travelers because Travelers isn't a bank.  Well, not yet 

         4   anyway.  It will be as soon as that's complete.  But 

         5   nonetheless, that the largest banking merger, $560 

         6   billion of capital, only allows -- and the Federal 

         7   Reserve and Mr. Greenspan should really consider this -- 

         8   is only having one meeting, one meeting in San Francisco 

         9   to allow city -- or community members and groups to voice 

        10   their concern over something of such monumental 

        11   importance.  This bank is going to cover a third of all 

        12   the states in the nation, yet only one city is going to 

        13   be the center point for community-based comments.  

        14            The banks have proven and the testimony here 

        15   just reinforces the fact that Nations has done about as 

        16   bad a job at serving the communities it works in as any 

        17   bank could possibly do.

        18            I am here to represent 49 million people with 

        19   disabilities, people who I hope can understand and 

        20   realize the negative impact of this kind of merger and 

        21   will quickly, as I have already done, move the account 

        22   from Bank of America to a bank that supports our needs.

        23             I don't want to take up any more time because 

        24   the real beef isn't here.  Coulter, McColl, and 

        25   Greenspan, I don't know where they're at, but they're 

        26   probably unpacking Golden Parachutes or doing what it 
.
                                                                     167


         1   might be that people of high importance do.  I just wish 

         2   they'd show us more respect because there are a lot of 

         3   people that are very concerned with this merger.  And it 

         4   certainly isn't taking place in any way that makes me 

         5   feel any more respected at all.  I oppose this merger.  

         6   Thank you.  

         7            MR. FREEMAN:   My name is David Freeman.  I 

         8   represent the Commission on Disability in Berkeley, 

         9   California.

        10            And to be honest, I really have never heard such 

        11   a ridiculous statement about a bank such as nations in my 

        12   life.  I think it's pretty depressing pretty much when 

        13   you look at the future of banking in this country if this 

        14   merger is allowed to go through, especially with these 

        15   two banks.

        16            There needs to be definite specific arrangements 

        17   so that the community does get reinvestments back into 

        18   it.  As a disabled person, as an African-American, I know 

        19   that the system was not built with me in mind, but I 

        20   definitely intend to partake in it no matter what entity 

        21   may put itself up against me.

        22            NationsBank and Bank of Atrocities needs to be 

        23   notified that we're entering the year 2000 and the 

        24   disabled community in particular is not going to stand 

        25   for the garbage.  I think this is all garbage.  I don't 

        26   have any beautiful words to put it into.  I'm just going 
.
                                                                     168


         1   to say it plain and simple.

         2            This is nonsense.  And if the Fed does not 

         3   enforce what's already on the books or if the Fed does 

         4   not make sure that these two banks invest in the 

         5   communities that they set up ATM's in and they withdraw 

         6   money from like an endless vacuum, what do you expect to

         7   happen?  

         8            I'm dead against this merger.  This merger 

         9   should not happen.  If it does happen, it's just another 

        10   sign of the times that the Federal Reserve is kind of 

        11   schizophrenic.  Okay?  It's not facing reality, and 

        12   that's just the bottom line.  I'm against the merger.  

        13   Thank you.  

        14            MR. GNAIZDA:   Members of the panel, we want to 

        15   thank you all very, very much from the approximately 70 

        16   speakers on the two panels that you arranged with Joy 

        17   Hoffman's assistance.  Although we obviously have 

        18   expressed displeasure at the lack of hearings, I think 

        19   all of us owe you a debt of gratitude for being as 

        20   flexible as you have been and as courteous as you have 

        21   been and as open.  So we thank you very much.  

        22            MS. SMITH:    I, in turn, want to thank everyone 

        23   who presented testimony this morning.  You have provided 

        24   us with important information, and I want to assure you 

        25   that as part of the record that the board will have when 

        26   it makes its decision on this application, the board will 
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                                                                     169


         1   review the materials that you have presented and will 

         2   take into account the concerns that you have expressed.

         3            So thank you very much.  

         4            MR. GNAIZDA:   Thank you.  

         5            MS. SMITH:   We will continue with -- we're 

         6   behind schedule, but we're going to continue with the 

         7   next panel before taking our lunch break, which may be 

         8   shorter than the half hour we had allocated.  But if the 

         9   next panel will come on up, then we will proceed 

        10   immediately.

Last update: December 3, 2010