Public Meeting Regarding Fleet Financial Group, Inc., and BankBoston Corporation
Wednesday, July 7, 1999
Transcript of Panel Six
19 REV. SHARPTON: I'm Reverend Al Sharpton,
20 President of National Action Network, and we have
21 members throughout the area that if this merger were
22 to go forward would cover much of that area. I come
23 as president of the Network with the vice chair,
24 Senator Ephraim Gonzalez, who heads the National
25 Coalition of Hispanic State Legislators, to express
0169
1 our unilateral concern and at this hearing objection
2 to the merger that is proposed today for several
3 reasons.
4 I think that first you must distinguish
5 between business policy and philanthropy. It is
6 very admirable that Fleet Bank gives away a lot of
7 money to certain charities. That has nothing to do
8 with its business policies and the policies that
9 will service or not service the community. You can
10 find I'm sure if you check in history slave masters
11 were good contributors to certain charities, but
12 their business was slavery. We're not here to talk
13 about their philanthropy; we're here to talk about
14 their policy, and their policy has left a lot
15 wanting.
16 The proposal that they give you, the CRA
17 proposal, the $14.6 billion, is just about what they
18 spend in Massachusetts alone. For you to approve a
19 merger where they would have more range, more states
20 for the same amount of money, in fact allows them to
21 reduce their commitment to borrowing and lending in
22 the community. They would argue because of certain
23 disvestments this is what figure they could best
24 come up with, yet with their divestments they have
25 an opportunity with the Boston Bank of Commerce to
0170
1 let a black bank that would service the communities
2 pick up some of those branches. They have not
3 chosen to make that arrangement.
4 So it seems that there is a situation here
5 where they want it all on their side and not on the
6 side of the community that needs development, that
7 needs fair borrowing and lending practices, that
8 needs policies that are fair for the people that the
9 federal government, and therefore the Federal
10 Reserve, are sworn to protect.
11 If they had made the effort to try and work
12 out some equation, certainly many of us would not
13 take that position. But clearly when you hear what
14 they have done with ACORN housing, when you hear the
15 problems that you have in mortgages and borrowing,
16 and when you hear their own proposal, which I think
17 falls far short of what is fair and equitable, we
18 have no choice but to appeal to you to block this
19 merger. We have no problem dealing with a Fleet
20 Bank, but we do have a problem dealing with being
21 fleeced by Fleet Bank. (Applause)
22 As they expand into other states, if this
23 merger is approved, clearly we have the right to be
24 concerned. The chairman, who the last panelist said
25 is such a nice guy, questioned why we would even
0171
1 want to deal with this hearing. Why would we be
2 here? He's coming in our house with a record from
3 allies that gives us a lot to be desired. It's like
4 me knocking on your door asking you "Why are you
5 answering it?" You answer it because you live
6 there. We live in New Jersey; we live in
7 Connecticut; we live in Massachusetts.
8 So, Mr. Chairman, all of us are not on your
9 payroll or your charity roll. Some of us don't want
10 a donation. We want fairness; we want equity; we
11 want parity. (Applause) We want to see loans to
12 those that seek mortgages and business loans that
13 are not at rates that are unbearable and not set up
14 with clauses that are unachievable. We want to see
15 an amount of money there that is representative of a
16 commitment toward development. If the Federal
17 Reserve passes this merger, where you have no real
18 commitment, with the dollar figures where they are
19 now, you have in effect already undone the purpose
20 of having CRA.
21 CRA is to have some redevelopment, not to
22 have bankers set their own bar, something they could
23 easily make, make all the profit they want and the
24 people be damned. And we would encourage you to
25 block this merger until a respectable proposal has
0172
1 been put forth on the divestment side, as I said,
2 with the Boston Bank of Commerce. And clearly they
3 should increase what they propose in the borrowing
4 and lending department, and their policies around
5 loans, and their policies around what they do with
6 their housing money.
7 I would hope that you will not ignore the
8 will of many people. Many say these hearings are
9 formality. I would hope that as we are on the brink
10 of a new millennium that people's wishes will not be
11 just listened to, patted on the head, and you go
12 forward with business as usual, because we in other
13 parts of New England will resist being policed by
14 any means necessary. Thank you. (Applause)
15 PRESIDING OFFICER SMITH: Ms. Yager, on
16 behalf of Mr. Lee.
17 MS. YAGER: Good afternoon. Matthew Lee,
18 the executive director of Inner City Press/
19 Community on the Move and Inner City Public Interest
20 Law Center was unable to attend today and asked me
21 to read his comments into is the record.
22 I see he is opposed to this
23 anti-competitive merger proposal. After each of its
24 previous mergers, Fleet has dramatically reduced
25 lending to low- and moderate-income neighborhoods.
0173
1 Fleet's lending record in New York reveals a bank
2 with a troubled history of discriminatory lending.
3 For example, in May 1996, Fleet settled
4 discrimination charges with the U.S. Department of
5 Justice that it systematically overcharged
6 minorities from its two New York City area mortgage
7 offices. Fleet's record has not improved. Fleet
8 acquired Shawmut in 1995 and NatWest in 1996. In
9 New York State in 1995, Fleet made 4,994 home
10 purchase loans, NatWest made 2,995 such loans, and
11 Shawmut before being taken over made 70 such loans,
12 for a three-institution total in New York State of
13 8,059.
14 In 1996, in New York State the combined
15 entities made only 4,300 such loans, and by 1997
16 this number had declined to 2,415 loans. The
17 combined Fleet's 1997 total was less than NatWest
18 alone in 1995. Particularly troubling is that
19 Fleet's lending volumes have declined even more to
20 minorities and low income and moderate income census
21 tracts in communities overall. The details are
22 included in the written testimony.
23 Fleet's combined entities home purchase
24 lending volume and LMI census tracts declined 76.6
25 percent between 1995 and 1997. An even steeper
0174
1 decline went to New York State communities overall.
2 Fleet's mergers have hurt entire communities. They
3 have disproportionately harmed low and moderate
4 income neighborhoods and communities of color as
5 well.
6 For example, in the New York city
7 metropolitan statistical area, in 1997, for home
8 improvement loans, Fleet Bank NA in New Jersey
9 denied 74 percent of applications from African-
10 Americans and Latinos versus only 44 percent
11 applications for whites.
12 This proposed merger would be
13 anti-competitive. Fleet proposes to acquire
14 BankBoston through consolidation of the four
15 previous competitors into a single institution. The
16 proposal should not be approved. Even since it has
17 been announced, it has triggered further
18 consolidation. For example, People's Heritage
19 Corporation from Maine has proposed acquiring Bank
20 North of Burlington, Vermont, and Citizens Bank has
21 proposed acquiring U.S. Trust, and in Connecticut
22 Websters has made a recent proposal.
23 Even where Fleet claims to be proposing a
24 clean sweep in its divestiture, it discloses in
25 footnotes that it would be retaining a number of
0175
1 Fleet's or BankBoston's operations. For example,
2 see Fleet's antitrust memo, Page 15, stating in a
3 footnote that, quote, "The parties proposed to
4 retain certain special industry customers in Boston
5 and other New England markets, some of which may
6 have revenues less than $100 million."
7 This is not a clean sweep proposal. It is
8 imperative that Fleet calculate and disclose the
9 amounts by which the proposed divestiture would be
10 reduced by the withdrawal and retention of deposits
11 associated with these retained lines of business.
12 Fleet would also gain an anti-competitive
13 share and market power in ATMs. The Providence
14 Journal on May 21st wrote, "After its takeover of
15 BankBoston, Fleet would control about 36 percent of
16 all ATMs operated by banks and credit unions in
17 Massachusetts up from 12 percent." This issue is
18 not addressed in Fleet's antitrust memo. The
19 comment period should not close until Fleet reveals
20 more of the nature of its divestiture proposal and
21 until Fleet completes the proposal by naming the
22 banks that would buy the assets it proposes to
23 divest.
24 His last comment is that he requests that
25 the -- he asserts that the community commitment is
0176
1 entirely inadequate and the details of that are in
2 the written testimony.
3 PRESIDING OFFICER SMITH: Thank you very
4 much. (Applause)
5 MR. MUHAMMAD: Greetings. My name is Abdul
6 Jabbar Muhammad, and I'm here on behalf of the
7 Nation of Islam under the leadership of the
8 Honorable Mr. Louis Farrakhan.
9 When Fleet merged with the Bank of New
10 England, we, the Nation of Islam, supported the move
11 based on a commitment to help the community, its
12 organizations, and its businesses. However, Fleet
13 did not honor this commitment. And the community,
14 its organizations, and businesses have paid the
15 price. We have seen documents that show unfair and
16 unethical lending practices by Fleet Bank. Are we
17 going to relive the mortgage scandal with this new
18 merger? Will we see our seniors losing homes
19 because of unethical lending practices?
20 The merger at issue with Fleet Bank and
21 Bank of Boston has successfully created a scenario
22 of infighting within the community. Your customers
23 are not sure what this merger will bring. A survey
24 conducted by Survey USA asked the following
25 question: What kind of service do you think
0177
1 customers of the new bank will receive? 44 percent
2 don't think the merger will have an impact on
3 service while 42 percent think things will get
4 worse.
5 The banking and insurance business is the
6 most lucrative business in this country. This
7 merger will serve your interests. Bigger is not
8 necessarily better. A nickel is bigger and weighs
9 more than a dime, but it is less in value. When
10 airlines merged we were told to expect better
11 service, and we received peanuts and half a
12 beverage. (Applause)
13 Hospitals merged with the vision of better
14 service and healthcare for minority communities.
15 Division has been lost. Minority communities have
16 not experienced better service or healthcare. Will
17 this merger bring more personalized service to the
18 community? We no longer have the word "trust"
19 within banking institutions, we need the word
20 "trust" reflected within the practices of banks,
21 your bank.
22 The only thing we have in our best interest
23 is the Community Reinvestment Act. The Nation of
24 Islam has a suggestion on how you could honor the
25 CRA. We want a letter of commitment to the
0178
1 community. You have an obligation to offer more
2 than lip service. The letter should detail what you
3 propose to do for minority communities.
4 How can you, Fleet Bank, assure us that
5 things will not get worse? William Sands wrote a
6 paper entitled "Proper Attitude is Key to Successful
7 Community Lending." He states the CRA was one of a
8 series of laws passed by Congress to address
9 problems of unequal access to credit. The CRA
10 emphasizes the continuing and affirmative obligation
11 of lending institutions to meet the deposit and
12 credit needs of the entire community, including low-
13 and moderate-income areas, consistent with safe and
14 sound lending practice.
15 What is your attitude towards minority
16 communities? How will you ensure that the spirit
17 and intent of the CRA be met? One way is for Fleet
18 to support the Boston Bank of Commerce. The Boston
19 Bank of Commerce understands our needs and is
20 committed to fostering economic and social
21 development.
22 Yes, Fleet should make it a project to aid
23 and support this community by aiding and supporting
24 the Boston Bank of Commerce. They're not your
25 competitor; they're the only African-American-owned
0179
1 bank and the only minority-owned community
2 development financial institution in New England.
3 It is the right and moral thing to do. It is good
4 business practice. In fact, it is right in line
5 with the spirit of serving the convenience and needs
6 of the community.
7 I don't know what this merger will bring to
8 Boston, do you? How will this merger, creating the
9 third largest lender in the nation, handle the
10 individual? The small businesses? The not-for-
11 profit businesses in minority communities?
12 I do know that the Boston Bank of Commerce
13 is in the best position to handle the needs within
14 minority communities. They have provided over 15
15 years of community development and support. They
16 have not lost sight of the individual. They have
17 not lost sight of the small businesses. They have
18 not lost sight of the not-for-profit businesses in
19 our communities. Support the community by
20 supporting the Boston Bank of Commerce. Anything
21 less than Fleet will leave us banking while black,
22 banking while brown. Thank you. (Applause)
23 PRESIDING OFFICER SMITH: Questions from
24 the panel?
25 MR. ALVAREZ: Reverend Sharpton and
0180
1 Honorable Muhammad, you both mentioned the Boston
2 Bank of Commerce. Do you know, has the Boston Bank
3 of Commerce made a bid for any of the branches in
4 the Fleet package?
5 REV. SHARPTON: It is my understanding that
6 they have made a bid. I understand that the
7 thinking was that they wanted in the divestment
8 phase of this merger a major bank to take over most
9 of it and some 10 to 15 percent would be left. I
10 think the Boston Bank of Commerce, if I'm not
11 mistaken, had only made a bid for like 18 branches
12 out of 280, which I think is clearly, as Minister
13 Muhammad said, not dealing with the competitiveness.
14 The fact that nothing has been made concrete there
15 shows to me an arrogance and an insensitivity on not
16 even trying to work with the community.
17 I don't think that's a reasonable proposal,
18 given the fact you're talking about 280 branches
19 will become available and the bid for the only black
20 bank in the region is only for about less than 10
21 percent of that.
22 MR. ALVAREZ: But as far as you know, a bid
23 has been made.
24 REV. SHARPTON: A bid has been made.
25 MR. ALVAREZ: Bids haven't yet been
0181
1 announced.
2 REV. SHARPTON: It might be while we're
3 here today.
4 MR. ALVAREZ: Yes.
5 PRESIDING OFFICER SMITH: If there are no
6 further questions, we thank you very much for coming
7 this morning and afternoon.
8 (A pause)
9 PRESIDING OFFICER SMITH: We are ready to
10 start with Panel Seven, and we have about five
11 different organizations with five minutes total
12 each.
13 So where we have Ms. Feingold and Mr.
14 Gornstein, is one of you speaking?
15 MS. FEINGOLD: Just one.
16 PRESIDING OFFICER SMITH: Thank you very
17 much.