Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty-Two
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16 MR. LONEY: Do we have any other
17 questions of the panel? If not, I will thank
18 you very much for coming in and talking to us.
19 Mark Winston Griffith, who was
20 scheduled to testify in Panel Twenty-two, is
21 now here.
22 Do you want to come up, Mr. Griffith.
23 (Continued on next page)
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25
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2 MR. LONEY: Mr. Griffith, please
3 proceed.
4 MR. GRIFFITH: Good morning. Sorry
5 for being late.
6 MR. LONEY: You'll stay after school.
7 MR. GRIFFITH: Okay. I get all the
8 special attention. I appreciate that.
9 Good morning. My name is Mark
10 Winston Griffith, and I'm the founding
11 executive director of the Central Brooklyn
12 Partnership and was the founding chairman of
13 the Board of the Central Brooklyn Federal
14 Credit Union.
15 The Partnership serves the
16 neighborhoods of Ft. Greene, Clinton Hill,
17 Bedford Stuyvesant, Crown Heights, Brownsville,
18 Prospect Heights, East Flatbush and Flatbush.
19 I have a confession to make. When I
20 first learned of these hearings I was planning
21 to be out of town, out of reach, or just plain
22 out. As I saw it, I would have to be out of my
23 mind to show up today and testify. No matter
24 what stance I take on what is probably the most
25 important merger prospect within the financial
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2 industry since CRA was enacted me and my
3 organization are sure to be dragged through the
4 mud one way or the other as a result of this
5 testimony.
6 To go on record against this proposed
7 merger would be perceived as dismissing and
8 betraying the efforts of one of the strongest
9 supporters of my organization, and of the
10 community development credit union industry
11 which of course is Citibank.
12 To advocate for the merger could risk
13 ignoring some glaring threats to consumer
14 interests, and more specifically to my
15 community, an area that has endured its own
16 history of betrayal and dismissal.
17 But, ultimately, staying home while
18 the future of financial services as we know it
19 is to be discussed would be a disservice to my
20 colleagues at Citibank and the people of
21 Central Brooklyn.
22 Simply put, too much is at stake and
23 as one of the few organizations in Central
24 Brooklyn that has and explicit mandate to serve
25 as community reinvestment advocate and watch
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2 dog, staying home, no matter how convenient,
3 would be irresponsible and ultimately
4 unconscionable.
5 I'm sure I don't have to tell you
6 that Central Brooklyn has been a long-standing
7 victim of bank redlining, discrimination and
8 disregard.
9 In the nation's largest black
10 community in the last ten years alone we have
11 seen twice as many bank branches close as we
12 have seen open. Nationally there is one bank
13 branch for every five thousand people. In
14 Central Brooklyn there is one bank branch for
15 every 23,000 people.
16 A now somewhat outdated study of bank
17 lending showed that for every dollar deposited
18 in local banks, less than one penny was
19 reinvested back into the community.
20 Check cashing operations inevitably
21 step in. And in Central Brooklyn there are
22 twice as many cash checking operations as there
23 are bank branches.
24 Into this environment came the
25 Central Brooklyn Partner in 1991. The
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2 Partnership provides education and training on
3 financial literacy issues and organizers and
4 advocates around community reinvestment issues.
5 The Partnership runs the youth empowerment
6 program, a leadership development and financial
7 education program for young people, the Sisters
8 Lending Circle, a financial self-sufficiency
9 support group for people who receive public
10 assistance, and an economic justice program
11 which conducts research on local financial
12 patterns, and, as I mentioned earlier, serves
13 as a CRA watch dog.
14 In 1993 the Partnership created the
15 Central Brooklyn Federal Credit Union a
16 financial cooperative that serves more than
17 five thousand people who live, work, worship
18 and do business in Central Brooklyn has almost
19 five million in assets and has made millions of
20 dollars of loans over the past five years.
21 And yet the credit union, while one
22 of the largest community development financial
23 institutions in all of New York City struggles
24 on many levels to remain healthy and robust in
25 a credit parched area.
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2 Since the beginning, Citibank has
3 been there for us. As one of our first
4 nonmember investors, Citibank helped capitalize
5 the credit union and enabled us to make low
6 interest personal and small business loans to
7 our membership almost immediately upon the
8 credit unions opening with a zero interest
9 deposit of $100,000 dollars.
10 Eager to support us in our early
11 growth period, Citibank made a grant of
12 $10,000.
13 Over the years we have also received
14 several grants for our youth program,
15 participated in a Citibank technical assistance
16 program for not-for-profit community developers
17 and have turned to people like Janet Thompson
18 for advice.
19 As you know from the testimony of the
20 National Federation of Community Development
21 Credit Unions, Citibank has made a sizable
22 development in community development credit
23 unions nationwide and Central Brooklyn is
24 scheduled to soon receive a $55,000 equity
25 grant through Federation.
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2 Depending upon how Citibank responds
3 to the rest of my testimony, I plan to make
4 additional requests for grants for the
5 Partnership and deposits for the credit union.
6 Unequivocally, Citibank has been a
7 full partner in our organizational efforts to
8 rebuild the economy of Central Brooklyn, but
9 although my organization quickly turned
10 Citibank investments into the Partnership into
11 an instrument that vastly improved the quality
12 of peoples' lives, it would be arrogant and
13 narrow minded to conclude that meeting
14 organizational needs fulfills a financial
15 institutions obligation to the people of low
16 and moderate income neighborhoods.
17 Let's be real. Community
18 reinvestment and the consideration of mergers
19 are not just about measuring a bank's support
20 of neighborhood-based community efforts, no
21 matter how impressive.
22 It's also more importantly about the
23 quality accessibility and affordability of a
24 bank's financial product and what the sum of
25 this proposed mergers parts mean for the future
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2 survivability of my community.
3 On that count I have deep-seated
4 fears and reservations. I am concerned that
5 Citibank's record of mortgage lending, once the
6 best in Central Brooklyn, has fallen
7 precipitously over the last ten years. I am
8 concerned with Citibank's growing complacency
9 in my neighborhood and its most recent failure
10 to participate in a fund raising consortium to
11 support the credit union, because it's based
12 more value on it's rivalry with Chase then the
13 future of my institution and the people we
14 serve.
15 I am concerned with Citibank's
16 prohibitively high fees for its consumer retail
17 services such as checking, where there is no
18 low to mid range pricing between life-line and
19 ridiculously expensive no-fee checking.
20 I am concerned that Citibank's
21 increasing global banking strategy is coming at
22 the expense of communities like Central
23 Brooklyn and that this merger will make them
24 even less focused on our needs.
25 I am deeply suspicious of any
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2 community reinvestment pledge, 115 billion, or
3 otherwise made while a merger is being
4 considered and I am disgusted at the way this
5 proposed merger, which at this moment in time
6 is illegal, has been treated as a foregone
7 conclusion probably turning the hearing into a
8 cynical exercise, yet again watching the
9 restless natives jump up and down and shout
10 ugga-bugga.
11 I think that ACORN had the right idea
12 yesterday when they came in here, shut the
13 place down for a moment, and made us consider
14 whether we even have the slightest bit of power
15 to direct the effects of this monumental
16 decision.
17 I for one am not going to go home and
18 passively sit by to a deal cut in the corporate
19 hallway.
20 I again acknowledge Citibank's
21 financial support of Central Brooklyn through
22 my two organizations, one of which makes loans
23 to people that every other lender has now
24 abandoned. This is a testament to Citibank's
25 reinvestment record and I'm here to bear
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2 witness to that.
3 God knows I hope the support
4 continues, and that Citibank approves the
5 deposit request that I plan to submit next
6 week.
7 (Laughter)
8 But at the risk of sounding
9 ungrateful, that is simply not enough. My
10 recommendations are simple and broad.
11 I challenge Citibank to either be a
12 more aggressive supporter of community
13 development, make more mortgage and small
14 business loans in my neighborhood, and provide
15 products that can be more widely used by people
16 of low and moderate income or give up its
17 merger plan.
18 I know you have the power, Citibank,
19 and resources. Use them. I challenge the
20 Federal Reserve to enforce this, set higher
21 standards for the consummation of this merger
22 proposal and not be seduced or rolled over by
23 the seeming inevitability of this deal. Don't
24 sacrifice my neighborhood for the sake of
25 making financial history.
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2 Thank you.
3 MR. LONEY: Thank you, Mr. Griffith.
4 Any questions from the panel?
5 MR. ALVAREZ: I have a question,
6 Mr. Griffith, do you think that the Citi is
7 learning at all from its Partnership with you
8 about how better to meet the needs of Brooklyn
9 directly?
10 MR. GRIFFITH: I think so. I mean
11 one of the advantages to working with us is
12 that we sort of cover all bases. Not only do
13 we do financial literacy and advocacy, but we
14 also include a financial organization itself,
15 so we are in the business of making loans and
16 provide financial services, and so not only are
17 powerless but there are ways in which we can
18 empathize with each other, and ways in which
19 they can learn and we can learn from them.
20 So I think that the relationship has
21 been very beneficial. I think the relationship
22 that they have established with the National
23 Federation of Community Development Credit
24 Unions has been very helpful as well.
25 Again, my fear is that they have
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2 rested on that, and they, I think, recently
3 over the past few years, have not really gone
4 beyond that and, again, I don't want to dismiss
5 or discount those efforts, because it's a lot
6 more than what most banks are doing to be quite
7 frank, but, again, to work through
8 intermediaries and organizations like ours,
9 it's just, it's not enough.
10 It's easy to say that you're doing
11 things when you have middle class people who
12 run these organizations coming up here and
13 testifying and saying thank you for those
14 contributions, but it does not necessarily,
15 does not necessarily mean that those services
16 are being translated into better product and
17 community investment efforts for the people
18 who, the low and moderate income people, who
19 live and work there.
20 MR. LONEY: Any other questions?
21 MR. ALVAREZ: Thank you very much.
22 MR. LONEY: I will wish you luck on
23 your grant request.
24 MR. GRIFFITH: Thank you.