Public Meeting Regarding NationsBank and BankAmerica - Panel 11
Thursday, July 9, 1998
Transcript of Panel Eleven
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17 MS. SMITH: Thank you. Any questions from the
18 panel? Thank you all very much for being here.
19 MR. REID: Good afternoon, my name is Jim Reid
20 from Dallas, Texas and I'm the President and founder of
21 the Southern Dallas Development Corporation, we're a
22 community development financial institution that focuses
23 on economic development. And I'm delighted to be here
24 today. It's 102 degrees in Dallas and I'm glad to be in
25 San Francisco, nice cool weather, besides the opportunity
26 to talk to you all.
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1 In terms of our organization, our mission is to
2 finance and develop small business, create jobs and
3 promote investment in the southern part of Dallas. Dallas
4 is kind of a city that's divided in terms of its income.
5 The northern sector of the city is very strong, the
6 southern sector which includes about 45 percent of the
7 population only has 60 percent of the median income of the
8 northern sector. There's a big difference. Four to
9 50,000 people live there. Primarily 75 percent minority
10 population. It has 45 percent of the population and 13
11 percent of the commercial tax base, so our focus is on
12 southern Dallas.
13 We're here today in support of the merger because
14 we are excited by the commitment of $350 billion. We're
15 used to dealing with one bank, Bank of America being on
16 the west coast, and the other bank, NationsBank being on
17 the east coast. In fact, Texas is blowing and going with
18 bank's money from other parts of the country so you can
19 deal with that and we can deal with that.
20 And I think that you'll find, based on our
21 experience, that these banks will deliver for you.
22 What is our experience with these banks? First,
23 and in terms of the population we serve, the type of deals
24 we do, we've done about 300 loans. All of the loans are
25 either non-bankable loans or partially bankables, so
26 nobody could walk in the door of a bank and get the
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1 financing that we provide to them.
2 About 70 percent of our clients are minority
3 businesses. We have managed to loan them over the past
4 eight years $21 million and leveraged $36 million in
5 participating with banks and create about 2,500 jobs in
6 your community. And when we started out, we were doing
7 about 100 jobs a year, and in the last two years, we've
8 help create 1,000 jobs as a 12 person community
9 development financial institution.
10 We do this through things like joint financing
11 with the banks. In the case of these two institutions, we
12 financed 17 deals and ten with NationsBank, two in tandem
13 with Bank of America totaling three and a half million
14 dollars. When we come in, we provide subordinate debt and
15 that gives the bank a level of comfort in terms of coming
16 in with their financing, leveraging resources to benefit
17 our community.
18 We've created, with the help of these banks, a
19 multi-bank development corporation that's possible under
20 your regulations and under the regulations of the OCC
21 where a bank can take up to two percent of its capital
22 assets and put it in a corporation that is allowed to
23 behave differently than a bank.
24 Our corporation that we've set up can do equity
25 investments in businesses. And in the minority community
26 we serve, we find that equity is a very important portion
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1 of what has to be done. Debts sometimes is zero, the
2 equity in relationship to the debt is not always
3 available, and in the multi-bank development corporation
4 that we have established, Bank of America has an $800,000
5 investment, NationsBank has a $600,000 investment, so
6 that's equity we can bring to the table in tandem with
7 bank deals.
8 Both banks have helped us with corporate
9 donations. You'll say, "Well, what does that do? Help
10 you to have staff?" It's true, these banks -- our
11 corporate donations provide ten percent of our operating
12 budget. And in the process of lending things that we do,
13 we spend more time on the front end with borrowers. Once
14 the money is lent, we're out there in terms of monitoring
15 and technical assistance. It's these donations that
16 Nations been donating 10,000 a year for the last seven
17 years and Bank of America 5,000. They helped us publish a
18 newspaper that talks about the benefits of our community.
19 Nations is financing a $600,000 building that we will own
20 where 150 jobs will be created and Bank of America helped
21 underwrite our micro-loan program where they provide us an
22 $80,000 grant and we generated 500,000 from micro-loans.
23 So we support this merger and are delighted to
24 have the opportunity to work in an expanded way with both
25 partners.
26 MS. ARMENTA: Good afternoon. My name is Loretta
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1 Armenta and I am the President/CEO for the Albuquerque
2 Hispano Chamber of Commerce in Albuquerque, New Mexico,
3 and I want to thank you for the opportunity to be able to
4 express some of our thoughts here today. I'm here
5 representing the Albuquerque Hispano Chamber of Commerce
6 who is in support of the merger of NationsBank and Bank of
7 America.
8 The Albuquerque Hispano Chamber of Commerce has
9 enjoyed a strong partnership with NationsBank and its
10 predecessors for over 25 years. In addition, we've
11 developed a successful partnership with Bank of America
12 since they entered our market in 1990. The Albuquerque
13 Hispano Chamber is the oldest Hispanic Chamber of Commerce
14 in the United States and the second largest of 250
15 Hispanic Chambers of Commerce in the United States.
16 As strong advocates, NationsBank and Bank of
17 America continue to contribute significant resources for
18 the education of our Hispanic youth and the education and
19 development of programs for our Hispanic business owners
20 in New Mexico. We have some wonderful leadership in
21 Albuquerque, part of that leadership is through Alex
22 Romero, Executive Vice President, who we're very proud who
23 has also worked very hard with us to open up those other
24 doors of opportunity.
25 In sitting here this morning and listening to
26 much of the testimony, one can't help but think how
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1 sometimes not everything appears the same on both sides of
2 the street. And I heard some very interesting things this
3 morning and it is apparent that one of the things that
4 does need to happen is that, for instance, those other
5 groups that spoke up on the State of New Mexico in areas
6 that they think need much attention, the chamber hopes to
7 be able to work with them and them work with us and us
8 work with this new merger and acquisition to make sure
9 that their needs are addressed.
10 We do have some recommendations. We would like
11 to see the implementation and process to maintain and
12 expand procurement contracts for our local small business
13 vendors. That is critical, that when a bank goes in in an
14 acquisition this large, that those local vendors are not
15 displaced with their contracts with those institutions.
16 We supported the increase and to simplify the
17 business loans for our small business minority owners for
18 their start-up and the expansion of their business. We
19 often see this, we are bombarded weekly by those small
20 business owners who still have tremendous needs. And it's
21 not necessarily with NationsBank, with Bank of America,
22 it's with banking institutions. Although, we will say
23 that NationsBank and Bank of America have initiated some
24 procurement programs with us to make sure that at least
25 our business owners have an opportunity to access the
26 information and to be able to get the loans that they
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1 need.
2 We support the increase and making available of
3 loans to minorities who have a right for decent housing.
4 It is criminal today that that is still an issue and that
5 is an issue all across the country. CRA loans and
6 investors -- CRA loans and investments are profitable and
7 continue to meet the credit needs of our underserved
8 communities.
9 We believe that NationsBank and Bank of America
10 will continue to generate resources that will support the
11 education and the advancement of our Hispanic community in
12 New Mexico. And New Mexico, by the way, is a
13 minority/majority state, with Hispanic and Native American
14 being the largest population base in this state. And I
15 think you heard some of that this morning. One of the
16 statements that I will also support very strongly was the
17 need for what has happened in the rural areas, because
18 they are always definitely never paid any attention to.
19 Through our partnership with NationsBank and Bank
20 of America, we hope to be able to maximize the financial
21 benefits for our community and for our state that will
22 improve the quality of life for all. Thank you.
23 MR. JOHNSON: Good afternoon, my name is Calvin
24 Johnson, I'm the president and CEO of Do The Right Thing
25 which we trade the Athlete's Foot which is a national
26 franchise. I'm here this evening in support of the bank
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1 merger. I am a franchisee and entrepreneur and I'm just
2 speaking on behalf of us out of Washington, D.C.
3 About two years go, we were trying to open up a
4 national franchise in the metropolitan area which is also
5 an inner city of Washington, D.C. and we were told by
6 several of the banks that there's no money going to be
7 available to lend to us to open up this type of store in
8 the inner city of Washington.
9 We went to NationsBank about two years ago with
10 their SBIC program, and they were willing and able to loan
11 us money to open up this store and take the chance for us
12 to open this store up in the community. From that, we
13 were able to also employ about ten young people within
14 that community to bring some viable jobs and some economic
15 wealth back into the community.
16 Within five months later, we were able to open up
17 a second store and employ another ten -- eight to ten
18 people to work and be managers and learn entrepreneurship.
19 So just in real brief, I wanted to come here and I thought
20 it was very important for a franchisee and entrepreneur to
21 express the interest that we're very interested and we do
22 support the merger of Bank of America and NationsBank
23 because we feel that, hopefully, they can duplicate the
24 programs that we go through in the SBIC on the east coast
25 also on the west coast. So I would like to say thank you.
26 MS. HUGHES-JONES: Good afternoon, panel, my name
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1 is Deborah Jones, I'm here representing LEDK Management
2 Group of Atlanta, Georgia. LEDK provides many facets of
3 property management services in the southeast.
4 NationsBank is one of our clients. I am in support of the
5 merger.
6 NationsBank operates one of the first bank owned
7 community development corporations in the southeastern
8 United States. Since opening an Atlanta office in 1993,
9 NationsBank has invested more than $75 million in the
10 acquisition and redevelopment of affordable housing in
11 Atlanta's urban communities.
12 In 1993, NationsBank engaged LEDK to manage more
13 than 4200 apartment units in Georgia. NationsBank takes
14 an active role in community revitalization. In addition
15 to providing safe, affordable housing, NationsBank is also
16 very concerned about family needs. The Make A Difference
17 Center concept was created in 1993 in the hopes of
18 providing meaningful services to residents of large
19 multi-family rental properties developed by NationsBank's
20 CDC.
21 NationsBank provides start-up and operating funds
22 for the centers as a way to provide a safe place for
23 children to go after school and enhance the living
24 environment of our residents. The first Make A Difference
25 Center opened in Atlanta in 1995. Our eighth center in
26 Atlanta opened Monday of this week. Since '95, we have
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1 opened 16 centers. We have centers in North Carolina,
2 Texas, Tennesse, District of Columbia, and Maryland.
3 With the acquisition of Bank of America, we can
4 envision centers from coast to coast and many more
5 families impacted with the merger, children will benefit
6 the most.
7 In just three years, we have grown from one
8 center to 16. NationsBank has made a commitment to open a
9 total of 25 centers by the year 2000. NationsBank had the
10 unprecedented foresight to make a different center.
11 Imagine the obligation now to share this successful
12 quality product. NationsBank has demonstrated its
13 responsiveness to the needs of our resident families. Its
14 corporate philosophy has set NationsBank apart from its
15 competitors.
16 Our goals for the Make A Difference Center are
17 very simple, to strengthen the parent-child relationship
18 through interactive educational activities. To provide a
19 diverse range of learning opportunities for all residents,
20 to empower our youth through academic assistance,
21 educational programs and other resources, to provide a
22 nurturing and safe environment where children can learn
23 and grow, to further self-esteem, self-identity, respect
24 and responsibility in youth.
25 Some of the programs we offer are structured
26 after school programs from 3:00 to 6:00 daily, homework
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1 assistance for tutoring our youth, computer skilled
2 training for youth and also our adults, money management
3 courses for our youth and our adults, neighborhood watch
4 meetings, health fairs, fire safety classes, bike safety
5 programs, senior adult meetings, stress management for
6 youth as well as adults, urban gardening, just to make a
7 few. Each Make A Difference Center is equipped with a
8 computer lab and we're connected to the internet, a
9 library with age appropriate books, reference materials,
10 literature and games, a tutorial room and a large
11 multipurpose room. We always focus at all our centers on
12 reading because it's very important to us.
13 Many communities have already been revitalized
14 with investments from NationsBank. Thousands of families
15 have been impacted. We can touch the lives of many more
16 through the various programs delivered by the Make A
17 Difference Centers. We strongly support the acquisition
18 of Bank of America by NationsBank. NationsBank has very
19 high standards. We have seen a significant measure of
20 success as a result of NationsBank's caring, commitment
21 and diverse investments. I am grateful for the
22 opportunity to be associated with NationsBank in making a
23 difference in our children's lives. I thank you.
24 MS. SMITH: Thank you.
25 MR. ANESI: Good afternoon, my name is Greg
26 Anesi, I'm the President of Independent Mobility Systems
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1 in Farmington, New Mexico. We manufacture lowered floor
2 mini vans for America's 3 million plus disabled people.
3 We sell them all over the country. We're in a little
4 town, 40,000 people, predominantly Native American.
5 When I started to sell these vans, the most
6 common question that always came back to us was, "That's
7 great, I want it, but how much are the payments?" We
8 could never offer that answer. When the disabled people
9 go -- when a disabled person goes into a bank, many times
10 they find that the loan officer in the bank is frightened.
11 They look at him and they say, "How can he drive? How can
12 she work? What does she do? More importantly, how are we
13 going to be paid back?" Then when they think about
14 financing a $42,000 adapted van, they say, "What's the
15 collateral value? What's the residual value? How are we
16 going to make this loan?" A lot of times, most of the
17 time, the answer was, "We can't do that." Or they would
18 look at it and say, "Okay, it's a $42,000 loan, there's no
19 value for the added conversion, the lowered floor or the
20 lift," they'd say, "We'll lend you 90 percent of the value
21 of the chassis and you put up 100 percent of the
22 conversion." That places a disabled person having to come
23 up with 40 percent of the downpayment. I don't know about
24 you but I wouldn't own a car if I had to come up with 40
25 percent of the downpayment, who would?
26 It was an unnecessary burden on disabled people,
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1 it lessened their lives. Because transportation, it's
2 more than just getting from one place to another, it's
3 freedom, it's independence, it's a job. I looked for a
4 bank to try and solve this problem for over five years. I
5 had gone to Boatmen's, I'd gone to local New Mexico banks,
6 I had gone to other banks which I won't mention, both
7 national, regional and local, and they didn't want to
8 touch that.
9 So when NationsBank acquired Boatmen's back in
10 1997, I wasn't a customer of that bank, I thought big
11 national bank coming in, the chances of them being
12 receptive to a little branch in a town of 40,000 people
13 was pretty small. I've got to tell you, I was shocked.
14 Within a month of me asking the bank president, a
15 special CRA team came out from Dallas, they listened, they
16 were interested, they wanted to help. Two months later, a
17 team from NationsBank Dealer Financial Services came out
18 of Greensborough or Jacksonville or someplace and they
19 came out and they listened. Within nine months,
20 NationsBank offered a national program for all 48 states
21 that would lend up to 90 percent of the total value of an
22 adapted van for ten years. That was unheard of.
23 That changed, in my opinion, the banking
24 industry. Because now pretty soon other banks, Union
25 Bank, Barnett Bank before it was acquired, those banks
26 started to be competitive with NationsBank. They made a
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1 difference in disabled people's lives. I wish I could
2 point and say it was one Nations banker that had a vision
3 and was a strong leader, but I can't, it was a collage of
4 NationsBank people. And they really made a difference in
5 this community. I would urge you to approve this merger.
6 Thank you.
7 MS. SMITH: Thank you very much. Any questions
8 for this panel? I think we're ready for a break.
9 (Short break.)