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Public Meeting Bank of America Corporation and Countrywide Financial Corporation
Held on Tuesday, April 22, 2008, at the Federal Reserve Bank of Chicago
Unedited Transcript

0001
 1                      PUBLIC MEETING
 2   BANK OF AMERICA CORP AND COUNTRYWIDE FINANCIAL CORP
 3                     CHICAGO, ILLINOIS
 4   
 5   
 6            STENOGRAPHIC REPORT OF PROCEEDINGS had in
 7   the above-entitled matter held on April 22, 2008, at
 8   the Federal Reserve Bank, 230 South LaSalle Street,
 9   Chicago, Illinois, MS. SANDRA BRAUNSTEIN,
10   presiding, commencing at 8:30 o'clock a.m.
11   
12       PRESENT:
13            MS. SANDRA BRAUNSTEIN, Director, Board of
14                 Governors of the Federal Reserve
15                 System
16            MS. JENNIFER BURNS, Vice President,
17                 Federal Reserve Bank of Richmond
18            MS. PATRICIA ROBINSON, Assistant General
19                 Counsel, Board of Governors of
20                 the Federal Reserve System
21            MS. ALICIA WILLIAMS, Vice President,
22                 Federal Reserve Bank of Chicago
23   
24   
0002
 1       MS. BRAUNSTEIN:  I think we'll get started.
 2   Good morning everybody.  And I am pleased to
 3   welcome you this morning to this very important
 4   public meeting on the application by Bank of
 5   America Corporation to acquire Countrywide
 6   Financial Corporation.
 7            First I'll introduce myself, I'm Sandra
 8   Braunstein, director of the Division of Consumer
 9   and Community Affairs at the Federal Reserve Board
10   in Washington, DC.
11            And I am the presiding officer for this
12   public meeting, and our other panelists today, next
13   to me on my right is Patricia Robinson who's the
14   assistant general counsel at the Federal Reserve
15   Board's legal divison, and next to her is Jennifer
16   Burns, vice president in the Department of Banking
17   Supervision and Regulation from the Federal Reserve
18   Bank of Richmond, and next to me on my left is
19   Alicia Williams, vice president in the Department
20   of Consumer and Community Affairs from the Federal
21   Reserve Bank of Chicago.
22            We are here today because the Bank of
23   America Corporation in Charlotte, North Carolina
24   has applied for approval to acquire Countrywide
0003
 1   Financial Corporation, Calabasas, California.
 2            When the Federal Reserve System considers
 3   an application, we look at a number of factors
 4   under the Bank Holding Company Act, and these
 5   include financial issues, managerial issues,
 6   competitive issues, and the convenience and needs
 7   of the communities affected.  In doing so we
 8   particularly look at the record performance of the
 9   parties under the Community Reinvestment Act or
10   CRA.
11            The CRA requires the Board to take into
12   account an institution's record of meeting the
13   credit needs of its entire community.  The purpose
14   of the public meeting today is to receive
15   information regarding these factors and to clarify
16   factual issues related to the application.
17            We are pleased that so many witnesses have
18   been willing to come forward and testify at this
19   public meeting.  We will have about fifty groups
20   and individuals represented, and I just want to
21   make a few remarks about the procedures.
22            This is what we call an informal public
23   meeting.  Members of the panel, our panel up here,
24   may ask those who are testifying about their
0004
 1   testimony, but this is not a formal administrative
 2   hearing so we are not bound by rules regarding
 3   evidence, cross examination, and some of the formal
 4   trappings of that kind of proceeding.
 5            Because we have so many witnesses we will
 6   need to stick to the schedule so that everyone who
 7   is asked to offer testimony will have a chance to
 8   do so.  So we're going to ask the witnesses today
 9   to be mindful of the needs of others and to help us
10   stay on schedule.
11            The panels of witnesses will be expected
12   to keep within their allotted times, and to help us
13   with that, we have a signal system that will -- we
14   have a time keeper who is right there.
15            We have two time keepers.  Can you lift
16   your hands higher so people in the audience can
17   see?  Okay.  And the time keepers are going to give
18   you a signal, when you have two minutes left, there
19   is -- first of all, there's a little box here for
20   those of you who are coming up to testify you will
21   see, there's a box with lights on it and there's a
22   white light, a yellow light, and a red light, and
23   the yellow light will come on, and also you'll get
24   a sign when you have two minutes left, and then the
0005
 1   red light will come on and you'll get a sign when
 2   it's time for you to stop.
 3            There may have been some individuals who
 4   were unable to sign up in advance, and to the
 5   extent possible we want to give them a chance to
 6   speak as well.
 7            At the end of the meeting today, we will
 8   make -- have an open mike period where we will make
 9   the mike available to anybody who would like to
10   make a presentation time permitting.
11            One more comment about testimony.
12   Witnesses may submit a written supplement to their
13   oral testimony but must do so by next Tuesday,
14   April 29th.  Then the record will be closed.
15            Any written supplements should be directed
16   to Jennifer Johnson, Secretary of the Board of
17   Governors of the Federal Reserve System in
18   Washington, D.C. and they must be received by
19   5:00 p.m. on April 29th.  And there's also a fax
20   number, and if you need this information you can
21   get it from the registration table.
22            If you haven't turned in your written
23   testimony or if you have other written statements
24   to put into the record you can also leave them with
0006
 1   the Federal Reserve staff at the registration
 2   table.
 3            It's important we get this material for
 4   the record.  A hard copy of the official transcript
 5   will be available sometime next week through the
 6   Federal Reserve Bank of Chicago and the Board, and
 7   the official transcript will also be up on the
 8   Board's website next week.
 9            And with that we're going to start the
10   proceedings.  I would ask that before each panel
11   speak, and this will be true for everybody today,
12   could you please introduce yourself, your name and
13   your organization.  And with that, I don't know,
14   Mr. Hammonds.
15       MR. HAMMONDS:  Good morning.  My name is Bruce
16   Hammonds, I'm president of consumer/credit at Bank
17   of America.
18            Joining me today is Andrew Plepler, senior
19   vice president of Bank of America responsible for
20   community development and president of the Bank of
21   America Charitable Foundation, and David Rudis who
22   is the Bank of America market president for
23   Illinois.
24            We would like to thank the Federal Reserve
0007
 1   for this opportunity to discuss the benefits of
 2   Bank of America's proposed acquisition of
 3   Countrywide Financial Corporation.
 4            Our combined company will offer high
 5   quality service and innovative products, and these
 6   will be delivered by our employees and anyone who
 7   does business on our behalf with the same
 8   dedication to the highest standards of trust and
 9   integrity that our customers and employees and
10   shareholders expect from Bank of America.
11            We recognize responsibilities that come
12   with being the nation's largest mortgage lender
13   particularly in the current environment.
14            During 2007 significant disruptions
15   occurred in the U.S. mortgage market and the global
16   capital markets.  Industry experts acknowledge the
17   downturn was caused by unsustainable home price
18   appreciation which was particularly pronounced in a
19   few regions.  In this environment a correction was
20   inevitable.
21            As we lead through this correction, we
22   must seek through responsible lending to encourage
23   more buyers to return to the housing market.  In
24   doing so Bank of America must balance the need to
0008
 1   continue to offer home loan products to those who
 2   can afford them while evolving lending practices to
 3   reflect a dramatically different mortgage
 4   environment.
 5            This evolution in no way deters us from
 6   our mission in helping Americans achieve their
 7   dreams of home ownership.
 8            We also recognize that some customers with
 9   the wherewithal to repay their debts need our help
10   to keep their homes, and we are determined to
11   provide that help.
12            To accomplish these goals we will improve
13   the mortgage origination process end-to-end
14   including the products we offer, our sales and
15   underwriting standards and channels of
16   distribution.
17            We will reduce the number of foreclosures.
18   We will help the communities hardest hit by
19   foreclosures, and we will continue to make
20   affordable mortgages available to those
21   traditionally underserved including low and
22   moderate income households and minorities.
23            Today I will share with you our plans with
24   regard to future lending practices and future
0009
 1   efforts to strengthen consumer protection and
 2   transparency for our customers obtaining home loan
 3   products.  I will also discuss current efforts of
 4   both Bank of America and Countrywide to stem the
 5   rising number of foreclosures.
 6            Next week in Los Angeles we will announce
 7   more specific plans to help communities through
 8   affordable mortgage lending, grants and additional
 9   steps specific to foreclosures as Bank of America
10   Global Consumer and Small Business president, Liam
11   McGee, provides remarks at that public hearing.
12            Let me start by describing the benefits of
13   this transaction.  Countrywide is the largest
14   provider of mortgage products in the United States.
15   It is the nation's premier mortgage origination,
16   fulfillment and servicing platform.  Combining
17   these two companies will benefit customers of both
18   organizations.
19            Countrywide's customers will gain access
20   to a full range of banking services while Bank of
21   America's customers will gain access to better
22   mortgage services.
23            We will enhance shareholder value by
24   working hard to broaden and deepen customer
0010
 1   relationships and more efficientlly enhance loan
 2   origination and fulfillment capabilities.  Our
 3   customers, communities, employees, and shareholders
 4   will benefit from the financial strength and
 5   stability of the combined company.
 6            Bank of America's diverse business model
 7   is built to weather turbulent times.  Our combined
 8   company will be better able to continue offering
 9   financial solutions to customers and to assist
10   customers hardest hit by the current mortgage
11   crisis.  This acquisition will position us to
12   prosper as markets improve.
13            Many have asked what changes we plan to
14   make in light of the current market conditions.  As
15   I noted at the outset, upon completion of the
16   acquisition we intend to meaningfully change the
17   end-to-end mortgage origination process starting
18   with our products.
19            Our combined mortgage business will offer
20   a range of products that continue to respond to
21   market conditions and consumer demands with
22   features that are fair to our customers.
23            Specifically we expect to offer a broad
24   array of responsible lending products and employ
0011
 1   sound underwriting criteria to ensure customers can
 2   get in and stay in their homes.
 3            To this end the combined mortgage business
 4   will offer retail customers the following types of
 5   first lien mortgage loans:
 6            Conforming loans underwritten to standard
 7   guidelines of government sponsored entities and the
 8   government including expanded approval loans,
 9   FHA/VA loans, and other loans designed for low and
10   moderate income borrowers;
11            Interest only, fixed rate, and adjustable
12   rate products subject to a ten-year minimal
13   interest only period which will lessen the
14   possibility of short term payment shock;
15            And fixed-period ARMs that provide
16   borrowers low initial rates with the security of
17   fixed payments subject to protections against
18   severe step-ups in payment amounts.
19            Upon the completion of the merger we will
20   continue our long established policy not to offer
21   subprime mortgage loans, not offer non-traditional
22   mortgages that may result in negative amortization,
23   so-called option ARM loans, and significantly
24   curtail other non-traditional mortgages such as
0012
 1   certain low documentation loans.
 2            We recognize this tightening by definition
 3   restricts the availability of credit to subprime
 4   borrowers.  However this will help ensure that
 5   borrowers who get loans can afford to repay them.
 6            Moreover we remain committed to offering
 7   affordable mortgage loans particularly to LMI and
 8   minority households as Andrew will explain in a
 9   minute.
10            Additionally Bank of America is committed
11   to enhance consumer protection.  We listen to our
12   customers who felt the lack of transparency in the
13   process of acquiring a home loan created fear and
14   anxiety.  We will continue to strive to ensure that
15   borrowers are presented with an appropriate range
16   of product options for which they qualify, that
17   borrowers understand the product features and make
18   informed choices, and that borrowers are not
19   deliberately steered to products that are more
20   costly or that provide no benefits.
21            The combined mortgage business also will
22   adopt early added protection for borrowers who
23   receive higher priced mortgage loans which
24   generally have been associated with riskier loan
0013
 1   types.
 2            Upon the effective date of the Federal
 3   Reserve's final revised rule under the Home
 4   Ownership and Equity Protection Act we will
 5   voluntarily adopt our own definition of higher
 6   priced mortgage loans.
 7            Consistent with the Federal Reserve's goal
 8   of consumer protection we will apply restrictions
 9   to those loans substantially similar to those
10   proposed by the Federal Reserve.
11            We also plan to adopt practices with
12   regard to prepayment penalties and escrows that are
13   responsive to consumer demands while reflecting
14   prudent risk management.
15            We will offer our customers choices to
16   have loans with prepayment fees and a lower
17   interest rate or loans without.
18            We will ensure that our fees are
19   transparent and clearly disclosed so that our
20   customers understand available product options,
21   features, rates and terms that are consistent with
22   borrower qualifications.
23            I also want to talk about what we are
24   doing to help borrowers facing delinquency and
0014
 1   foreclosure.  Home foreclosures are a significant
 2   issue today.
 3            Foreclosures are painful and costly to
 4   homeowners and their neighborhoods.  They also
 5   prolong the housing correction by adding to the
 6   inventory of unsold homes.
 7            Like the rest of the industry we are
 8   experiencing increased foreclosures and foreclosure
 9   sales, but we need to put foreclosures in
10   perspective.
11            First, 12.8 million or 93 percent of the
12   13.6 million owners whose mortgage loans we will
13   service following the acquisition of Countrywide
14   pay their mortgages on time every month.
15            Of the remaining seven percent only a
16   fraction of those who miss their payments are in
17   foreclosure.
18            Our experience shows these foreclosures
19   are concentrated in subprime borrowers.  Other
20   borrowers were investors or speculators.  In other
21   cases borrowers simply cannot afford the homes they
22   bought and the current housing slump makes it
23   difficult for them to sell their homes.
24            Subtracting the speculators leaves us with
0015
 1   our target population of borrowers for whom we are
 2   seeking a solution, those who want to keep their
 3   homes and have the financial wherewithal but are
 4   facing challenges making their monthly payments.
 5   We are focused on doing all we can to help these
 6   borrowers.
 7            The combined mortgage business will
 8   continue to devote substantial financial and other
 9   resources during the current market downturn to
10   help borrowers to avoid foreclosures and remain in
11   their homes.
12            We will continue practices already in
13   place to help borrowers avoid foreclosure.  These
14   include:  Robust processes for identifying and
15   contacting borrowers early who are having or may
16   have trouble making their mortgage payments
17   including customers who may be facing significant
18   rate increases;
19            Special strategies for subprime borrowers
20   holding adjustable rate mortgages for which the
21   rates are about to reset or have already reset;
22            Refinance, modification and other
23   restructure tools that make the borrower's debt
24   affordable and allow him or her to stay in their
0016
 1   home;
 2            And substantial financial and other
 3   resources devoted to these tasks to ensure maximum
 4   responsiveness for our customers.
 5            As a result of the significant efforts
 6   both companies have made over the past year, more
 7   than 138,000 homeowners received modified or other
 8   workout loans and avoided losing their homes.
 9            While much has been accomplished in this
10   difficult environment there is more to do, and next
11   week at the hearing in Los Angeles, Liam McCGee
12   will provide information about foreclosure and loss
13   mitigation plans for the combined company.
14            As I noted at the outset, in our role as
15   the nation's largest mortgage lender we will also
16   continue to help meet the needs of the communities
17   we serve.
18            Andrew Plepler will now describe our
19   efforts to date and plans in this area.
20       MR. PLEPLER:  Thank you, Bruce.  Good morning.
21   My name is Andrew Plepler.
22            Bank of America's commitment to
23   strengthening the health and vitality of
24   communities stems from a deeply ingrained
0017
 1   philosophy and a long tradition of demonstrating
 2   corporate citizenship through community development
 3   and philanthropy.  In particular, by partnering
 4   with nonprofits and community leaders we
 5   concentrate on improving the lives of low and
 6   moderate income and minority families in
 7   neighborhoods.
 8            Our company has received five consecutive
 9   outstanding CRA ratings reflecting our community
10   development focus.
11            In addition, the Bank of America
12   Charitable Foundation is the second largest
13   corporate donor in the world.
14            For many years Bank of America has been
15   recognized for its community development work.  The
16   vast majority of these activities are the results
17   of our line of business products and services we
18   provide to customers and communities.
19            In more specific areas of community
20   development we have leveraged our knowledge and
21   expertise to become a national leader in affordable
22   housing, small business lending, and neighborhood
23   revitalization, and we are recognized for our
24   results in creating sustainable community and
0018
 1   economic development through public private
 2   partnerships.
 3            Since 2004 our company has been delivering
 4   on an ambitious ten-year goal of $750 billion for
 5   community development loans and investments.  To
 6   provide just a few proof points consider some of
 7   our 2007 results:
 8            More than $100 billion in community
 9   development loans and investments to low and
10   moderate income and minority families, businesses,
11   and communities;
12            Financing, developing, and rehabbing
13   nearly 22,000 units of affordable housing;
14            $25.6 billion in small business lending,
15   and the number one SBA lender for the tenth
16   consecutive year;
17            Investing more than $84 million in
18   community development financial institutions or
19   CDFI's.
20            Because we also believe that affordable
21   quality rental housing is critical to our national
22   housing stock we have been a leader in financing to
23   non-profit and for profit developers.
24            Bank of America remains a strong player in
0019
 1   this space and has expanded its capability to
 2   direct low income housing tax credit investments to
 3   ensure continuity and capacity in this rental
 4   market.
 5            In addition to our community development
 6   goal the Bank of America Charitable Foundation set
 7   an unprecedented $1.5 billion goal in 2004 for
 8   philanthropic giving over ten years.  Since then we
 9   have invested more than $550 million toward
10   increasing the health and vitality of neighborhoods
11   throughout our franchise.
12            Through signature programs like our
13   Neighborhood Excellence Initiative we are helping
14   increase the capacity of community organizations
15   develop the current and the next generation of
16   community leaders and create significant impact in
17   the communities we serve.
18            By also supporting anchor institutions
19   such as hospitals, universities, and cultural
20   institutions we are helping to create jobs and
21   stimulate economic development to enhance the
22   quality of life in diverse neighborhoods.
23            In addition our associates provide
24   tremendous support as volunteers in the communities
0020
 1   where we live and work.  A local example of a
 2   not-for-profit we have supported is Bethel New
 3   Life.
 4            This organization is empowering
 5   individuals, strengthening families, and building a
 6   sustainable community.
 7            Bethel brought in more than $110 million
 8   in new investments to a credit starved community
 9   and developed more than a thousand units of
10   affordable housing in Chicago's west side.
11            Through the neighborhood Excellence
12   Initiative Bethel's president and CEO, Steven
13   McCullough, attended leadership training and the
14   organization received a $200,000 operating support
15   grant.
16            Some of our 2007 philanthropic activities
17   include more than $200 million in charitable
18   giving.  Grants were made to 4800 nonprofits for
19   education and youth programs, health and human
20   services, community development, arts and culture,
21   and the environment.
22            More than 50 percent of our grants were
23   CRA qualified, directly benefiting LMI individuals
24   or neighborhoods, and contributing more than
0021
 1   650,000 employee volunteer hours and more than $20
 2   million in charitable donations by our employees to
 3   help meet pressing community needs.
 4            We recognize the needs are great.  We
 5   pledge our ongoing support as we have in the past
 6   in addressing community needs, especially in
 7   challenging economic times as we now face.
 8            To that end I'm proud to announce that the
 9   Bank of America Charitable Foundation and
10   Countrywide will provide $35 million in grants and
11   program related investments as part of our
12   neighborhood stabilization program.
13            These funds will help local and national
14   nonprofits engaged in foreclosure prevention and to
15   purchase vacant single family homes for
16   neighborhood stabilization.
17            At Bank of America we have a remarkable
18   franchise dedicated to leveraging our broad
19   financial reach, our financial capacity and
20   capability, and our deep commitment to
21   strengthening communities.
22            We take our leadership role very seriously
23   as demonstrated by our $750 billion goal for
24   community development and our $1.5 billion goal for
0022
 1   philanthropy.  We hold ourselves accountable to
 2   create real change, and we publicly report on our
 3   progress toward these goals.
 4            I want to just give two other specific
 5   instances where Bank of America serves as a good
 6   corporate citizen.
 7            First is supplier diversity.  Bank of
 8   America is committed to fostering diversity in our
 9   communities and has incorporated that commitment as
10   a core value in our business practices.
11            We developed an aggressive program of
12   outreach and business development to grow these
13   opportunities.
14            We are proud that more than 16 percent of
15   our company's sourceable spend in 2007 were with
16   firms that are majority owned by women, minority,
17   or people with disabilities.
18            Second is the environment.  Bank of
19   America is recognized as a leader for its advocacy
20   of efforts to reduce greenhouse gases and support
21   responsible, sustainable development.
22            We have dedicated $20 billion over ten
23   years for an environmental initiative to support
24   these efforts.
0023
 1            We recently announced that Bank of America
 2   has adopted the carbon principles, guidelines for
 3   lenders to promote cleaner energy technologies.
 4            We are also very proud that our new Bank
 5   of America tower in New York City has been
 6   recognized widely as one of the most
 7   environmentally friendly buildings in the world.
 8            In short Bank of America is and will
 9   continue to be committed to the communities that we
10   serve.  By providing local, relevant support to
11   neighborhoods we will continue to create
12   opportunities for our customers, employees, and
13   communities to grow and prosper.
14            We know that we are most effective by
15   partnering with nonprofit organizations and
16   community leaders to identify and address the
17   challenges that together we can overcome.
18            Now I'll turn it to David to give you a
19   local perspective of our community leadership and
20   activities.
21       MR. RUDIS:  Thank you, Andrew.  I've David
22   Rudis, Bank of America, Illinois president.
23            In my role as Illinois president I focus
24   exclusively on the Illinois market and especially
0024
 1   on Chicago.  I'm proud to Chicago home for the last
 2   37 years.
 3            It's our goal to build the Bank of America
 4   brand in Chicago and Illinois and to strengthen our
 5   relationship with our clients, employees, and the
 6   community at large.
 7            You will see the Bank of America name and
 8   brand even more in Chicago as we approach the day
 9   when LaSalle Bank becomes part of the Bank of
10   America family.  You will see visible changes like
11   signs, advertising, other changes in just a couple
12   of weeks.
13            However, the signs might change but the
14   traditions will continue.  We're proud to continue
15   many iconic traditions the community has supported
16   in the past, including our continued sponsorship of
17   the Chicago Marathon and the soon to be renamed
18   Chicago LaSalle Theatre.
19            These brand changes and the continued
20   support of these Chicago traditions are important,
21   but what Bank of America has committed to the
22   community is even more important.
23            We have adopted a strategic community
24   development plan specific to Illinois that has the
0025
 1   goal of funding $70 billion over ten years to
 2   support local affordable housing, consumer small
 3   business and farm lending, and economic
 4   development.
 5            This is part of Bank of America's
 6   nationwide goal for community development.  This
 7   Illinois goal represents a 31 percent increase over
 8   past production of LaSalle Bank and Bank of America
 9   in the region.
10            Bank of America's Charitable Foundation
11   has also pledged $14 million in support of local
12   causes in Illinois this year.
13            Last year we announced $5 million in
14   grants to address some of Chicago's most pressing
15   community challenges including work force
16   development, winter heating assistance for low
17   income individuals, financial literacy, and after
18   school activities and foreclosure prevention.
19            We conduct extensive community outreach to
20   ensure that we more fully understand and address
21   local needs.  This work is already creating results
22   in Chicago neighborhoods.
23            Let me highlight just a few.  The $2
24   million in grants for foreclosure prevention
0026
 1   counseling will enable twelve different
 2   organizations to hire 20 foreclosure prevention
 3   counselors.  These counselors will work to preserve
 4   affordable home ownership through post purchase
 5   education and help low and moderate income
 6   homeowners maintain and protect their investment.
 7            The $1 million grant for Opportunity
 8   Chicago is helping 11,000 low income public housing
 9   residents address their education, training, and
10   job placement needs to achieve economic self
11   sufficiency.
12            In addition, related to our work with
13   public housing we have provided more than
14   $128 million in financing for projects that are
15   part of the Chicago Housing Authority's plan for
16   transformation.
17            Under this plan the Chicago Housing
18   Authority is redeveloping and rehabilitating more
19   than 25,000 units of public housing and represents
20   the largest reconstruction of public housing in the
21   nation's history.
22            The $1 million grant to help low income
23   people with winter heating assistance has helped
24   more than 4,000 people this past winter.
0027
 1            I would also note that locally more than
 2   80 percent of our charitable giving in 2007 was CRA
 3   qualified directly benefiting low and moderate
 4   income individuals and neighborhoods.
 5            I'm also proud of my Bank of America
 6   teammates who volunteer their time and energy to
 7   meet a wide range of community needs.
 8            Just this past tax season we continued our
 9   annual participation in the City Wide Tax
10   Assistance Program.  This year more than 60
11   employees have helped 300 low income families
12   receive $400,000 in Federal and state tax refunds.
13            These initiatives are just a few oft he
14   examples of our ongoing work in the community.  As
15   Bank of America president for Illinois I am looking
16   forward to expanding and deepening our
17   relationships with our community partners.
18            We are committed to partnering new and
19   innovative ways to make a positive difference in
20   our community.   Thank you.  I'll now call on Bruce
21   for concluding remarks.
22       MR. HAMMONDS:  To conclude, we appreciate the
23   Federal Reserve for this time to present this brief
24   overview of our business principles and practices.
0028
 1   We encourage the Federal Reserve Board to act
 2   swiftly to approve Bank of America's application.
 3            Bank of America's record of one of the
 4   lowest foreclosure rates in the country
 5   demonstrates a strong history for meeting the
 6   convenience and needs of the community.
 7            We have outlined how the acquisition will
 8   enable Bank of America to make an even greater
 9   impact in the future.  Thank you.
10       MS. BRAUNSTEIN:  Thank you very much.  Does the
11   panel have any questions?
12       MS. ROBINSON:  I have a question.  What
13   specific actions, if you can disclose today, that
14   you plan to take to do outreach to the Countrywide
15   customer who may be troubled to help mitigate, you
16   know, and/or restructure their loans, et cetera, or
17   do other outreach?
18            And a second part to that question is much
19   has been reported that one of the difficulties is
20   actually contacting those borrowers and getting
21   them to, you know, engage in conversation with
22   borrowers, and what actions, if any, are you
23   planning to take with the local community groups or
24   other measures that you would be taking to help
0029
 1   assist in that process?
 2       MR. HAMMONDS:  Well, first in terms of
 3   mitigation around those kinds of things, Liam McGee
 4   is going to lay out more of that in Los Angeles
 5   last week.
 6            I will tell you that today we have a
 7   transition team of literally hundreds of people
 8   looking at the best practices at both Bank of
 9   America and Countrywide and starts with early
10   ability to get customers on the telephone and try
11   and work with those customers.
12            In some cases I know that we've even sent
13   people out to the home, we've sent cell phones to
14   the homes so people could call us on the cell
15   phones, and things of that nature.
16            So it's extremely important that we get to
17   people early and work out their -- and make an
18   early solution to the workout program.  But as I
19   said, Liam will explain more of that in Los Angeles
20   next week.
21       MS. WILLIAMS:  Hi.  Could you talk a little bit
22   more about what you said earlier about your own
23   definition of high priced loans that you would
24   adopt?
0030
 1       MR. HAMMONDS:  We are still putting that
 2   together, but until formal adoption is made we will
 3   come out with our own interpretation of that, but
 4   we are still working through those details.
 5       MS. WILLIAMS:  And then how would that relate
 6   to what the Board is doing?
 7       MR. HAMMONDS:  Well, it would be very much in
 8   line with everything that we think you will do in
 9   that regard.  We're going to follow your guidelines
10   on that.
11       MS. BRAUNSTEIN:  Okay.  Thank you.  I want to
12   thank the panelists very much.  Next panel I see,
13   Reverend Jackson.  Do you want to step forward?
14            Welcome Reverend Jackson, and our time
15   keepers are over here, and you will see lights --
16   you will see the green light, you can keep talking,
17   the yellow light will tell you you have two minutes
18   left, and the red light when it's time to stop.
19            And could you please start out by
20   introducing yourself and starting the name of your
21   organization.
22       REVEREND JACKSON:  Reverend Jesse L. Jackson,
23   Sr., Rainbow PUSH Coalition.  I'll do just like
24   Bank of America, look the other way from most
0031
 1   lights.
 2            I want to applaud the Federal Reserve
 3   Board for acceding to requests to hold these public
 4   hearings concerning the proposed acquisition of
 5   Countrywide by Bank of America.  I want to thank
 6   the Federal Reserve Board for allowing me to make
 7   these comments.
 8            These hearings will enable the public to
 9   raise questions, express concerns, and perhaps shed
10   light on the proposed merger's impact on the public
11   and consumers throughout the country.
12            But on a broader level, these hearings and
13   the practices and policies adopted by the Bank of
14   America in its proposed merger with Countrywide
15   will have a profound impact on the financial
16   services industry, millions of homeowners, and
17   indeed the entire economy which has been dragged
18   down in the back draft of the subprime sub-crime
19   mortgage crisis.
20            Ken Lewis, CEO of Bank of America is a
21   leader of distinction.  We have worked with him
22   over the years and know him to be a man of
23   integrity.
24            So we appeal to him to help lead America's
0032
 1   families out of this crisis, and to meaningful
 2   address the compelling challenges that come with
 3   this proposed merger with Countrywide.
 4            Assets and liabilities.  The magnitude of
 5   this proposed merger is welcome documented.  Bank
 6   of America is the nation's biggest bank by market
 7   value.  The proposed acquisition of Countrywide
 8   will make it the nation's largest mortgage lender.
 9            Countrywide was once a high-flying
10   corporation, the nation's largest mortgage lender
11   and servicer, but it is now the corporate symbol of
12   all that's gone wrong with Wall Street
13   financial services firms that selfishly engage in
14   predatory and discriminatory lending practices, and
15   the steering of subprime loans to minority
16   homeowners to maximize the enormous and immediate
17   profits.
18            Countrywide is now the subject of
19   investigations and lawsuits brought by homeowners,
20   and by states attorneys' general, and Federal
21   agencies.
22            In our own state, Attorney General Madigan
23   has challenged Countrywide, they found that blacks
24   and browns making 110, 120,000 a year were steered
0033
 1   toward subprime.  Half of those are eligible for
 2   prime.  Why aren't they steered toward prime?  This
 3   is outright thievery and thuggery.  We've found
 4   steering and we've found clustering.  That, of
 5   course, must end now.
 6            Bank of America then by acquiring
 7   Countrywide assumes its enormous liabilities,
 8   financial, legal, and moral.
 9            How will it rectify the legacy of
10   Countrywide which through its practices is
11   synonymous with the nation's home foreclosure
12   crisis?
13            It is not an overstatement to say that the
14   crisis brought on by Countrywide's of the nation
15   have put in severe jeopardy the American dream
16   homeownership.
17            The spill-over effect has wreaked havoc on
18   the budgets of states, counties, and citizens that
19   depend upon property taxes.  This has resulted in
20   profound cutbacks in social services and education
21   for the people.  California, for example, now faces
22   a $14 billion shortfall.  All of America is
23   hurting.
24            But this subprime mortgage crisis is
0034
 1   worldwide as signalled by the Bank of England's
 2   announcement this week of a UK wide bail-out plan
 3   of England's banking industry.  No doubt the
 4   subprime mortgage crisis has caused instability in
 5   global markets.  The full impact of its implosion
 6   is still yet to be felt.  The worst is not over.
 7            Industry at a crossroads:  Leadership and
 8   a plan to remedy the crisis and offset patterns of
 9   discrimination and unfair lending practices.
10            Bank of America's proposed acquisition of
11   Countrywide stands at the crossroads of this
12   profound housing and overall economic crisis.
13            So I comment today not in support of or in
14   opposition to the proposed merger but to raise the
15   questions and seek answers as to how Bank of
16   America will address the myriad liabilities of
17   Countrywide, financial, legal, and moral, and to
18   seek clarity on how Bank of America will take
19   comprehensive steps to address the home foreclosure
20   crisis, provide some safe haven for millions of
21   Americans whose homes and communities are at risk.
22            Make no mistake about it, Bank of America
23   can provide homeowners, the nation and our economy
24   with enormous benefit if it seeks appropriate
0035
 1   solutions to these fundamental questions and
 2   problems.
 3            But it can further derail our economy and
 4   abandon millions of homeowners if its solutions to
 5   the home foreclosure crisis it has inherited from
 6   Countrywide fall short.
 7            How Bank of America handles this
 8   Countrywide's mortgage portfolio and its
 9   liabilities is critical.  But in every crisis there
10   is opportunity, and if bold leadership and
11   comprehensive solutions are sought, Bank of America
12   has the opportunity to provide relief for millions
13   of previously harmed homeowners around the nation.
14            It has the capaciity to restore integrity
15   and credibility to the financial services industry
16   and do its part in righting the nation's economic
17   ship.
18            While Countrywide's lending practice are
19   turning America's dream into nightmares, Bank of
20   America has the challenging task of setting a new
21   path for the newly merged company.
22            Recommendations.  One, as a critical first
23   step, Rainbow Push recommends, urges Bank of
24   America to place an immediate moratorium on all
0036
 1   home foreclosures.  We urge Bank of America to
 2   freeze existing rates and halt upward and
 3   ballooning interest rates on existing mortgages.
 4            Two, we urge Bank of America to take
 5   proactive steps to restructure loans into 30 year
 6   fixed rates at a six percent cap for homeowners.
 7            Three, a nationwide aggressive community
 8   by community outreach program must be undertaken to
 9   inform homeowners of such a moratorium, enable them
10   to take advantage of these programs.
11            Four, in that poor and minority
12   communities are most harmed by Countrywide's
13   practices and by the subprime mortgage crisis in
14   general, I would urge Bank of America to revisit
15   its commitments under the CRA, Community
16   Reinvestment Act.
17            I would recommend that a broad coalition
18   of community organizations be convened to identify
19   ways that Bank of America can fulfill it's CRA
20   commitments by enhancing positive investment in
21   poor and minority communities and stimulate their
22   economic growth.
23            Five, I wish also to open a dialogue about
24   Bank of America's internal and external policies of
0037
 1   inclusion.  Are people of color included on the
 2   Board of Directors and highest executive leadership
 3   positions of the newly merged company?  How are
 4   minority financial services firms involved in
 5   pension and management, private equity investment
 6   and other financial matters?  How are minority
 7   professional services firms, accounting, legal and
 8   consuming involved in the merger process and in
 9   Bank of America's going operations?
10            Six, lastly, Fair Finance Watch has
11   reported data indicating that Bank of America
12   "confined African Americans to higher cost loans
13   1.88 times more frequently than whites, and denied
14   the applications of 1.62 Latinos more frequently
15   than whites.  Countrywide confined African
16   Americans to higher cost loans 1.95 times more than
17   whites, denied Latinos 1.53 times more."
18            As stated before, Countrywide is subject
19   of numerous investigations and litigation for its
20   onerous lending practices.
21            Seven, lastly, I urge Bank of America to
22   confirm if this data is accurate and if so confer
23   with community based organizations and homeowner
24   groups to identify appropriate remedies to repair
0038
 1   the damage done.  If not, it should clarify its
 2   record.
 3            Data from a number of Federal agencies has
 4   asserted that JP Morgan Chase and other financial
 5   services firms have engaged in de facto
 6   discriminatory practices.
 7            Fair lending laws have not been adequately
 8   enforced.  It is an industry-wide problem, but now
 9   it is time to make whole those who were harmed.
10   Now is the time to repair damage done, and we
11   appeal to Bank of America in the process of this
12   merger to take the lead.
13            I urge Bank of America to fully cooperate
14   with Federal authorities, legislators and the
15   courts in providing full disclosure of
16   Countrywide's past practices and provide
17   appropriate restitution to the individuals and
18   communities harmed by these practices.
19            A clean break with Countrywide's past
20   practices we appeal.  In closing, I reiterate that
21   with the financial services industry in such
22   disarray and beset by problems it has brought upon
23   itself, Bank of America has the unique opportunity
24   to lead and set a new standard of integrity.
0039
 1            For Bank of America's proposed acquisition
 2   of Countrywide to have integrity, Bank of America
 3   must make a clean break from Countrywide's pattern
 4   of unfair lending practices, to come clean and make
 5   whole those harmed by these practices and set a new
 6   environment with fair transparent and inclusive
 7   external and internal policies and practices.
 8            Only then can it restore the confidence
 9   and trust of our communities and the nation.  We
10   look forward to seeing and hearing how Bank of
11   America will address these issues and how its
12   proposed merger with Countrywide will provide a
13   lifelife to millions of homeowners at risk and
14   restore stability, transparency and integrity to
15   the financial services industry.
16            I thank you for your time and commitment
17   and look forward to bold leadership and
18   comprehensive initiatives from Bank of America that
19   will make its acquisition of Countrywide worthy of
20   broad support.  Thank you.
21       MS. BRAUNSTEIN:  Thank you very much.  Does the
22   panel have any questions?  Thank you very much,
23   Reverend Jackson.
24       REVEREND JACKSON:  Thank you.
0040
 1       MS. BRAUNSTEIN:  I request for the next panel
 2   to come forward, Dory Rand, Flora johnson, Katie
 3   Coombes.
 4            Good morning.  Welcome.  As with the other
 5   panels, the time keepers are right here.  You'll
 6   see the lights go on, the green, the yellow the
 7   red, and we would -- I would recognize you and ask
 8   you to please start out your statement by stating
 9   your name and your organization.  And we can start
10   with Ms. Rand.
11       MS. RAND:  Good morning.  I'm Dory Rand, these
12   are the comments of Matthew Lee, executive director
13   of Inner City Press, Fair Finance Watch.  He cannot
14   be here today.
15            His comments are opposing the proposal by
16   Bank of America to acquire Countrywide.  While the
17   grounds include not only lending disparities, but
18   also predatory credit card practices, enabling of
19   payday lenders, presumptive violation of the 10
20   percent deposit cap, and money laundering, since
21   this is in Illinois, consider that in the first
22   study of the just released 2007 mortgage lending
23   data, Inner City Press, Fair Finance Watch has
24   identified worsening disparities by race and
0041
 1   ethnicity in the higher cost lending of Countrywide
 2   and Bank of America, combining these two would only
 3   make things worse.
 4            In Illinois in 2007 Countrywide confined
 5   African Americans to higher cost loans 1.87 times
 6   more frequently than whites.  If combined with Bank
 7   of America and LaSalle, the disparity for African
 8   Americans grows to 1.96.  The disparity for Latinos
 9   combining Countrywide and Bank of American would
10   also increase from 1.31 to 1.36.
11            The U.S. Federal Reserve Board, while
12   still trying to avoid any public comments on or
13   review of the controversial Bear Stearns/JP Morgan
14   Chase bailout, has agreed to hold this public
15   hearing to be continued in Los Angeles April 28 and
16   29.
17            In the State of California in 2007
18   Countrywide confined African Americans to higher
19   cost loans 1.43 times more frequently than whites.
20   If combined with B of A, the disparity for African
21   Americans grows to 1.54.
22            But why no opportunity on the east coast
23   where B of A is headquartered?  In Delaware in
24   2007, Countrywide confined African Americans to
0042
 1   higher cost loans 1.84 times more frequently than
 2   whites.  If combined with B of A the disparity for
 3   African Americans grows to 1.94.  The disparity for
 4   Latinos would also increase from 1.29 to 1.32.
 5            Nationwide hearings are needed across the
 6   nation.  B of A in 2007 confined African Americans
 7   to higher cost loans 1.88 times more frequently
 8   than whites and denied the applications of Latinos
 9   1.62 times more frequently than whites.
10            Meanwhile, Countrywide Financial confined
11   African Americans to higher cost loans 1.95 times
12   more frequently than whites and denied the
13   applications of Latinos 1.53 times more frequently
14   than whites.
15            Bank of America continues supporting
16   payday lender Advance America.  In July 2004 Bank
17   of America Corp arranged a $265 million credit line
18   for Advance America.  Documents Advance America
19   filed with the SEC indicate B of A administered the
20   credit line.  Not long after Advance America
21   announced an IPO that raised 195 million.
22            In a 2004 filing to the SEC, Advance
23   America which is the nation's largest payday lender
24   said it wouldn't be as big or successful at
0043
 1   corralling borrowers without banks.  "We depend on
 2   loans from banks to operate our business, if banks
 3   decide to stop making loans to companies in the
 4   payday cash advance services industry, it could
 5   have a material adverse effect on our business."
 6            Also in late September 2006 B of A
 7   acknowledged that it lax operations allowed South
 8   American money launderers to illegally move
 9   3 billion through a single Midtown Manhattan
10   branch.
11            Bank of America with the Federal Reserve's
12   complicity has been making a mockery of the 10
13   percent deposit cap which is one of the few
14   consumer protections enacted along with the
15   Interstate Banking Act of 1994.
16            Bank of America is now arguing that the 10
17   percent deposit cap will not prevent its proposed
18   acquisition of Countrywide since Countrywide holds
19   it deposits in a savings and loan, but then the 10
20   percent deposit cap means nothing.  An institution
21   could just shift deposits into a savings and loan
22   and keep on buying up other institutions.
23            Countrywide's Angelo Mozilo has pocketed
24   410 million in salary bonuses and stock options
0044
 1   gained since 1999, now he stands to cash in with
 2   severance if B of A buys Countrywide.
 3            Fox News in August 2007 said:  The press
 4   has come up, Angelo, when times are good you are a
 5   savior, now when times are bad you're a predatory
 6   lender and you pounce on unsuspecting people, what
 7   do you think of that?  Mozilo replied:  I think
 8   it's nonsense, I think it's absolute nonsense.
 9            Compare that to the testimony you heard
10   today.  Consider that Countrywide's high cost full
11   spectrum unit was called a predator even when times
12   were good.  For example, Inner City Press reported
13   in June 2007 that Countrywide Financial -- at
14   Countrywide Financial even upper income blank
15   borrowers got high cost loans 1.92 times more
16   frequently than white borrowers, and note that
17   Countrywide settled charges of its racial
18   disparities in New York in a case brought by the
19   Attorney General's office.
20            While those records are not being
21   produced, Federal Reserve should extend the comment
22   period.  For all of these reasons, Inner City Press
23   Fair Finance Watch contends the Federal Reserve

24   Board should not approve Bank of America's
0045
 1   application.  Thank you.
 2       MS. BRAUNSTEIN:  Thank you.  Ms. Johnson.
 3       MS. JOHNSON:  Good morning.  My name is Flora
 4   Johnson.  Thank you for letting me speak today.
 5            I'm a member of Action Now.   We think the
 6   merge between Countrywide and Bank of America
 7   should not be approved until Countrywide changes
 8   how it behaves.
 9            I am here today to describe my experience
10   with Countrywide.  I work for Jewel Food Stores for
11   23 years as a cashier and front end manager.  My
12   life has been a struggle.  I have 11 children.  My
13   husband and I separated when my youngest was five
14   years old.
15            After he left he didn't provide any
16   support for the children.  I have a son with
17   cerebral palsy.  I live in a house on the south
18   side of Chicago, 97th and Normal.
19            We bought the house in 1963.  I had so
20   little money that over the years my house was sold
21   for taxes three times but I held onto the house by
22   the grace of God.
23            In 1999 I got a home equity loan.  I
24   needed the money to pay for insulation for my
0046
 1   house, it's a frame house and it wasn't insulated.
 2            It was cold in the house, and the gas bill
 3   was so high it also reached $900 per month, and
 4   when I got the equity loan I used that to pay gas
 5   bills, get new windows and doors.
 6            The house is about to be sold again, so I
 7   used the loan money to pay the taxes.  I also used
 8   the money to fix my roof which was leaking, and I
 9   used the money to pay for care for my son with
10   cerebral palsy.
11            When I got the loan and when I signed the
12   papers, no one told me it was an adjustable loan.
13   I read the papers the best I could, but I didn't
14   see anything where it said that the mortgage was
15   going to change.
16            I didn't know it would change.  I didn't
17   have a lawyer to look at the documents.  I could
18   not afford a lawyer.
19            The loan company gave me papers to look at
20   the day before, but when I came back to sign the
21   papers, there were more papers I didn't get until I
22   signed, so that means I really didn't read those
23   papers.
24            I was desperate to get the loan, I was so
0047
 1   far behind in my bills, my gas had already been
 2   shut off.  The home equity loan started out at 932
 3   a month.  I was able to pay that.  It was hard.
 4            Then my mortgage went up to $1,450.95 a
 5   month.  I couldn't pay that.  Countrywide sent me a
 6   payment plan, I was shocked when I got it.
 7            I called Countrywide and told the lady
 8   that I talked to I couldn't pay that.  I said to
 9   the woman, can you give me some time to pay.  She
10   said, no.  I said, well, I can't pay this.  She
11   said, I might as well start foreclosure on you now.
12            I said to the lady, it is not even due,
13   today is the 7th, and that was March, today is the
14   7th of March, it's not due till the 17th.  She
15   said, if you don't have it now, you won't have it
16   then.
17            I was terribly worried about losing my
18   house because I have a son with cerebral palsy and
19   I had fixed the house where he could get in and out
20   with a lift to lift him up, bathrooms with rods and
21   things where he could use the bathroom, and I was
22   just terribly upset, and people from Countrywide
23   called me constantly.
24            They would say when are you going to get
0048
 1   your payment in, you are behind, which I already
 2   knew, you know you're in foreclosure.  They said I
 3   should go to my relatives and get money to pay my
 4   mortgage.  Well, I don't have that type of family
 5   that have money can pay my mortgage and their
 6   mortgage, too.
 7            Then they say, go to your church.  My
 8   church is just paying their bills, so they can't
 9   pay my mortgage.  And they never said anything
10   about making the loan affordable, they didn't do
11   anything to work things out.  They just tried to
12   squeeze every dollar out of me dragging me down to
13   the lowest level.
14            I didn't get any help until Action Now,
15   and when -- when I told Susan at Action Now that I
16   was having problems, they were going to foreclose
17   on my house, she said, well, you know, we are
18   having an action on Countrywide at their office in
19   Chicago tomorrow, would you want to join us.  I
20   said, I'll meet with bells on, I will be down
21   there.
22            So we went down to Countrywide to their
23   office.  Then Countrywide adjusted my loan to make
24   it affordable again.  They did it right away, the
0049
 1   same day of the protest.  My mortgage was changed
 2   to a 30 year fixed rate mortgage with a much lower
 3   amount to pay each month.  But it shouldn't take
 4   protests by Action Now to get Countrywide to adjust
 5   its loans and keep people in their homes instead of
 6   going straight to foreclosure.
 7            It's this kind of behavior we want
 8   changed.  The merge between Countrywide and Bank of
 9   America shouldn't be approved unless Countrywide
10   change its practices so that Countrywide works out
11   plans to keep people in their homes and make loans
12   available, affordable instead of going straight to
13   foreclosure.  Thank you.
14       MS. BRAUNSTEIN:  Thank you.   Ms. Coombes.
15       MS. COOMBES:  Good morning.  My name is Katie
16   Coombes, national field organizer for the National
17   Training Information Center or NTIC.
18            NTIC is here today to strongly oppose the
19   proposed merger between Countrywide and Bank of
20   America.
21            Neither of these institutions should so
22   easily be rewarded.  On one hand Countrywide was
23   one of the nation's leaders in creating bad loans
24   but set up millions for foreclosure, and on the
0050
 1   other Bank of America is a bank that has
 2   historically refused to sign meaningful Community
 3   Reinvestment Act agreements with community
 4   organizations.
 5            NTIC was cofounded in 1972 by the late
 6   Gale Cincotta.  Many of you know Gale Cincotta,
 7   mother of the Community Reinvestment Act.  NTIC
 8   remains committed to CRA and continues to work with
 9   community organizations to use CRA as a tool to
10   bring the much needed credit to our neighborhoods.
11            Although I did not have the opportunity to
12   work with Gale, I know the long history of NTIC and
13   the CRA.  Gale, in fact, was known for warning us
14   that banks were going to continue to merge, get
15   bigger, and move further away from the communities
16   they are meant to serve.
17            She also warned us all that the subprime
18   lending products were just loans that were geared
19   to rip us off and would not help people become
20   homeowners.
21            We are now seeing the dreadful impact of
22   all these loans turning into foreclosures.  We
23   asked many, many big banks to stop sticking low and
24   moderate income communities interest only 30/27 and
0051
 1   20/28 loans that are not affordable before the
 2   foreclosure crisis started hitting the news
 3   headlines.
 4            Unfortunately they listened to corporate
 5   headquarters that were enjoying record profits on
 6   these loans and continued aggressively making these
 7   loans.  Maybe the reason banks got away with making
 8   these loans is they're located far away from local
 9   communities and are not really in touch with what
10   our needs are.
11            Certainly community credit needs are not
12   loans that borrowers cannot afford.  For example,
13   in just the first quarter of 2007, Countrywide made
14   more than $9 billion in payment option ARMs.  In
15   the same quarter Countrywide made $18 billion in
16   interest only loans.
17             Gale was also known for saying that she
18   thought once CRA was passed banks would be forced
19   to make good loans in moderate and low income
20   communities.
21            We soon found out that we had to push the
22   regulators to hold banks accountable.  We took
23   hundreds of community leaders to meet Paul Volcker
24   who was the chairman of the Federal Reserve from
0052
 1   1979 to 1987.  Leaders from around the country
 2   persuaded Volcker that the regulators should be
 3   monitoring banks for CRA performance which they had
 4   not done to CRA in the past.
 5            He agreed, and bank monitoring happened
 6   after that.  In fact, in the 1980s NTIC held
 7   hearings throughout the country with banks,
 8   community groups and regulators about the
 9   enforcement of CRA.
10            We are forced recently to return to the
11   Federal Reserve on April 14, 2008 to demand that
12   the Fed take action just as quick to help
13   homeowners as they had taken to help Bear Sterns.
14            This Bank of America/Countrywide buyout on
15   the table today is one opportunity for the Fed to
16   hold the industry accountable.
17            I'm testifying on behalf of NTIC and
18   several of our affiliates including the Pittsburgh
19   Community Reinvestment Group which is also here
20   today and working in neighborhoods in Cincinnati
21   who have been urging banks to sign specific CRA
22   pledges to local communities.
23            Specific local commitments, not
24   immeasurable billion dollar goals which Bank of
0053
 1   America mentioned earlier today are important as
 2   banks move forward and they move further and
 3   further from our communities.
 4            NTIC does not see any good news with the
 5   Bank of America merger and Countrywide.
 6   Countrywide has only recently started to work with
 7   homeowners and neighborhood groups to the fix bad
 8   loans they made.  We cannot say the same thing
 9   about Bank of America.  We can only hope that Bank
10   of America will reverse years of disengagement of
11   their community organizaiton.
12            The mortgage crisis with millions of
13   families losing their homes inevitably reflects on
14   the lender.  We must look carefully at how their
15   behavior has fueled the crashing and burning of
16   this industry.
17            In the current fiscal crisis that may well
18   be leading the nation into a recession, many
19   families are in danger of being put out of their
20   homes and need real help and real partners in their
21   struggles, not bigger, less responsive financial
22   entities with a dismal track record of cooperating
23   with communities.
24            Bank of America officials should step up
0054
 1   now and pledge both to honor the commitment made by
 2   Countrywide to aid every single customer caught in
 3   the subprime mortgage mess.
 4            If Bank of America wants to demonstrate
 5   higher standards and community development they
 6   need to live up to the spirit of the Community
 7   Reinvestment Act and sign local CRA agreements.
 8            NTIC strongly opposes the proposed merger
 9   between Countrywide and Bank of America, and the
10   Federal Reserve also must live up to its duty to
11   enforce the Community Reinvestment Act and ensure
12   that banks meet community needs.
13            These mega mergers cannot be given a blank
14   check.  The only way the Fed can consider approving
15   this merger and acknowledge the credit needs of the
16   communities is to at a minimum require Bank of
17   America to stop all foreclosures on Countrywide
18   loans until they're modified into 30 year fixed
19   rates that are affordable.  Thank you.
20       MS. BRAUNSTEIN:  Thank you very much.  Any
21   questions for the panel?
22       MS. ROBINSON:  I have a question.  You said you
23   got your home equity loan in 1999 and then you
24   described the unfortunate conversations with
0055
 1   Countrywide.  What year was that?
 2       MS. JOHNSON:  When I talked to Countrywide?
 3       MS. ROBINSON:  What you were describing as the
 4   conversations with Countrywide when you were trying
 5   to get them --
 6       MS. JOHNSON:  That was March of this year.
 7       MS. ROBINSON:  And when did they adjust the
 8   mortgage?  When did you have the protest and they
 9   finally agreed to adjust the mortgage?
10       MS. JOHNSON:  It was March of this year.
11       MS. ROBINSON:  Okay.  Same month.  Thank you.
12       MS. BRAUNSTEIN:  Anything else?  Thank you very
13   much.  Our next panel.
14            Okay.  We'll start this panel, I just now
15   want to remind everybody to -- the time keeper is
16   here, they will let you know when your time is up,
17   and also to ask that everybody clearly state their
18   name and organization at the beginning of their
19   statement, and we will -- excuse me, Bruce, are
20   you -- other people are going to speak for your
21   time?
22       MR. MARKS:  Yes.
23       MS. BRAUNSTEIN:  Since we don't have your names
24   in the record, could you make sure that you state
0056
 1   your names clearly so we can get them for the
 2   record?
 3       MR. MARKS:  Yes.
 4       MS. BRAUNSTEIN:  Thank you.  We'll start with
 5   Mr. Sims, though.
 6       MR. SIMS:  Good morning, panel.  My name is
 7   Wallace Sims, and I'm the owner of Wally Sims
 8   Associates representing BMC Associates of Maywood,
 9   Illinois.
10            I'm here in the affirmative regarding this
11   acquisition.  As we know Countrywide has been a
12   cancer for the financial society of America.
13            Bank of America as I know it from the time
14   that it was the nation's bank became -- accepted
15   the name Bank of America on that acquisition, we
16   find that Bank of America has been vigilant in the
17   marketplace and with that competitive clean eye for
18   new opportunities in their field especially in the
19   area for African American business to business
20   relationships.
21            The good news is that this acquisition
22   opened a world of possibilities for initiatives and
23   growth.  It offers new configurations to make
24   things work.  It would define objectives that are
0057
 1   important to the American consumers.
 2            I am convinced that Bank of America is
 3   communicating a different image to the consumer
 4   marketplace at large.
 5            Bank of America priorities and objectives
 6   would yield to the African American business to
 7   business opportunities for a greater level.  This
 8   Bank of America acquisition of Countrywide
 9   Financial has been the kind of a mortality to a
10   business that is most valuable to the American
11   populace.  It would modify, building on, expanding
12   on that which already exists.  It would give more
13   access to minority business.
14            It is simply framed together to be a
15   magnified financial institution for a growth of
16   opportunity to all consumers of the market at
17   large.
18            This will give it bigger and better
19   cornerston.  A cornerstone by definition brings two
20   walls together.  These walls usually are
21   perpendicular to one another.  Each of these walls
22   is given in different direction and has a specific
23   function.  The cornerstone joins them altogether.
24   Bank of America and Countrywide form a new and more
0058
 1   functional economic behavior no longer two separate
 2   entities serving different purposes.
 3            This acquisition to the community at large
 4   would no longer be two separate institutions
 5   serving different purposes.  Uniting will form an
 6   entirely new structure, one which has more
 7   opportunities, strength, power, and potential than
 8   the walls held by themselves.
 9            Bank of America as the bank of opportunity
10   we believe would give what we believe to be an
11   evolutionary approach such applied to acquisitions
12   by Bank of America with knowledge.
13            They do not project the old or the new but
14   instead keep the best of both, adopting the new
15   ideas to the current methods and business
16   philosophies.
17            We believe that this acquisition to all
18   Americans alike, flexible and adaptive to
19   alternatives, we characterize Bank of America as
20   one with the reputation for trustworthiness and
21   ethical integrity, for confidential service, and
22   for this the financial structure so sound and
23   applied by Bank of America to the African American
24   business to business relationship will be
0059
 1   multiplied, thereto we sign and endorse this
 2   acquisition.  Forget the things that are behind.
 3   Bank of America is bank of opportunities.  Thank
 4   you.
 5       MS. BRAUNSTEIN:  Thank you.  Ms. Logue.
 6       MS. LOGUE:  Thank you.  My name is Trinita
 7   Logue, and I am president of IFF formerly Illinois
 8   Facilities Fund, a certified community development
 9   financial institution working in Illinois, Iowa,
10   Missouri, and Wisconsin, and we will soon move into
11   Indiana.
12            We finance real estate for nonprofit
13   corporations located in or serving low income
14   communities such as health clinics, child care
15   centers, shoulders, food pantries, and other human
16   services.  We also provide a range of support
17   services and real estate consulting to these and
18   other nonprofits.
19            Our total assets just topped 150 million
20   and we are growing rapidly.  Almost two-thirds of
21   our loan capital comes from banks through CRA loans
22   and investments including Bank of America.
23            My organization has no direct involvement
24   in the home mortgage crisis.  As you know, as you
0060
 1   can tell our loans are more what you would call
 2   commercial loans and we have no particular
 3   knowledge about Countrywide other than the
 4   information available in both industry and popular
 5   press.
 6            I believe, however, that it is important
 7   that Bank of America should acquire Countrywide and
 8   manage the crisis that has been caused by
 9   Countrywide and others and has the potential to
10   bring financial ruin to so many individuals and
11   families.
12            We are concerned, however, that the
13   magnitude of this crisis will distract Bank of
14   America from many other priorities including
15   building a better relationship with the Chicago
16   metro area community which is an important priority
17   due to its recent acquisition of LaSalle Bank.
18            As you know, LaSalle Bank's commitment to
19   corporate civic leadership and community
20   involvement was visible and tangible in many ways.
21            Bank of America has very quickly moved
22   toward not only continuing but increasing this
23   commitment, however, the bank is only at the very
24   beginning of this effort and has a long way to go.
0061
 1            We look forward to working with Bank of
 2   America as it reaches a higher level of commitment
 3   and sustains it over time, but it is not an
 4   either/or situation.
 5            Bank of America has the responsibility to
 6   manage many economic and social priorities, at the
 7   same time to acquire Countrywide with all its
 8   problems and the ongoing investigations of its
 9   practices and also to transform its role in this
10   community to one that reflects its size and the
11   size complexity and needs of the Chicago metro area
12   market.
13            There is no silver lining for the many
14   individuals and families who have or will lose
15   their homes.
16            Responsibility must be shared by many, but
17   we all know that Bank of America is among the giant
18   institutions that must shoulder a large share of
19   the burden to make sure that the terrible lessons
20   translate into real progress rather than fear of
21   community lending.
22            They share this responsibility because of
23   their size and their history.  The CDFI industry
24   can benefit we all know from greater assistance and
0062
 1   attention as we, too, take bold steps to gain
 2   access to the capital markets for community
 3   development investments.
 4            Bank of America has the ability to help us
 5   strengthen bridges with mainstream financial
 6   markets and to do it in a way that eliminates any
 7   chance of the type of crisis we now have with
 8   subprime mortgages.
 9            To reduce uncertainty around community
10   development investments, the CDFI industry needs
11   help in finding ways for appropriate risks and
12   pricing models to be developed that will take us to
13   the capital markets on a consistent basis.
14            Capital providers such as Bank of America
15   can lead the effort to strengthen working
16   relationships with the CDFI industry to develop a
17   richer understanding of our activities.
18            I'm confident that the expertise found at
19   Bank of America coupled with the community
20   development finance industry can move the industry
21   in the right direction to increase capital to low
22   and moderate income communities and individuals
23   with appropriate oversight and leadership.
24            We have seen Bank of America moving in
0063
 1   this direction in Chicago and we urge that this
 2   continue and grow.
 3            Just as increased transparency will be
 4   required if Bank of America acquires Countrywide,
 5   accountability is the most important component of
 6   success in all CRA activities, particularly with
 7   these global institutions.
 8            I recommend that together we establish new
 9   models for community accountability as one of many
10   changes that emerge from this crisis.  Thank you.
11       MS. BRAUNSTEIN:  Thank you very much.
12   Mr. Marks.
13       MR. MARKS:  Hello.  My name is Bruce Marks, I'm
14   the CEO of the Neighborhood Assistance
15   Corporation America.
16            Before I talk -- I want to talk about
17   solutions today, so before I do that, if I can
18   ask -- we have a lot of people here who have -- who
19   have mortgages and are at risk of foreclosures, so
20   if I can ask the people to stand up who have an at
21   risk mortgage and are at risk of foreclosure.
22            So, everybody, thank you for coming.  So
23   what you see, clearly there's huge numbers out
24   there of people across the board, hard working
0064
 1   people who are at risk of foreclosure through no
 2   fault of their own because they have a mortgage
 3   that was structured to fail.
 4            Let's talk about solutions.  Through the
 5   NACA program, we have $10 billion that has been
 6   committed that provides the best mortgage
 7   opportunity for people -- hard working people who
 8   in the industry -- who the industry considers to be
 9   subprime borrowers, but when you provide a prime
10   loan, meaning a loan that requires no down payment,
11   requires no closing costs, that does not require
12   perfect credit but has a 30 year fixed term, one
13   percent below market, and today's rate is 5.25
14   percent, what happens to those borrowers, they
15   become prime borrowers, and that's the reality.
16            We have destroyed the myth that you have
17   to compensate for someone's low credit score or
18   someone's lack of assets by providing an
19   unaffordable subprime or predatory loan, and the
20   biggest partner that we have in that agreement is
21   Bank of America, so that's on the purchase side.
22            On the home save side, people who are at
23   risk of foreclosure, we have an agreement with not
24   just Countrywide but with others, but the biggest
0065
 1   one is with Countrywide where they will restructure
 2   loans based on what the homeowner can afford.  That
 3   means that you look at someone's net income,
 4   required liability payments, required monthly
 5   expenses, you back into a mortgage payment that
 6   that homeowner can afford over the long term.
 7            And we've done a lot of those loans out
 8   there, and this applies not just -- this applies to
 9   all of the Countrywide mortgages that they service.
10            So now we're able to go back and we're
11   able to make those loans affordable and over the
12   long term because the agreement says that they will
13   restructure those over a 30 year fixed rate.
14            So there are solutions out there.  The key
15   is to make those solutions not just through NACA,
16   but to make those the standard, and that's what we
17   hope and we expect the Bank of America acquisition
18   of Countrywide to do.
19            But I want to turn over the remaining time
20   that I have to two -- to two very special people
21   who -- one on my left, Carmen, she -- just not for
22   me saying we provide the best home ownership for
23   working people, Carmen can say it in her own words.
24   Carmen.
0066
 1       MS. BROOKS:  Hi.  My name is Carmen, and it is
 2   true, I closed about three weeks ago, I didn't
 3   have -- there was no down payment, no closing cost,
 4   no prepayment penalty, and they provided me with an
 5   attorney, and my interest rate was 4.75 percent,
 6   and I purchased a home for 150,000 in Joliet,
 7   Illinois.
 8       MR. MARKS:  And if I can turn it over to
 9   Fernando who on the home save side, Fernando had a
10   Countrywide mortgage, and also Nancy is going to
11   translate.
12       THE INTERPRETER:  Hello, my name is Nancy, and
13   I'm a bilingual housing counselor for the NACA
14   program.
15            Fernando is one of our members that had a
16   negative and balloon mortgage with Countrywide that
17   would adjust to 115 percent of the original
18   principle.
19            He took out a $300,000 mortgage and his
20   payment was over $3200, and it was restructured to
21   a fixed rate loan at a fixed rate interest rate,
22   and I'm also Fernando's translator.
23       MR. AVILLA:  Hello.  My name is Fernando
24   Avilla.  He always had his mortgage with
0067
 1   Countrywide and we have it now.
 2            Since he's been into the program, his
 3   interest rate now is 3.50 fixed for the remaining
 4   term of the loan, and his mortgage payment went
 5   from $3200 to $2100 including escrow and made it
 6   affordable for him to keep his home.
 7       MR. MARKS:  Is there anything else you want to
 8   say?
 9       MR. AVILLA:  He has tried to look for other
10   solutions through other banks and through other
11   brokers and he went to visit five other banks and
12   brokers before he came to NACA.
13            And it wasn't through an ad -- and through
14   something that was published in a newspaper, he
15   came in, knew about the organization that provided
16   solutions for the homeowners.  Thank you.
17       MS. BRAUNSTEIN:  Thank you very much.
18       MR. MARKS:  So what I would like to end with is
19   there is these solutions out there both on the
20   purchase side so you can really make -- to
21   transform how lending can get done going forward
22   and on the home save side.
23            So the two players that we're talking
24   about today have provided those real solutions out
0068
 1   there in a comprehensive way, now we got to make
 2   that the national standard.  Thank you very much.
 3       MS. BRAUNSTEIN:  Okay.  Thank you.  The panels
 4   have questions.  Alicia.
 5       MS. WILLIAMS:  Yes.  Can you tell me how long
 6   the agreement has been in place with the B of A and
 7   also how many people you have helped?
 8       MR. MARKS:  B of A on the purchase side, that's
 9   been in place since 1995, and tens and tens of
10   thousands of homeowners have gone through the
11   program, and our performance is the best in the
12   country both prime and subprime.
13            So we have shown that when you provide a
14   prime loan to what the industry considers a
15   subprime borrower, they become a prime borrower and
16   perform better than any other program out there.
17       MS. WILLIAMS:  So do you have like numbers for
18   2006 and 7 at this point that you can share?
19       MR. MARKS:  I don't have it on the top of my
20   head, but one of things that was clear is that we
21   have lost a lot of business, a lot of loans over
22   the last four years because a lot of lenders out
23   there were saying they were going to qualify people
24   for $100,000 more than what we knew they could
0069
 1   afford.
 2            They would have an initial interest rate
 3   which was even lower than a 30 year fixed, one
 4   percent below market, and the fact of the matter
 5   is, you know, people went to those major
 6   institutions, we did not compromise our standards,
 7   they're out of business, we're growing.
 8            We have 38 offices around the country,
 9   we'll be doubling in size this year, and we've
10   become the national standard on both the purchase
11   side and on the home save side.
12       MS. BRAUNSTEIN:  Any questions?  Okay.  Thank
13   you very much to this panel.  Next panel is
14   Heddy Ratner, Debbie Dixon, and Raul Raymundo.
15            All right.  Just once again to state that
16   our time keepers are here, the green light, yellow
17   light means two minutes, and then red light stop,
18   and also just to remind you again, please state
19   your name and your organization at the beginning of
20   your statement.   And we'll start with Ms. Ratner.
21       MS. RATNER:  I'm Heddy Ratner, I'm co-president
22   of the Women's Business Development Center, and I
23   thank you for the opportunity to support and
24   endorse Bank of America's acquisition of
0070
 1   Countrywide and on Bank of America's commitment to
 2   economic opportunity issues to assist minority and
 3   women, small business community of the Chicago
 4   metropolitan area, as well on Bank of America's
 5   support of community development and its leadership
 6   on economic development and their commitment to the
 7   letter and the spirit of community reinvestment.
 8            My organization, Women's Business
 9   Development Center, and in collaboration with other
10   minority business organizations represent thousands
11   of women and minority business owners in the
12   Chicagoland area.
13            Our organization is involved in Bank of
14   America's continuing investment into low and
15   moderate income families, businesses, and
16   neighborhoods, and specifically in its efforts to
17   provide access to credit in those communities.
18            The Women's Business Development Center
19   has had positive firsthand experience with Bank of
20   America and its previous incarnations since the
21   inception of our organization founded in 1985.
22            The WBDC provides counseling,
23   entrepreneurial training, financial assistance,
24   business and strategic planning, marketing,
0071
 1   procurement assistance, and assistance with loans
 2   to startup, emerging, and maturing businesses.
 3            Our organization is now the oldest and
 4   largest and the most comprehensive women's business
 5   assistance center in the United States.  Bank of
 6   America has been our partner since 1988 in economic
 7   and community development providing support for our
 8   organization and its programs, loans to our
 9   clients, participation as a lender in our women's
10   business bank loan program, and participation in
11   our annual entrepreneurial women's conference since
12   1991.
13            Several years ago the Women's Business
14   Development Center and Bank of America began a
15   wonderful partnership to provide business
16   development, financial assistance to low and
17   moderate income Hispanic communities.
18            WBDC with the support of Bank of America
19   is making our successful child care and business
20   assistance programs available in English and
21   Spanish.
22            These innovative new business programs
23   bring information and services, counseling and
24   entrepreneurial training, credit advice and
0072
 1   counseling, financial assistance as well as
 2   self-employment opportunities through economically
 3   disadvantaged communities.  In 2001 I was honored
 4   to be the recipient of the Bank of America
 5   community leadership award.
 6            In 2006 and 2007 Bank of America asked me
 7   to help select honorees in neighborhood excellence.
 8   Bank of America continues to be in leadership
 9   development with high school students with
10   scholarships for college for deserving students and
11   to nonprofit leaders who have gone above and beyond
12   to public service.
13            Also in 2007 Bank of America was the host
14   and sponsor of a Women of Color Forum in
15   conjunction with the Women's Business Development
16   Center and Center for Women's Business Research.
17            Our recommendations are we look to the
18   merger of these two major institutions to increase
19   their commitment to community and economic
20   development and to diversity and leadership in
21   employment policies and in the procurement and
22   purchasing practices of the bank.
23            Small business lending and low and
24   moderate income communities and loans to minority
0073
 1   and women owned businesses would be enhanced with
 2   the collection of gender and race based lender data
 3   that has been available for housing through HMVA
 4   and has not been available for small business.
 5            We propose that Bank of America would
 6   voluntarily collect gender and race based
 7   information to help develop the most successful
 8   policies and programs to enhance the growth of
 9   small business lending as well as mortgages in our
10   communities.
11            We look to Bank of America to be the
12   precedence center and lead national efforts in
13   changing Regulation B.
14            This is a timely window of opportunity.
15   Although our organization and hundreds of community
16   economic development organizations agree that the
17   requirements of gender and race based commercial
18   lending date is necessary for policy and program
19   development, we would like to see the participation
20   of major banks in this effort as well.
21            We at the Women's Business Development
22   Center support the merger of Bank of America with
23   Countrywide.  Thank you for the opportunity to
24   present today.
0074
 1       MS. BRAUNSTEIN:  Thank you.  Ms. Dixon.
 2       MS. DIXON:  Yes.  My name is Debbie Dixon, and
 3   I'm the associate director of Neighborhood Housing
 4   Services of Chicago.
 5            First I would like to also say thank you
 6   for the opportunity to share these comments with
 7   this panel and members of this hearing.
 8            Neighborhood Housing Services of Chicago
 9   is a nonprofit housing organization with more than
10   30 years experience in creating and preserving home
11   ownership in the City of Chicago.
12            Since 1975 NHS has served 164,000 clients,
13   invested 388 million in Chicago neighborhoods, and
14   created 3,000 new homeowners and counting.
15            Bank of America is a 20 year partner of
16   NHS on community reinvestment initiatives in
17   Chicago.
18            One of the ways Bank of America currently
19   partners with NHS is by investing in NHS's hundred
20   million dollar loan pool.  This source of funds
21   enables NHS to make home purchase improvement and
22   refinance loans available to low and moderate
23   borrowers at affordable fixed rates.
24            By making credit available this way, Bank
0075
 1   of America creates significant investment in
 2   Chicago's low and moderate income neighborhoods.
 3   Bank of America's staff also provides personal
 4   leadership to NHS in our efforts to create and
 5   maintain sustainable home ownership.
 6            For example, B of A president, David
 7   Rudis, serves as co-chair of the NHS trustee
 8   committee, and then with that, senior vice
 9   president is an active long-time member of the NHS
10   Board of Directors and currently serves as
11   secretary.
12            NHS appreciates the time and expertise
13   these industry leaders provide to our work.  An
14   assessment of Bank of America's acquisition of
15   Countrywide must take into consideration Bank of
16   America's sizeable capacity and enthusiastic
17   willingness to respond to the foreclosure issue
18   through significant loss mitigation efforts.
19            Bank of America has demonstrated that its
20   loss mitigation staff can move cases forward in a
21   timely manner and can offer meaningful option to
22   borrowers.
23            Furthermore, NHS believes that Bank of
24   America would integrate Countrywide's business into
0076
 1   a corporate culture that favors responsiveness to
 2   trouble homeowners.
 3            And, finally, Bank of America has a track
 4   record for testing innovative solutions to the
 5   foreclosure problem.
 6            Bank of America's long standing commitment
 7   to community development issues and investment in
 8   the foreclosure work of nonprofits such as NHS
 9   makes B of A a strong candidate to acquire
10   Countrywide.
11            NHS believes Bank of America will provide
12   Countrywide with the stability, financial
13   resources, and access to a network of institutions
14   committed to community reinvestment.
15            These hearings place important attention
16   on the needs of our communities and specifically
17   the resources they need to be successful.  Thank
18   you for this opportunity to testify.
19       MS. BRAUNSTEIN:  Thank you very much.
20   Ms. Reyes.
21       MS. REYES:  Good morning.  My name is Guacolda
22   Reyes.  I'm the deputy director of The Resurrection
23   Project.
24            The Resurrection Project is a
0077
 1   non-for-profit, 17 years all non-for-profit working
 2   on the communities of Pilsen, Little Village, and
 3   Back of the Yards in Chicago producing affordable
 4   rental housing and also promoting home ownership.
 5            I appreciate this opportunity to provide
 6   comments to the Board of Governors of the Federal
 7   Reserve regarding Bank of America's proposal to
 8   acquire Countrywide Financial Corporation.
 9            As the deputy director of The Resurrection
10   Project, we would like to express our support to
11   this recent announcement, and it is our belief that
12   it would provide much needed stability to our
13   troubled housing market and to many communities
14   feeling the devastating impact of escalating
15   foreclosure rates.
16            Since 1990 The Resurrection Project has
17   been working to create healthy communities by
18   building and preserving affordable housing.  Our
19   work in Chicago's growing Latino population has
20   produced hundreds of homeowners and leveraged over
21   151 million in community reinvestment.
22            And now today with foreclosure rates at an
23   all time high and projected to continue to
24   increase, the work that we have done over the years
0078
 1   to build wealth and create asset for our families
 2   is being threatened.
 3            Today, as you all know, the demand for
 4   foreclosure counseling has increased dramatically
 5   and more and more homeowners find themselves in
 6   danger of losing their homes.
 7            Left alone with no intervention from Bank
 8   of America, Countrywide is very likely to go
 9   bankrupt resulting in a scenario that would further
10   undermine the mortgage industry and the confidence
11   of families in buying homes that we still seeing
12   coming through our doors.
13            In supporting Bank of America's
14   acquisition of Countrywide, we would like to see
15   Bank of America put forward a plan for any
16   Countrywide mortgage holders at risk of
17   foreclosure.  This means to create real sustainable
18   solutions for families that allow them to stay in
19   their homes for long term.
20            I'm working primarily in partnership with
21   HUD certified counseling agencies such as ours and
22   many others probably in this room.
23            Furthermore as a result of its acquisition
24   of Countrywide, Bank of America will become the
0079
 1   nation's mortgage lender leader and hence it should
 2   be proactive in creating again sustainable credit
 3   worthy and affordable mortgages for working
 4   families.
 5            For many communities like ours
 6   experiencing record high rates of foreclosures this
 7   is critical to be addressed.  Thank you again for
 8   this opportunity.
 9       MS. BRAUNSTEIN:  Thank you very much.
10   Questions from the panel?  Okay.  Then thank you
11   very much.
12            At this point we're going to take a
13   fifteen minute break and we will reconvene at
14   twenty after.
15                      (Short break.)
16       MS. BRAUNSTEIN:  We're reconvening, please.
17   Okay.  We're going to start with our next panel.
18   And do we have everybody here?  Okay.
19            We have our time keepers there, please
20   keep an eye out for the time keeper, and please
21   state your name and your organization at the
22   beginning of your statement, and we'll start with
23   Ms. Donoghue.
24       MS. DONOGHUE:  Thank you for having me on the
0080
 1   panel today.  I am Mary Donoghue, housing counselor
 2   at the North Side Community Federal Credit Union.
 3            Our credit union serves the low and
 4   moderate income population in northeast Chicago
 5   with traditional banking services and products
 6   specifically designed for this population such as
 7   our payday alternative loans, our New American
 8   loans and our housing counseling program.
 9            We began our housing counseling program a
10   year and a half ago.  What began as a program aimed
11   at helping low and moderate income renters become
12   homeowners has quickly turned into a largely
13   foreclosure intervention counseling program.
14            As a counselor I meet with clients one on
15   one, assess their hardship and ability to repay a
16   mortgage and then assist homeowners by negotiating
17   a loan modification or forbearance -- or repayment
18   plan with their servicer.
19            Of my clients facing foreclosure,
20   45 percent of them have loans that adjusted within
21   the first three years.  Many of these clients
22   simply need a fixed loan at a competitive rate to
23   be able to stay in their homes.
24            As the foreclosure crisis worsens, housing
0081
 1   counseling agencies see banks responding with more
 2   willingness to provide loan modifications.  This is
 3   a good sign.
 4            I'm here today to ask that if Bank of
 5   America acquires Countrywide Financial, it will
 6   agree to increase the number of staff in its loss
 7   mitigation department, retrain current Countrywide
 8   foreclosure counseling staff and formally commit to
 9   work with counseling agencies to find solutions for
10   homeowners facing foreclosure.
11            Countrywide is notorious among housing
12   counselors as the worse servicer to work with in
13   the industry.
14            I would like to tell you a story about one
15   particular case.  My client, we'll call her Susan,
16   is typical of the North Side Credit Union member.
17   She lives on the south side of Chicago, and she
18   commutes to the north side for work.
19            One day last November she called the
20   credit union to get a loan.  It turn out she wanted
21   a loan in order to pay the upfront costs associated
22   with the prepayment plan that Countrywide had
23   recently sent her.
24            Our loan officer referred her to the
0082
 1   housing counseling program instead.  Susan
 2   purchased her home fourteen years ago with her
 3   husband.  With both incomes they could afford the
 4   mortgage.
 5            When they got a divorce, Susan could no
 6   longer afford the payments on her own.  She fell
 7   behind, and she did what she thought was the only
 8   option for saving her home, she filed for
 9   Chapter 13 bankruptcy.
10            During the bankruptcy she moved into a
11   cheaper rental unit and found a tenant to live in
12   her home to help pay the mortgage.  When the
13   bankruptcy was discharged she was dealt another
14   blow, her tenant stopped paying the rent, and
15   although Susan tried to work things out, she ended
16   up evicting the tenant.
17            She lost over $8,000 in the process.  At
18   this point Susan moved back in and tried to set up
19   a repayment plan with Countrywide to get back on
20   track.
21            When I met her she was already eight
22   months behind on her mortgage.  Right away we began
23   calling Countrywide.  It took more than ten calls
24   and numerous e-mails over three days to finally get
0083
 1   in touch with the helpful customer service
 2   representative.  I told this representative that
 3   every time I called the workout negotiator's
 4   extension I was transferred to a customer service
 5   representative rather than the negotiator's
 6   voicemail.
 7            This representative informed me that
 8   Countrywide had gotten rid of voicemail for workout
 9   negotiators.  I mentioned to her that I never
10   received replies to my e-mails.  The representative
11   told me that although the workout negotiators can
12   read the e-mails I send them, they cannot respond
13   to them.
14            Therefore as an advocate working on behalf
15   of my client I have an incredibly difficult time
16   reaching the very negotiator with whom I need to
17   speak.  In Susan's case she could have avoided a
18   repayment plan if we had been able to reach the
19   negotiator quickly.
20            It took one month, however, to reach the
21   actual workout negotiator working on her case and
22   another month before Countrywide was able to
23   produce a new payment plan.  As these months
24   passed, however, a payment plan ceased to be an
0084
 1   option.
 2            Susan's budget could handle repaying eight
 3   missed payments over 36 months but not ten missed
 4   payments.  We moved to the loan modification
 5   department, and once again encountered a negotiator
 6   who did not answer the phone, have voicemail, or
 7   reply to e-mails.
 8            Again we communicated in a convoluted
 9   manner where we both left messages with a customer
10   service representative.  This surprisingly did
11   result in a loan modification, yet under no
12   circumstances should this process take three to
13   four months to complete.
14            Both my client and Countrywide would be
15   better served if a loss mitigation solution could
16   have been negotiated in a more efficient manner,
17   therefore, I have two recommendations for Bank of
18   America should it acquire Countrywide Financial.
19            No. 1, Bank of America should hire and
20   train an adequate staff to provide loss mitigation
21   solutions for delinquent borrowers.
22            Bank of America should retrain Countrywide
23   loss mitigation staff to work by a much higher
24   standard.
0085
 1            In addition Bank of America should hire
 2   and train new staff to meet the increasing demand
 3   for loss mitigation solutions.  This includes
 4   efficiently moving customers through the various
 5   workout options to find the best solution for each
 6   case.
 7            In particular, if clients have adjustable
 8   rate mortgages, they need to be fast tracked to a
 9   loan modification and skip the possibility of a
10   repayment plan.
11            No. 2, Bank of America should provide
12   training for housing counselors covering its loss
13   mitigation procedures.
14            This training should allow HUD housing
15   counselors to personally meet with workout
16   negotiators in loss mitigation department.
17            It is vital that counselors establish
18   these contacts so that together we can quickly find
19   solutions for delinquent borrowers.  Thank you.
20       MS. BRAUNSTEIN:  Thank you very much.
21   Ms. Rand.
22       MS. RAND:  Good morning.  I'm Dory Rand,
23   supervising attorney for community investment at
24   the Sargent Shriver National Center on Poverty Law.
0086
 1            Shriver Center is a national law and
 2   policy center that takes action to end poverty
 3   through policy development, communications,
 4   advocacy, and litigation.
 5            As part of our national agenda, we
 6   champion civil rights and racial justice,
 7   preservation of affordable housing, and building
 8   and protecting assets for financial stability and
 9   growth.
10            We neither support nor oppose the proposed
11   acquisition but we do have serious concerns about
12   the potential negative impact of the proposed
13   acquisition on the growing racial wealth gap
14   dwindling affordable housing stock and precarious
15   state of consumer protection.
16            My comments focus on Bank of America's CRA
17   performance and the effect of the acquisition on
18   resources and Countrywide's predatory lending
19   practices and Bank of America's response.
20            I want to acknowledge that I have
21   benefited in the past from receipt of a Bank of
22   America grant.  I'm aware that B of A has made
23   substantial grants to many nonprofits in Chicago
24   and throughout the country, and I hope that such
0087
 1   grants will continue and increase in the future.
 2            The most recent CRA exam for B of A was
 3   based on the time period ending in December of
 4   2001.  How can the Federal regulators provide
 5   meaningful oversight of one of the largest banks in
 6   the country with such outdated information?
 7            The CRA exam does not include, for
 8   example, the fact that B of A is banking the
 9   largest payday lender in the country, Advance
10   America, thereby facilitating the trapping of
11   millions of consumers and endless cycles of death.
12            The Shriver Center recommends more
13   frequent CRA exams and more detailed data
14   collection including loan modification data,
15   information on the affordability of its retail
16   products and services, and information on the
17   impact of its support of payday lending on
18   borrowers.
19            The Shriver Center supports the
20   recommendations of Woodstock and CRA coalition
21   calling for ongoing meetings between B of A and
22   community groups to monitor and discuss progress on
23   community reinvestment, mortgage lending, and
24   retail services.
0088
 1            B of A's recent acquisitions of Fleet
 2   Boston and LaSalle Bank resulted in elimination of
 3   thousands of jobs.  According to the Boston Globe,
 4   B of A eliminated over 16,000 jobs after it
 5   acquired Fleet outsourcing many of them overseas.
 6            According to American Banker, LaSalle
 7   acquisition will result in elimination of 4,000
 8   jobs including 2500 in Illinois.
 9            The Shriver Center is concerned that if
10   B of A follows through with elimination of 4,000
11   LaSalle jobs and more at Countrywide it will not
12   have sufficient resources to address the problems
13   caused by Countrywide's predatory lending and other
14   community concerns.
15            We support North Side and Woodstock and
16   others calls for maintaining adequate staffing and
17   training including multilingual and culturally
18   competent staff.
19            Countrywide has a record across the
20   country for making high risk, high cost loans and
21   for creating significant disparities by race.
22            According to the FFI June 1, 2007 report,
23   for Countrywide home loans, the affiliate in
24   Chicago, African Americans were 1.81 times more
0089
 1   likely than were whites in Chicago to receive high
 2   cost loans.
 3            The Shriver Center is concerned that the
 4   Federal regulators have paid insufficient attention
 5   to these racial disparities which reflect
 6   violations of our neighbor's civil rights.
 7            The unfair pricing of loans in our
 8   communities of color exacerbate the already
 9   significant racial wealth gap, decreases the supply
10   of affordable housing, and threatens to prolong
11   cycles of intergenerational poverty.
12            For example, in yesterday's Crain's
13   Chicago Business section on the foreclosure
14   fallout, Juan Rivera of Lucha said for Latino and
15   African American families, the equity would have
16   been used to send their kids to college or to start
17   businesses in the community, now that equity is
18   completely lost.
19            Bank of America must take aggressive steps
20   to competently handle the fallout from Countrywide
21   and B of A's high cost loans including extensive
22   community outreach, loan modifications to
23   affordable 30 year fixed rate loans, adequate
24   multilingual staffing for loan modifications and
0090
 1   significant funding and training of nonprofit and
 2   bank staff to assist with homeowner counseling.
 3            Bank of America must be held accountable
 4   for the lending practices of Countrywide that are
 5   under investigation by the attorney general of
 6   Illinois and other states.
 7            In addition, we support the Chicago Rehab
 8   Network's recommendations on steps needed to
 9   preserve affordable rental housing.
10            Thank you for the opportunity to make
11   these comments.
12       MS. BRAUNSTEIN:  Thank you very much,
13   Ms. Rand.  Mr. Feltner.
14       MR. FELTNER:  Good morning.  My name is Tom
15   Feltner, I'm the policy and communications director
16   of the Chicago based Woodstock Institute, a
17   research and policy development organization and a
18   convener of the Chicago CRA coalition, an
19   association of community organizations working to
20   increase community reinvestment activity in the
21   Chicago metropolitan region.
22            This acquisition raises several concerns
23   which Woodstock feels must be adequately addressed
24   before the merger is approved by the Federal
0091
 1   Reserve Board which I respectfully request that the
 2   Federal Reserve Board require Bank of America to
 3   have a public action plan in place and rigorously
 4   examine the ability of that plan to resolve the
 5   following issues before approving the acquisition.
 6            No. 1, Bank of America must have a public
 7   action plan in place to aggressively modify problem
 8   Countrywide loans into 30 year fixed rate loans;
 9            Discussions with housing counselors in the
10   Chicago region have indicated that for many
11   Countrywide borrowers, a modification to a fixed
12   rate 30 year loan would represent the best chance
13   to avoid default and foreclosure.
14            In addition reports showed as many as one
15   in three Countrywide borrowers were improperly
16   placed into subprime loans despite credit scores or
17   other factors that would have qualified them for
18   lower cost prime mortgage loans.
19            An aggressive loan modification strategy
20   targeted to borrowers who currently or potentially
21   may have problems affording their mortgages would
22   best serve both the interest of the borrowers and
23   the bank.
24            No. 2, Bank of America must commit to
0092
 1   ongoing meetings between senior bank staff and
 2   community groups to monitor and discuss progress
 3   and provide data on loan modifications, community
 4   reinvestment, mortgage lending, and retail
 5   services.
 6            No. 3, Bank of America must maintain
 7   existing staffing levels dedicated to identifying
 8   problem borrowers and working with them to stay in
 9   their homes.
10            In the past Bank of America has taken
11   steps to cut costs immediately after a merger has
12   been approved including the dramatic reduction of
13   staff at the acquired institution.
14            If Bank of America is expected to absorb a
15   significant amount of problem mortgages after the
16   acquisition of Countrywide, multilingual staff must
17   be in place to implement a meaningful foreclosure
18   prevention strategy.
19            Evidence from one local housing counselor
20   in the Chicago region has shown that while
21   Countrywide mortgages make up about 7 percent of
22   the regional market, Countrywide counseling cases
23   make up about 20 to 25 percent of their overall
24   case load.  A dramatic reduction in staff is
0093
 1   certain to exacerbate this program.
 2            Bank of America should be accountable for
 3   Countrywide's lending practices particularly those
 4   currently under investigation.  Countrywide's
 5   lending practices have come under the intense
 6   scrutiny of the Illinois Attorney General for
 7   alleged racial steering and other discriminatory
 8   practices.
 9            Countrywide is also under investigation by
10   the U.S. Trustee for improperly handling mortgage
11   payments, charging unwarranted fees and improperly
12   calculating escrow.
13            Recognizing that Countrywide has a
14   considerable number of pending investigations, Bank
15   of America must be accountable for Countrywide's
16   violations and proactively work with the incoming
17   members of Countrywide's management to eliminate
18   the causes of these violations.
19            Woodstock Institute and the CRA coalition
20   look forward to learning more about Bank of
21   America's long-term plan to help Countrywide
22   borrowers in distress and address these four
23   concerns.
24       MS. BRAUNSTEIN:  Thank you very much.
0094
 1   Mr. Jackson.
 2       MR. JACKSON:  Thank you, and welcome to
 3   Chicago.  My name is Kevin Jackson, I'm with the
 4   Chicago Rehab Network.
 5            The network is a coalition of over 30, 40
 6   organizations for 30 years, all nonprofits
 7   committed to affordable housing either as advocacy
 8   organizations or as the community development
 9   corporations in this city, and together they have
10   been responsible for over 10,000 units of rental
11   housing production.
12            As Chicago's leading coalition of
13   nonprofit community development corporations, we
14   are interested in sharing the best opportunity for
15   the people and communities throughout metro Chicago
16   who require affordable housing.
17            Bank of America's leadership in lending
18   and investment will be measured in large part by
19   their actions related to the foreclosure crisis and
20   the directly related need for affordable rental
21   housing.
22            Let me provide a quick snapshot.  We just
23   released a fact book update for what happened
24   between 2000 and 2005 as well as between 2005,
0095
 1   2006.  What you've seen is that 2000 incomes across
 2   Chicago as -- across the country was at the highest
 3   ever.  In five years, the decrease was ten percent
 4   in income to whereas the housing cost in Chicago
 5   increased by over 65 percent for detach for sale.
 6            At that same five-year period we lost
 7   71,000 units of rental housing.  In the year 2008
 8   January, we lost a thousand homeowners to
 9   foreclosure in the City of Chicago, and in February
10   it was approaching 1700 before the month was done.
11            So what we have is a collision happening
12   in terms of people being moved out of one housing
13   type into another at the very time when losing that
14   housing.
15            I mentioned the 71,000 number, it was from
16   2000 to 2005.  In 2005 to 2006, the census status
17   shows us another 10,000 came off line of rental
18   housing units.
19            2000 to 2005, to put it in perspective,
20   that's over 12 percent of the rental stock for this
21   city, 600 percent increase in the City of Chicago
22   alone and people paying over $2,000 in mortgages.
23            So I'll continue with my testifying, I'm
24   going to not try to repeat everything because we're
0096
 1   in agreement with what you've heard here with my
 2   fellow panelists.
 3            Bank of America's pending merger with
 4   Countrywide could either benefit hundreds of
 5   thousands or further decimate their financial
 6   future.
 7            In acquiring Countrywide, Bank of America
 8   will become responsible for more than $9 million
 9   new customers.  Many of these customers are faced
10   with the threat of foreclosure.
11            We are concerned about Bank of America's
12   plan to purchase the troubled Countrywide because
13   Countrywide's unbridled business practices and
14   lowered mortgage lending standards paved the way
15   for this crisis.
16            Bank of America not only stands to acquire
17   the largest mortgage lender and servicer in this
18   nation but numerous lawsuits and default mortgages
19   as well.
20            Given the leadership of Bank of America,
21   we are concerned that Countrywide's bad lending
22   practices are ruining the dreams of thousands, Bank
23   of America has the opportunity to rebuild them.
24            In particular, as the people have
0097
 1   mentioned, the Rehab Network's biggest concern is
 2   going to be on rental housing stock.  We will
 3   detail actions that can remedy households in
 4   foreclosure.
 5            But many households will need to enter the
 6   rental market, and for that reason we ask that Bank
 7   of America create a product line to meet the needs
 8   of Chicago's rental portfolio which has been
 9   mid-sized loans.
10            On the Federally assisted portfolio, we
11   need Bank of America's leadership in providing
12   financing to multi-layered financing deals where
13   housing assistant payment contracts are involved.
14            Any policies which exclude these projects
15   from access to loan products are policies which
16   work against the national, local tide of efforts to
17   preserve existing affordable rental stock.
18            In fact, I would like to underscore the
19   need for innovative loan products for rental with
20   particular attention and favorable rates for rental
21   preservation.
22            In summary, we recommend that Bank of
23   America create a product line to meet the needs of
24   Chicago's rental portfolio which has been mid-sized
0098
 1   loans;.
 2            Initiate a system to transfer bank owned
 3   properties in Illinois to municipalities and/or
 4   non-profit developers who can rehab, recycle homes
 5   into habitable affordable uses;
 6            Initiate an immediate foreclosure
 7   moratorium on all mortgage loans in Bank of America
 8   and Countywide's portfolios including those that
 9   are currently being serviced;
10            Modify loans for borrowers in danger of
11   losing their homes to a fixed interest rate of no
12   more than six percent for 30 years;
13            Meet semiannually with the Chicago CRA
14   coalition and senior Back of America community
15   reinvestment mortgage lending and retail staff to
16   evaluate investment impacts and explore product
17   adjustments and maintain or increase the level of
18   philanthropic giving to the community involvement
19   field.
20            Bank of America has the opportunity to
21   rebuild the broken dreams of Countrywide borrowers,
22   your leadership on this important issue is needed
23   now more than ever.
24            Thank you for your attention and support
0099
 1   with this important issue.
 2       MS. BRAUNSTEIN:  Thank you very much.  Any
 3   questions for the panel?
 4       MS. WILLIAMS:  Dory, you talked a little bit
 5   about more loan collection data, so could you tell
 6   me what you were thinking in that regard?
 7       MS. RAND:  I believe I mentioned more data on
 8   loan modification so that we can see how Bank of
 9   America is handling these refinancing into
10   hopefully 30 year fixed mortgages of the predatory
11   Countrywide loans.
12       MS. WILLIAMS:  Okay.  And so what specifically
13   would you like them to report out in that regard?
14       MS. RAND:  There's a number of things they
15   could include in terms of the number of loans
16   modified, the terms of the loans, how quickly they
17   were modified after receiving a request for a
18   modification, racial, gender breakdowns in terms of
19   how the loans were modified to see if they're being
20   done on a fair basis.  Other panelists have other
21   suggestions.
22       MR. FELTNER:  I think it's also important to
23   recognize there are lots of different types of
24   modifications.
0100
 1            Obviously we're more concerned with
 2   modifications that reduce the principal, that
 3   reduce the interest rates rather than modifications
 4   that would recapitalize interest or simply extend
 5   the repayment plan.
 6       MS. WILLIAMS:  Thank you.
 7       MS. BRAUNSTEIN:  Thank you very much.  Will the
 8   next panel come forward, please?  That would be
 9   Michael Shea, Peter Gagliardi, Lee Beaulac, and
10   Judy Kennedy.
11            Just a reminder to the panel, the time
12   keeper is right there, and you'll see the little
13   box with the lights on it, and also please start
14   your statement, please, with your name and your
15   organization.  And we'll start with Michael Shea.
16       MR. SHEA:  Good afternoon.  Thanks for the
17   opportunity to be here.  My name is Michael Shea,
18   I'm executive director of ACORN Housing.
19            I'm speaking on behalf of the members of
20   the community group ACORN as well as ACORN Housing
21   Corporation.
22            ACORN Housing has had a partnership with
23   Bank of America for sixteen years.  During that
24   time our partnership has produced over 100,000
0101
 1   first time home buyers.  It's resulted in very
 2   innovative underwriting for first time home buyers.
 3            We're here to support the merger of Bank
 4   of America of Countrywide because we've seen over
 5   the last sixteen years Bank of America's
 6   willingness to provide a leadership role in making
 7   affordable mortgage credit available to low and
 8   moderate income communities and people of color.
 9            It's a long history we have with B of A
10   that we're proud of.  Bank in 1991, 1992 after the
11   last great credit crunch we faced after the savings
12   and loans went bust, Bank of America stepped
13   forward and made billions of dollars in commitments
14   to low and moderate income lending.  To get out
15   they adopted many of the available underwriting
16   features even though it meant that they have the
17   portfolio of those loans which they did for
18   decades.
19            In the mid 1900s -- I'm sorry, the mid
20   1990s when the Republicans in Congress were
21   attempting to eliminate the Community Reinvestment
22   Act, Bank of America was the only major lender that
23   came to Congress to speak at congressional
24   hearings, sat at a panel with community members in
0102
 1   support of strengthening the Community Reinvestment
 2   Act.
 3            Back in the early part of this decade when
 4   the subprime lending crisis was starting to
 5   explode, Bank of America sat down with ACORN
 6   Housing, other community groups, listened to us as
 7   we told them about the abuses that were taking
 8   place through their subprime mortgage lender,
 9   Nations Credit.
10            They went back, they did some analysis,
11   and as a result Bank of America exited completely
12   the subprime lending market, left it to the others
13   that saw the quick money, and as a result Bank of
14   America did much better in recent years than those
15   other lenders.
16            And then recently executives from Bank of
17   America have come forward and have suggested that
18   the only way we're going to be getting out of this
19   crisis that we're currently in is if the government
20   steps in, buys large packages of mortgages so that
21   they can be restructured in a way that would allow
22   them to be affordable to the homeowners that are
23   theirs so the homeowners can be saved.
24            Bank of America has also recenly stepped
0103
 1   forward and provided millions of dollars of funding
 2   to housing counseling agencies who are attempting
 3   to work with people to save their homes even though
 4   Bank of America did not make those loans that were
 5   abusive and are leading the foreclosures.
 6            I wish I could say that the kind of
 7   leadership that Bank of America has provided over
 8   the last few years was duplicated -- over the last
 9   sixteen years is duplicated by the Federal Reserve.
10            But the fact is the Federal Reserve more
11   than anybody has been asleep at the switch.  We're
12   in this crisis currently because the Federal
13   Reserve failed to regulate, failed to listen, and
14   with the exception of the great late Ed Gramlich
15   didn't do anything to try to curb predatory
16   lending, that's why we're in the mess we are
17   currently.
18            It's our great desire that the Federal
19   Reserve take steps to find a moral compass as we
20   move forward to force loan servicers to do long
21   term loan modifications to save people's homes.
22   Thank you.
23       MS. BRAUNSTEIN:  Thank you.  Mr. Gagliardi.
24       MR. GAGLIARDI:  Good morning.  My name is Peter
0104
 1   Gagliardi, and I've served as the executive
 2   director of HAP, Inc., a regional nonprofit housing
 3   agency based in Springfield, Massachusetts for the
 4   past 17 years.
 5            Prior to that I served for four years on
 6   the staff of the Massachusetts Executive Office of
 7   Communities for Development, and that service
 8   followed 13 years and a number of positions at
 9   Rural Housing Improvement, Inc., in Winchendon,
10   Massachusetts.
11            Currently I'm serving on the Board of
12   Directors of the Housing Partnership Network, the
13   Massachusetts Housing Investment Corporation, the
14   Massachusetts Nonprofit Housing Association, and
15   National Rural Housing Coalition.
16            And recently I was honored to be appointed
17   to the Massachusetts Home Mortgage Finance Agency
18   Advisory Committe by Governor Deval Patrick.
19            We're a regional nonprofit housing
20   partnership serving 43 cities and towns in Hampton
21   and Hampshire counties in Massachusetts, a region
22   encompassing all of the Springfield, Massachusetts
23   metropolitan area.
24            We've been in business for some 35 years
0105
 1   and have a staff of about 100 people, and we
 2   operate a wide variety of housing programs
 3   including those that educate first time home
 4   buyers.
 5            We recently received a grant from the
 6   Massachusetts Division of Banks to create and
 7   operate the Western Massachusetts Foreclosure
 8   Prevention Center, a collaboration of 15 nonprofit
 9   and municipal entities.
10            The City of Springfield alone had more
11   than 1,000 foreclosure options in 2007.  If you're
12   from Detroit that may not sound like a lot, but
13   Springfield is not a huge city, and that's a
14   disaster.  This is nearly four times the level of
15   2005, and the number appears to be climbing much
16   higher in 2008.
17            And we're still in the process of
18   repairing the damage done by a wave of foreclosures
19   in the 1990s.  We're inundated now with yet another
20   wave.  And on this morning's walk, the young lady
21   in the green hat from Action Now told me just how
22   serious the problem is here in Chicago, and I took
23   note of that.
24            One of our major lines of business is home
0106
 1   ownership education and counseling.  Bank of
 2   America has consistently been our leading private
 3   sector partner in this initiative.
 4            Its predecessor Fleet Bank was
 5   instrumental in launching our home ownership effort
 6   nearly 15 years ago, and that partnership continues
 7   today.  This does include Bank of America financial
 8   support of our home ownership counseling and
 9   education.
10            As a consequence of our partnership with
11   the bank, more than 8700 people from our region
12   have completed our accredited first time home buyer
13   education program.
14            Those who have been education and
15   counseled are less likely to be victims in the type
16   of lending that has led to the current foreclosure
17   crisis, and our anecdotal data from working with
18   people facing foreclosures confirms that.
19            Bank of America has been a leading lender
20   this program statewide and has provided a wide
21   variety of mortgage products that have served the
22   need of our program gradually.
23            We've established over the past 15 years
24   that Bank of America as well as other regulated
0107
 1   lenders have successfully served the low and
 2   moderate income and minority households of our
 3   region providing appropriate products that allow
 4   our home buyers to succeed.
 5            It's our belief that Bank of America's
 6   stewardship of Countrywide will bring the bank's
 7   understanding of positive community impact to this
 8   major lender further adding to the resources
 9   available to low and moderate income communities.
10            We expect that this will enhance our
11   partnership with Bank of America leading to
12   responsible lending that will benefit low and
13   moderate income families and communities in our
14   service area.
15            We support Bank of America's acquisition
16   of Countrywide Financial Corporation.  Thank you.
17       MS. BRAUNSTEIN:  Thank you.  Mr. Beaulac.
18       MR. BEAULAC:  Good morning.  My name is Lee
19   Beaulac, I'm the senior vice president with
20   community and economic development at Rural
21   Opportunities, ROI.
22            ROI is based in Rochester.  We're a 38
23   year old organization, non-for-profit community
24   development corporation providing services to farm
0108
 1   workers and to other low and moderate income people
 2   across seven different states and Puerto Rico, and
 3   we deploy our services and capital through 74 local
 4   offices throughout that region.
 5            ROI has developed or preserved over 10,000
 6   units of affordable housing valued at over half a
 7   billion dollars.  Our CDFI, The Enterprise Center
 8   has helped placed over $60 million in small and
 9   micro business financing and 350 small and micro
10   business enterprises.
11            I am a member of the Bank of America's
12   National Community Advisory Council, I also serve
13   on the executive committee of the National Rural
14   Housing Coalition, and I'm the current chair of the
15   Board of Directors of the National Community
16   Reinvestment Coalition in Washington.
17            To begin I want to express my appreciation
18   to the Federal Reserve Bank for having made a
19   decision to hold these hearings.
20            It's clear to us that many changes in the
21   American finance system have been allowed to take
22   place without the benefit of careful and thoughtful
23   analysis and discussion and that the impact of some
24   of these changes on local communities have not been
0109
 1   adequately considered.
 2            It is critically important to America's
 3   communities that the Federal Reserve Bank carry out
 4   its mandate, and I think the words are to assess
 5   the convenience and needs of the communities to be
 6   served by institutions proposing to merge or
 7   acquire other financial institutions.
 8            Today, however, I'm speaking on behalf of
 9   ROI.  From our perspective as an organization
10   that's focused a great deal of attention on rural
11   economic development, we generally oppose banking
12   mergers and a consolidation in the lending
13   industry.
14            In our view rural communities are usually
15   better served by local financial institutions which
16   have employees who are more in tuned with those
17   rural communities and better able to meet the
18   credit needs.
19            Also from our perspective, consolidation
20   of the banking industry has reduced competition in
21   the market and has often disrupted the flow of
22   credit and capital to certain local business
23   sectors, particularly natural resource based
24   industries like timber and agriculture and other
0110
 1   agriculturally related enterprises.
 2            However, to their great credit, Bank of
 3   America has realized the degree to which this is a
 4   problem for small business lending, and they have
 5   begun a rural initiative designed to give credit
 6   needs in smaller markets, and to that end they have
 7   made substantial donations to, and have made a ve