Public Meeting Regarding Citicorp and Travelers Group Friday, June 26, 1998 Transcript of Welcoming Remarks

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   2               (8:00 a.m.)

   3               MR. LONEY:  If we could begin,

   4     please.  I want to welcome you all to this

   5     public meeting.  This is a continuation of the

   6     public meeting that we are holding on the

   7     application by Travelers Group to acquire

   8     Citicorp.

   9               Yesterday we held a meeting here.  We

  10     had approximately 90 witnesses, and I think it

  11     was a very useful exercise for everyone

  12     involved.  I am confident that today's meeting

  13     will be useful as well.

  14               Let me first introduce myself.  I am

  15     Glenn Loney, Deputy Director of the Division of

  16     Consumer and Community Affairs of the Federal

  17     Reserve Board in Washington D.C.  I am the

  18     presiding officer for this meeting.

  19               Our other panelists today, to my

  20     immediate left Scott Alvarez, Associate General

  21     Counsel from the Board's legal division, and to

  22     his left is Jim Hodgetts, Senior Vice President

  23     from the Federal Reserve Bank of New York, and

  24     to his left is Barbara Kent, who is Acting

  25     Deputy Superintendent of the Consumer Services



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   2     Division of the State of New York Banking

   3     Department, and we are particularly happy to

   4     have the State of New York Banking Department

   5     represented here today.

   6               We are here today because Travelers

   7     Group of New York has applied for the Federal

   8     Reserve's approval to acquire Citicorp, also in

   9     New York.

  10               When the Federal Reserve system

  11     considers one of these applications, we look at

  12     a number of factors under the Bank Holding

  13     Company Act.  These include financial issues,

  14     managerial issues, competitive issues and the

  15     convenience and needs of the communities

  16     affected.  In doing so, we are particularly

  17     looking at the record of performance of the

  18     parties under the Community Reinvestment Act.

  19               The Community Reinvestment Act

  20     requires the Board to take an institution's

  21     record of meeting the credit needs of its

  22     entire community into account.

  23               In addition, the transaction also

  24     involves the proposed acquisition or retention

  25     of nonbanking companies engaged in activities



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   2     permissible for bank holding companies, as well

   3     as a proposal to divest or otherwise conform a

   4     number of other activities that are not

   5     permissible for bank holding companies under

   6     current law.

   7               With respect to the proposal to

   8     conduct permissible nonbanking activities, the

   9     Board also must determine whether conducting

  10     the proposed nonbanking activities can

  11     reasonably be expected to produce benefits to

  12     the public that outweigh possible adverse

  13     effects, such as undue concentration of

  14     resources, decreased or unfair competition,

  15     conflicts of interest, or unsound banking

  16     practices.

  17               The purpose of today's meeting is to

  18     receive information regarding these factors,

  19     and we are very pleased that you have all been

  20     willing to come and testify in our public

  21     meeting.

  22               Over the two days we will have had

  23     over 120 witnesses, representing varying groups

  24     or speaking on their own behalf at these

  25     meetings.  Let me make a few remarks about the



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   2     procedures.

   3               This is what is called an informal,

   4     public meeting.  Members of the panel, those of

   5     us up here, may ask the people who are

   6     testifying questions about their testimony in

   7     this kind of a forum.  This is not a formal

   8     administrative hearing, so we are not bound by

   9     rules regarding evidence, cross-examinations,

  10     and some of those formal trappings of that kind

  11     of a proceeding.

  12               We will be here for a full morning

  13     and, as you see from the agenda, we need to

  14     stick to that schedule very rigorously in order

  15     to give everyone a chance to say what they

  16     would like to say.  We are going to ask the

  17     people today to help us stay on schedule.  The

  18     panels will be expected to keep within their

  19     allotted time, so please be mindful of the

  20     needs of others.

  21               We have a very dramatic, and as it

  22     turned out at yesterday's meeting, an effective

  23     timekeeping system that you will see from the

  24     first row will help people keep on target in

  25     terms of their timing.  The timekeepers, the



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   2     lady sitting in the middle of the front row,

   3     will give you a signal when you have two

   4     minutes left to speak and another signal when

   5     your time is up.

   6               Thank you all for coming.  There may

   7     have been some individuals who haven't had a

   8     chance to sign up in advance, and to the extent

   9     possible we want to give them a chance to speak

  10     as well.

  11               At the end of the meeting, we will

  12     throw the mike open to anyone who would want to

  13     make a presentation at the end of the time,

  14     time permitting.

  15               Witnesses may submit a written

  16     supplement to the oral testimony by July 2 and

  17     then the record for this matter will be closed.

  18               Any written supplements must be

  19     received by close of business at 5 p.m. on July

  20     2 and directed to Jennifer J. Johnson,

  21     Secretary of the Board, Board of Governors of

  22     the Federal Reserve System, Washington D.C.

  23     20551.  You may fax your submission to area

  24     code 502-457-3462.

  25               Also, if you haven't turned in copies



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   2     of your written testimony or if you have any

   3     other written statements to put in the record,

   4     please leave them with the Federal Reserve Bank

   5     staff at the registration table outside.  It is

   6     important that we get this material for the

   7     record.

   8               The transcript of the meeting will be

   9     available by June 30 for the June 25 meeting

  10     yesterday, and by July 1 for the June 26

  11     meeting today to the Federal Reserve Bank of

  12     New York.

  13               In addition, the official transcript

  14     will be available by close of business on June

  15     29 for the June 25 meeting, and by the close of

  16     business on June 30 for the June 26 meeting on

  17     the Board's website on www.bog.frb.fed.us.

  18               With that, I would like to begin this

  19     morning's proceedings.  The first panel, Number

  20     Seventeen in the agenda is made up of Marie

  21     Nahikian, George McDonald, Freddy Espaillat and

  22     Julie Colon.  If those folks would come

  23     forward.