Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas July 9-10, 1998
Public Meeting Transcripts
Public Meeting Regarding NationsBank and BankAmerica
Thursday, July 9, 1998
Transcript of Applicant Presentation
8 2 MR. COULTER: Good morning, Madam Chairmen, my 3 name is David Coulter, with me is Hugh McColl, the CEO of 4 NationsBank. I also want to introduce Don Mullane on my 5 right, Executive Vice President of Corporate Community 6 Development for Bank of America. And Cathy Bessant, on my 7 far left, President of the Community Investment Group at 8 NationsBank. 9 We want to thank the Federal Reserve Board for 10 this opportunity to talk about the proposed creation of 11 America's first coast-to-coast bank. 12 The new BankAmerica will represent the triumph of 13 an idea that began nearly a century ago right here in 14 San Francisco when a local produce merchant named A.P. 15 Giannini founded the Bank of Italy. 16 The Bank of Italy later became the Bank of 17 America and it became a catalyst for economic opportunity, 18 moving capital between communities, funding the rise of 19 major industries and helping to house, feed and move the 20 population of a state that is now the world's seventh 21 largest economy. 22 The story of California is really Bank of 23 America's story. Here are just a few highlights. Through 24 the years and right up until today, Bank of America has 25 purchased the bonds that have built universities, highways 26 and, yes, even the Golden Gate Bridge. . 9 1 In 1929 when the City and County of San Francisco 2 ran out of funds to complete the Hetch Hetchy water 3 system, our bank stepped in and bought the bonds. Today 4 that water is in the drinking fountains in this building. 5 We financed farmers and ranchers at a time when no other 6 bank would entertain them. And today California boasts 7 the most fruitful agricultural industry in the world. 8 We helped build Hollywood, too. We lent money 9 for thousands of films ranging from Snow White and the 10 Seven Dwarfs to Gone With the Wind, from Lawrence of 11 Arabia to It's a Wonderful Life. In Hollywood we became 12 known as The Movie Bank. 13 The Dodgers came to Los Angeles with BofA's help. 14 Mattel and Disneyland were built with BofA financing. And 15 we've been there for Silicon Valley, too. From O'Malley 16 to Disney to Jobs, the great visionaries have turned to us 17 to finance their dreams. As have millions of individuals 18 who count on Bank of America when the time comes to 19 purchase their home, educate their children or start their 20 business. 21 I can assure you that Bank of America has brought 22 unparalleled commitment to the communities we serve. The 23 new Bank of America will continue in this manner but on a 24 much larger scale than ever before. In fact, it will be 25 positioned to create economic opportunity nationwide. 26 Long ago Bank of America sought to empower people . 10 1 by opening bank branches in hundreds of communities 2 throughout California. Today we're bringing a wide array 3 of financial services even closer to home and making them 4 available to customers 24 hours a day. And we are not 5 turning our backs on the communities that need financial 6 services the most. 7 In South Central Los Angeles, for example, we 8 have more branches than all other banks combined. We've 9 played a principal role in capitalizing one of Los 10 Angeles's three African American owned financial 11 institutions, Founders National Bank. And just last month 12 the CEO of that bank, Carlton Jenkins, said this in a 13 letter to the Federal Reserve Bank in Richmond. Quote, 14 "BankAmerica has been an extremely significant participant 15 in the growth and maturation of Founders National Bank. 16 This, in spite of the fact that several of our branch 17 locations -- in several of our branch locations, we are 18 clearly a competitive institution to them," unquote. 19 The BankAmerica Board of Directors has 20 established a goal that its major operating units receive 21 outstanding ratings for their CRA activities. We are 22 living up to that standard. BankAmerica Corporation has 23 five bank subsidiaries and all five currently hold 24 outstanding Community Reinvestment Act ratings. Two of 25 those have been earned under the new CRA regulations. 26 Our flagship institution, Bank of America . 11 1 National Trust & Savings Association, has received four 2 consecutive outstanding ratings. Our Federal Savings Bank 3 is rated outstanding by the Office of Thrift Supervision. 4 Our Community Development Bank is rated outstanding by the 5 FDIC. Bank of America Texas and our Credit Card Bank in 6 Phoenix are rated outstanding by the Office of the 7 Comptroller of the Currency. 8 We believe that allocating the resources and 9 performing at a level to achieve these outstanding ratings 10 is very, very important. We believe it is equally 11 important to reward outstanding banks by placing value on 12 their outstanding ratings at times like this. 13 I know that it's important to you to have 14 financial institutions that are committed to community 15 building. I hope you come away from today's hearing with 16 a better understanding of our commitment. To help in that 17 regard, let's take a brief look at Bank of America's 18 record. 19 We surpassed the ten year $12 billion community 20 lending commitment that was announced by the bank in 1992 21 in four and a half years. 22 Last year, we voluntarily set a new, very well 23 defined ten year goal of $140 billion in community 24 lending. It was an unprecedented move by a major bank, 25 once again on a voluntary basis. Mr. McColl will later 26 speak to an even larger voluntary commitment by the . 12 1 BankAmerica. 2 Since 1992, we have booked $2.5 billion in 3 affordable consumer loans to low- and moderate-income 4 borrowers. 5 Underscoring our commitment to neighborhood 6 revitalization is the success of Bank of America's 7 Community Development Bank which has become the west's 8 number one source of government guaranteed small business 9 loans and multi-family affordable housing finance. In the 10 last five years, we have booked nearly $1.5 billion in 11 community related small business loans and approximately 12 $2 billion in credit for multi-family affordable housing, 13 including more than $600 million in the first half of 14 1998. 15 Last year, Bank of America became the first major 16 bank to launch an initiative tailored specifically around 17 the banking needs of rural America. Our rural 2,000 18 Community Development Initiative includes a three year 19 $500 million community development lending goal. It also 20 calls for $5 million in grants that will benefit rural 21 communities and Indian country. Helping us to carry out 22 this initiative are four advisory committees that include 23 42 rural community experts and practitioners. 24 We were the founders of the California Community 25 Reinvestment Corporation which provides permanent 26 financing for multi-family affordable housing and serves . 13 1 as the model in the western United States for other bank 2 consortiums. We have invested in dozens of other similar 3 multi-bank organizations. 4 To help create jobs and stimulate economic growth 5 in minority communities, we have invested more than $32 6 million in minority venture capital funds. 7 We continue to expand homeownership opportunities 8 among low-income and minority borrowers through our 9 Neighborhood Advantage program which has generated loans 10 of more than $15 billion since its inception. In 1997, 11 nearly one-fourth of all our mortgage loans were made to 12 minorities and low- and moderate-income borrowers. 13 We've just introduced a new zero downpayment 14 mortgage program for low- and moderate-income borrowers 15 which has had stunning results in our demonstration 16 markets. In fact, we accepted nearly $300 million in 17 applications in just three months. 18 In 1992, we introduced Advantage Business Credit, 19 a lending initiative that has taken much of the paperwork 20 out of small business loan applications for $100,000 or 21 less. In fact, the application for this product is just 22 one page. During the last six years, our so-called ABC 23 program has generated loans of $4.1 billion. 24 And we've trained more than 15,000 of our 25 associates in diversity programs so that they can better 26 respect and cherish the differences that make our company . 14 1 and our communities unique. We believe that changing 2 demographics represent new markets and opportunities for 3 us to serve people. Or as my predecessor, Dick Rosenberg, 4 said so often, quote, "Service to low-income communities 5 is the right thing to do and the smart thing to do," 6 unquote. 7 We're also helping to meet the financial needs of 8 a changing population by delivering ATM service in three 9 languages and staffing many branches with employees who 10 speak Spanish, Japanese, Korean, Chinese or Tagalog. 11 And since 1991, we have helped to strengthen 12 local education, economic development and environmental 13 quality with $206 million in contributions to nonprofit 14 organizations across the western United States. 15 We were the leading advocate for the revised CRA 16 regulations, encouraging banks, regulators and politicians 17 to give the regulations a chance. We recently commented 18 positively to the Federal Reserve on Regulation B which 19 calls for the voluntary collection of race and gender data 20 on small businesses. We've spoken out and taken 21 leadership positions on child care, Proposition 13, urban 22 sprawl, water, Hispanic higher education and other issues 23 important to all of our communities. 24 We've established ourselves as good corporate 25 citizens through an environmental program that has 26 resulted, among other things, debt for nature swaps to . 15 1 preserve Latin American rain forests. We were the first 2 major financial institution to sign the CERES Principles, 3 which hold signatories to a strict environmental code of 4 conduct. 5 Throughout the nation, Bank of America's record 6 is one of commitment, commitments made and commitments 7 kept. 8 I think the point is best made in a letter that 9 was forwarded to me a while back by then Comptroller of 10 the Currency Gene Ludwig. The letter was sent to 11 Mr. Ludwig in October of 1997 by the Greenlining 12 Institute's Executive Director and General Counsel who 13 wrote him about our CRA performance. Here's what they 14 said, quote, "The so-called outstanding rating given to 15 almost half of all very large financial institutions is 16 inadequate regarding Bank of America. As we previously 17 discussed, Bank of America is the overall CRA leader. We 18 believe the rating for Bank of America should be 19 outstanding plus," unquote. 20 I hope this helps give you a better understanding 21 of our community commitment. 22 NationsBank has a similar commitment to its 23 communities just as we are both committed to our 24 associates. Hugh McColl will elaborate on this for you 25 during his testimony. I'd like to turn it over to Hugh 26 but first allow me to close with this thought. . 16 1 A.P. Giannini once said, "When nationwide branch 2 banking is an accomplished fact, then America will have 3 come of age financially." 4 That's what our merger is all about, it will 5 produce an awesome combination and its power will be 6 unleashed for the benefit of this country. 7 Mr. McColl and I are convinced of this, that is 8 why we shook hand on this deal and that is why we'll 9 become teammates. And now I'd pleased to introduce my 10 colleague at NationsBank, Hugh McColl. 11 MR. McCOLL: Thank you, David. This meeting is 12 about the effects bank mergers have on communities. This 13 subject is close to my heart, as all of you know, my 14 company has been through many mergers over the past 20 15 years. 16 In each, our intention has been to employ more 17 people, win more money, do more business with minority 18 vendors, be more active in the community, and generally 19 make a bigger difference than our predecessor 20 institutions. 21 In fact, in reviewing the effects of these 22 mergers on our communities, we have found almost 23 universally that employment, lending, community 24 development efforts and charitable contributions actually 25 increase. That has been our vision and it will continue 26 to be so with this merger. In San Francisco and in . 17 1 Charlotte and throughout our coast-to-coast franchise. 2 Our goal is for the new BankAmerica Corporation 3 to be the best community development bank in this country. 4 So I welcome the opportunity to share with you the values, 5 efforts, and achievements that make NationsBank a positive 6 force in all the communities where we do business. 7 Now, as you know, NationsBank has a strong record 8 of community investment. We have achieved and maintained 9 outstanding CRA ratings. We have been a leader in our 10 local market and we have consistently sought out local 11 community based partners to help us achieve our community 12 development goals. 13 Let's consider some of the results. In 1997 14 alone, our mortgage lending to minority borrowers topped 15 $2.7 billion and our mortgage lending in low-income 16 neighborhoods topped $2.5 billion. NationsBank is the 17 number one bank lender to small businesses in this 18 country. 19 Our total production in 1997 was more than $11 20 billion, $2.3 billion of which was loaned in low-income 21 areas. We're also the number one bank originator of SBA 22 loans in the United States and we have preferred lender 23 status in every state in our franchise. 24 Our investment capabilities are significant and 25 unique with more than $520 million in community 26 development equity investments currently on our books. . 18 1 The NationsBank Community Development 2 Corporation, with the help of many local partners, has 3 involved a or re-habbed more than 14,000 units of 4 affordable housing, investing more than $300 million. Our 5 Community Development Corporation is the only bank owned 6 CDC that serves as both a developer of and investor in 7 affordable housing. 8 The NationsBank Small Business Investment 9 Corporation makes equity investments in small and 10 minority-owned companies. Through it, we've invested more 11 than $15 million in small businesses across the country. 12 Finally, we have invested more than $50 million in 13 minority-owned financial institutions and community 14 development financial institutions. These organizations 15 extend our reach to low-income borrowers and provide 16 capital to distressed neighborhoods in ways that no 17 traditional bank can. 18 Now, looking at what we've accomplished is 19 important, but to understand how we'll continue to be 20 successful in the future, we should look at how we've 21 achieved these results. 22 Our approach can be boiled down to three basic 23 principles. One, we build strategical alliances with 24 community based organizations. Two, we believe in a 25 national commitment delivered and differentiated locally. 26 And, three, we believe strongly in accountability. . 19 1 Our partners include national organizations as 2 well as hundreds of local community based organizations in 3 cities, towns, and neighborhoods where we do business. 4 These alliances will represent a fundamental way -- the 5 fundamental way that we do business. We seek partnerships 6 for the betterment of neighborhoods. 7 Our purpose in these partnerships is not to 8 compete against community based organizations but, rather, 9 to work with them to improve neighborhoods. 10 Our decentralized management philosophy means 11 that we understand that one size does not fit all 12 communities in need. In other words, associates across 13 the country do not get community development instructions 14 from Charlotte, North Carolina, they get the resources 15 they need and they get a corporate culture that backs them 16 up when they decide what needs to be done. 17 Our commitment to accountability is self-evident. 18 Since 1992, we have provided detailed reporting at the 19 local, state and national level on all of our results. 20 This process ensures that we continue to meet the evolving 21 needs of our communities. Equally important, it provides 22 further opportunities to gain feedback from community 23 groups, civic leaders and the public. 24 Now, let me be perfectly clear about one thing. 25 Our goal has never been simply to meet the requirements of 26 the Community Reinvestment Act. We strive to lead in . 20 1 everything we do, and that includes building strong 2 communities. Our commitment to our communities extends 3 throughout the company, to every business line and to 4 every associate throughout our franchise. 5 Beyond our core business activity, which fuels 6 the economy, supports the tax base and provides 7 employment, there are five areas in which NationsBank and 8 its associates are active in supporting our communities. 9 And they are, first, community leadership, an associate 10 volunteerism; second, individual and corporate 11 philanthropy; three, commitment to adversity; and, four, 12 minority business development; and, five, progressive 13 marketing programs and business policies. 14 Now, I'd like to touch on each of these areas 15 briefly. Community leadership and associate volunteerism 16 are important parts of the NationsBank culture. At the 17 corporate level we provide leadership to our communities 18 by putting our financial muscle behind important community 19 projects. By advocating for a stronger CRA and a 20 permanent low-income housing tax credit, and by working 21 with local governments and community organizations to 22 achieve shared goals. 23 We also have a strong culture of associate 24 volunteerism. Associate volunteers receive two hours of 25 paid time of every week to work in the schools. Local 26 councils within the bank identify volunteer opportunities . 21 1 for our associates, and our newest program, NationsBank 2 Neighborhoods, offers cash grants in an associate's name 3 to organizations at which the associates volunteer. 4 Now, the next area I mentioned is philanthropy. 5 Simply put, NationsBank is the most generous financial 6 institution in the country and the new BankAmerica will be 7 so by a long shot. Our combined budget this year will 8 exceed $100 million. No one else even comes close. 9 One of the most important aspects of our 10 decision-making process is that we put the control over 11 charitable dollars in the hands of local executives who 12 know best how to serve their communities. This policy has 13 resulted in not just increased giving but more effective 14 giving with dollars going where they are needed the most 15 throughout the franchise. 16 The third area in which we work very hard to 17 strengthen communities is building diversity among our own 18 associates. Our company will stretch from coast to coast 19 and will include the entire sunbelt, the Pacific 20 Northwest, the Midwest and the Mid-Atlantic. Now, while 21 we are unalterably opposed to quotas of any type, we will 22 continue to support affirmative action and we will have 23 one of the most diverse work forces of any large 24 corporation in this country. 25 And it is our intention that our board of 26 directors will be one of the most diverse corporate boards . 22 1 in the country. Not at some time in the distant future, 2 but on day one. 3 One of the most important areas of focus in 4 building strong communities is minority business 5 development. 6 NationsBank has been a pioneer and a national 7 leader in creating and sustaining a strong minority 8 business development program. NationsBank was the first 9 financial institution to be recognized by their Minority 10 Supplier Development Council as the corporation of the 11 year. And the first to receive this recognition two years 12 in a row. 13 In 1990, NationsBank set a goal of ten percent 14 for directing discretionary spending to women and 15 minority-owned businesses. Since then, we have averaged 16 more than 15 percent, amounting to more than $470 million 17 spent with women and minority-owned businesses. Once 18 again, our self-imposed goal turned out to be a floor, not 19 a ceiling. And in typical NationsBank fashion, we blew it 20 away. 21 Now, finally, we are supporting our communities 22 through progressive marketing programs and business 23 policies. 24 For example, we have had a formal Hispanic 25 Marketing Program for more than five years in an effort to 26 reach out to this growing segment of our population. . 23 1 We've installed bilingual ATMs, hired bilingual 2 tellers and telemarketers and formed partnerships with the 3 National Council of La Raza, the Hispanic Association on 4 Corporate Responsibility and SER-Jobs for Progress, Inc., 5 as well. 6 Now, throughout these partnerships, we have begun 7 to develop programs and products that will make banking 8 with us easier and more accessible for all members of the 9 Hispanic community. 10 What we want to establish with our customers, all 11 our customers, regardless of race, ethnicity or economic 12 means are strong relationships and that's why we 13 implemented a relationship approach to fees and pricing 14 that minimizes fee increases for as many of our individual 15 deposit account customers as possible. 16 This spring NationsBank broke from the pack to 17 offer pricing benefits to a vast number of customers. We 18 eliminated check card fees for all customers, and fees for 19 a broad array of services associated with our two most 20 popular accounts were eliminated or frozen through the 21 year 2000. 22 Now, we've heard Dave Coulter talk about his 23 company's commitment to building strong communities across 24 the western half of the United States. And you've heard 25 me talk about my company's commitment to doing the same 26 across the NationsBank franchise. . 24 1 In fulfilling these commitments, both our 2 companies have a strong record of accessibility and 3 proactive partnerships with local community groups. In 4 fact, since our merger announcement, we've met with 5 hundreds of community organizations to talk about ways we 6 can best work together to improve our neighborhoods and 7 communities. 8 Bringing our companies together will only enhance 9 our ability to deliver on all of our commitments. 10 The company we will create will be the leading 11 American bank of the 21st Century and we will be this 12 country's premiere community development bank, as well. 13 This will benefit all of our constituents. 14 First, our customers will see a new standard for 15 choice, convenience, value and market presence. Second, 16 our associates will realize more opportunities from 17 working at a larger, stronger company. And, third, by 18 investing in our communities, by providing good jobs and 19 creating new ones and by helping to improve the quality of 20 life for customers and associates alike, we will be the 21 model for corporate citizenship. 22 We will build on the best initiatives from both 23 banks, retaining the Bank of America Community Development 24 Bank and NationsBank Community Development Corporation. 25 These vehicles, as well as new initiatives to promote 26 rural development and Indian country lending and . 25 1 investment, will be used to rebuild neighborhoods, create 2 jobs and provide access to the financial system as never 3 before. 4 We will keep decision-making in the hands of 5 local bankers and managers who know best how to serve 6 their communities. 7 We will continue to lead locally and nationally 8 and we will deliver on our commitments whatever and 9 wherever they may be. 10 Now, recently we announced a ten year $350 11 billion commitment to community development lending and 12 investing. The commitment targets $180 billion for small 13 business lending. 115 billion for affordable housing, $25 14 billion for economic development and $30 billion for 15 consumer lending. Now, let me underscore, this is a 16 floor, not a ceiling. 17 Furthermore, fulfilling this commitment will not 18 be easy, it will be a stretch. This commitment will push 19 our new company and each of us individually to be even 20 more proactive, more innovative and more creative than 21 we've ever been. We view this as a challenge, and as with 22 all challenges, we are ready and eager to take it on. 23 Both banks have a demonstrated record of working 24 with community partners. Yet, there are those who oppose 25 this merger because we have not signed, quote, unquote, 26 "CRA agreements" and because we have not itemized the . 26 1 commitment by market or by product. 2 I understand the passion these organizations have 3 for their specific communities. As I've said, we share 4 common goals. However, their desire to receive the 5 greatest financial support possible for their individual 6 causes should not overshadow the fact that our pledge, the 7 largest of its kind ever, is designed to benefit all of 8 our communities. 9 When we created this commitment, we decided not 10 to itemize the commitment by market or by product. And 11 there's a good reason for this. 12 Because community needs and circumstances are 13 always changing, we believe the best approach is a 14 flexible commitment that establishes goals on a nationwide 15 basis and relies on capacity and demand within each market 16 to determine how goals are met. 17 Our outstanding record of achievement, 18 accountability and public reporting of results 19 demonstrates the CRA agreements and itemized commitments 20 are unnecessary for our company, they are unwarranted, 21 they are burdensome to manage, they divert resources from 22 the areas most in needs and they prevent us and our 23 partners from meeting the changing needs of our 24 communities. In short, they're not in the best interests 25 of underserved neighborhoods. 26 Now, for our part, NationsBank is, and the new . 27 1 BankAmerica will be, devoted to building strong, growing, 2 vigorous communities everywhere that we do business. 3 Community development has been a part of both of 4 our cultures and it will be an integral part of our new 5 culture. It's a fundamental part of the way that we do 6 business. It's essential to the future health of our 7 company and perhaps, most important, as Dave said, it's 8 simply the right thing to do. 9 This is what we have always believed, it's what I 10 believe today and I assure you that it is not going to 11 change. Now, we'll be happy to take your questions. 12 MS. SMITH: Thank you. Bob. 13 MR. FRIERSON: Thank you very much. This is a 14 question to the panel, so anyone feel free to respond. I 15 have several. The board is required to consider the 16 effects of this proposal and the convenience and needs of 17 the communities served and this consideration takes into 18 account the records of performance under the Community 19 Reinvestment Act of NationsBank and BankAmerica. 20 In assessing the effects of the proposal on 21 communities, particularly communities in California, 22 should the board rely on NationsBank's record or 23 BankAmerica's record? If the board should rely on 24 NationsBank's record, how does NationsBank intend to 25 ensure that all individuals in all communities will have 26 access to a full range of products that assist in meeting . 28 1 credit needs that may differ substantially from community 2 to community? If the board is to rely on BankAmerica's 3 records, which programs -- and I believe I understood you 4 correctly to say you would be retaining BankAmerica's 5 Community Development Bank -- which programs in addition 6 to that would NationsBank expect to continue? 7 MR. McCOLL: Can I answer the last question 8 first? As to the last question, we intend to retain all 9 of what the Bank of America has been doing, including 10 their support through their foundation of local community 11 efforts and Don Mullane can outline all of the aspects of 12 what has been done. 13 We ask that you measure us on both of our 14 records. And what we believe we would do is bring 15 whatever we think is the best of NationsBank's efforts 16 also to California and to the west coast to supplement 17 whatever has been done by the Bank of America. In other 18 words, we think the sum will be greater than the parts. 19 And that's where I am on that. 20 I may have missed one of the questions. Oh, you 21 want to talk about making credit available to all 22 individuals? 23 MR. COULTER: Sure. I will be somewhat 24 repetitive but I would indicate that we are trying to 25 create a new company here. In fact, we refer to it today 26 as the new BankAmerica Corporation, and in that sense, . 29 1 we're trying to take the best of what we think are two 2 fine organizations today. We're blending this merger, as 3 indicated, from the establishment of a policy committee 4 with three senior individuals from Bank of America and 5 three senior individuals from NationsBank and we are going 6 to attempt to operate on a nationwide basis. This is the 7 first coast-to-coast franchise. 8 And in that sense, I think we have a clear 9 understanding that to be successful on a nationwide basis 10 size is not the only important criteria. To be successful 11 on a nationwide basis and take advantage of size, you have 12 to demonstrate local market or natural market leadership. 13 And that involves community investment efforts as well as 14 day-to-day business efforts in terms of relating the 15 products and services you provide in a natural market, be 16 it the Bay Area or be it St. Louis or be it Jacksonville, 17 Florida in a way that the market clearly believes that you 18 have the decision-making power to offer the products and 19 services that makes sense in that natural market. 20 MR. McCOLL: I would just like to add one thing. 21 As to the understanding of the difference in the markets, 22 which I think is a fair question, it should be noted that 23 NationsBank operates in 16 states now, four major regions, 24 each of which is different. For instance, the cattle are 25 more important in Texas by some staggering margin than 26 they are in South Carolina where cotton is more important. . 30 1 And we have different industries, from aerospace to the 2 furniture industry, just illustratively. 3 And we understand that the needs of the 4 individuals in each market are quite different and we 5 respond. I made the point earlier and I'd like to 6 underline it, that we have local market leadership that 7 makes decisions in the best interests of each individual 8 community. 9 So our response in Southern California may well 10 be quite different from South Carolina, albeit it will be 11 to achieve the same goals, which is support small 12 business, adequate housing at fair values and services 13 available to everyone in the areas where we do business. 14 So it's not something we're unfamiliar with. 15 We have earned our CRA ratings over a broad 16 number of states and broad regions and we have 17 demonstrably performed in facing the differences that are 18 existent in each of these markets and we will continue to 19 do so. 20 Let me say one last thing. We are Americans, we 21 understand what America is about, and it's about all of us 22 here in the room, even the right to disagree with each 23 other. And I just might -- in response to the earlier 24 statement, you need to understand that we support and, in 25 fact, furnish money to a large number of the groups that 26 are here protesting this merger. . 31 1 MR. FRIERSON: Let me follow up on the 2 characterization which has been used several times here 3 which is the coast-to-coast banking franchise. This 4 proposal has been characterized as allowing customers that 5 would have access to approximately 5,000 branches and I 6 believe 15,000 automated teller machines. In addition to 7 what you've told us already, can you provide us with any 8 more detail on how it's going to serve the convenience and 9 needs of those residents in communities who may only use 10 the branches and the ATMs that are located within their 11 own communities? 12 MR. McCOLL: Well, we'll try. The first and most 13 important thing that I believe that banks should do is to 14 provide the fuel for the economy, that is, provide credit. 15 Now, that's the first thing we should do. 16 We have a large deposit base, but in addition to 17 that, because of our strong earnings and capital base, 18 we're able to raise money across the world. And we have 19 demonstrated conclusively and can demonstrate empirically 20 that we're net importers of capital into every market in 21 which we operate. And so it starts with that, being a net 22 importer of capital and furnishing it to markets no matter 23 how large they are or how small they are. We start with 24 that and that's because of our strong ability to access 25 the world markets and to bring money into the market that 26 is beyond our deposit base. . 32 1 Secondly, because of our company's success, both 2 companies' success, we are able to develop software that 3 drives down cost, not only to us but to the customer, that 4 is it makes the products that are available to the 5 customer work better for them and facilitates the ease in 6 which they do their business. And that isn't a lot 7 different, candidly, from Wal-Mart which is a 8 coast-to-coast company which does the same thing. 9 Dave, you may want to comment further about that. 10 MR. COULTER: I have just a few comments. Even 11 if you're confined to a pretty small local market, I 12 didn't move very far out of the small town I grew up in 13 Port City, Pennsylvania for the first 16 or 17 years of my 14 life. I'd still argue that value and convenience that we 15 can provide are quite important. 16 Maybe you go to your normal -- maybe you go to 17 your branch on a weekly basis. But perhaps as technology 18 changes and the world continues to evolve and you don't 19 have transportation, if you can access your bank via your 20 interactive cable TV, that's of some value to you. If you 21 need information about sending a child to college in 22 another part of the United States and need to be able to 23 move money back and forth to that child, that's of value 24 to you. 25 So I think the basic benefits you laid out at the 26 start of the question are quite important and very . 33 1 valuable. 2 In addition to that, it's certainly my experience 3 here in California that it does not take a very small 4 business today to have international, if not global, 5 aspirations to look at this broad pacific rim which we're 6 fortunate to be on one edge of and desire to sell some of 7 its product offshore. 8 Now, we're in a little bit of a disruptive 9 economic period but I think that's a long-term desire and 10 a long-term need. And that's a case where I think the new 11 BankAmerica Corporation can bring a wide range of services 12 in how to do business in offshore markets that appear very 13 foreign and very distant to many small businesses today. 14 And as I said, I think most small businesses have those 15 kinds of aspirations and dreams. 16 MR. McCOLL: I'd like to add one thing. We have 17 about a hundred thousand teammates in our company and Bank 18 of America has approximately the same number of people who 19 are drawing a paycheck, in effect, from the company, so a 20 couple hundred thousand people working. 21 We live in these communities, large and small, 22 and if for no other reason, we all like our communities 23 that we live in and it's in our interests both personally 24 and corporately to support those communities and we're 25 going to do that. 26 Secondly, we are interested in making money. We . 34 1 cannot make money if we don't do the things that banks are 2 supposed to do. That is, if we don't lend money. If we 3 do not make service and products available at reasonable 4 prices, they can go somewhere else and we will lose the 5 business. So we are incented to do the right thing and 6 will do so. 7 MR. FRIERSON: I have one last question, I just 8 want to clarify the record. NationsBank has stated that 9 it will -- it intends to expand all aspects of the 10 BankAmerica rural 2000 Community Development Initiative. 11 Will the rural 2000 initiative be extended to all rural 12 communities that would be served by the combined 13 organization if the merger is approved and how will the 14 initiative be expanded? 15 MR. McCOLL: Well, we'll do that where it makes 16 sense. And it will be expanded under -- obviously, under 17 the leadership of the people who thought it up inside our 18 company. But we'll obviously have to bring more people to 19 the -- bring more people to it from our company, that is, 20 added staffing. Because of time zones, because of 21 different types of rural needs. As I said, a rural need 22 in eastern North Carolina or South Georgia is quite 23 different from what it is in Kansas or Iowa or in Southern 24 California or in -- right here in the valley. So it will 25 have to be tailored to be responsive to each region. But, 26 yes, we intend to continue with the outreach. . 35 1 MS. SMITH: Thank you very much for your 2 presentation and we will move on to the first panel. 3 MS. ORR-SMITH: Madam Chairman, I'd like to 4 address this letter to Mr. McColl and Mr. Coulter 5 requesting a meeting with some of the protestors to 6 discuss the specific issues raised. Thank you. 7 MS. SMITH: I think the first panel is mostly up 8 but if there's anyone who hasn't made it up. And if you 9 will just introduce yourselves to the audience as you are 10 seated and let's start with the person on the extreme 11 right.
Last update: December 3, 2010