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Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Thursday, July 9, 1998

Transcript of Panel Six

                                                               191

       1                 MS. SMITH:  I think our court reporter is
           
       2   ready to go, and someone is going to fill in for our
           
       3   timekeepers until our timekeepers return.  We'd like to
           
       4   go ahead.  Our panel is all here and we will start with
           
       5   Ms. Cincotta.  
           
       6                 MS. CINCOTTA:  My mike is on.  Thank you
           
       7   very much.  
           
       8                 It's nice to be in San Francisco, but I
           
       9   would like to really urge you that the Federal Reserve
           
      10   Board did not end it at a one-day hearing here.  People
           
      11   all over the country want to comment on this.  This is a
           
      12   very important issue for everybody and people can't all
           
      13   afford to get out here.  Three of us shared a room
           
      14   together to help cut down to cost last night. 
           
      15                 National Training Information Center,
           
      16   which I am Executive Director of, and National People's
           
      17   Action, who I am chairperson of, have worked on getting
           
      18   home mortgage disclosure passed, CRA, and then went into
           
      19   whatever else it takes to make the market work in our
           
      20   communities such as the Jessie Legislation, going after
           
      21   the MI companies, insurance partners, that bring
           
      22   together all the necessary pieces in lending. 
           
      23                 When we got CRA passed, we did not think
           
      24   the burden of making it work was going to go on all the
           
      25   neighborhood organizations.  We thought we got it
           
      26   passed, we have disclosure and this is what regulators
           



                                                              192

       1   all should take care of. 
           
       2                 To our dismay, most financial institutions
           
       3   in the United States get a passing grade.  I think most
           
       4   of them get -- about 95 percent of them or more get a
           
       5   passing grade.  If they all deserved it, we wouldn't be
           
       6   in this room today, we wouldn't be arguing about banking
           
       7   or loans, et cetera.  They don't deserve it.  Maybe four
           
       8   percent, and the other 95 don't deserve it. 
           
       9                 In Chicago we have monitored agreements
           
      10   with our large downtown lenders for 12, 14 years
           
      11   following through, following through, following through. 
           
      12   They said they would do more but the secondary market
           
      13   wouldn't buy their loans and we heard this from
           
      14   institutions around the country.  We took it to
           
      15   Washington to make sure that Fannie Mae and Freddie Mac
           
      16   would work for them. 
           
      17                 So we have dealt with pieces of pieces of
           
      18   pieces.  And, if we ever hear an excuse of why loans
           
      19   can't go in, be it the MI companies -- we went after the
           
      20   MI companies to get them as part of the lending
           
      21   community also. 
           
      22                 So I want to make sure you know we don't
           
      23   just pick on banks.  If they say they'd like to do it
           
      24   but they need help, we're willing to do that.  
           
      25                 What we're facing in Chicago, which was a
           
      26   major -- had major banks -- some of the major banks in
           



                                                              193

       1   the country, Chicago owned and operated.  After all
           
       2   these mergers and acquisitions take over, we're going to
           
       3   have one bank that's Chicago owned and operated only. 
           
       4                 One of the financial institutions we lost
           
       5   years ago was Continental Illinois Bank.  They wouldn't
           
       6   loan in the community, but they lost a ton of money
           
       7   speculating in Oklahoma in oil wells. 
           
       8                 They went under, Bank of America took it
           
       9   over.  That was our first experience with Bank of
           
      10   America.  So this large institution all of a sudden
           
      11   became a non-bank bank. 
           
      12                 So any programs, anything with BankAmerica
           
      13   had to be through NHS, through different groups doing
           
      14   development, et cetera.  But we're losing this big
           
      15   institution you could walk in to talk to, argue with
           
      16   about will they make loans, was lost. 
           
      17                 Part of that decision was that would be
           
      18   the non-bank bank, but the control would stay in
           
      19   Chicago.  As soon as the intra/interstate banking went
           
      20   through, the control was moved to California.  To
           
      21   appease the regulators at that time, Bank of America
           
      22   said they would open branches in all the Jewel Food
           
      23   Stores.  They did.  It lasted two months until they got
           
      24   approval to move the control to California. 
           
      25                 So that was -- that's our experience.  We
           
      26   can work with some of the folks who were left in the
           



                                                              194

       1   building.  Again, it's all putting special programs
           
       2   together, not walking in, making deposit, getting a
           
       3   loan. 
           
       4                 One minute remaining.  Thank you. 
           
       5                 All we have from Nations in Chicago is
           
       6   something called Nations Credit which receives a
           
       7   predatory lender, if you could find your way downtown
           
       8   and you are willing to pay maybe 15 percent for a loan. 
           
       9   They do not have a presence of regular lending, but just
           
      10   through a loan kind of company.  So that our experience
           
      11   with Nations and what we're hearing from the groups
           
      12   across the country that they're interested in
           
      13   communities or lending is pretty bad. 
           
      14                 We tried getting meetings with NationsBank
           
      15   when we were having our national conference in
           
      16   Washington this past year.  Sent letters, made calls,
           
      17   couldn't -- our style with NPA is we had a demonstration
           
      18   at the bank until we got to talk to somebody, because we
           
      19   will not take no for an answer for the community.  It
           
      20   ended up that they said they would meet with us in 30
           
      21   days in St. Louis. 
           
      22                 We pulled back on any protest, anything
           
      23   until we could have that meeting.  Talked to a gentleman
           
      24   on the phone who said he would be speaking for -- was it
           
      25   McCoy, who is head of Nations.  
           
      26                 When we got down there, and we had groups
           



                                                              195

       1   from 12 cities, Cathy Bessant was the person who was
           
       2   sent to represent the bank and we did not have the
           
       3   person who I talked to on the phone, and we had
           
       4   presented them with what we thought would be a good
           
       5   agreement that they could do for ten years. 
           
       6                 They laughed, they threw it away and
           
       7   Ms. Bessant said -- at some point said, "We do not deal
           
       8   with people like you," going like this (indicating). 
           
       9   "And, if you think we're ever going to deal with people
           
      10   like you, you are mistaken." 
           
      11                 And at the same time, they were touting
           
      12   their agreement.  I know I'm short of time, one more
           
      13   sentence.  
           
      14                 If you take their agreement and look at
           
      15   their housing lending, what they say they want to do in
           
      16   the next ten years is less than they've done in the last
           
      17   ten years. 
           
      18                 I would not believe one single word that
           
      19   NationsBank told you, one single word of what they said
           
      20   they're going to do.  And, when you hear the experiences
           
      21   of how they treat people in a lot of the local community
           
      22   organizations, you wouldn't want them as your lender and
           
      23   you wouldn't want them in your communities either. 
           
      24                 So, please, have more hearings, deny them,
           
      25   deny them, deny them until they learn how to deal with
           
      26   people instead of being as obnoxious as they are. 
           



                                                              196

       1                 I mean, I've met a lot of bankers and
           
       2   they're not all perfect, and neither am I.  This tops
           
       3   the cake, and you would agree if you'd been there. 
           
       4   Thank you.  
           
       5                 MS. SMITH:  Thank you very much.
           
       6                 MS. WEBB:  My name is Margaret Webb, and
           
       7   I'm from Wichita, Kansas.  I'm here today representing
           
       8   National People's Action and Sunflower Community Action
           
       9   from Wichita, Kansas. 
           
      10                 Before I begin, I would like to tell you a
           
      11   little bit about myself.  I'm a single parent working
           
      12   two jobs.  I am live in a low-income area, am very proud
           
      13   of my community.  I'm a volunteer at our local school
           
      14   and leader with Sunflower Community Action. 
           
      15                 I'm not getting paid to be here today.  In
           
      16   fact, I took the day off from work without pay because I
           
      17   feel in my heart that we need a national CRA agreement
           
      18   with NationsBank. 
           
      19                 I am new to this part of the banking
           
      20   process.  In May Sunflower Community Action asked me if
           
      21   I would be interested in looking into redlining at
           
      22   NationsBank.  I wanted to see if it was happening in
           
      23   Wichita.  Just getting to see a copy of the HMDA was
           
      24   hard work.  I went to NationsBank in downtown Wichita. 
           
      25   The bank alone covers two city blocks and is seven
           
      26   stories high.  To my understanding it was always a main
           



                                                              197

       1   bank in Kansas. 
           
       2                 Anyway, I asked Marilyn Polly, the bank
           
       3   president, if I could look at the HMDA.  After some
           
       4   stalling I found out our big beautiful downtown bank was
           
       5   just a branch bank. 
           
       6                 The only NationsBank that had the HMDA
           
       7   information, according to Ms. Polly, was in the home
           
       8   office in Charlotte, North Carolina.  For some reason,
           
       9   Ms. Polly had called Dallas, Texas, not Charlotte, for a
           
      10   copy of the HMDA.  
           
      11                 Now, remember, I just asked to look at a
           
      12   copy of the information.  To my understanding, CRA
           
      13   regulations state that anyone should be able to walk in
           
      14   the bank and look at the HMDA. 
           
      15                 After more stalling, they did give me a
           
      16   notebook with small business and farm loan data.  But
           
      17   the home loan section was empty.  At first I was told
           
      18   the bank had given us seven days to get the information. 
           
      19   Then, as I continued to press, Ms. Polly arranged to
           
      20   have it overnighted.  Imagine my surprise, when I
           
      21   received it a few days later, on just how bad the
           
      22   redlining is. 
           
      23                 You all have a copy of it that I turned in
           
      24   this morning, plus there is a bigger picture behind me
           
      25   with Bank Four and Boatmen's. 
           
      26                 NationsBank keeps saying that bigger is
           



                                                              198

       1   better, but we have small to medium sized banks that do
           
       2   a whole lot better job of home loans than NationsBank. 
           
       3   NationsBank just isn't giving home loans to low and
           
       4   moderate income people. 
           
       5                 NationsBank says that it makes pledges,
           
       6   but an executive of NationsBank also told me that those
           
       7   pledges aren't legally binding. 
           
       8                 On May 21st, I was with a group of people
           
       9   that sat down with NationsBank, Bank of America, in St.
           
      10   Louis.  This meeting opened my eyes to NationsBank. 
           
      11   First of all, I felt it was nothing but a stalling
           
      12   tactic on the part of NationsBank.  
           
      13                 Catherine Bessant told us at that meeting,
           
      14   and I quote, "We, NationsBank/Bank of America will never
           
      15   work with people like you," end of quote.  I feel that
           
      16   we people is what made NationsBank what it is today.  
           
      17                 NationsBank also says that they don't sign
           
      18   contracts, they make pledges, not contracts or
           
      19   agreements.  How can they be held accountable without a
           
      20   mutually signed agreement?  
           
      21                 There are serious problems with allowing
           
      22   this merger to take place without making the spirit of
           
      23   CRA -- without making sure that spirit of CRA is
           
      24   implemented at the level they plan to grow. 
           
      25                 The rebuilding of my low-income community
           
      26   is dependent on such an agreement.  National Bank,
           



                                                              199

       1   national agreement. 
           
       2                 NationsBank/Bank of America recently made
           
       3   a promise of -- a ten-year promise.  Part of that
           
       4   promise was that they would loan money to rural America. 
           
       5   But last year, in Kansas alone, they closed ten
           
       6   branches.  Again, their talk isn't following what they
           
       7   are doing.  
           
       8                 Even if they give money to America, what
           
       9   is it to stop them from redlining?  To me it sounds like
           
      10   they're dangling a carrot in front of us, look at the
           
      11   money, not the redlining. 
           
      12                 America wouldn't be what it is today
           
      13   without people taking risks.  The bank thinks it's a
           
      14   risk to work with us, but in reality it's not. 
           
      15                 I'm not asking for a handout.  I am asking
           
      16   to stop the redlining and give out home loans to low and
           
      17   moderate income people.  Our communities must be rebuilt
           
      18   and the only way to do this is with a written national
           
      19   CRA agreement 
           
      20                 MS. SMITH:  Thank you.  
           
      21                 MR. ORTEGA:  Buenos Tardes.  Mi nombra es
           
      22   Erneto Manuel [phonetic] Ortega.  I forgot I'm in
           
      23   California, English only.  Sorry. 
           
      24                 My name is Ernest E. Eugene Ortega.  I
           
      25   live in Albuquerque New Mexico.  I have been involved in
           
      26   low-income housing and community development work in
           



                                                              200

       1   rural and urban New Mexico for over 30 years.  I would
           
       2   support this merger if the bank made specific written
           
       3   and enforceable commitments that New Mexicans would be
           
       4   better served by this merger.  As Bank of America's last
           
       5   CRA evaluation shows, national commitments don't always
           
       6   translate into better lending for New Mexico. 
           
       7                 I am alarmed by the overall trend towards
           
       8   national -- nationwide institutions.  A national
           
       9   approach will not work in New Mexico.  New Mexico has
           
      10   what is known as the Lou Wallace effect; if it works
           
      11   somewhere else, it doesn't work in New Mexico. 
           
      12                 The Federal Reserve has a responsibility
           
      13   to ensure that a merger of this magnitude does not
           
      14   adversely affect the consumers in New Mexico.  
           
      15                 My support for the merger would be
           
      16   contingent on the banks:  
           
      17                 Presenting specific implementation plans
           
      18   for the 350 billion as it relates to New Mexico.  
           
      19                 Presenting a specific plan for monitoring
           
      20   the 350 billion commitment as it would impact New
           
      21   Mexico. 
           
      22                 Continuation and expansion of Bank of
           
      23   America's Rural 2000 initiative.  
           
      24                 Continuation of a Bank of America's CRA
           
      25   Advisory Committee Structure.  
           
      26                 Assurances that the divestiture does not
           



                                                              201

       1   dilute CRA activities in New Mexico's rural communities. 
           
       2                 Development of specific CRA initiative for
           
       3   New Mexico's native American Pueblos and reservations.  
           
       4                 Presentation of a plan which addresses
           
       5   closing of the branches due to the overlapping of the
           
       6   two banks.  New Mexico is one of the states where there
           
       7   is overlapping of the two banks. 
           
       8                 What happens to minority personnel this
           
       9   those branches?  What happens to the minority consumers
           
      10   in those communities?  The other thing is how will those
           
      11   consumers actually be served once those branches are
           
      12   closed and how they actually occur. 
           
      13                 Assurance the bank charges would not
           
      14   escalate for moderate and low and rural consumers.  
           
      15                 The CRA does not mean that New Mexicans
           
      16   can be neglected because Californians or North
           
      17   Carolinians are better served.  We need a CRA commitment
           
      18   for New Mexico based on New Mexico's needs, not its
           
      19   market share as the banks have proposed. 
           
      20                 The Federal Reserve and all other bank
           
      21   regulators must find a way to make sure that national
           
      22   banks serve small markets like New Mexico.  In 1997 Bank
           
      23   of America received an outstanding CRA rating, largely
           
      24   based on its efforts in California, Washington and
           
      25   Portland.  But, as the OCC says, "Bank of America
           
      26   historical commitment to the CRA has not been fully
           



                                                              202

       1   exported to the bank's other areas.  The OCC gave Bank
           
       2   of America's lending and investments in New Mexico a
           
       3   grade of low satisfactory.  Will this always be true in
           
       4   an era of nationwide banks? 
           
       5                 The question for all of us is how can we
           
       6   assure that we get the best of both banks from this
           
       7   merger. 
           
       8                 We don't know if Bank of America's
           
       9   eight-month-old Rural 2,000 community development
           
      10   initiative has produced much in New Mexico, but we
           
      11   should honor its goals.  Also, I am proud to serve on
           
      12   Bank of America's CRA Advisory Committee, which I think
           
      13   provides a better relationship between advocates,
           
      14   consumers and the bank than does NationsBank's annual
           
      15   CRA forums.  
           
      16                 This allows us, as consumers and
           
      17   advocates, on a periodic basis to come and kick their
           
      18   nuggats [phonetic].  For those of you, nuggats is
           
      19   glutius maximus.  
           
      20                 Both NationsBank and Bank of America need
           
      21   to create specific sub-goals for serving Native
           
      22   Americans in New Mexico.  
           
      23                 If we get a specific, enforceable
           
      24   commitment for New Mexico, as I previously stated, then
           
      25   I could support this merger. 
           
      26                 Sunwest, NationsBank predecessor in New
           



                                                              203

       1   Mexico, was a market leader in small business community
           
       2   development lending, but its level of service to our
           
       3   community appears to have declined recently.  We need to
           
       4   make sure that NationsBank, at a minimum, maintain
           
       5   Sunwest's level of lending and investment.  
           
       6                 In New Mexico, some divestiture of assets
           
       7   would be necessary to reduce the monopoly power if the
           
       8   merger were approved.  Let's set criteria for
           
       9   divestiture of those assets.  I propose that any
           
      10   institution assuming those assets must have a New Mexico
           
      11   CRA rating higher of either that of Sunwest or Bank of
           
      12   America in New Mexico. 
           
      13                 If the past is any guide, the proposed 350
           
      14   billion CRA commitment won't mean much to New Mexico.  I
           
      15   urge the Federal Reserve and other regulators reviewing
           
      16   this application to help us create a financial system
           
      17   that truly addresses New Mexico's credit and community
           
      18   development needs.  
           
      19                 I made some comments and my
           
      20   recommendations in my written statement is elaborated a
           
      21   little more.  
           
      22                 MS. SMITH:  We will be glad to have that
           
      23   statement.  
           
      24                 MR. ORTEGA:  (In Spanish unintelligible.) 
           
      25   Thank you.  
           
      26                 MR. TODEA:  Good afternoon.  Yati
           



                                                              204

       1   [phonetic] from Navajo country.  My name is Rockling
           
       2   Todea.  I was born and raised on the Navajo Reservation
           
       3   in northwest New Mexico.  Today I live in Albuquerque,
           
       4   New Mexico.  I have been working in community-based
           
       5   economic development since the early '70s, and I started
           
       6   in San Francisco then.  And now I'm working in New
           
       7   Mexico. 
           
       8                 I am representing the Community
           
       9   Reinvestment and Development Task Force, a consortium of
           
      10   community-based organizations concerned about low-income
           
      11   housing, community development and fair access to
           
      12   capital.  Members of our coalition have been working on
           
      13   CRA-related issues for decades now. 
           
      14                 The question before us is this:  How can
           
      15   we ensure that New Mexicans obtain the best outcome from
           
      16   this merger?  
           
      17                 First, the Federal Reserve and other CRA
           
      18   regulators must devise a way to ensure that nationwide
           
      19   banks serve better small markets like New Mexico. 
           
      20                 Consider the following:  According to the
           
      21   Office of Controller of the Currency's recent CRA
           
      22   evaluation of Bank of America, Bank of America made few
           
      23   community development investments during the period of
           
      24   study in New Mexico. 
           
      25                 Bank of America's overall housing lending
           
      26   to low income and other traditionally underserved groups
           



                                                              205

       1   in New Mexico was substandard when compared to that of
           
       2   other lenders.  
           
       3                 Between 1994 and 1996, Hispanos, American
           
       4   Indians and African Americans all experienced mortgage
           
       5   application denial rates significantly higher than did
           
       6   Anglo buyers, by all banks, even when controlling for
           
       7   income levels. 
           
       8                 Second, we strongly support a written,
           
       9   enforceable commitment that the banks are committed to
           
      10   changing the status quo in New Mexico.  We believe that
           
      11   approval of this merger and support from the public
           
      12   should be based on the following conditions: 
           
      13                 A written commitment to traditionally
           
      14   underserved people who live in rural areas, inner cities
           
      15   and who are members of groups neglected by lenders.  
           
      16                 The establishment of a sub-goal for Indian
           
      17   country that will spell out how the merged entity would
           
      18   better serve Indian country.  
           
      19                 And a divestiture plan that would assure
           
      20   that the assets are sold to lenders with a superior
           
      21   record and meeting the needs of traditionally
           
      22   underserved New Mexicans. 
           
      23                 Small business lending decisions are
           
      24   usually based on relationships between a lender and a
           
      25   small business or small farm owner.  Nationwide banks
           
      26   using national strategies cannot be depended on to focus
           



                                                              206

       1   on New Mexico's special business circumstances. 
           
       2                 In his inaugural address, President John
           
       3   F. Kennedy said, "If a free society cannot help the many
           
       4   who are poor, it cannot save the few who are rich."  In
           
       5   the last years since, America has undergone many
           
       6   changes, but poverty has remained unchanged and some
           
       7   would argue poverty has increased.  Change has been good
           
       8   for a few, but for the rest it has been the same old,
           
       9   same old. 
           
      10                 I work with individuals in groups from
           
      11   low-income communities throughout New Mexico to help
           
      12   them make changes in their lives.  The biggest problem
           
      13   facing these individuals is the deeply imbedded
           
      14   institutional resistance to change, both public and
           
      15   private.  
           
      16                 For your information, New Mexico has
           
      17   ranked 50th in the nation for the past three years in
           
      18   level of poverty.  
           
      19                 I want to share a story that demonstrates
           
      20   an institutional discrimination within New Mexico.  A
           
      21   group of Navajo ranchers formed a cooperative on what is
           
      22   referred as the Checkerboard area of the Navajo
           
      23   Reservation.  Their research was exceptional, the
           
      24   business plan brilliantly conceived, the financial
           
      25   forecast expertly supported by market research and
           
      26   management capacity beyond question.                
           



                                                              207

       1   This Bureau of Indian Affairs determined this venture
           
       2   was not on trust lands, therefore, the ranchers could
           
       3   not get a BIE loan guarantee. 
           
       4                 The banks, on the other hand, refused to
           
       5   make the loan because -- simply because the land
           
       6   property was on -- the project was on Indian country. 
           
       7                 Never mind that these families, ranchers,
           
       8   have been ranchers since the turn of the century and
           
       9   market conditions spelled opportunity in bold capital
           
      10   letters. 
           
      11                 Banks wouldn't come near this project as a
           
      12   matter of longstanding policy, not because it was a bad
           
      13   deal.  The government agency that is mandated to assist
           
      14   Indians refused assistance because of outdated policy. 
           
      15   The status quo was maintained. 
           
      16                 The one-size-fits-all approach to
           
      17   nationwide banks to small business lending and minority
           
      18   development is not the answer.  The banks in question
           
      19   have demonstrated, little, if any, capacity to serve New
           
      20   Mexico's native American communities.  They have refused
           
      21   to commit to maintaining the level of lending to our
           
      22   state. 
           
      23                 To add to our problem, the proposed merger
           
      24   will remove lending decisions from the local communities
           
      25   and place it outside the state.  How is the loan officer
           
      26   located somewhere in the east or west coast supposed to
           



                                                              208

       1   evaluate a proposal coming from New Mexico?  Would that
           
       2   loan officer understand that the value and needs of
           
       3   Native Americans are different than their surrounding
           
       4   neighbors?  We fear not. 
           
       5                 What would happen if the banks are to
           
       6   close their branches in rural New Mexico?  We are
           
       7   worried too about declining services for traditionally
           
       8   underserved areas and population groups, and we are
           
       9   alarmed by the trend toward hiring freeze that is being
           
      10   led by big banks.  We are especially alarmed by big
           
      11   banks anti-competitive practices.  
           
      12                 That concludes my remarks.
           
      13                 MS. SMITH:  Thank you very much, and, if
           
      14   you had anything further, then please submit it for the
           
      15   record.                
           
      16                 MR. TODEA:  I will, thank you.  
           
      17                 MS. SMITH:  Are you next?  
           
      18                 MR. WELLS:  Buenos dias.  My name is
           
      19   Robert Wells and I live in Chama, New Mexico, population
           
      20   less than 1,000.  I am an accountant and self-employed
           
      21   consultant to small businesses in that part of the
           
      22   state. 
           
      23                 I want to express to this body of my
           
      24   concern regarding the impact of this merger towards
           
      25   rural America of which I believe the America I am from
           
      26   is very typical of.  
           



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       1                 I will admit that I am not well-versed on
           
       2   many of the issues of other communities on a national
           
       3   scale, but I will say that I find some very alarming
           
       4   trends in banking practices that are definitely
           
       5   affecting the way we have done business in the past. 
           
       6                 In Northern New Mexico, especially the
           
       7   Chama Valley, the lending policies, community
           
       8   involvement and benefits are not being addressed fairly. 
           
       9   This is of great concern. 
           
      10                 This geographic area of the state consists
           
      11   of a community bank and a NationsBank branch, which is
           
      12   rumored to be up for sale or subject to closure. 
           
      13                 The next competitive bank is 90 miles
           
      14   away.  This is rural America.  Northern New Mexico is
           
      15   also the home to Jicarilla Apache Tribe, one of the
           
      16   wealthiest Indian Nations in the country.  Several
           
      17   members of that tribe, not to mention many local
           
      18   businesses, are not being served by our local banks.  
           
      19                 I will correct myself on a prior statement
           
      20   I just made.  I will add a comment, and this is to say
           
      21   that Norwest Bank does have a branch on the reservation,
           
      22   but, to my knowledge, this branch was opened expressly
           
      23   to accommodate casino operation revenues in addition to
           
      24   some tribal transactions. 
           
      25                 Four years ago, the main bank in town was
           
      26   known to us as Sunwest Bank.  Approximately two years
           



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       1   ago it was purchased by Boatmen's and today it is a
           
       2   NationsBank. 
           
       3                 Regarding some of the lending practices. 
           
       4   I know of a current transaction where a loan for
           
       5   $200,000 that was made with Sunwest Bank carried a
           
       6   15-year amortization with a three-year call and was
           
       7   collateralized by 500-plus thousand dollars of real
           
       8   estate.  That was the only way this loan could be
           
       9   transacted.  It was normal in the past to renew notes of
           
      10   this automatically, assuming that the payments were
           
      11   current and had never been in default. 
           
      12                 That is not the case today.  That is a
           
      13   loan that I'm involved with right now.  
           
      14                 Decisions regarding this loan were not
           
      15   only made at the branch level, but it was also made by
           
      16   another person in the Dallas, Texas area to renew it,
           
      17   but somebody above her out of St. Louis, North Carolina
           
      18   said no, despite the fact of spending collateral. 
           
      19                 Another example, we have very hard winters
           
      20   in this northern part of the state.  Some of the small
           
      21   businesses need 5- to $10,000 bridge loans to carry us
           
      22   for the next 90 to 180 days.  They require excessive
           
      23   real estate collateral.  This is not fair.  There are
           
      24   many other examples. 
           
      25                 It is my understanding that there has been
           
      26   no plan to address the above issues and I don't know if
           



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       1   one is planned.  
           
       2                 NationsBank, according to a recent
           
       3   advertisement in the Albuquerque Journal, said that it
           
       4   has committed $350 billion to community reinvestment. 
           
       5   To citizens of my area, we have not seen a mere
           
       6   investment, much less reinvestment. 
           
       7                 I, therefore, ask this body to require a
           
       8   lending policy with  conditions and commitments that
           
       9   address the banking needs of rural America as a
           
      10   condition for this approval. 
           
      11                 Lastly, I pray that you not only listen
           
      12   but you also hear my comments.  Thank you, God bless
           
      13   America. 
           
      14                 MS. SMITH:  Thank you very much.  
           
      15                 MR. SANCHEZ:  (Unintelligible Navine
           
      16   American Language.) 
           
      17                 I am J. Gilbert Sanchez.  I come from the
           
      18   Pueblo San le Fanso, located in the State of New Mexico. 
           
      19   I am here representing myself, the Mexico Alliance and
           
      20   those that could not afford to come here today to give
           
      21   testimony. 
           
      22                 I open in my Tewa [phonetic] Language as
           
      23   my tradition mandates of me, that is to ask permission,
           
      24   that is by requesting permission from the Federal
           
      25   Reserve Board to address or speak to you.  
           
      26                 I spoke in Tewa to illustrate to you how
           



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       1   foreign the bank's and Federal Reserve's language is to
           
       2   me and the common people of the State of New Mexico, and
           
       3   especially to Native Americans. 
           
       4                 In order to preserve time and not to be
           
       5   repetitious, I will state for the record that I too
           
       6   strongly support the recommendations from my fellow
           
       7   panelists from New Mexico.  Those that are present here
           
       8   with me at the moment. 
           
       9                 I also have as many stories of what has
           
      10   taken place since the mega-mergers have come to be and
           
      11   its impact on our state and the communities. 
           
      12                 The increase in the number of loan stores
           
      13   that loan on vehicle titles, the number of payday loan
           
      14   shops and the decrease in the number of bank loans in
           
      15   our communities complement each other's in many curious
           
      16   ways.  
           
      17                 The statistics are there which indicate
           
      18   that we, the minorities in our state, are not extended
           
      19   credit.  Credit that is deserving and desired by the
           
      20   community to support economic self-sufficiency.  
           
      21                 In the bank's offer of $350 billion CRA
           
      22   commitment, I would like to know, just like my fellow
           
      23   panelists, how much of this is going to be coming from
           
      24   New Mexico, especially how much of it will be committed
           
      25   to rural New Mexico and the Native American communities. 
           
      26                 Too, I will bring forth a couple words
           



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       1   that fears -- that sense fear through any federal agency
           
       2   or agent.  I would like to know how the Federal Reserve
           
       3   Board is going to meet basic federal trust
           
       4   responsibility to me and my people, a basic obligation
           
       5   that the president is committed to at the White House
           
       6   Conference with Tribes.  
           
       7                 I would like to know how this Federal
           
       8   Reserve Board plans to address the negative impacts that
           
       9   mega-mergers will have and are having on Native American
           
      10   people and tribes when mega-mergers are being allowed to
           
      11   continue to happen. 
           
      12                 As stated, the State of New Mexico, for
           
      13   the last 50 years, enjoyed being 48th in the economic
           
      14   standing of this country.  Only recently did it drop to
           
      15   50.  When you speak of market-driven decisions, I fear
           
      16   that New Mexico will never be in the running for any of
           
      17   the benefits the Federal Reserve Board's decision might
           
      18   generate. 
           
      19                 I only have one additional request, and
           
      20   that comes from our communities in North Central New
           
      21   Mexico, the rural Native American communities, the
           
      22   Federal Reserve Board hold a public hearing in New
           
      23   Mexico so truly you can hear the many vast number of
           
      24   stories that are out there pertaining to what is going
           
      25   on in our communities. 
           
      26                 We being the -- I being part of the first
           



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       1   Americans that came here are the least to benefit from
           
       2   any of the economic standings or any of the economic
           
       3   impacts from anything.  
           
       4                 I live next to a colony of Californians. 
           
       5   Yes, the State of California does have a colony in the
           
       6   State of New Mexico.  The benefits that I supposed to be
           
       7   reaping off of them, I do not see.  So, when the
           
       8   mega-mergers happen, I do not see any benefits to myself
           
       9   personally, I do not seek them, but I would hope and
           
      10   pray that our economic level will increase if these
           
      11   things are brought forth. 
           
      12                 Those are the only comments I have.  I
           
      13   thank you for your time.  Again, would like to hear from
           
      14   Mr. Greenspan as to how he is going to address trust
           
      15   responsibility.  
           
      16                 MS. SMITH:  Thank you very much.  Any
           
      17   questions from the panel?  
           
      18                 MR. FRIERSON:  I would just like to say,
           
      19   Mr. Sanchez, that the board will follow the procedure it
           
      20   does in all of these cases in that it will look at all
           
      21   the facts in the record, and the board will explain its
           
      22   decision to you.  Whether you agree with it or not, the
           
      23   board will state how it has applied the statutory
           
      24   factors to the particular facts and you will get a copy
           
      25   of that order 
           
      26                 MR. SANCHEZ:  Thank you.  
           



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       1                 Just one more item for the record, I am
           
       2   here representing myself.  I do not represent any Native
           
       3   American government or governments at this point in
           
       4   time.  
           
       5                 MS. SMITH:  Thank you.  If there are no
           
       6   questions, I thank you again and we'll move on to the
           
       7   next panel. 
         
Last update: December 3, 2010