Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas June 25-26, 1998
Public Meeting Transcripts
Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty
491 20 MR. LONEY: Are there any other 21 questions? If not, I will thank the panel for 22 coming. 23 Let me just ask the audience, Lloyd 24 Williams, Cary Sanchez, or John Defano? Are 25 any of them in the audience? If not, we're . 492 1 2 scheduled for a break, and we're early for that 3 break, but since the folks who were scheduled 4 to testify aren't here, I think we have no real 5 choice but to take the break. We'll come back 6 at the next panel scheduled for 9:40. 7 (Recess) up low piece? 8 My name is Lillian Rodriguez Lopez 9 and I serve as the acting president of the 10 Hispanic Federation, a membership organization 11 representing the Latino human services sector 12 in New York, and New Jersey. 13 I am pleased to have been given this 14 opportunity to address you about the proposed 15 merger. I can speak with authority about the 16 philanthropic activities of Citibank, and its 17 impact in the Hispanic community as well as 18 Citibank's commitment to economic development 19 in New York City neighborhoods. 20 Citibank was one of our first 21 supporters and has remained a supporter since 22 our inception in 1990. Our partnership has 23 resolved around the collection and analysis of 24 data on Latinos that serves to promote a 25 greater understanding of our social, economic, . 493 1 2 and political roles in the city. They have 3 helped us to share with the larger community, 4 our dreams, our aspirations, and our reality. 5 Citibank has supported the publication of 6 Hispano-Stats, one of our yearly publications 7 for the past three years. 8 With Citibank assistance, we 9 distributed over ten thousand copies of our 10 first Hispano-Stats, which presented a 11 demographic and economic profile of Latino New 12 Yorkers. We still receive requests for the 13 inaugural Hispano-Stats from elected officials, 14 funders, students and many of our member 15 agencies. 16 Our second edition of Hispano-Stats 17 helped interpret the political strength and 18 potential of the Hispanic community in 29 New 19 York City neighborhoods, and the third one 20 which we'll be issuing shortly will profile 21 Hispanic institutions providing services to 22 communities throughout the State of New York. 23 This I say just to illustrate 24 Citibank's commitment to a better understanding 25 of the Hispanic community in New York. . 494 1 2 Citibank has also been committed to 3 strengthening the economic fiber of the Latino 4 community. Three years ago, Hispanics in 5 northern Manhattan joined together to create an 6 economic development institution dedicated to 7 growing neighborhoods and assisting Hispanic 8 and Dominican with small business. 9 Citibank has been a partner in this 10 enterprise and today, the Audubon Partnership 11 for Economic Development grows stronger. Just 12 one month ago the empowerment zone awarded to 13 the Audubon Partnership, a three quarter 14 million dollar grant to help Dominican 15 merchants in this area. 16 This is a fine accomplishment for 17 such a young nonprofit organization. I could 18 share much more with you about Citibank, but my 19 time is limited. I just want to say that they 20 have been a very strong supporter of the 21 Hispanic community. 22 MR. LONEY: Thank you. 23 (Continued on next page) 24 25 . 495 1 2 MR. LONEY: Thank you. I would just 3 say to the panel, if you have written testimony 4 and you want to make sure it all gets in, leave 5 a copy with the registration desk in the front; 6 the entire statement will be put in the record. 7 Ms. Middleton. 8 MS. MIDDLETON: Good morning and 9 thank you for affording me this opportunity to 10 speak before this panel. My name is Shirley 11 Middleton, and I am the founder of WLM Bridge 12 the Gap Family Day Care, which was established 13 to provide professional, educational, and 14 affordable childcare services in a safe and 15 motivating environment. 16 As for our children and their 17 families, our broad range and comprehensive 18 program addresses these changing needs that 19 help our clients to maintain human dignity to 20 be functional and productive members of 21 society. We provide job training development 22 and offer entrepreneurial training to the 23 family day care providers and new small 24 business operators and home businesses. 25 Bridge the Gap Family Day Care . 496 1 2 network has established a relationship and a 3 commitment with Citibank to support our 4 community entrepreneurial and economic training 5 program. They have supported these programs 6 and others through grants, and they have been 7 mainstays of our board of directors. 8 Citibank has been servicing our 9 community through a joint effort for the past 10 two years, for the past two-and-a-half years. 11 We have trained approximately 60 family day 12 care providers in developing their business as 13 a professional business, who now have had 14 access to opening up a business account with 15 the proper credentials. 16 The staff of Citibank assists with 17 the training of the providers, helping the 18 providers to develop business plans; also, in 19 terms of how to report their quarterly taxes; 20 setting up payrolls; and, also, assisting them 21 in opening up the business account that will 22 suit their business; also, they have training 23 in PC Banking; and, also, they have helped with 24 the credit plans of these providers; and they 25 have had seminars on mortgages and commercial . 497 1 2 buying. 3 Bridge the Gap supports the merger of 4 Citicorp and Travelers Insurance to become one. 5 We, the members of the Bridge the 6 Gap, hope for the merger because change must 7 come within all our lives. We do not agree 8 with their past servicing, servicing of the 9 minority communities across this land. We will 10 not quote statistics because it is all in the 11 record. 12 To go forward, we believe history is 13 a lesson we all must learn from. History keep 14 us from making the same errors over and over. 15 History has posed to us many opportunities; 16 some have been partially implemented and some 17 have not been acknowledged. We all have a 18 history, but we were not a part -- it was not a 19 part of our lives. Many changes came about by 20 war, enslavement and cheating. No matter what 21 the methods used, history remains on the 22 record. 23 Today and the future is what we are 24 addressing going into the new millennium. 25 Although we support the merger of these two . 498 1 2 financial institutions, we put before you this 3 day the following proposal: 4 Let us begin by developing a 5 community business consultant group that will 6 be directly involved with the local community 7 small businesses and home businesses; also, to 8 have staff or members from this financial group 9 to be able to be a part of the small business 10 not-for-profit board, in terms of helping them 11 in managing their business for the first five 12 years of operation, because doing business in 13 the first five years, for one who does 14 not-for-profit business development -- to have 15 the team review with the businesses, and 16 seminars, how to maintain good records, tax 17 reporting, business accounts, reviewing their 18 books every three months -- this will provide 19 the kind of support for the business to go on 20 and not become a failing business and here we 21 are again in trouble. 22 Instead of always giving us loans to 23 start up a business, provide many startup 24 business grants instead of loans, as I said 25 before. Because this creates problems; we . 499 1 2 start out with a loan and we end up in a hole. 3 We also would like partnerships to be 4 developed with the various programs of our 5 community, educational programs, between 6 Citibank, also, economic development programs 7 within our community. 8 The other thing, instead of giving 9 students loans all the time, let us develop 10 some kind of grant or scholarship for students, 11 at least for the first two years, so when they 12 graduate from college they will owe 25,000 and 13 30,000 before they get a job. 14 As we outlined in this partial 15 proposal, we challenge you to be committed to 16 all of the minority communities across the 17 land. Once again we get into classifying 18 minorities, Afro-American women, and who knows 19 better but myself and as a single parent. 20 Thank you for allowing me this 21 opportunity. 22 MR. LONEY: Thank you, Ms. Middleton. 23 Ms. Johnson-Claxton. 24 MS. JOHNSON-CLAXTON: Good morning. 25 My name is Grace Johnson-Claxton. I am the . 500 1 2 president of Johnson Home Care Services. We 3 are a nursing agency that places nurses in the 4 home. 5 Citibank has been very instrumental 6 in assisting us in our payroll and also in 7 helping us to acquire larger headquarters. 8 They also have assisted us in making available 9 different opportunities for our employees, like 10 direct deposit, and give an offering to our 11 employees, mortgages at a lower rate, and car 12 loans. 13 I enjoy a very positive relationship 14 with my bank, bank manager -- her name is Kathy 15 Wheeler -- and also with my personal banker 16 whom made the request for me to be here today, 17 Gus Patraco. I am very grateful to the support 18 and help that the bank had given to me. 19 My credit line they have increased, 20 and, as I said, that assisted me very much with 21 my payroll because many a nights before the 22 credit line -- and the business keep, you know, 23 burning up on the cash flow -- we had to divest 24 to meet our payroll. That has really afforded 25 me to have good sleep at night. It has given . 501 1 2 me that assurance, because the payroll, it's 3 very much a headache for a small business. 4 One of the things that I appreciate 5 that Citibank have done, many banks have been 6 known to not want to deal with minority women 7 owned. The true testimony, this has not been 8 the case. Many banks have been known to 9 redline. We are located in East Flatbush, 10 which is a predominantly immigrant population, 11 and it is the new headquarters that, with the 12 help of Citibank through SB loan, we got it at 13 the lower rate with that assistance. That 14 really is a true testimony that they have met 15 that criteria, which is a need in the 16 neighborhood that we have, by lending to 17 minority, by lending to a woman and by lending 18 also in the East Flatbush minority-owned 19 neighborhood. The loan that we had, it was at 20 a lower interest rate, which really helped us 21 also. 22 Once again, I am giving my support to 23 this merger because I believe that it would be, 24 much more programs would be beneficial to our 25 community, and I support this merger, and I . 502 1 2 also support the help that they are giving me 3 and also thanking my bank manager and my 4 personal banker. 5 Thank you. 6 MR. LONEY: Thank you very much. 7 It is good to sleep at night, isn't 8 it? 9 MS. JOHNSON-CLAXTON: That was a big 10 problem for me. 11 MR. LONEY: Mr. Gotto. 12 MR. GOTTO: Thank you, Governor Loney 13 and panel. I am pleased to be here today to be 14 able to address this public meeting concerning 15 the proposed Travelers/Citicorp merger. My 16 name is Alberto Gotto. I am the Provost for 17 Federal Affairs at Cornell University and the 18 dean of the Joan and Sanford I. Weill Medical 19 College in New York City. 20 Here as the dean of the medical 21 college in New York City, practicing physician 22 and medical educator, I have no special 23 credentials in business economic matters, but I 24 do want to speak about an area in which I do 25 have special and particular knowledge, and that . 503 1 2 concerns the excellent corporate citizenship of 3 the Travelers Group and its chairman and CEO 4 Sanford I. Weill. 5 Mr. Weill received his bachelors of 6 arts degree from Cornell University in 1955 7 and, of course, as we all know, he's had a 8 remarkably successful career in business since 9 then. But just as remarkable as his business 10 success has been the extraordinary degree to 11 which Mr. Weill has volunteered his time, 12 effort, his vision and his financial resources 13 to support educational, civic and cultural 14 organizations that make meaningful 15 contributions to our society as a whole. 16 Mr. Weill's been on the Board of 17 Overseers in the medical college since 1982, 18 and we have been especially fortunate to 19 witness the depth of his dedication and 20 commitment to enable Cornell State the 21 cutting-edge of medical education, research and 22 patient care. 23 In 1995 he became the chairman of the 24 Board of Overseers. I'd like to just give a 25 few examples to illustrate Mr. Weill's . 504 1 2 commitment. 3 He and Mrs. Weill endowed the Joan 4 and Sanford Weill Medical Education Center 5 which made it possible for us to introduce a 6 problem-based learning curriculum. This has 7 been extraordinarily popular with our students 8 and the faculty. Cornell has currently over 9 7,000 applicants. We accept 100 medical 10 students each year. And, we wouldn't be able 11 to do this program without this new educational 12 center which provides one computer for every 13 two students and really has state-of-the-art 14 educational facilities. 15 We are in the process of implementing 16 a strategic plan. We are expanding our 17 research space by 25 percent and are increasing 18 the size of our research faculty by recruiting 19 30 new faculty in three areas -- structural 20 biology, neuroscience, gene therapy and genetic 21 medicine. These are all going to be very 22 important areas of research going into the 21st 23 century. It will enable us, we believe, to 24 make New York more competitive in regaining our 25 share of federal grants. . 505 1 2 Mrs. Weill, on April, the 30th, 3 announced a commitment, personal commitment of 4 $100 million to fund this strategic research 5 effort of the medical college. 6 We for 30 years, Cornell Medical 7 College, has had a Summer Minority Research 8 Fellowship. This has been highly successful. 9 The program enrolls college juniors and seniors 10 and gives an intensive summer experience. Each 11 student receives a stipend and housing, as well 12 as travel expenses. 13 From 1969 to 1983, we supported this 14 with federal grants. And in 1985, under 15 Mr. Weill's leadership, the Travelers Group has 16 stepped forward and provided an endowment to 17 ensure the continuation of this program. 18 Since 1969, more than 700 minority 19 students have participated in this program, and 20 an extraordinary number, over 90 percent of 21 them, have gained admission to U.S. medical 22 schools; over 100 of them have come to Cornell 23 Medical School. Cornell has one of the best 24 records in the country in underrepresented 25 minority students, one of the highest . 506 1 2 proportion of underrepresented minorities of 3 any medical school in the country. We accept 4 students on a needs basis, and 43 percent of 5 the tuition is discounted with either grants or 6 loans. 7 We renamed the medical college in 8 honor of Mr. and Mrs. Weill's extraordinary 9 support of the medical college over the years 10 and it is now the Joan and Sanford I. Weill 11 Medical College of Cornell University. 12 Mr. Weill, since 1991, has served as 13 the chairman of Carnegie Hall's board of 14 trustees. He cochaired the steering committee 15 to raise $60 million for Carnegie Hall, and in 16 1997 was honored by New York State with the 17 Governor's Arts Award. 18 Just one final example, with regard 19 to one of the comments of the earlier speakers 20 about grants for minority businesses. On July, 21 the 15th, Mr. Weill and the Reverend Jessie 22 Jackson will cochair a meeting under the 23 sponsorship of the Rainbow Coalition to be held 24 at Cornell Medical College. Represented there 25 will be corporations with $3 trillion of assets . 507 1 2 and pension funds and the stated goal of this 3 program is to provide money for minority 4 businesses. 5 I think Mr. Weill is amply dedicated 6 or demonstrated his dedication both personally 7 and through his leadership with Travelers and I 8 am confident with this merger there will be a 9 continuing and ongoing support of the community 10 and civic activities throughout New York. 11 Thank you. 12 MR. LONEY: Thank you, Mr. Gotto. 13 Are there any questions? 14 MR. ALVAREZ: I had a question for 15 Ms. Middleton. 16 You suggested at the end of your 17 remarks a list of things that you thought could 18 be improvements. I was wondering, you also at 19 the beginning of your remarks mentioned a few 20 of those same things that you thought City was 21 doing now, some of the services, the lending 22 programs, technical assistance and training. I 23 was wondering if you could differentiate a 24 little bit for us or clarify a little bit for 25 us the areas you thought City was stronger and . 508 1 2 the areas you were pointing out where they 3 could improve more. 4 MS. MIDDLETON: The area in which 5 they were strong, in terms of providing the 6 technical assistance to help to educate us, in 7 terms of what kinds of banking accounts that we 8 should open as a small not-for-profit business 9 or as a for-profit business; also, the 10 introduction to us about the PC Banking, which 11 I was one of those that they are teaching; 12 also, the area in terms of how to keep our 13 records, how to pay our taxes. They were very 14 strong in the whole business area of 15 developing, to help us to go forward and to be 16 a part of the board so that we can continue on 17 so we will not have, within two years, failed 18 as we have done. 19 The other areas I have mentioned, in 20 terms of grants to small businesses, if you 21 give us a loan and we have no capital, etc., 22 what happens? You are giving us a loan for 23 $70,000. If our businesses fail or we begin to 24 go under or we cannot keep the business going 25 because we lack that continuity to keep going . 509 1 2 forward, that would only mean that our business 3 is going to fold, and what has happened in the 4 Harlem community, many businesses have folded 5 because of this, and then we end up paying the 6 money back or we end up going to court because 7 they are forcing us to pay the money back which 8 we don't have. So it has to come out our 9 personal needs. 10 So instead of giving us loans to 11 start us out with, which is starting us out at 12 a handicap, start us out at a mini-grant which 13 we will then be able to develop and go forward 14 from there. That is our major problem, to be 15 able to continue to go forward. That is where 16 at this point we need that kind of assistance 17 and we are not getting it at this particular 18 point. 19 MR. ALVAREZ: Thank you. 20 MR. LONEY: Any other questions? If 21 not, I thank you, our panel, very much.
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