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Public Meeting Transcripts
Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty-Two
538 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) 24 25 . 539 1 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 . 540 1 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 . 541 1 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 . 542 1 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. . 543 1 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. . 544 1 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 . 545 1 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 . 546 1 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 . 547 1 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. . 548 1 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 . 549 1 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.
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