Public Meeting Regarding Fleet Financial Group, Inc., and BankBoston Corporation
Wednesday, July 7, 1999
Transcript of Panel Seventeen
22 MR. SARKISSIAN: Thank you.
23 In the first place, I appreciate the
24 opportunity to testify on behalf of ARC
25 Massachusetts. Our organization's mission is to
0441
1 enhance the quality of life for persons with
2 specific developmental disabilities, and we
3 accomplish this mission by promoting quality
4 community services and advocating for enlightened
5 public policy. Our former name is the Massachusetts
6 Association for Retarded Citizens.
7 My comments are going to focus -- my short
8 comments -- on the needs of people with
9 disabilities. And, basically, there have been
10 others here to speak about community reinvestment
11 which is also what I'm going to focus on in the
12 general sense. And I presume the Board will be
13 looking at some objective figures in terms of what's
14 been realistic in the past, the community banks
15 versus larger institutions around the issue of
16 community reinvestment.
17 If it was any other time, and if things
18 were great for people with disabilities in terms of
19 affordable, accessible housing, I think this
20 wouldn't be an issue for me to come in front of this
21 Board; and it is pretty unusual for us to be present
22 in front of this Board. But, in fact, only in 1998,
23 there was a report published; and it was called
24 "Priced Out in 1998." I don't know if you are
25 familiar with it, but it was a report published by
0442
1 the Consortium for Citizens with Disabilities and
2 the Technical Assistance Collaborative which is its
3 main office is actually housed in Boston.
4 And what that showed is the severity and
5 nature of the housing crisis for people with
6 disabilities, and it cited in the report that the
7 most evident part of this crisis was in the
8 affordability of efficiency or studio and
9 one-bedroom apartments. On a national average, the
10 cost of such housing is 60 percent of the average
11 monthly income of people with disabilities who are
12 living primarily on SSI and related income. For
13 many people, that's the situation, especially those
14 with cognitive or intellectual disabilities. SSI
15 and related income is the primary source.
16 In Massachusetts, this income is under 17
17 percent of the one-person median income; and that's
18 a direct statistic from "Opening Doors" published in
19 May 1999. And people with disabilities often end up
20 in the category of very low income. HUD studies
21 estimate that 70 percent of households with incomes
22 below 30 percent of median income who are not
23 receiving any assistance in housing from HUD or
24 elsewhere, they have priority housing problems.
25 In Massachusetts, the percentage of that
0443
1 income to rent an efficiency unit alone is 95
2 percent of income. So just to give you the flavor
3 of how -- such a price it is, another piece,
4 families aren't much better off that are working
5 class, and, again, even lower income. When they're
6 looking for affordable apartments that are also
7 accessible, it can be an impossible process. We
8 hear from local advocates of people that work on a
9 local level, whether it's Boston or the South Shore;
10 and you hear about situations where people end up
11 renting apartments on the second floor, the third
12 floor. They have to bring their child up, and they
13 go have to go back and bring the wheelchair up.
14 A great story, because we also happen to
15 have a wait list for people with disabilities who
16 are adults. A gentleman and his wife who were in
17 their 70s. Every day he would carry his daughter up
18 three flights of stairs and only three years ago was
19 he able to get housing for his daughter and some
20 State-supported funding program.
21 So, anyway, it is a crisis; and I won't --
22 I have other statistics that I have handed in. I
23 won't repeat them publicly.
24 But what we need, we have a megamerger here
25 so it is a great opportunity for some kind of
0444
1 standard around megacommunity reinvestment; and I
2 would suggest that there be some kind of standard
3 developed around that. Use this as an opportunity
4 to raise the stakes and take a look at what would be
5 reasonable given the scope of this merger, and let's
6 include housing for people with disabilities
7 affordable as part of the low-income piece.
8 We're not asking for set aside or anything,
9 you know? We want to be part of the main stream of
10 this.
11 When you think about affordable housing, we
12 need to think about an accessible housing. And
13 there are two types in this community reinvestment
14 aspect that I want to encourage. One is, really, we
15 need to subsidize some heavy development of
16 apartments across metropolitan areas. We really
17 need a dearth of those, again, accessible ones. So
18 that's one area that community reinvestment can play
19 a role in low-cost mortgage financing for people who
20 are willing to develop such affordable housing.
21 And the second is for home ownership. You
22 heard about that earlier for people with low income.
23 It is important for people with disabilities, too,
24 and something around community reinvestment where we
25 would have mortgage programs and downpayment
0445
1 programs to enhance what is there already such as
2 soft second and programs that already exist.
3 One of the big programs for people with
4 disabilities is really the Fannie Mae program, and I
5 am embarrassed to tell them how many people -- it's
6 a great program. I'm glad Fannie Mae's doing it,
7 bur really in terms of Massachusetts with 90,000
8 people with specific developmental disabilities
9 alone, not counting the physical disability world,
10 it really falls far short of what we need.
11 So we're going to have to come up with a
12 private partnership. We're going to have to make a
13 merger. And I really encourage the Board to think
14 in these lines of some kinds of standards
15 surrounding community reinvestment.
16 Thank you very much for this opportunity.
17 HEARING OFFICER SMITH: Thank you.
18 Mr. Van Meter.
19 MR. VAN METER: Thank you for the
20 opportunity to testify today. My name is Bob Van
21 Meter, and I'm executive director of the Allston
22 Brighton Community Development Corporation and an
23 active member of the Massachusetts Association of
24 Community Development Corporations.
25 The Allston Brighton CDC is a 19-year-old
0446
1 nonprofit, community-based organization in the
2 Allston-Brighton section of Boston, a neighborhood
3 of 70,000 people. Our organization has worked
4 closely with both BankBoston and Fleet Bank for
5 several years and values the relationships we have
6 with each institution. We view them both as
7 partners in community development.
8 However, we come to this hearing
9 disappointed at the stands taken by the two banks.
10 They have so far opposed making specific commitments
11 would give us confidence that one plus one is more
12 than two. We, therefore, must oppose the proposed
13 merger unless and until the banks make specific
14 commitments to the community.
15 Past experience with bank mergers and the
16 track record of community lending post merger makes
17 it necessary to look for specific commitments.
18 Moreover, those commitments should be negotiated
19 with the community, not made unilaterally by press
20 release.
21 The Federal Reserve Bank should require
22 that Fleet and BankBoston develop a detailed and
23 verifiable community investment plan that assures
24 this merger is a net benefit to our communities.
25 We urge the Federal Reserve to extend the
0447
1 public comment on the mergers as my colleagues
2 before have urged, and we urge that the Federal
3 Reserve not approve this merger until such a plan is
4 developed.
5 We also would look to the Federal Reserve
6 to ensure that consumer and worker interests are
7 interested. Reduction of competition in
8 Massachusetts that will result from this merger is a
9 serious concern for all of us in the commonwealth.
10 I'd like to talk a little bit about the
11 area of small business lending and work in
12 commercial revitalization efforts in urban
13 communities. I know that the hour is late, and I am
14 not going to talk about other aspects of community
15 development.
16 While both banks have some important
17 successes in small business lending and assistance
18 to commercial revitalization efforts, we see at the
19 neighborhood level a clear difference in the two
20 banks in that area; and we want to urge that if the
21 merger goes forward, that the merged bank build on
22 BankBoston's example of engagement.
23 We're active in Main Street's commercial
24 revitalization efforts in both of the major
25 commercial zones of our neighborhoods and also in
0448
1 Brighton and are participating in the community
2 business network which provides technical assistance
3 and loan packaging to smaller micro-businesses in
4 our communities.
5 BankBoston has been a more consistent
6 presence and ally in local revitalization efforts.
7 Fleet's corporate policies on branch staffing mean
8 that rarely, if ever, are Fleet branch managers
9 able to play a leadership role in local
10 revitalization efforts, while BankBoston branch
11 managers are active in leadership roles. If Fleet's
12 corporate culture and policies dominate the new
13 bank, we will see a further draining of energy and
14 leadership from neighborhoods.
15 BankBoston's First Community Bank has been
16 a welcome addition to the banking scene in our
17 neighborhood. First Community Bank lenders have
18 gone the extra mile to work with immigrant
19 businesses in our community. We have not yet seen a
20 similar commitment from Fleet to small business
21 lending in our community.
22 Within the past three years, our
23 neighborhood business districts have seen the loss
24 of several banks as Greater Boston Bank was acquired
25 by Grove, and Grove was acquired by Citizens. Now
0449
1 Allston and Brighton's major commercial districts
2 could each see the loss of one additional bank
3 because we don't think that after the sale of
4 branches, branches will continue necessarily. We
5 haven't seen that evidence in the past with past
6 mergers. We will he will also see additional branch
7 loss with the Citizens-U.S. Trust merger possibly.
8 Maintaining healthy community business
9 districts is part of maintaining healthy vital urban
10 communities. Increasingly, banks which have been
11 the mainstays of these districts are a smaller
12 presence in the business districts.
13 The emphasis on banking electronically
14 means that resources are siphoned away from staffing
15 of branches. Bankers who know the community are
16 becoming increasingly rare. And the new emphasis on
17 mini branches in supersized grocery stores also
18 hurts the vitality of local business districts by
19 pulling people away from community business areas.
20 We hope that bank regulators will consider these
21 issues carefully.
22 Finally, it's important to note that
23 philanthropic support for community revitalization
24 is an essential complement to community
25 reinvestment. It's important to maintain
0450
1 community-based organizations with strong capacity.
2 Both banks have supported community development with
3 philanthropy. But with the increasing pace of
4 change in the corporate world and the emphasis on
5 strategic high visibility, philanthropy by
6 corporations, including the banks, support by
7 financial institutions becomes increasingly
8 precarious; and it's very difficult to replace.
9 We urge a $5 million commitment to
10 community development in Massachusetts from the
11 merged bank in the next calendar year, and that
12 commitment would go to local and statewide
13 organizations and community development
14 intermediaries.
15 Thank you for the opportunity to testify
16 today.
17 HEARING OFFICER SMITH: Thank you very
18 much.
19 We'll go to Mr. Grainger.
20 MR. GRAINGER: Thank you. My name is
21 Andrew Grainger, and I'm appearing here today as
22 president of the New England Legal Foundation. New
23 England Legal Foundation is a not-for-profit public
24 interest law firm which has as its mission a
25 balanced economic growth throughout our six-state
0451
1 region and support of our system of free enterprise.
2 We are represented by a board of directors
3 which is comprised of general counsel and senior
4 partners from leading businesses and law firms
5 throughout New England.
6 In addition to that, we have an advisory
7 counsel network, one in each New England state,
8 which provides a foundation with an ear to the
9 ground so to speak on issues affecting business, the
10 economy, and property rights in the state and local
11 level.
12 Generally, what we do is engage in
13 courtroom advocacy on behalf of our constituents in
14 filing amicus briefs in the U.S. Supreme Court and
15 state and federal courts, mostly in New England. We
16 also engage in advocacy outside the courtroom from
17 time to time when it's an important issue affecting
18 business interests and free enterprise; and in that
19 context, I'm here today to speak in support of the
20 proposed merger or acquisition, whichever it's
21 called. It doesn't matter. I think we know what
22 we're talking about.
23 The inescapable fact from our perspective
24 is that the economic well-being of New England, and
25 the best interests of individuals and companies
0452
1 doing business here, and I would include in that all
2 the community groups that have testified here today,
3 are all better served if we can preserve a large,
4 strong, regionally-based commercial lender in New
5 England, which is what this merger contemplates. It
6 is simply -- cannot be denied that institutions the
7 size of Fleet and BankBoston are vulnerable to
8 out-of-region acquirers many times their size.
9 I heard Mayor Albano from Springfield refer
10 to the problem of perhaps having to get approval
11 from 90 miles away. That is probably what is
12 happening in the marketplace today, but it pales
13 compared with the problem of going to Charlotte or
14 San Francisco. This merger may help to prevent
15 that.
16 Large, national, and international
17 businesses based in New England can select on a
18 national and international basis to meet capital
19 requirements. Middle market, smaller companies are
20 hurt when deposit and credit decisions are moved to
21 other parts of the country. In particular, the
22 branch system and cash management services that New
23 England-based lenders can provide are important to
24 New England businesses.
25 If the proposed merger does preserve a
0453
1 local regional presence, Boston and the rest of New
2 England and everyone here will benefit.
3 Because New England Legal Foundation
4 represents business interests in all the New England
5 states, I have in the past week specifically
6 discussed this proposed merger with Board and
7 counsel members from my foundation throughout the
8 region. I have got a list in my written remarks
9 which have been filed with you; and I won't go
10 through all of them, but I will note that sort of in
11 echoing what I think you heard in Panel 15, the
12 Connecticut Business and Industry Association, which
13 represents many, many, many businesses large and
14 small in that state; the New Hampshire Business and
15 Industry Association, are both among the
16 constituencies that I talked to, as well as
17 Jefferson Pilot Financial in Concord, New Hampshire;
18 the Maine Medical Center in Portland, Maine; IDX
19 Systems in Vermont; every state large and small, the
20 overwhelming consensus among the foundations,
21 participants, and supporters is that this merger in
22 the very least is necessary and in most cases
23 desirable in view of the consolidation we're seeing
24 today.
25 We do share the concern raised in some
0454
1 quarters that competitive environment should not be
2 sacrificed to retain what we view as the important
3 economic advantages of local control. We are in
4 favor of free enterprise and competition.
5 As I understand the divestiture proposal
6 that's been put forward today, it is really designed
7 to avoid any material change in market
8 concentration. In that context, we believe further
9 that a competitive environment includes the right
10 and the ability of businesses to make and execute
11 management and strategic decisions which their own
12 thinking and which the market brings them to.
13 Businesses that have taken at least
14 reasonable steps to comply with the myriad of legal
15 and regulatory requirements that are imposed on them
16 by so many agencies and so many statutes should be
17 free to pursue their business plans and react to
18 market forces, which is what these two institutions
19 are seeking to do today.
20 I want to throw one slight curve ball at
21 you which is to say that I also served as chairman
22 of Arts Boston which is a local, not-for-profit
23 organization that serves as an umbrella group for
24 150 local and regional arts organizations.
25 In Copley Square today, there is a very
0455
1 nice half-price ticket booth that helps us support
2 arts organizations, that helps us take inner city
3 school children to cultural events. That booth
4 would not be there today except that Fleet stepped
5 forward and gave us financing for it. I went to
6 many other banks to try to get that money first.
7 Thank you for your consideration.
8 HEARING OFFICER SMITH: We'll go to Mr.
9 O'Connor and then to Mr. Brown.
10 MR. O'CONNOR: Good afternoon. I guess I
11 should say good evening. My name is John O'Connor.
12 I'm a longtime community organizer with substantial
13 experience in consumer and urban department issues.
14 I also run a small business incubator, and I proudly
15 serve on State Senator Dianne Wilkerson's Community
16 Advisory Committee. For all these reasons, I have
17 followed with great interest and growing concern the
18 planned merger of Fleet Bank and BankBoston.
19 I speak today to express my strong
20 opposition to that proposal. This merger would
21 substantially lessen competition in Massachusetts
22 and around New England, nor would there be
23 sufficient, if any, net positive benefits to the
24 public interest to justify its approval.
25 Put simply, this is a deal that made
0456
1 greenline the pockets of Fleet and BankBoston
2 shareholders, but it redlines the needs of -- but it
3 redlines the needs and concerns of Massachusetts
4 consumers, small businesses, and urban communities.
5 Let me start by stating the obvious.
6 Although what's being proposed here is
7 usually described as a merger of two, Fleet and
8 BankBoston, it in fact represents the consolidation
9 of what had been just a few short years ago four of
10 the largest banks in Massachusetts into a single
11 entity. Surely going from four to two and now to
12 one cannot be a recipe for robust, healthy
13 competition, the heart of free enterprise.
14 Not surprisingly, even after divestiture,
15 this new Fleet Boston entity would utterly dominate
16 regional markets, commanding a roughly one-third
17 share across Massachusetts, and possibly more in
18 greater Boston.
19 In other areas, like Worcester, Hartford,
20 Rhode Island, Fleet's -- Hartford and Rhode Island,
21 Fleet Boston's overwhelming presence would even be
22 more dramatic. Ironically, many of these markets
23 are already overconcentrated in the hands of Fleet
24 alone at its current site.
25 Likewise, the new Fleet Boston would be by
0457
1 far the biggest holder of ATMs in Massachusetts.
2 Again, even after divestiture, Fleet Boston is
3 likely to control upwards of half of all the
4 bank-owned ATM machines in our state, many times the
5 number held by any other institution.
6 Some say the solution lies in recruiting
7 some financial behemoth from Charlotte or San
8 Francisco to come up to New England and compete with
9 Fleet Boston on its own terms, while others favor
10 helping our existing smaller banks do more.
11 Let's be clear. This is a no-win
12 situation.
13 If history is the guide, small banks
14 probably will better serve their customers in our
15 communities than megabanks like the proposed Fleet
16 Boston, but they cannot effectively compete with the
17 super-heavyweight division occupied by a Fleet
18 Boston. Eventually, many of these smaller banks
19 will be acquired, squeezed out, or just plain run
20 over.
21 So I for one cannot see how this proposed
22 merger, no matter how it's handled, can do anything
23 other than substantially lessen competition. At
24 best, it pushes us further in the direction of a
25 market oligarchy, which is not an acceptable
0458
1 substitute for true competition.
2 The question then becomes will consumers
3 and communities see sufficient new benefits from
4 Fleet Boston in terms of convenience or service to
5 offset the bad side effects of diminished
6 competition. Again, the answer is a clear no.
7 BankBoston and Fleet are both plenty big
8 enough now to be able in theory, anyway, if not
9 always in practice, to offer the full range of
10 services and products needed by our consumers and
11 our economy.
12 This isn't a case of two little community
13 banks teaming up to be able to do more lending to
14 mid-sized businesses. Nor is there any reason to
15 think that when it comes to banks, bigger inherently
16 means better for consumers. Just the opposite in
17 fact. A recent study pointed out that as banks get
18 bigger, they charge an average of about 15 percent
19 higher fees in terms of checking accounts and ATM
20 charges and the like.
21 Significantly, Fleet and BankBoston have
22 been very quiet on the subject of customer fees and
23 consumer issues. So unless and until they make some
24 public commitments to the contrary, I see no
25 evidence to assume the outcome here will be any
0459
1 different. More money for less services.
2 Fleet and BankBoston may consider that
3 perfectly convenient, but consumers and small
4 businesses will probably think otherwise.
5 Finally, there is the vital issue of how to
6 deal -- of how this deal meets or fails to meet the
7 needs of all communities and whether the proposed
8 merger in the component banks are truly in
9 compliance with the purposes of the Community
10 Reinvestment Act.
11 A couple of weeks ago, Fleet and BankBoston
12 unveiled what they're touting as a 14-billion-plus
13 CRA commitment that allegedly addresses some of
14 these concerns. Having examined it closely, I
15 concur totally with the many others who have
16 criticized it as both woefully insufficient in
17 funding, lacking in forward-looking innovations that
18 anticipate likely changes in the financial services
19 landscape, and critically missing an enforcement
20 mechanism.
21 Parse the numbers, and you find that the
22 Fleet-BankBoston CRA proposal fails short of
23 representing what the two institutions have achieved
24 separately. The CRA plan will constitute a 12
25 percent decline in small business lending and a
0460
1 whopping 46 percent drop in lending and investment
2 for community development.
3 Let me close by going back to the
4 beginning. Fleet and BankBoston kicked off this
5 process some months ago with now famous phrase that
6 one plus one is greater than two. Asked to attach
7 some specifics to that promise, Fleet officials soon
8 asserted their statement was meant to apply only to
9 supposed business synergies, a synonym, I take it,
10 for shareholder profits.
11 But I suggest today that Fleet must be held
12 to its word, and that the merits of this proposed
13 merger must be tested against the same benchmark
14 Fleet has set for itself. Does Fleet plus
15 BankBoston really add up to more than the sum of its
16 part for all of our people and all of our
17 communities? In short, it doesn't work for us; and
18 it doesn't work for all of us.
19 Or is it actually the case that
20 Fleet-BankBoston's deal asks us to work for them
21 through higher fees, fewer choices, and less
22 attention to the pressing needs of so many
23 communities?
24 I respectfully submit to you that this
25 proposal does not and will not pass these tests and,
0461
1 therefore, should be rejected.
2 Thank you.
3 HEARING OFFICER SMITH: Mr. Brown.
4 MR. BROWN: Thank you very much for this
5 opportunity. I'm here today to speak as a partner
6 of RDR Properties, and our company is based in
7 Asbury Park, New Jersey.
8 RDR is a low-income, single-family housing
9 developer. A substantial part of our business is
10 also buying abandoned, boarded-up properties in
11 Asbury -- which are plentiful if any of you have
12 ever been down there -- and turning them into the
13 highest quality rentals in the area.
14 We have a for-profit side to our business
15 and a not-for-profit or 501(c)(3) side as well,
16 which I will explain as I go along the necessity of
17 doing that.
18 I want to touch briefly on three areas --
19 an overview of Asbury Park so you get a feeling for
20 what we're up against and the banks in dealing
21 there; the focus and growth of our business; and,
22 finally, our relationship with Fleet Bank.
23 Asbury Park is a uniquely blighted area
24 from the top of Maine clear down the eastern
25 seaboard to Key West. Thirty years ago, it was the
0462
1 jewel and economic hub of the northern Jersey shore.
2 At one time, there were over 200 hotels in the area.
3 Now there is one. Surrounding real estate prices on
4 the shore are at an all-time high. In Asbury, the
5 total value of taxable property has shrunk each year
6 since 1993. The downtown area is virtually deserted
7 and boarded up, but hopefully showing some signs of
8 life.
9 This recent article with a page and a half
10 in the New York Times a couple of months ago is
11 called "Blocks of Oceanfront Property in Asbury Park
12 Once a Magical Result Have Been Festering for 15
13 Years." And the headline is "Caught in the
14 Undertow." It kind of gets into more detail about
15 the problems in Asbury.
16 But the article described the waterfront as
17 looking like Beirut. It's totally desolate. The
18 city's population is 60 percent African-American,
19 and the unemployment rate is in the high teens.
20 Compared economically to Asbury, Bridgeport,
21 Connecticut, looks like the Silicon Valley.
22 RDR Properties, our company, is a unique
23 company; and here are a few reasons why. We buy
24 almost exclusively abandoned, boarded-up properties
25 and rehab them for sale or rent. We have our own
0463
1 construction and management companies that are also
2 based in Asbury Park. RDR is the only property
3 developer with a major physical presence in the
4 downtown Asbury area.
5 Our goal is to move our best renters from
6 the rental status to homeowners. And we work very
7 closely with the faith-based organizations in the
8 area. We have no local community home buyer
9 assistance programs, so we serve in that role
10 ourselves, hence, the nonprofit part of our
11 business.
12 In fact, we can put a family into a brand
13 new three-bedroom, bath-and-a-half home, built by a
14 modular builder for less than $50,000; and that's
15 with State assistance. We also have our own
16 construction company, and a year ago that was almost
17 all white. Today, it is more than 50 percent
18 minority, whether it is blacks, Latinos, and Asians.
19 And by next year, we expect that number to exceed 70
20 percent, with many of the minorities moving into
21 management positions. We have our own skilled
22 training program because none of that exists in the
23 area.
24 What's been Fleet's role in all of this?
25 Three months ago, our company owned eight properties
0464
1 comprising about 53 rental units. By Labor Day of
2 this year, we will own and be converting at least
3 another 150 new abandoned units in the area. We
4 have an existing three million line with Sovereign
5 Bank, which is LTS regulated; and we have a new line
6 of $2 million with First Union. By the way, PNC and
7 Summit Bank are also in the area.
8 But I want to say that Fleet is by far and
9 away becoming our lead lender, not just in dollars,
10 but in creativity, flexibility, understanding, and
11 response. When we need to move on a deal, they have
12 somebody who is there immediately; and they work
13 very closely with us. It is a very competitive
14 situation. They've done a very fine job.
15 We also want to give particular thanks to
16 Joyce Harley. She is the senior VP and community
17 development officer for all of New Jersey for Fleet,
18 Bill Grossman who is the senior VP and head of
19 community lending for the head of the real estate
20 division, and, of course, our own representative
21 down there, Jim Maloney. Of the five banks we deal
22 with, they are by far and away the most expert.
23 And, finally, let me just say we look
24 forward to staying in touch with Gail Snowden and
25 Agnes Bundy Scanlon. I've known Gail for five years
0465
1 in our work with the National Community Reinvestment
2 Coalition; and I've worked with Agnes since she
3 first arrived in Fleet from her former position in
4 the Senate Budget Committee.
5 And I want to thank Fleet for being part of
6 our company's success, and we look forward to an
7 even stronger relationship with them as a Boston
8 combination.
9 Thanks very much.
10 HEARING OFFICER SMITH: Mr. Raff.
11 MR. RAFF: Thank you. First, let me say I
12 admire your stamina.
13 My name is Larry Raff. I'm vice-president
14 of development and external affairs for Morgan
15 Memorial/Goodwill Industries, which is located in
16 lower Roxbury and in the heart of the recently
17 designated empowerment zone in Boston.
18 Goodwill provides a variety of job training
19 and other services to people with disabilities and
20 other barriers to work to help them maintain
21 self-sufficiency. Goodwill is also an important
22 participant in the revitalization of the
23 economically-challenged communities in Boston.
24 I'm here this evening to speak to the issue
25 of philanthropy. I'm a -- Goodwill is a
0466
1 representative on the Community Advisory Committee
2 initiated by Senator Wilkerson and have hosted
3 several of these meetings. We're very involved with
4 the Advisory Committee because we're deeply
5 concerned for the well-being of the physically- and
6 economically-challenged residents of our service
7 area which encompasses all of eastern and central
8 Massachusetts.
9 Access to affordable, user-friendly banking
10 services is especially important to people with
11 physical and educational challenges and to those
12 with limited and fragile financial resources. Any
13 reduction in services in affordability as a result
14 of this merger would be an assault on an array of
15 public and philanthropic initiatives that have
16 sought to better and assimilate this population into
17 the mainstream and into the economic mainstream.
18 Many of these programs are supported by Fleet Bank
19 and BankBoston.
20 I want to share with you the support that
21 Fleet Bank has provided Goodwill. Especially in the
22 last year, it has been quite generous.
23 Fleet has committed nearly a quarter of a
24 million dollars to Goodwill over the next three
25 years for a few programs that address job training
0467
1 to help people acquire computer skills, to acquire
2 competitive employment, as well as to help them put
3 clothing on their backs for job interviews and for
4 being on the job so they can maintain their
5 employment.
6 Fleet's also been our banker for many years
7 and has supported and underwritten $4 million in
8 bonds to help us purchase our main headquarters
9 building in Roxbury.
10 In terms of corporate charitable giving,
11 both Fleet and BankBoston have been very generous to
12 Goodwill; and for that I thank them very much.
13 However, it's incumbent upon me to also
14 look at the larger picture; and I want to do that
15 now.
16 Fleet has clearly been generous to Goodwill
17 and many other organizations in Boston and in
18 Massachusetts; and this is emblematic of why it's
19 important to preserve the integrity and the level of
20 Fleet Boston's corporate philanthropy in
21 Massachusetts, which is what I want to speak to
22 directly.
23 It's my concern, however, that this merger,
24 the proportion of Fleet Bank's combined corporate
25 giving that goes to Massachusetts will diminish
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1 significantly and in favor of those marketplaces
2 where the new Fleet BankBoston or new Fleet Boston
3 will be expanding its business operations. It's no
4 secret that corporate philanthropy in general is
5 based on enlightened self-interest for the benefit
6 of the business operations and for the community.
7 It is certainly understandable.
8 Given this reality, however, it is also
9 understandable for Fleet Boston to maximize its
10 charitable giving programs in those areas where the
11 bank is expanding its business operations. Unless
12 precautions are taken by this body and the other
13 regulatory agencies addressing this merger, the
14 result will be a significant decline in charitable
15 giving in Massachusetts. This will further diminish
16 the ability of human service organizations to
17 effectively benefit their constituencies and
18 assimilate them into the economic and social
19 mainstream, which benefits everyone.
20 In closing, I want to make an observation.
21 If I as a philanthropic or as a charitable
22 organization, a community-based organization were to
23 make application to Fleet Bank or BankBoston with a
24 proposal reflecting the integrity of the proposal
25 that has been put forth by the bank to you on behalf
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1 of this merger, I can assure you Goodwill would not
2 receive a grant and would not receive a loan based
3 on the facts, figures, promises, and measurable
4 outcomes that have been provided by this proposal to
5 you.
6 I would suggest you apply the same
7 standards to this proposal for merger as Fleet Bank
8 and BankBoston would apply to their own
9 philanthropic program in your own considerations.
10 Thank you very much.
11 HEARING OFFICER SMITH: Any questions?
12 Thank you very much for taking the time to
13 share your views with us.
14 (Pause)
15 HEARING OFFICER SMITH: Mr. Campen.