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Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Friday, July 10, 1998

Transcript of Panel Eighteen

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      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
           



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       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
           



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       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
           



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       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
           



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       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. 
           

Last update: December 3, 2010