Public Meeting Transcripts
Public Meeting Regarding Fleet Financial Group, Inc., and BankBoston Corporation
Wednesday, July 7, 1999
Transcript of Panel Six
19 REV. SHARPTON: I'm Reverend Al Sharpton, 20 President of National Action Network, and we have 21 members throughout the area that if this merger were 22 to go forward would cover much of that area. I come 23 as president of the Network with the vice chair, 24 Senator Ephraim Gonzalez, who heads the National 25 Coalition of Hispanic State Legislators, to express 0169 1 our unilateral concern and at this hearing objection 2 to the merger that is proposed today for several 3 reasons. 4 I think that first you must distinguish 5 between business policy and philanthropy. It is 6 very admirable that Fleet Bank gives away a lot of 7 money to certain charities. That has nothing to do 8 with its business policies and the policies that 9 will service or not service the community. You can 10 find I'm sure if you check in history slave masters 11 were good contributors to certain charities, but 12 their business was slavery. We're not here to talk 13 about their philanthropy; we're here to talk about 14 their policy, and their policy has left a lot 15 wanting. 16 The proposal that they give you, the CRA 17 proposal, the $14.6 billion, is just about what they 18 spend in Massachusetts alone. For you to approve a 19 merger where they would have more range, more states 20 for the same amount of money, in fact allows them to 21 reduce their commitment to borrowing and lending in 22 the community. They would argue because of certain 23 disvestments this is what figure they could best 24 come up with, yet with their divestments they have 25 an opportunity with the Boston Bank of Commerce to 0170 1 let a black bank that would service the communities 2 pick up some of those branches. They have not 3 chosen to make that arrangement. 4 So it seems that there is a situation here 5 where they want it all on their side and not on the 6 side of the community that needs development, that 7 needs fair borrowing and lending practices, that 8 needs policies that are fair for the people that the 9 federal government, and therefore the Federal 10 Reserve, are sworn to protect. 11 If they had made the effort to try and work 12 out some equation, certainly many of us would not 13 take that position. But clearly when you hear what 14 they have done with ACORN housing, when you hear the 15 problems that you have in mortgages and borrowing, 16 and when you hear their own proposal, which I think 17 falls far short of what is fair and equitable, we 18 have no choice but to appeal to you to block this 19 merger. We have no problem dealing with a Fleet 20 Bank, but we do have a problem dealing with being 21 fleeced by Fleet Bank. (Applause) 22 As they expand into other states, if this 23 merger is approved, clearly we have the right to be 24 concerned. The chairman, who the last panelist said 25 is such a nice guy, questioned why we would even 0171 1 want to deal with this hearing. Why would we be 2 here? He's coming in our house with a record from 3 allies that gives us a lot to be desired. It's like 4 me knocking on your door asking you "Why are you 5 answering it?" You answer it because you live 6 there. We live in New Jersey; we live in 7 Connecticut; we live in Massachusetts. 8 So, Mr. Chairman, all of us are not on your 9 payroll or your charity roll. Some of us don't want 10 a donation. We want fairness; we want equity; we 11 want parity. (Applause) We want to see loans to 12 those that seek mortgages and business loans that 13 are not at rates that are unbearable and not set up 14 with clauses that are unachievable. We want to see 15 an amount of money there that is representative of a 16 commitment toward development. If the Federal 17 Reserve passes this merger, where you have no real 18 commitment, with the dollar figures where they are 19 now, you have in effect already undone the purpose 20 of having CRA. 21 CRA is to have some redevelopment, not to 22 have bankers set their own bar, something they could 23 easily make, make all the profit they want and the 24 people be damned. And we would encourage you to 25 block this merger until a respectable proposal has 0172 1 been put forth on the divestment side, as I said, 2 with the Boston Bank of Commerce. And clearly they 3 should increase what they propose in the borrowing 4 and lending department, and their policies around 5 loans, and their policies around what they do with 6 their housing money. 7 I would hope that you will not ignore the 8 will of many people. Many say these hearings are 9 formality. I would hope that as we are on the brink 10 of a new millennium that people's wishes will not be 11 just listened to, patted on the head, and you go 12 forward with business as usual, because we in other 13 parts of New England will resist being policed by 14 any means necessary. Thank you. (Applause) 15 PRESIDING OFFICER SMITH: Ms. Yager, on 16 behalf of Mr. Lee. 17 MS. YAGER: Good afternoon. Matthew Lee, 18 the executive director of Inner City Press/ 19 Community on the Move and Inner City Public Interest 20 Law Center was unable to attend today and asked me 21 to read his comments into is the record. 22 I see he is opposed to this 23 anti-competitive merger proposal. After each of its 24 previous mergers, Fleet has dramatically reduced 25 lending to low- and moderate-income neighborhoods. 0173 1 Fleet's lending record in New York reveals a bank 2 with a troubled history of discriminatory lending. 3 For example, in May 1996, Fleet settled 4 discrimination charges with the U.S. Department of 5 Justice that it systematically overcharged 6 minorities from its two New York City area mortgage 7 offices. Fleet's record has not improved. Fleet 8 acquired Shawmut in 1995 and NatWest in 1996. In 9 New York State in 1995, Fleet made 4,994 home 10 purchase loans, NatWest made 2,995 such loans, and 11 Shawmut before being taken over made 70 such loans, 12 for a three-institution total in New York State of 13 8,059. 14 In 1996, in New York State the combined 15 entities made only 4,300 such loans, and by 1997 16 this number had declined to 2,415 loans. The 17 combined Fleet's 1997 total was less than NatWest 18 alone in 1995. Particularly troubling is that 19 Fleet's lending volumes have declined even more to 20 minorities and low income and moderate income census 21 tracts in communities overall. The details are 22 included in the written testimony. 23 Fleet's combined entities home purchase 24 lending volume and LMI census tracts declined 76.6 25 percent between 1995 and 1997. An even steeper 0174 1 decline went to New York State communities overall. 2 Fleet's mergers have hurt entire communities. They 3 have disproportionately harmed low and moderate 4 income neighborhoods and communities of color as 5 well. 6 For example, in the New York city 7 metropolitan statistical area, in 1997, for home 8 improvement loans, Fleet Bank NA in New Jersey 9 denied 74 percent of applications from African- 10 Americans and Latinos versus only 44 percent 11 applications for whites. 12 This proposed merger would be 13 anti-competitive. Fleet proposes to acquire 14 BankBoston through consolidation of the four 15 previous competitors into a single institution. The 16 proposal should not be approved. Even since it has 17 been announced, it has triggered further 18 consolidation. For example, People's Heritage 19 Corporation from Maine has proposed acquiring Bank 20 North of Burlington, Vermont, and Citizens Bank has 21 proposed acquiring U.S. Trust, and in Connecticut 22 Websters has made a recent proposal. 23 Even where Fleet claims to be proposing a 24 clean sweep in its divestiture, it discloses in 25 footnotes that it would be retaining a number of 0175 1 Fleet's or BankBoston's operations. For example, 2 see Fleet's antitrust memo, Page 15, stating in a 3 footnote that, quote, "The parties proposed to 4 retain certain special industry customers in Boston 5 and other New England markets, some of which may 6 have revenues less than $100 million." 7 This is not a clean sweep proposal. It is 8 imperative that Fleet calculate and disclose the 9 amounts by which the proposed divestiture would be 10 reduced by the withdrawal and retention of deposits 11 associated with these retained lines of business. 12 Fleet would also gain an anti-competitive 13 share and market power in ATMs. The Providence 14 Journal on May 21st wrote, "After its takeover of 15 BankBoston, Fleet would control about 36 percent of 16 all ATMs operated by banks and credit unions in 17 Massachusetts up from 12 percent." This issue is 18 not addressed in Fleet's antitrust memo. The 19 comment period should not close until Fleet reveals 20 more of the nature of its divestiture proposal and 21 until Fleet completes the proposal by naming the 22 banks that would buy the assets it proposes to 23 divest. 24 His last comment is that he requests that 25 the -- he asserts that the community commitment is 0176 1 entirely inadequate and the details of that are in 2 the written testimony. 3 PRESIDING OFFICER SMITH: Thank you very 4 much. (Applause) 5 MR. MUHAMMAD: Greetings. My name is Abdul 6 Jabbar Muhammad, and I'm here on behalf of the 7 Nation of Islam under the leadership of the 8 Honorable Mr. Louis Farrakhan. 9 When Fleet merged with the Bank of New 10 England, we, the Nation of Islam, supported the move 11 based on a commitment to help the community, its 12 organizations, and its businesses. However, Fleet 13 did not honor this commitment. And the community, 14 its organizations, and businesses have paid the 15 price. We have seen documents that show unfair and 16 unethical lending practices by Fleet Bank. Are we 17 going to relive the mortgage scandal with this new 18 merger? Will we see our seniors losing homes 19 because of unethical lending practices? 20 The merger at issue with Fleet Bank and 21 Bank of Boston has successfully created a scenario 22 of infighting within the community. Your customers 23 are not sure what this merger will bring. A survey 24 conducted by Survey USA asked the following 25 question: What kind of service do you think 0177 1 customers of the new bank will receive? 44 percent 2 don't think the merger will have an impact on 3 service while 42 percent think things will get 4 worse. 5 The banking and insurance business is the 6 most lucrative business in this country. This 7 merger will serve your interests. Bigger is not 8 necessarily better. A nickel is bigger and weighs 9 more than a dime, but it is less in value. When 10 airlines merged we were told to expect better 11 service, and we received peanuts and half a 12 beverage. (Applause) 13 Hospitals merged with the vision of better 14 service and healthcare for minority communities. 15 Division has been lost. Minority communities have 16 not experienced better service or healthcare. Will 17 this merger bring more personalized service to the 18 community? We no longer have the word "trust" 19 within banking institutions, we need the word 20 "trust" reflected within the practices of banks, 21 your bank. 22 The only thing we have in our best interest 23 is the Community Reinvestment Act. The Nation of 24 Islam has a suggestion on how you could honor the 25 CRA. We want a letter of commitment to the 0178 1 community. You have an obligation to offer more 2 than lip service. The letter should detail what you 3 propose to do for minority communities. 4 How can you, Fleet Bank, assure us that 5 things will not get worse? William Sands wrote a 6 paper entitled "Proper Attitude is Key to Successful 7 Community Lending." He states the CRA was one of a 8 series of laws passed by Congress to address 9 problems of unequal access to credit. The CRA 10 emphasizes the continuing and affirmative obligation 11 of lending institutions to meet the deposit and 12 credit needs of the entire community, including low- 13 and moderate-income areas, consistent with safe and 14 sound lending practice. 15 What is your attitude towards minority 16 communities? How will you ensure that the spirit 17 and intent of the CRA be met? One way is for Fleet 18 to support the Boston Bank of Commerce. The Boston 19 Bank of Commerce understands our needs and is 20 committed to fostering economic and social 21 development. 22 Yes, Fleet should make it a project to aid 23 and support this community by aiding and supporting 24 the Boston Bank of Commerce. They're not your 25 competitor; they're the only African-American-owned 0179 1 bank and the only minority-owned community 2 development financial institution in New England. 3 It is the right and moral thing to do. It is good 4 business practice. In fact, it is right in line 5 with the spirit of serving the convenience and needs 6 of the community. 7 I don't know what this merger will bring to 8 Boston, do you? How will this merger, creating the 9 third largest lender in the nation, handle the 10 individual? The small businesses? The not-for- 11 profit businesses in minority communities? 12 I do know that the Boston Bank of Commerce 13 is in the best position to handle the needs within 14 minority communities. They have provided over 15 15 years of community development and support. They 16 have not lost sight of the individual. They have 17 not lost sight of the small businesses. They have 18 not lost sight of the not-for-profit businesses in 19 our communities. Support the community by 20 supporting the Boston Bank of Commerce. Anything 21 less than Fleet will leave us banking while black, 22 banking while brown. Thank you. (Applause) 23 PRESIDING OFFICER SMITH: Questions from 24 the panel? 25 MR. ALVAREZ: Reverend Sharpton and 0180 1 Honorable Muhammad, you both mentioned the Boston 2 Bank of Commerce. Do you know, has the Boston Bank 3 of Commerce made a bid for any of the branches in 4 the Fleet package? 5 REV. SHARPTON: It is my understanding that 6 they have made a bid. I understand that the 7 thinking was that they wanted in the divestment 8 phase of this merger a major bank to take over most 9 of it and some 10 to 15 percent would be left. I 10 think the Boston Bank of Commerce, if I'm not 11 mistaken, had only made a bid for like 18 branches 12 out of 280, which I think is clearly, as Minister 13 Muhammad said, not dealing with the competitiveness. 14 The fact that nothing has been made concrete there 15 shows to me an arrogance and an insensitivity on not 16 even trying to work with the community. 17 I don't think that's a reasonable proposal, 18 given the fact you're talking about 280 branches 19 will become available and the bid for the only black 20 bank in the region is only for about less than 10 21 percent of that. 22 MR. ALVAREZ: But as far as you know, a bid 23 has been made. 24 REV. SHARPTON: A bid has been made. 25 MR. ALVAREZ: Bids haven't yet been 0181 1 announced. 2 REV. SHARPTON: It might be while we're 3 here today. 4 MR. ALVAREZ: Yes. 5 PRESIDING OFFICER SMITH: If there are no 6 further questions, we thank you very much for coming 7 this morning and afternoon. 8 (A pause) 9 PRESIDING OFFICER SMITH: We are ready to 10 start with Panel Seven, and we have about five 11 different organizations with five minutes total 12 each. 13 So where we have Ms. Feingold and Mr. 14 Gornstein, is one of you speaking? 15 MS. FEINGOLD: Just one. 16 PRESIDING OFFICER SMITH: Thank you very 17 much.
Last update: December 3, 2010