Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas July 9-10, 1998
Public Meeting Transcripts
Public Meeting Regarding NationsBank and BankAmerica
Friday, July 10, 1998
Transcript of Panel Eighteen
419 23 MS. FADELLI: Good morning. My name is 24 Michelle Fadelli, and I'm the Manager of Communications 25 and Governmental Affairs for the Association of Bay Area 26 Governments, and I'm speaking today on behalf of 420 1 Supervisor Mary King from Alameda County who regrets she 2 was not able to join you this morning. 3 Mary and I both would be representing the 4 Association of Bay Area Governments, which is an 5 affiliation of the nine counties and 97 cities in the 6 San Francisco Bay Area. I'll be just reading from a 7 letter that we submitted on June 16th, which is a 8 summary of comments that we heard at a much smaller 9 regional hearing that we held last month. 10 Number one, job losses. We are concerned 11 about the large number of jobs being eliminated and 12 particularly concerned about the number that will be 13 eliminated, not just in San Francisco but throughout the 14 Bay Area. We ask that employees receive reasonable 15 notice of any layoffs and that the new bank make a 16 commitment to job training and placement. 17 Number two, community development. We are 18 concerned about the recent community development 19 commitment that fails to provide specifics about 20 distribution throughout various states, regions and 21 communities; in addition, reference to small business 22 fails to provide specific commitments to minorities and 23 low-income and populations. 24 We are concerned about the preservation of B 25 of A's Community Development Bank and ask that the new 26 bank not compete with nonprofit housing developers in 421 1 the Bay Area. 2 Number three, consumer protection. We are 3 concerned about branch closures, fee increases, ATM 4 availability and ATM fees and honoring commitments to 5 current customers. 6 If the new bank plans to save over a billion 7 dollars by 1999, we can only suspect that it is the 8 customers will feel the impact. The merger announcement 9 boasted that the new bank will have $570 billion in 10 assets. We ask how with this giant maintain hits 11 connection to the hometown customers. 12 Number four, fairness to minority and 13 low-income populations. It is stated that the 14 NationsBank has a reputation for generic lending, and 15 California is not a generic state. As an aside, our 16 association has forecast significant changes in regional 17 demographics. The Asian population will grow from 16 18 percent of the population in 1990 to 20 percent in the 19 year 2020. 20 The Hispanic population will grow from 14 21 percent to 24 percent by 2020 and the Caucasian 22 population will no longer be a majority at 47 percent. 23 We are concerned that NationsBank is not prepared to 24 deal with the diversity in California and especially the 25 Bay Area. 26 We are concerned with reports that 422 1 NationsBank has a very poor record of lending to 2 minorities and low-income populations, lending only a 3 reported 6.3 percent to low-income households and even 4 lower percentages to minorities. 5 The new bank must not be dragged down by the 6 poor standards established by NationsBank. Similar 7 performance with minority and low-income lending will 8 not pass muster in the Bay Area. 9 We are concerned about the closure of San 10 Francisco BofA headquarters and the transfer of 11 decision-making to Charlotte. North Carolina is a long 12 way from California in miles and light years away, we 13 believe, in attitude. 14 Our concerns are not relieved by word that 15 global operations will be based in San Francisco. Such 16 operations will be looking west to the Pacific Rim and 17 will not be concerned about jobs and customer relations 18 in the rest of the Bay Area. 19 More generally, we are concerned about the 20 reduction of competition in this merger as well as other 21 proposed mergers in banking. With fewer banks, who will 22 be compelled to offer free checking, free ATMs, and true 23 customer service? 24 Mergers don't tend to favor consumers and 25 don't tend to favor small businesses. BofA customers 26 are our constituents and we voice our concerns on their 423 1 behalf. 2 And this letter was signed by Mary King, the 3 ABAG, and Alameda County Supervisor. 4 MS. SMITH: Thank you. Ms. Corbin. 5 MS. CORBIN: Yes, thank you. I am here 6 representing West Contra Costa County. I am Rosemary 7 Corbin, the Mayor of Richmond. I want to thank you for 8 allowing me to testify this morning. 9 Located on the east shore of San Francisco 10 and San Pablo Bays, West Contra Costa is comprised of 11 the cities of El Cerrito, Hercules, Pinole, Richmond and 12 San Pablo and the unincorporated areas of El Sobrante 13 Kensington, Rodeo and Crockett. West County has 14 approximately a population of 200,000. The City of 15 Richmond, with a population of 93,000, is the largest, 16 oldest and most urbanized city in the area. 17 West County is a diverse community with 18 minority population of over 52 percent. While it 19 contains approximately 22 percent of the county 20 population, over 40 percent of the county's AFDC 21 recipients reside in West County and has many of the 22 largest low and moderate income neighborhoods in the 23 county. 24 However, it has some of the oldest 25 communities where the banks that are now moving to the 26 suburbs got their start. 424 1 West County is a community where a majority 2 of its population live and work in the area or in 3 communities very close by. The West County Mayors and 4 the city staffs meet on a regular basis and act 5 collaboratively on issues such as transportation, waste 6 disposal, public safety and economic issues such as the 7 subject of this hearing. 8 Our West County chambers of commerce, cities 9 and institutional institutions and nonprofit 10 organizations collaborate through a variety of 11 organizations. 12 Finally, we are an effective lending 13 territory as described by the Federal Reserve Bank of 14 San Francisco and believe that the Bank of America and 15 NationsBank, should this merger go forward, have an 16 obligation to develop a plan with West County business 17 government and community leaders for addressing the 18 community reinvestment needs in our area. 19 Bank of America has nine branches in West 20 County and, with over $425 million in business and 21 household deposits, is the second largest bank in our 22 community. 23 In terms of banking services, while BofA has 24 not closed any branches in West County, it has downsized 25 and relocated, which had been freestanding bank 26 branches, to cramped in-store branches, particularly in 425 1 low-income areas such as Richmond's Iron Triangle 2 neighborhood. 3 While we applaud BofA's innovative 4 initiatives in reinvestment lending, they appear to have 5 had little visible impact in West County. One bright 6 spot was a $625,000 loan and assistance with welfare- 7 to-work-planning to Rubicon programs, a job and housing 8 development nonprofit agency serving special needs 9 populations. 10 Should this merger go through, we want to see 11 the continuation and strengthening of the BofA's 12 Community Development Bank, and we are requesting that 13 BofA begin a process of assisting West County for 14 developing a plan for meeting our community reinvestment 15 needs. 16 I often describe West County as being in a 17 money shadow. You probably know what a rain shadow is. 18 Well, when money floats down from the federal 19 government, we tend to be behind this rain shadow where 20 the money goes to Oakland and San Francisco, and we 21 think that community, as defined under the Community 22 Reinvestment Act, should include the whole community. 23 West County's specific needs in terms of 24 community economic development are: 25 Financing for commercial rehabilitation and 26 facade improvements in conjunction with redevelopment 426 1 and other public financing in the older retail and 2 commercial areas of Richmond, El Cerrito, Pinole, San 3 Pablo, Rodeo and Crockett; 4 better access to financing for young small 5 businesses, particularly minority and women-owned 6 businesses through collaboration with business 7 development organizations such as the West County 8 Business Development Center and the local chambers of 9 commerce; 10 financing for various major development 11 projects in West County, including the Richmond Transit 12 Village, Ford Assembly Building rehabilitation, Point 13 Molate reuse and the business incubator for bioscience 14 business; 15 In terms of housing, we need new affordable 16 development such as Richmond Transit Village, a 52-unit 17 senior housing project, Cortez and Woods school sites 18 and Pinole commercial properties owned by a subsidiary 19 of BofA which the city would like to develop for senior 20 housing; 21 In-fill new construction and rehabilitation 22 throughout older developed neighborhoods throughout West 23 County. 24 Vacant closed branches for a are a problem 25 for all of us. The bank needs to work with cities and 26 economic organizations to develop commercially viable 427 1 reuse programs for branch facilities at closes such as 2 the Richmond Ninth street branch. 3 And, finally, we have a relatively high 4 unemployment rate. The bank needs to mitigate the loss 5 of jobs from this merger and commit to the hiring and 6 promotion of women and minorities. 7 In summary, West Contra Costa is concerned 8 about how you define community and how you can ensure 9 that all of the bank's community will be served. We do 10 not believe that the proposed CRA plan contains enough 11 specific goals or the monitoring necessary to enforce 12 them. 13 We need area-specific community reinvestment 14 plans with community input. Also, the potential loss of 15 CRA leaders within the Bank of America causes us to 16 worry about commitment. 17 We applaud BofA's history of innovation 18 regarding community reinvestment and its ability to work 19 with all segments of the community, including nonprofit 20 organizations. 21 We are looking to the Federal Reserve Bank to 22 ensure the continuance of a commitment to the innovation 23 from the merged bank and that commitment will extend to 24 all parts of the community. 25 Thank you. 26 MS. SMITH: Any questions of Ms. Corbin? 428 1 MR. FRIERSON: Mayor Corbin, could I ask you 2 a question, please? 3 MS. CORBIN: Yes. 4 MR. FRIERSON: You mentioned that one of the 5 things you were advocating was the continuation of the 6 strengthening of the Bank of America Community 7 Redevelopment Bank, and we've heard quite a lot about 8 that organization yesterday, and I expect we'll hear 9 more today. 10 Could you elaborate a little bit on your 11 relationship with the bank and it's projects or any 12 types of developments they have done in the City of 13 Richmond? 14 MS. CORBIN: That's what I referred to in 15 terms of the money shadow we are in. The Bank of 16 America has funded the Rubicon program, which we are 17 very grateful for, but we think that in defining 18 community, too often Oakland is seen as taking care of 19 the whole -- the Oakland area is seen as taking care of 20 the whole of the East Bay, and we're saying that 21 community has to include West Contra Costa County as 22 well. 23 I used to live in San Francisco, and I was a 24 librarian at San Francisco Public and used to get in 25 arguments about the fact that Richmond is not in Alameda 26 County and it's not a suburb of Oakland. 429 1 I think too often people don't understand 2 what we are. They should come. I'll give him a tour 3 and they can see that it's a lot -- the East Bay is a 4 large area and we're probably -- this is probably just 5 one example of others throughout the Bay Area where, if 6 you sit in an office in San Francisco or, God help us, 7 in North Carolina, and you think that because you are 8 doing something in Oakland you are doing it for the 9 whole East Bay, you are wrong, and we're very concerned 10 about that because we have suffered from that. 11 I don't want to take anything away from 12 Oakland. I just want to be sure we get our fair share. 13 Any other questions? 14 MS. SMITH: Thank you. 15 MS. CORBIN: Thank you. 16 MS. SMITH: Thank you very much.
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