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Public Meeting Transcripts

Public Meeting Regarding Banc One and First Chicago

Thursday, August 13, 1998

Transcript of Panel Eleven

 
         13       MR. PARKER:  Thank you and good afternoon.
 
         14            My name is Bernard Parker.  I am the
 
         15   Co-Chair of Alliance For Fair Banking out of
 
         16   Detroit's coalition of organizations.  They came
 
         17   together about 12 years ago.  And I'm also a Wayne
 
         18   County Commissioner serving the East Side of the
 
         19   City of Detroit.  And I'm the Executive Director of
 
         20   a community organization Operation Get Down for 28
 
         21   years now.
 
         22            I'm here to speak in support of the merger
 
         23   for one particular reason, and that is the history
 
         24   of what we have had in relationship to working with
 
 
 
 
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          1   National Bank of Detroit NBD in the City of
 
          2   Detroit.
 
          3            Back in 1986, we had a similar type of
 
          4   situation where we came together to express some
 
          5   real concerns about the disinvestment and the lack
 
          6   of involvement of NBD and other banks in the City
 
          7   of Detroit, and we came together and negotiated an
 
          8   agreement with them under the leadership of the
 
          9   NAACP, and they were able to come to an agreement
 
         10   at that particular time.  And then after that, we
 
         11   reached another agreement with them.
 
         12            What we have found is that as we've had
 
         13   many concerns, opposed what they were doing, we
 
         14   found that communication, working with them and
 
         15   meeting with them on a regular basis at least twice
 
         16   a year and going through our agreements and going
 
         17   through the various items that we have and working
 
         18   with them to try to improve their investment in the
 
         19   community really was a way that we were able to, I
 
         20   think, achieve some outstanding type of agreements
 
         21   and loans to the City of Detroit.
 
         22            Just some examples of that, in 1995, we
 
         23   reached an agreement with NBD and for $677 million
 
         24   over a three-year period, and by working with them,
 
 
 
 
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          1   though, and by encouraging and by on a regular
 
          2   basis having a staff that worked with their staff,
 
          3   they were able to achieve 1.5 billion dollars worth
 
          4   of lending in that same three-year period,
 
          5   surpassing the low income mortgages by 144 percent
 
          6   of the goal that we have set as small businesses
 
          7   under $1 million located in the City of Detroit by
 
          8   765.  An outstanding achievement what they were
 
          9   able to do by us working with them.
 
         10            Under procurement, when we went with them,
 
         11   they admitted that they did not even know if there
 
         12   was any minorities that were serving their company
 
         13   to any degree and particularly African Americans.
 
         14   And Detroit representatives 75 percent African
 
         15   Americans.  We were very concerned about that.
 
         16            The CEO at that time put it as a major
 
         17   objective for him to increase that, and we worked
 
         18   with them, and they created a division called the
 
         19   Minority Procurement Division and appointed a
 
         20   person there that was very supportive in the
 
         21   community.  And as a result of that, they have
 
         22   increased that minority procurement and now has
 
         23   become a model that is used throughout our
 
         24   grievance with other financial institutions, and
 
 
 
 
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          1   that is used throughout the country in setting up a
 
          2   department that does procurement.
 
          3            In employment, we're very pleased that
 
          4   they have one of the highest levels of senior
 
          5   management that there is in the banking community
 
          6   in Detroit and as we understand across the country
 
          7   and they have promoted people from within and
 
          8   brought in others in order to have a diverse type
 
          9   of senior management and unemployment level also.
 
         10   We think that has been very helpful.
 
         11            So what we believe is that this merger is
 
         12   something that is happening throughout the city.
 
         13   It's something that is probably going to happen
 
         14   even more so in the future.
 
         15            And what is important is that we're going
 
         16   to have to -- they are going to have to understand,
 
         17   Banc One as well as First Chicago NBD and those
 
         18   entities, that it is important to work with all the
 
         19   communities that have come out here and expressed
 
         20   some concerns as we were able to do in Detroit by
 
         21   coming together and meeting on a regular basis.  We
 
         22   think that they will be able to achieve some of the
 
         23   similar goals that we've been able to do in Detroit
 
         24   with NBD.  And we think that those are very
 
 
 
 
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          1   important goals.
 
          2            Some of the things that we think are going
 
          3   to allow us to make sure that we continue to have
 
          4   representation in Banc One and continue to have
 
          5   some influences there, one, we have met with John
 
          6   McCoy and we have had very enlightening discussion
 
          7   with him about exactly what we want to see happen.
 
          8            There's agreement that we will have one of
 
          9   our members that we select that will be on the
 
         10   advisory board of NBD, their advisory council, that
 
         11   is formerly the board members of NBD before the
 
         12   merger with First Chicago.
 
         13            there's an agreement there will be a real
 
         14   effort on diversity in the senior management of
 
         15   Banc One, and we'll be looking at those numbers on
 
         16   a regular basis whenever we meet with them to make
 
         17   sure there is diversity on all levels of management
 
         18   and that we want to continue to have that type of
 
         19   communication with them.
 
         20            And we feel confident that NBD has agreed
 
         21   and have said -- it has been a good business
 
         22   decision to work with us.  It has increased their
 
         23   time and their relationship with the community and
 
         24   they're now recognized as a real leader in the City
 
 
 
 
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          1   of Detroit.
 
          2            Thank you very much.
 
          3       MS. SMITH:  Thank you.
 
          4       MR. ANTHONY:  Thank you very much.
 
          5            My name is Wendell Anthony.  I'm president
 
          6   of the Detroit Branch of the NAACP and also
 
          7   Co-Chair of the Detroit Alliance For Fair Banking.
 
          8            Pardon me if I leave when I finish because
 
          9   I have a flight to catch.
 
         10            I do want to echo some of the concerns
 
         11   that Mr. Parker said.
 
         12            One of the things I think that is
 
         13   important for us to point out is that several years
 
         14   ago, many persons in our community along with the
 
         15   local news media did an expose on all of the banks
 
         16   in the City of Detroit, and we found that all of
 
         17   them were guilty of noncompliance to access to
 
         18   capital, to discriminating against minorities, to
 
         19   not including us in procurement, to not including
 
         20   us in the full benefits of what banks do derive
 
         21   from their communities.
 
         22            So the alliance was formed.  The first
 
         23   agreement that we reached with NBD at that time,
 
         24   the National Bank of Detroit, was for $1 million.
 
 
 
 
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          1   Today, we have an agreement with them for $3.25
 
          2   billion for the next three years.  That came after
 
          3   negotiations and pain and some gain.
 
          4            We believe that it's important for us to
 
          5   engage in the community.  We certainly understand
 
          6   where a lot of people are in terms of their own
 
          7   local communities, but I think it was Diane
 
          8   Karmasol that said one must be true to his or her
 
          9   own reality.
 
         10            Our reality is what we're pointing out to
 
         11   you today, and that is that we have reached a point
 
         12   in Detroit particularly that is driven by First
 
         13   Chicago NBD in conjunction with Banc One with this
 
         14   new agreement.
 
         15            The Detroit Alliance For Fair Banking is
 
         16   made up of several organizations, almost a
 
         17   hundred.  We have, in fact, enlisted not only their
 
         18   thoughts but also tapped into the sources and the
 
         19   thinking that our community would have this merger
 
         20   presents an opportunity to open the door even
 
         21   wider.
 
         22            Just recently in Detroit, over 400
 
         23   businesspersons, African Americans 99 percent of
 
         24   them, were at a Detroit sit-in in which we talked
 
 
 
 
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          1   about the debriefing which would be accomplished as
 
          2   a new plan.  The new plan accomplishes new homes,
 
          3   commercial development, small business development,
 
          4   hiring of minorities in various areas of the bank.
 
          5            One of the things that we were very
 
          6   concerned about was how this is going to transfer
 
          7   itself, if, in fact, this merger would take place.
 
          8   Would Banc One be driving the other way or would
 
          9   the other way be driving Banc One.
 
         10            We believe that this marriage has some
 
         11   promise to the degree the two cultures can come
 
         12   together and impact each other.
 
         13            We have found that First Chicago NBD has
 
         14   been a good culture and a good experience for us,
 
         15   otherwise, we would not be here talking to you.
 
         16            For so many years, banks have been talking
 
         17   loud and doing nothing.  Well, in Detroit, they are
 
         18   now talking loud and they're doing something.  The
 
         19   fact that we do have businesses we can point to who
 
         20   have been the recipients of loans from the bank,
 
         21   the fact that we do have African Americans and
 
         22   women and other minorities who have received home
 
         23   mortgage improvements and loans and start up
 
         24   capital is a fact that we can point to.
 
 
 
 
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          1            The fact that in this recent agreement
 
          2   they have predevelopment moneys which allow
 
          3   businesses who are trying to develop a business
 
          4   plan heretofore might not have the expertise to do
 
          5   that, but they can now back out of their grants or
 
          6   their loans.
 
          7            Money for predevelopment is a major, major
 
          8   factor.  We've also set up a program where they
 
          9   will now work with the local community colleges so
 
         10   that students can be trained in the banking
 
         11   community.
 
         12            As you may or may not have heard, Detroit
 
         13   is on the cusp of getting casinos in our
 
         14   community.  Usually, though, it's the persons who
 
         15   are from banks, the tellers and the financial
 
         16   people, are the first ones that are snatched to
 
         17   work in those industries.  What we believe that's
 
         18   going to occur, then there should be a constant
 
         19   flow going into the banking community.
 
         20            So we structured a program whereby through
 
         21   a feasibility study and work with other banks that
 
         22   we can train students in Wayne County Community
 
         23   College and in Detroit at the Lewis College of
 
         24   Business inside the City of Detroit to prepare them
 
 
 
 
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          1   for the future in the banking industry.
 
          2            We believe that while this merger may not
 
          3   be perfect, it certainly puts us in a situation of
 
          4   being able to impact and to influence the bank, and
 
          5   we believe that in other communities, if they
 
          6   begin -- and I'm sure they are already -- doing the
 
          7   same types of things that we are doing, and perhaps
 
          8   we can loan some expertise to them in some other
 
          9   areas.  We'll be glad to do that.  There will be
 
         10   some new pavement that will be open to all of us.
 
         11            We support the merger.  It's drawn from
 
         12   our experience which to us has been a good
 
         13   partner.  We believe through their impact, Banc One
 
         14   can also become a good partner.
 
         15            Thank you.
 
         16       MS. SMITH:  Thank you very much.
 
         17            Mr. Cardona.
 
         18       MR. ANTHONY:  Please excuse me.
 
         19       MR. ALVAREZ:  Thank you very much.
 
         20       MS. SMITH:  Thank you for coming.
 
         21       MR. CARDONA:  Good afternoon.  My name is Hugo
 
         22   Cardona.  I'm the President and Chief Executive
 
         23   officer for SER Jobs Progress National.
 
         24            I'm here to speak on behalf of Banc One
 
 
 
 
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          1   and its merger with Bank Chicago.
 
          2            SER is the largest in serving minorities,
 
          3   especially Hispanics.  We empower people to go from
 
          4   welfare to work.  We were founded in 1964;
 
          5   therefore, we have been 34 years serving the
 
          6   communities.
 
          7            We were founded by LAUC, the Latin
 
          8   American United Citizens, and the GI Forum, the two
 
          9   organizations that serve the Hispanics minorities
 
         10   and Hispanic minorities for civil rights.
 
         11            Our mission is very simple.  We empower
 
         12   the individual to find the skills that they need to
 
         13   be useful to the communities.  We give the
 
         14   education, the training, the housing, whatever they
 
         15   need.
 
         16            Our challenge is very simple.  We need to
 
         17   empower the 21st Century work force to have the
 
         18   skills in such a way that at this time that we have
 
         19   a good economy, everybody's being hired, but two
 
         20   years from now, if we have organization, they will
 
         21   be the first ones to go if we don't empower them to
 
         22   have the skills to survive.
 
         23            To do that, we have our national
 
         24   headquarters in Dallas.  We have 38 affiliates
 
 
 
 
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          1   located in 17 states, the District of Columbia and
 
          2   Puerto Rico.  We are in 91 locations.  We have more
 
          3   than 180 programs.  We serve more than 400,000
 
          4   individuals a year, of which we place more than
 
          5   30,000 in meaningful jobs, meaning jobs beyond the
 
          6   minimum wage with full benefits.
 
          7            This means for the economy between $701
 
          8   billion in purchasing power that these individuals
 
          9   that were on welfare now have as a Hispanic
 
         10   community.  Our funding exceeds $68 million a
 
         11   year.
 
         12            To do this empowerment, we have different
 
         13   programs.  We have programs like One Stop Career
 
         14   Centers where anybody can come and we will take
 
         15   care of them.  We will evaluate their needs and we
 
         16   will find a way for them.  We have housing in which
 
         17   we assist minorities to buy their first homes.  We
 
         18   have distance learning.  Through the computer, we
 
         19   are able to give today from your home Associate's
 
         20   Degrees, K-4 to K-16 education, GED, English as a
 
         21   second language, basic skills, whatever you need.
 
         22            We have different programs for women, for
 
         23   youth, for children.  And we have peoples with
 
         24   disability, homemakers that are disabled.
 
 
 
 
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          1            Whatever it is, we take care of our
 
          2   minorities before they are born until they are --
 
          3   until they die.  To do that, we have two sources of
 
          4   funding; the government, who take cares of the
 
          5   present.  They give us through competitive grants
 
          6   the ability in these locations to serve the needs
 
          7   of the people, but we must take care of the
 
          8   future.
 
          9            And this is where Corporate America and
 
         10   individuals like you come into place.  You are the
 
         11   ones who give us the money to develop the things
 
         12   that we need to be better, all the distance
 
         13   learning and all these programs that we need to
 
         14   serve the minorities.
 
         15            And this is where Banc One comes into
 
         16   play.  They have been our partners in our housing
 
         17   program.  In the last three years, we have placed
 
         18   more than 270 individuals in homes, people that did
 
         19   not have a credit record, people that did not have
 
         20   the down payment.  We were able with the assistance
 
         21   of Banc One to put them in homes.  Their
 
         22   contribution to our work will be this year more
 
         23   than $100,000 dollars.
 
         24            And we are negotiating right now a million
 
 
 
 
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          1   dollar credit line on what we need to replace all
 
          2   the computers in our network, and we will be able
 
          3   to place the old computers in the homes of the
 
          4   minorities.
 
          5            This is an outstanding record for an
 
          6   organization that is working with us into making
 
          7   this positive.
 
          8            So as I said, look at Banc One as a
 
          9   partner that with this measure we increase the
 
         10   support to the community, but we work for the
 
         11   community in making this possible.  So we do
 
         12   support this merger.
 
         13            Thank you so much.
 
         14       MS. SMITH:  Thank you very much.
 
         15            Ms. Hunt.
 
         16       MR. CARDONA:  And I apologize, but I also have
 
         17   to leave.
 
         18       MS. HUNT:  Good afternoon.
 
         19            My name is Gladys Hunt, and I am with the
 
         20   Community Collaboration for Economic Development in
 
         21   Champaign, Illinois.
 
         22            And I'm here to represent the Community
 
         23   Collaboration for Economic Development.  It's a
 
         24   relatively young organization.  It was initially
 
 
 
 
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          1   convened as an informal community group in June of
 
          2   1997.
 
          3            This group came together to address the
 
          4   needs of the low income and minority community in
 
          5   terms of small business development.  It's an
 
          6   informal community group comprised of
 
          7   representatives from the African American business
 
          8   community, from municipal government, nonprofit
 
          9   civic groups like the NAACP and the Urban League of
 
         10   Champaign County, women's business groups and the
 
         11   University of Illinois.
 
         12            In the Spring of 1998, the Community
 
         13   Collaboration for Economic Development was legally
 
         14   incorporated as a nonprofit organization.
 
         15            Our mission is to create an ongoing
 
         16   economic development project to increase the number
 
         17   of businesses within the low income and minority
 
         18   community.
 
         19            The mission is to develop human capital to
 
         20   promote unique ideas through business education,
 
         21   technical assistance and targeted economic
 
         22   development programs.
 
         23            To date, we have graduated one
 
         24   entrepreneurial small business development class
 
 
 
 
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          1   this past spring.  We graduated 14 out of 15
 
          2   persons who started in the class.  And in the
 
          3   class, people were given technical assistance and
 
          4   business development information.
 
          5            Our next class will start August 29th, and
 
          6   we have 18 people signed up in that class, and we
 
          7   have 28 people on the waiting list to start a class
 
          8   next spring.
 
          9            In addition, this month, we're going to
 
         10   start a support organization to assist not only our
 
         11   graduates but other small business -- other
 
         12   minority and low income business owners, a minority
 
         13   business council of sorts.
 
         14            The project started, as I mentioned, in
 
         15   the Spring of 1997 with a partnership Illinois
 
         16   grant, which is a new funding program through the
 
         17   University of Illinois to encourage the university
 
         18   to become involved in the local community.
 
         19            We received an initial seed grant through
 
         20   that program and we worked with local city
 
         21   government and banks, including Banc One in our
 
         22   area, to receive matching funds to fund the
 
         23   program.
 
         24            At this point, we're seeking -- well,
 
 
 
 
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          1   we've made it to the second round of the community
 
          2   development financial institutions, the CDFI,
 
          3   technical assistance grant, and we're in the
 
          4   process of seeking monies from global banks and
 
          5   from municipal governments to start a revolving
 
          6   loan fund so that not only will we give our low
 
          7   income and minority community technical and
 
          8   business assistance, but we will also be able to
 
          9   help them with financial assistance in starting
 
         10   their business.
 
         11            Now, what does all this have to do with
 
         12   Banc One and the proposed merger?  In our efforts
 
         13   to put this community collaboration together, Banc
 
         14   One has been there every step of the way from the
 
         15   beginning.  They were at the table at the first
 
         16   meeting that took place in the Spring of 1997, and
 
         17   they've continued to provide leadership on the
 
         18   committee as a whole and in various subcommittees,
 
         19   specifically the Alternative Funding Committee, the
 
         20   Future Funding Committee, the Mentoring Committee
 
         21   and the Small Business Development Workshop
 
         22   Committee.
 
         23            They provided leadership in the form of
 
         24   staff and financial resources.  Banc One has led
 
 
 
 
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          1   the way in sponsoring financial -- various
 
          2   financial aspects of the CCED, -- or the CCED --
 
          3   I'm using the initials -- the Community
 
          4   Collaboration for Economic Development Operations.
 
          5   Wherever we needed to partner with financial
 
          6   institutions in continuing and expanding our
 
          7   operations, they've been at the table to help us.
 
          8            For example, when we decided that we
 
          9   needed this revolving loan fund to help fund our
 
         10   small business development class because they did
 
         11   not meet the criteria for some of the traditional
 
         12   business funding, again Banc One staffs were at the
 
         13   table providing that leadership helping us develop
 
         14   new and innovative strategies to bridge that
 
         15   between -- to bridge that gap in meeting the needs
 
         16   of low and income minority business community.
 
         17            Finally, I must add that in working with
 
         18   Banc One in developing this outstanding
 
         19   entrepreneur program for our community with the
 
         20   CCED, this was not my personally first encounter
 
         21   with them, this their proactive -- in what I
 
         22   consider a proactive and progressive stance in
 
         23   reaching out to the low income and minority
 
         24   community.
 
 
 
 
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          1            In 1991, as Assistant Executive Director
 
          2   of the Housing Authority of Champaign County, I was
 
          3   appointed to serve on Banc One's Community
 
          4   Reinvestment Advisory Committee to assist the bank
 
          5   in developing strategies and policies to serve the
 
          6   needs of low income and moderate neighborhoods.
 
          7            I served in that capacity until 1995.  And
 
          8   during those four years, I saw Banc One work
 
          9   diligently and proactively to meet the needs of the
 
         10   low income community.  And we did that in the
 
         11   housing area, and we're do -- oh, it's expired --
 
         12   we're doing -- I'm sorry -- in the business area.
 
         13            But I just want to say that we at the
 
         14   Community Collaboration for Economic Development
 
         15   wholeheartedly endorse and support the proposed
 
         16   merger between Banc One and First Bank NBD, and we
 
         17   would just -- I would just add that I would --
 
         18   well, my time has expired.  I'll stop.  I won't go
 
         19   so fast.
 
         20       MS. SMITH:  Mr. Smith.
 
         21       MR. SMITH:  Thank you.  Thanks for letting me
 
         22   come before you here.
 
         23            My name is Charlie Smith.  I'm Director of
 
         24   the housing authority in Wilmington, Delaware, and
 
 
 
 
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          1   I was a little nervous and reluctant to come speak
 
          2   when I saw such great opposition to this merger,
 
          3   especially since I'm in favor of -- my agency as
 
          4   well as my community is in favor of the merger with
 
          5   Banc One and FCC.  And you ask, well, why?
 
          6            At least we have some people -- at least
 
          7   we're all on the same page in terms of going along
 
          8   with this merger.  I think it's going to enhance
 
          9   the relationship that I have established with both
 
         10   banks.
 
         11            My first encounter has been with FCC.
 
         12   Well, FCC has been very creative in working with
 
         13   our community, especially in the public housing
 
         14   arena, to address some of the concerns as ways to
 
         15   employment opportunity, business development and as
 
         16   well as home ownership in our community.
 
         17            And I know Roland Ridgeway, who's very
 
         18   active in our community, who's been a leader in our
 
         19   city with FCC to try to encourage collaboration and
 
         20   partnership not only with communities, but he's
 
         21   also in his efforts to try to get them more
 
         22   involved in the neighborhoods with other banks and
 
         23   pulled together banking interest and collaborated
 
         24   in development programs and activities that have
 
 
 
 
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          1   helped facilitate opportunities of our community in
 
          2   Wilmington.
 
          3            Banc One has been good corporate partner
 
          4   as well as FCC, and that's a good corporate
 
          5   partner.
 
          6            It's not often I've had an opportunity to
 
          7   work with an institution that will come to you and
 
          8   say, look, what can we do to assist you in your
 
          9   efforts in your community?
 
         10            And Banc One took the lead in coming to
 
         11   the Wilmington Housing Authority because the
 
         12   Wilmington Housing Authority has had the
 
         13   distinction of having so many vacant units in its
 
         14   inventory throughout the City of Wilmington,
 
         15   somewhere around 500.  And we put up a plan to
 
         16   address those vacant units.
 
         17            And when the newspaper reported our plan,
 
         18   how we proposing to do it, Banc One and FCC were
 
         19   one of the first banks who came in and said what
 
         20   can we do to facilitate and participate in your
 
         21   efforts to address your home ownership as well as
 
         22   your vacant units?  One specifically.
 
         23            FCC is right now pulling together several
 
         24   banks in which they're taking the lead on putting
 
 
 
 
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          1   together a $5 million pool, revolving pool we're
 
          2   referring to it as.
 
          3            One of the reasons this pool is necessary
 
          4   for us is because we cannot collateralize our
 
          5   property, our public housing.  We can't use it as
 
          6   collateral.  This pool will be used to help
 
          7   collateralize some property so we can get some
 
          8   money from private as well as state to help us
 
          9   facilitate elimination of our vacant units that
 
         10   we're having.
 
         11            So FCC has really taken a lead on getting
 
         12   some banks together to be partners with them to
 
         13   help put together this pool of money so we can use
 
         14   to -- acquire some money for us to do something
 
         15   with these units that we have in this old city.
 
         16            Banc One came and said, look, what can we
 
         17   do, how can we be a partner with you to help
 
         18   dealing with not only housing, but what other
 
         19   areas?
 
         20            So we're talking about community
 
         21   development, about funding some programs as it
 
         22   relates to mortgages.
 
         23            Wilmington has a distinction.  We have
 
         24   like 54 banks just in Wilmington alone.  In our
 
 
 
 
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          1   case, we have so many banks falling on each other
 
          2   to get to do things in the community that we have
 
          3   the luxury, we can almost pick and choose who we'd
 
          4   like to work with, but Banc One and FCC has stepped
 
          5   up to the plate and really has demonstrated some
 
          6   guts in trying to work with public housing.
 
          7            I don't know how often they have an
 
          8   opportunity to do that, but they came to us.  They
 
          9   brought the thing to us and say, look, you guys sit
 
         10   down and talk and see where we can help you in your
 
         11   community and facilitate programs and activities
 
         12   that would help enhance.
 
         13            And they have done a tremendous job.  one
 
         14   of the things I've asked them to do and consider,
 
         15   personally give me some technical assistance.  They
 
         16   took two of my staff people recently, about two or
 
         17   three months ago they had a conference for their
 
         18   staff, Banc One staff, on how to put together
 
         19   packages for development of corporations and
 
         20   housing development, that stuff.  And they invited
 
         21   two of our staff to go to Texas to participate in
 
         22   that program.
 
         23            As a result, we're doing a private
 
         24   development on our own where we take one of our
 
 
 
 
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          1   largest high-rises and turn it into a private
 
          2   market venture and using tax credits and all that
 
          3   and provided us technical assistance on pulling
 
          4   this whole process together.
 
          5            So we've had good experience with Banc One
 
          6   and FCC.  And I'm kind of surprised that we have
 
          7   such opposition.  The relationship we've had has
 
          8   been a positive one.  This merger I think is going
 
          9   to enhance the relationship.  I've had work with
 
         10   both FCC and Banc One.  So I think that merger is
 
         11   going to enhance not only the opportunity for us to
 
         12   do more work in our community and our neighborhood
 
         13   but also is going to help facilitate some greater
 
         14   opportunities for economic development in home
 
         15   ownership as well as community development in our
 
         16   community and neighbors in our community in
 
         17   Wilmington.
 
         18       MS. SMITH:  Thank you very much.  We'll hear
 
         19   now from Mr. Reid.
 
         20       MR. REID:  Thanks very much.  I appreciate the
 
         21   opportunity to be here.
 
         22            I'm Jim Reid, President and founder of the
 
         23   Southern Dallas Development Corporation.  We're a
 
         24   nonprofit community development financial
 
 
 
 
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          1   institution that concentrates on business lending,
 
          2   and I'm glad to have this opportunity.  I'm glad to
 
          3   be where it's a little cooler than Texas.
 
          4            I'd like to provide some background on our
 
          5   organization, talk about our experience with Banc
 
          6   One and draw some conclusions with some of the
 
          7   issues before this group.
 
          8            Our organization, its mission is to assist
 
          9   businesses, create jobs and promote investment in
 
         10   Southern Dallas.  Southern Dallas is -- about half
 
         11   the City of Dallas, 45 percent of the population,
 
         12   75 percent of the population, is a minority
 
         13   population, African American and Hispanic, but it
 
         14   only has 13 percent of the commercial tax base, and
 
         15   the median income is about 60 percent of the
 
         16   northern sector, so Dallas is really bisected in
 
         17   terms of our economy.
 
         18            We were created to help create jobs and
 
         19   started out with one loan fund, and now we manage
 
         20   five different loan funds including an SBA
 
         21   microloan program, CDFI-funded fund and indirectly
 
         22   a bank CDC and an SBA community development
 
         23   corporation.
 
         24            With those funds, we've been able to lend
 
 
 
 
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          1   22 million directly, leverage about 27 million in
 
          2   our community, 2,500 jobs where they're needed
 
          3   most, including a thousand jobs in the last two
 
          4   years for a small community-based organization.
 
          5            We did that with the support of partners
 
          6   in the community like Banc One.  And Banc One,
 
          7   although they're not the largest bank in our
 
          8   market, they are the largest investor in our
 
          9   multi-bank CDC, and that's especially important
 
         10   because with a community loan corporation bank, you
 
         11   can do things banks cannot.
 
         12            We provide a lot of money in terms of
 
         13   subordinated debt, and that's very important to
 
         14   minority businesses.  That's about 70 percent of
 
         15   our portfolio is minority businesspersons.
 
         16            They have participated with us in 29
 
         17   deals, joint and financing where they brought money
 
         18   to the table totaling about 34 million dollars.
 
         19   They provided match to about $100,000 for the
 
         20   Community Development Financial Institutions Funds
 
         21   and pledged 200,000 in match.
 
         22            The underwriter newspaper that we put out
 
         23   every year going through all of the people who
 
         24   receive the Dallas Morning News telling about the
 
 
 
 
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          1   positive features of our community, one thing that
 
          2   we found, trying to promote investment is the
 
          3   negative image of what can happen to low and
 
          4   moderate income communities, so we publish our own
 
          5   newspaper, and we know it's the truth because we
 
          6   write it.
 
          7            They have helped us in terms of providing
 
          8   loan bankers and have helped us in terms of a
 
          9   volunteer member of our board, in fact, our current
 
         10   Board Chairman is a member of Banc One.
 
         11            Now, three issues.  Would they be
 
         12   responsive in a new community?  They came into
 
         13   Texas and bought a bank there.  And they were
 
         14   responsive in our community.  Will they lend to the
 
         15   minority community?  Our experience in terms of
 
         16   managing a portfolio that's 70 percent has gone to
 
         17   minority borrowers, we believe the answer is yes.
 
         18            And then finally, in terms of an issue
 
         19   before people doing small business lending, right
 
         20   now small business lending has changed dramatically
 
         21   in the last two years, and it's because credit's
 
         22   growing.  You know credit's growing if offering
 
         23   lower transaction charges and quicker turnaround.
 
         24   It also means if you don't make the profile, you
 
 
 
 
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          1   don't get money.  That's where alternative lenders
 
          2   like us have come in.  Banc One has worked with us
 
          3   in two ways.  There are people out there that are
 
          4   on the bubble and are not getting funded because of
 
          5   credit.
 
          6            We get referrals from Banc One and we
 
          7   provide an award to one of their staff persons
 
          8   providing the most referrals last year.
 
          9            The second thing I think is more
 
         10   important; they have created a community
 
         11   development lending arm within the bank that has
 
         12   special regulations, special allowances in terms of
 
         13   the time that they can spend with clients and their
 
         14   loan losses they are allowed and so forth.
 
         15            Basically, in this credit storing system,
 
         16   if you're a special kind of a deal that needs more
 
         17   help, you get put to the bottom of the pile.  This
 
         18   means that organizationally, they've helped address
 
         19   this just as we have addressed it by delivering
 
         20   alternative products.
 
         21            So we're very positive about this merger
 
         22   because of our experience.  People today have had
 
         23   different experience.  Our experiences have been
 
         24   positive, and we urge you to support the merger.
 
 
 
 
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          1       MS. SMITH:  Thank you very much.
 
          2            Any questions?
 
          3            Then we thank you very much for coming
 
          4   this afternoon.  Be sure and give your written
 
          5   statements, if you haven't already, to the people
 
          6   at the registration desk so they can be fully
 
          7   entered into the record.
 
          8            And we're going on to Panel 12.
 
          9            We're going to start with Mr. Bromley.
Last update: December 3, 2010