Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas August 13, 1998
Public Meeting Transcripts
Public Meeting Regarding Banc One and First Chicago
Thursday, August 13, 1998
Transcript of Panel Fifteen
5 MR. RUF: My name is Fritz Ruf. I'm the 6 Executive Director of Wisconsin Housing And 7 Economic Development Authority and here to testify 8 in support of the merger of Banc One and First 9 Chicago NBD. 10 Wisconsin Housing and Economic Development 11 Authority is a State Housing Finance Authority 12 created in 1973. 13 Our mission is to serve Wisconsin 14 residents and communities by working with others to 15 provide creative financing and technical resources 16 to stimulate and preserve affordable housing, small 17 business and agriculture. 18 One of our oldest and most reliable 19 partners has been Banc One and its predecessor, 20 Marine National Exchange Bank. Together, we have 21 provided millions of dollars of affordable 22 financial resources to Wisconsin home buyers, 23 farmers and small business owners. 24 Consider the following track record 297 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 established by WHEDA and Banc One. And incidently, 2 these numbers are not included in the HMDA data 3 that has been referred to previously because we are 4 still in the process of working with the Federal 5 Reserve Bank of Chicago to determine a method to 6 permit this information to be accumulated as the -- 7 in the HMDA data to give a more accurate reflection 8 of low to moderate income lending in Wisconsin. 9 1,539 home purchase loans totaling 10 $72,765,867; 41 home improvement loans totaling 11 $350,000; 2 beginning farmer loans totaling 12 $288,000; 133 agricultural production loan 13 guarantees totaling $1,758,000; 10 small business 14 loan guarantees totaling $1,055,000; and 23 small 15 business loan subsidies totaling $683,000. 16 Moreover, Banc One is the first 17 corporation to invest in Wisconsin whole 18 income housing credit development. Today, Banc One 19 has debt or equity investments in 35 Wisconsin 20 communities. 21 While we are pleased with this record, 22 we continue to seek opportunities to do more. 23 Recently, Wisconsin Housing and Economic 24 Development Authority talked to numerous investment 298 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 bankers, underwriters, insurance companies and 2 banks in an effort to find some parties interested 3 in providing financial assistance for the 4 development of low-income, multi-family housing in 5 rural areas in Wisconsin where the need is very 6 acute and the ability to meet that need has been 7 very limited by the size of the loans and the 8 inability to acquire adequate capital to be -- who 9 would be attracted to this market. 10 Banc One was the first and only 11 institution to respond to this search of ours. And 12 we have developed with them a corporation known as 13 the Wisconsin Affordable Housing Alliance, LLC. 14 The purpose of the alliance is to provide 15 a permanent loan product for financing of small, 16 nonmetropolitan, multifamily developments that 17 use low-income housing tax credits, to leverage 18 private capital for multifamily development, to 19 fill a market need with a product not otherwise 20 available in Wisconsin, and to create quality 21 rental housing for low to moderate income 22 Wisconsinites in small income markets. 23 Until the alliance, Wisconsin tax credit 24 developers had difficulty accessing long-term 299 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 credit. Many relied on short-term organizations 2 with uncertain and unknown future terms. This 3 mismatch of resources to purpose was limited to 4 production of smaller-scale developments that are 5 badly needed in many Wisconsin communities. 6 Through the alliance, developers can now 7 plan their projects with more confidence and also 8 readily assess equity from investors who favor such 9 long-term financing. 10 This program has allowed us to put forth 11 $1,975,000 in three developments containing 92 12 units. Presently, the alliance is committed -- has 13 committed to additional loans of up to $5,124,000, 14 this from a corporation in which we have 15 contributed $1 million of equity, Banc One CDC 16 contributed a million dollars in equity and a line 17 of credit of up to $10 million. 18 We feel very strongly that Banc One has 19 been and will continue to be a very aggressive 20 provider of lending product to low to moderate 21 income families in Wisconsin. And we'd urge the 22 Federal Reserve Bank to favorably consider the 23 merger that is before them today. Thank you. 24 MS. SMITH: Thank you very much. We'll go to 300 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 Mr. Barbash. 2 MR. BARBASH: Good afternoon. I appreciate 3 your allowing me to move up. It allows me to get 4 back to Columbus and not miss the Savage Garden 5 concert, which my 15-year old daughter has insisted 6 I be back for. 7 MR. ALVAREZ: Lucky for you. 8 MR. BARBASH: Yeah, lucky me. 9 My name is Mark Barbash. I'm Executive 10 Director of Columbus Countywide Development 11 Corporation. We are what's called a certified 12 development company. 13 We've been in existence since 1981. And 14 our mission in life is to create jobs. We do this 15 by filling the capital access gap for small 16 businesses by providing financing which takes 17 substantially greater risk than conventional bank 18 financing and which may involve substantial 19 technical assistance to entrepreneurs. 20 The purpose of my appearance here today is 21 to strongly support the merger of Banc One and NBD 22 First Chicago. 23 And I do this primarily based upon the 24 record of practical day-to-day partnership that 301 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 exists in Columbus between Banc One, and not just 2 Columbus Countrywide, which is the primary 3 small business lender in the area, but a whole 4 range of other economic development, social 5 service organizations, the Ohio State University, 6 and so on. 7 Let me give you four specific examples of 8 Banc One's involvement. 9 The first is their involvement in regular 10 standard small business lending through the SBA 504 11 program. In our business, we make loans -- second 12 mortgage loans to small businesses for real estate 13 expansions so they can grow and hire people. 14 Since 1981, Banc One has financed 15 $60 million in SBA 504 financing in essentially 16 three counties of central Ohio. This is about 17 14 percent of the total investment that our 18 certified development company has made in SBA 504 19 financing. They are the lead bank in this area. 20 Second is the area of microenterprise 21 financing. In 1993, we established a central Ohio 22 microloan program. We did this by using funding 23 from the Small Business Administration, but it 24 required contributions of area lenders to establish 302 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 a loan loss reserve fund. 2 Banc One was the first in the gate. They 3 contributed $14,000 to this program. It was a 4 small amount, but since then we've put out just 5 under a million dollars in financing to 150 6 start-up small businesses primarily in the inner 7 city of Columbus. 30 percent of this has gone to 8 minority-owned businesses, 49 percent to 9 women-owned businesses and 40 percent to low-income 10 business owners. 11 The third area is microenterprise 12 training, which you discover when you make loans to 13 start-up small businesses is it's not just the 14 money, it's the ability to run the business. 15 Banc One was the lead founder of a program 16 in Columbus called Fast Track, which was set up by 17 a group called the Ohio Foundation for 18 Entrepreneurial Education, which is a practical 19 day-to-day training program to help entrepreneurs 20 become better entrepreneurs. 21 To date, they've put $65,000 in 22 operational funding in and have funded $15,000 in 23 scholarships. In 18 months, we've basically 24 trained 150 small businesses. 303 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 Fourth, recently Banc One participated in 2 the establishment of the Columbus Growth Fund, 3 which is a Mezzanine Financing Fund between debt 4 and equity targeted at minority women-owned 5 businesses in the city of Columbus. 6 Banc One's specific involvement has been 7 $545,000 towards this project. Banc One's 8 involvement is not just money. It's day-to-day 9 involvement by their officers, both line lenders, 10 by senior managers and loan review committees, 11 evaluations of applications. They really put in 12 thousands of hours. 13 Let me stress a couple of points. The 14 first one is our organization, as I've said, is not 15 the only game in town. I represent but one facet 16 of Banc One's involvement in Columbus economic 17 development activities. 18 Second thing is that there's been some 19 concern about the impact of Banc One's local 20 economic development activities by the impact of 21 the merger. 22 In another role, I am the President of an 23 organization called the National Association of 24 Development Companies, which is an association of 304 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 groups like ours around the country. 2 And when Banc One would buy a local bank, 3 I would get calls from local certified development 4 companies around the country saying, you're from 5 Columbus, tell us about Banc One. I tell them 6 about my good experience. 7 And with almost universal response, six 8 to twelve months later these certified development 9 companies call back and say, you know, you were 10 right, it took them a little while, but, in fact, 11 they're very active in local economic development. 12 Around the country, they seem to be having this 13 effect. 14 A lot has been said here about the 15 desirability of having special agreements. I want 16 to finish by saying that we don't have a special 17 agreement with Banc One. We don't have a written 18 piece of paper. 19 What we have is a practical, day-to-day 20 working relationship with the bank that caused -- 21 has obligations on our part to do our job, 22 obligations on Banc One's part to help do this. 23 And we strongly support the merger. 24 MS. SMITH: Thank you very much. 305 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 MR. BARBASH: Thank you. 2 MS. SMITH: Ms. Carlstedt. 3 MS. CARLSTEDT: Is this -- 4 MS. SMITH: I'm not sure that that -- here, 5 just use that one. 6 MS. CARLSTEDT: Thank you for this opportunity 7 to address the Federal Reserve Panel. My name is 8 Moria Carlstedt, and I am the President of the 9 Indianapolis Neighborhood Housing Partnership. 10 The partnership was formed in 1988 and is 11 a catalyst and intermediary to support the 12 creation of affordable housing opportunities in 13 Indianapolis, as well as just to support the 14 sustaining of our current affordable housing 15 stock. 16 Through partnerships with Federal, State 17 and local governments, as well as our philanthropic 18 institutions, community development corporations 19 and the financial institutions, the Indianapolis 20 Neighborhood Housing Partnership has been involved 21 in counselling, credit counselling, home ownership 22 training and direct lending through loan pools. 23 Since 1988, we have counselled 24 approximately 5,000 customers. We have conducted 306 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 150 classes. And we've been involved in 2 approximately 2,000 units of home ownership 3 opportunity and/or quality rental opportunities. 4 The Housing Partnership has had a 5 long-standing relationship with Banc One and First 6 Chicago NBD. They have been with us since the 7 beginning. Both institutions have participated in 8 two single-family loan pool opportunities, as well 9 as one multi-family loan pool. 10 Banc One and First Chicago represented -- 11 First Chicago NBD, excuse me, represented 12 approximately 46 percent of our first loan pool, 13 they represent 40 percent of our existing loan 14 pool and about 66 of our multi-family lending 15 loan pool. 16 The pools have been the primary source 17 of funds dedicated to creating affordable and 18 low-income housing opportunities in Indianapolis. 19 Additionally, among the financial 20 institutions, since 1988 Banc One and First Chicago 21 NBD have been the single largest donating -- they 22 have donated more money to our partnership and 23 supported our operations. 24 They also have membership on our Board of 307 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 Directors and have been actively involved in our 2 community in the -- supporting the affordable 3 housing delivery system. 4 The Housing Partnership has been working 5 with Banc One and we have been in communications 6 with Banc One to ensure that the momentum and 7 significant community -- the significant community 8 development activity that has taken place over the 9 years remains at a pace that will meet the needs of 10 our citizens. 11 The Housing Partnership recognizes and 12 respects the business activities or the business 13 reasons for the merger. And we believe that 14 Banc One will, in fact, remain a strong community 15 partner. 16 We are always there in communication with 17 Banc One to remind them that the post-merger bank 18 will need to remain committed to our organization 19 and other organizations such as ours, like the 20 Community Development Corporations and other 21 partners and stakeholders. 22 It is imperative that Banc One remain 23 involved in order to enable us to sustain the pace 24 at which we are developing affordable housing 308 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 opportunities. 2 We are communicating with Banc One on a 3 regular basis to remind them of the tremendous 4 financial investment that has taken place in 5 Indianapolis over the years. 6 Our philanthropic institutions and our 7 community development corporations, the government 8 and the private sector, have worked well together 9 and we have made tremendous accomplishments. And 10 Banc One and First National and NBD have been there 11 primarily in the form of the loan pools and by 12 supporting the partnership. 13 We are always reminding Banc One of the 14 need for them to continue to play a significant 15 role. Our community has just completed a task 16 force which will guide our growth and our community 17 in the form of its housing policy for the next ten 18 years. And it is clear that Banc One and all of 19 the financial institutions will be imperative -- it 20 will be imperative that they participate in our 21 growth in the next ten years. 22 Finally, we don't hesitate to remind Banc 23 One and the other banks in our community about the 24 profitable business opportunities in remaining in 309 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 partnership and remaining actively engaged in the 2 community development movement. 3 Through our counselling, we refer 4 hundreds, hundreds of citizens to Banc One and 5 other banks in our community who and then -- who 6 then are able to access traditional mortgage 7 products. 8 Banc One and the Indianapolis Neighborhood 9 Housing Partnership have communicated throughout 10 this entire process. And we are optimistic that 11 that communication will continue to the benefit of 12 the community. 13 Therefore, based on the significant level 14 of participation of Banc One and the history of the 15 Community Development Corporation of the community 16 development movement and in their commitment to the 17 partnership, as well as assurances that we have 18 received during this process and a belief that 19 local bank management will, in fact, be making 20 decisions for the local community, the Housing 21 Partnership is encouraged about the future. 22 And we believe that Banc One will remain 23 committed to the Indianapolis community, to the 24 partnership and to community development. Thank 310 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 you for this opportunity. 2 MS. SMITH: Thank you. Ms. Jones-Kibby. 3 MS. JONES-KIBBY: Hello. I want to thank 4 you -- I need a microphone. 5 Good afternoon. I want to thank you for 6 the opportunity to speak out in support of the 7 merger between Banc One and First Chicago NBD. 8 My name is Denise Jones-Kibby, and I'm the 9 Policy Director at Women's Self-Employment Project, 10 as well as the Chair of Illinois State 11 Microenterprise Initiative, also known as ISMI. 12 Women's Self-employment Project founded 13 ISMI in the fall of 1995. ISMI is a coalition of 14 service providers, financial institutions, State, 15 local and private agencies. 16 Our mission is to provide an organized 17 voice to advocate for community economic 18 empowerment and to create growth opportunities 19 for microenterprise development throughout the 20 state of Illinois. 21 Microenterprise are defined as very small 22 businesses having fewer than five employees, 23 limited access to the commercial banking sector, 24 are able to utilize a loan under $15,000 and are 311 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 generally sole proprietors. 2 A study by the Aspen Institute found that 3 entrepreneurs served by microenterprise development 4 programs are predominantly women, people of color 5 and low to moderate income. 6 Many microenterprise businesses are 7 located in residential communities. By providing 8 business services in residential communities, 9 microenterprise affords economic fabric that is 10 critical to maintaining economically viable 11 neighborhoods. 12 There are over 200,000 microenterprise 13 businesses in Chicago. Microenterprise is growing 14 at an annual rate of 7 to 8 percent. The number of 15 microenterprise businesses is expected to reach 16 27.8 million nationwide by the year 2001. 17 66 percent of the new jobs created 18 in Illinois between 1992 and 1996 were 19 microenterprises compared with the net loss of 20 jobs in firms over 100 employees. 21 As a number of microenterprise businesses 22 increase in Illinois, it is imperative that the 23 government and private sector leaders recognize and 24 support microenterprise as an essential component 312 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 of economic development and welfare-to-work 2 strategies that result in job creation and 3 self-sufficiency. 4 I am testifying today to inform you that 5 Banc One Illinois has been very supportive of 6 ISMI's efforts to promote microenterprise in 7 Illinois. Banc One was one of the first financial 8 institutions to join ISMI and has taken a 9 leadership role in several of its initiatives. 10 In March of 1998, ISMI held its first 11 statewide microenterprise conference in 12 Springfield, Illinois. Banc One financially 13 sponsored the conference, assisted in the planning 14 and facilitated discussions. 15 Banc One has also taken a leadership role 16 in the development of a database and a directory of 17 microenterprise organizations in Illinois. We 18 anticipate that both items will be accessible 19 through the Internet in the near future. 20 Access to information is often cited as an 21 impediment to microenterprise development. And 22 ISMI anticipates that this second edition of the 23 directory will be as popular and useful statewide 24 as the first. 313 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 Banc One is working with other ISMI 2 members to research and develop a report 3 identifying the barriers faced by 4 microentrepreneurs in Illinois. 5 We will use this report to increase our 6 advocacy for creating a public and private sector 7 environment in Illinois that fosters 8 microenterprise development in fund-raising. 9 As ISMI works towards its goals of 10 developing a comprehensive public policy agenda 11 that promotes microenterprise as a viable economic 12 development alternative, especially for communities 13 with limited access to resources, addressing the 14 needs of microenterprise development programs and 15 building a network to exchange information between 16 microenterprise organizations in Illinois, ISMI 17 believes that Banc One will continue to be a 18 valuable partner and, therefore, ISMI supports this 19 merger application. Thank you. 20 MS. SMITH: Thank you very much. Mr. Kudek. 21 MR. KUDEK: Thank you. 22 My name is Ken Kudek. I'm Assistant 23 Director and Vice President of Focus Hope in 24 Detroit. Focus Hope is a human and civil rights 314 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 organization. And we are this year celebrating our 2 30th anniversary. 3 I think it's fair to say, up front, that 4 First Chicago NBD is one of three major banks that 5 we do a lot of business with in Detroit. We have 6 an operating budget of $60.2 million and usually 7 have a capital devolvement budget of $20 million a 8 year operating, okay? At least two of those banks 9 probably wish I wasn't here testifying in favor of 10 this merger today. 11 The programs that we run, let me start 12 with the key program, the Food Prescription 13 Program. It's a Federal Commodities Supplemental 14 Food Program for low-income pregnant women, 15 postpartum women, infants and children to six years 16 of age and senior citizens in Detroit. 17 During the first Reagan administration, we 18 actually got it introduced as a pilot legislation 19 when every other program -- social program in the 20 United States was coming under jeopardy. 21 The Food Prescription Program in the last 22 depression that we had in Detroit, which was in 23 1991, fed 90,000 people a year. It's that 24 experience that drives us as a civil and human 315 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 rights organization to community and economic 2 development. 3 We chose human skill development as the 4 primary driver, the one thing that could not be 5 relocated easily and the kind of thing that put 6 us into technical training in the deals that 7 we're in. 8 Effectively, those technical training 9 programs are viewed as breakthrough. They're 10 copied in the United States from Los Angeles 11 through St. Louis to Philadelphia. And we now have 12 a clone coming up in Port Elizabeth, South Africa. 13 In those programs, high school graduates, 14 who in the United States come out with Sixth Grade 15 math and Eighth Grade reading functionally, can end 16 up with a Bachelor's of Manufacturing Engineering 17 and human experience time. 18 We take people from Eighth Grade math and 19 Eighth Grade reading in seven weeks to be able to 20 do technical training; that is, Eleventh Grade math 21 and about Tenth Grade reading in the seven weeks, 22 all in human time. 23 These are all poor folks. 80 percent of 24 the population is African American, 45 percent in 316 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 a nontraditional field of manufacturing and 2 machining and engineering are female, 80 percent 3 are low income. 4 The place in which we live is 5 a low-income section of Detroit. We see poverty 6 day in and day out. We don't like it. We want to 7 change it. That is our mission, to eliminate 8 poverty, racism and adjust it. 9 To -- I've heard a number of concerns 10 about housing care. By the way, our bias on that 11 is, if you create the human skills so that people 12 are productive, you draw jobs. Jobs create money. 13 Money creates housing. I don't need Federal 14 Legislation to create housing. I need jobs, okay? 15 We have had, for the last 20 years -- we 16 looked at it last year -- fiduciary responsibility 17 for over one-half billion of Federal dollars alone, 18 500 million Federal dollars. The departments that 19 have put their confidence in us are Agriculture, 20 HHS, DOD, DOL, DOE, DOC, HUD, to name a few. Okay? 21 I say all this because bona 22 fese (phonetic) are important. And I've 23 listened in the audience for a while to my brother 24 and sister colleagues who are in community and 317 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 economic development who are on the other side of 2 this issue. 3 We've known NBD -- and I'll refer to them 4 as NBD because it's the old name. I don't change 5 that easily. 6 We've known NBD since we had $110.48 to 7 put in the bank. In the 30 years of history, one 8 sees both good times and bad times as a civil human 9 rights organization. NBD was always there. 10 As I said, we had a fiduciary 11 responsibility for a lot of Federal money, State 12 money, local money, foundation money all over the 13 place. And in each of those cases, particularly on 14 the Federal Government, the State side and the 15 local governmental side, it is extremely, extremely 16 slow pay. NBD has been there with a line of 17 credit. 18 I only have one minute left, so I'll take 19 on the two objections. One is Banc One, who I 20 don't know, has a bad history of lending, possibly 21 discriminatory. You guys need to look into that. 22 I'm a civil and human rights guy. You need to look 23 into that. 24 The second is that consolidation may lead 318 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 to disinvestment. I don't believe that's true. My 2 experience with NBD and Bank -- First of Chicago 3 NBD since the merger is that there has been more 4 re-investment and not less re-investment in 5 Detroit. And thank you for your time. 6 MS. SMITH: Thank you. Ms. Ratner. 7 MS. RATNER: I'm Hedy Ratner, and I'm 8 Co-President of the Women's Business Development 9 Center. 10 Thank you for the opportunity to present 11 my response to the proposed merger of Banc One with 12 First Chicago NBD in support for Chicago NBD and 13 Banc One's merger and commitment to both the letter 14 and spirit of the Community Reinvestment Act. 15 Representing thousands of women and 16 minority business owners in the Chicagoland area, 17 the WBDC is involved in First Chicago NBD's 18 continuing investment into low and moderate income 19 families, business and neighborhoods and 20 specifically in its efforts to provide access to 21 credit in those communities. 22 The Women's Business Development Center 23 has a positive first-time experience with First 24 Chicago NBD since the inception of our organization 319 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 in 1986. 2 The WBDC provides counselling, 3 entrepreneurial training, financial assistance, 4 business and strategic planning, marketing and 5 procurement assistance and assistance with loans to 6 start-up, emerging and mature businesses. 7 Our organization is now the oldest and one 8 of the largest and most comprehensive women's 9 business assistance centers in the United States. 10 First Chicago has been our partner in 11 economic development providing support for our 12 organization, loans to our client, funds for our 13 collateral pool to collateralize small business 14 loans, program-related investments for microlending 15 to women and minority start-up businesses, involved 16 with our Board of Directors, participation as a 17 lender in our women's business bank loan program 18 and participation in our annual events at 19 conferences and marts, and is committed to vendor 20 development and purchasing from minority and women 21 business owners, one of our major missions. 22 Recently, the Women's Business Development 23 Center and First Chicago NBD began a wonderful new 24 partnership to provide business development, 320 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 financial assistance and banking services to low 2 and moderate income communities. 3 First Chicago NBD and the WBDC are taking 4 our programs and services on the road with the 5 Wheels of Business mobile van to make our programs 6 and services more available and accessible in 7 low-income communities. 8 This innovative new business program will 9 bring information and services, counselling and 10 entrepreneurial training, banking services, credit 11 advice and counselling, financial assistance, 12 Internet training and access to that technology, as 13 well as self-employment opportunities to 14 economically disadvantaged communities. 15 Women, and specifically those in 16 low-income communities, have been left out of 17 economic opportunities. Women face numerous 18 barriers to economic self-sufficiency because of 19 lack of affordable child care and access to 20 transportations, quality education and jobs. 21 The First Chicago NBD Worlds -- Wheels 22 of Business -- First Chicago NBD-WBDC-Wheels of 23 Business approach helps us provide resources, 24 information and support to those who need -- 321 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 most need help. 2 The WBDC is also a partner with Banc One. 3 It has been part of the Women's Business Bank Loan 4 Program, participated in our annual conferences and 5 supports the WBDC and provides loans to our 6 clients. 7 WBDC is also partnering with ACCION, a 8 neighborhood microlender which has received 9 considerable support and encouragement from First 10 Chicago NBD. 11 With ACCION providing loans and WBDC 12 providing business assistance, the small businesses 13 in economically disadvantaged neighborhoods have a 14 better chance for success in the communities and 15 increased opportunities neighborhood 16 revitalization. 17 CANDO, a microlender and a neighborhood 18 development organization, has also been our partner 19 and a partner of First Chicago NBD for many years, 20 lending, developing and supporting Chicago's 21 economic strength. 22 The partnership of private and public 23 sector, nonprofit and for-profit entities is 24 also evident in First Chicago's involvement with 322 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 the Illinois Capital Access Program, a 2 state-based small business loan initiative begun 3 in early 1997. CAP is now one of the most 4 successful programs for access to capitals for 5 small businesses. 6 First Chicago NBD is the most active 7 lender in this successful program. CAP's incentive 8 program provides more ways for First Chicago to 9 approve loans for small business. 10 For the WBDC and other community 11 development organizations, to truly understand the 12 issues of small business lending in low and 13 moderate income communities, gender and race based 14 lender data that has been available for housing is 15 not available for small business. 16 With good research, gender and race based 17 data, we can develop the successful policies and 18 programs for small business lending in the next 19 century. We, therefore, look to First Chicago with 20 Banc One to be the precedent-setter and to lead 21 national efforts in changing Regulation B. 22 This is a tiny window of opportunity. 23 The Federal agencies are requesting comment and 24 recommendations on Reg B from the general public. 323 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 Although our organization and hundreds 2 of community and economic development organizations 3 agree that the requirement of gender and race 4 based commercial lending data is necessary for 5 policy and appropriate development, we would like 6 to see the participation of major banks in this 7 effort as well. 8 The WBDC and many of our colleagues across 9 the nation are also very concerned about the effect 10 bank mergers will have on small business lending. 11 The standardization of underwriting 12 criteria, the removal of lending decision-making 13 from the first-line banker, which is the continuing 14 trend in larger and merged banks, is detrimental 15 to the growth of small businesses in the inner 16 cities. 17 Although intermediaries like ours -- oops, 18 am I off? I'm off. Well, I'm done, I guess. 19 MS. SMITH: Thank you very much. We will 20 keep -- we will put your entire statement into the 21 record. 22 MS. RATNER: Thank you. 23 MS. SMITH: Any questions? All right. We're 24 ready for Panel 16. 324 McCORKLE COURT REPORTERS, INC. CHICAGO, ILLINOIS - (312) 263-0052 1 All right. We're going to start with 2 Mr. Ellis, if someone will give him the mike.
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