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Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Thursday, July 9, 1998

Transcript of Panel Eleven


        17            MS. SMITH:  Thank you.  Any questions from the

        18   panel?  Thank you all very much for being here.

        19            MR. REID:  Good afternoon, my name is Jim Reid

        20   from Dallas, Texas and I'm the President and founder of

        21   the Southern Dallas Development Corporation, we're a

        22   community development financial institution that focuses

        23   on economic development.  And I'm delighted to be here

        24   today.  It's 102 degrees in Dallas and I'm glad to be in

        25   San Francisco, nice cool weather, besides the opportunity

        26   to talk to you all.

         1            In terms of our organization, our mission is to

         2   finance and develop small business, create jobs and

         3   promote investment in the southern part of Dallas.  Dallas

         4   is kind of a city that's divided in terms of its income.

         5   The northern sector of the city is very strong, the

         6   southern sector which includes about 45 percent of the

         7   population only has 60 percent of the median income of the

         8   northern sector.  There's a big difference.  Four to

         9   50,000 people live there.  Primarily 75 percent minority

        10   population.  It has 45 percent of the population and 13

        11   percent of the commercial tax base, so our focus is on

        12   southern Dallas.

        13            We're here today in support of the merger because

        14   we are excited by the commitment of $350 billion.  We're

        15   used to dealing with one bank, Bank of America being on

        16   the west coast, and the other bank, NationsBank being on

        17   the east coast.  In fact, Texas is blowing and going with

        18   bank's money from other parts of the country so you can

        19   deal with that and we can deal with that.

        20            And I think that you'll find, based on our

        21   experience, that these banks will deliver for you.

        22            What is our experience with these banks?  First,

        23   and in terms of the population we serve, the type of deals

        24   we do, we've done about 300 loans.  All of the loans are

        25   either non-bankable loans or partially bankables, so

        26   nobody could walk in the door of a bank and get the


         1   financing that we provide to them.

         2            About 70 percent of our clients are minority

         3   businesses.  We have managed to loan them over the past

         4   eight years $21 million and leveraged $36 million in

         5   participating with banks and create about 2,500 jobs in

         6   your community.  And when we started out, we were doing

         7   about 100 jobs a year, and in the last two years, we've

         8   help create 1,000 jobs as a 12 person community

         9   development financial institution.

        10            We do this through things like joint financing

        11   with the banks.  In the case of these two institutions, we

        12   financed 17 deals and ten with NationsBank, two in tandem

        13   with Bank of America totaling three and a half million

        14   dollars.  When we come in, we provide subordinate debt and

        15   that gives the bank a level of comfort in terms of coming

        16   in with their financing, leveraging resources to benefit

        17   our community.

        18            We've created, with the help of these banks, a

        19   multi-bank development corporation that's possible under

        20   your regulations and under the regulations of the OCC

        21   where a bank can take up to two percent of its capital

        22   assets and put it in a corporation that is allowed to

        23   behave differently than a bank.

        24            Our corporation that we've set up can do equity

        25   investments in businesses.  And in the minority community

        26   we serve, we find that equity is a very important portion


         1   of what has to be done.  Debts sometimes is zero, the

         2   equity in relationship to the debt is not always

         3   available, and in the multi-bank development corporation

         4   that we have established, Bank of America has an $800,000

         5   investment, NationsBank has a $600,000 investment, so

         6   that's equity we can bring to the table in tandem with

         7   bank deals.

         8            Both banks have helped us with corporate

         9   donations.  You'll say, "Well, what does that do?  Help

        10   you to have staff?"  It's true, these banks -- our

        11   corporate donations provide ten percent of our operating

        12   budget.  And in the process of lending things that we do,

        13   we spend more time on the front end with borrowers.  Once

        14   the money is lent, we're out there in terms of monitoring

        15   and technical assistance.  It's these donations that

        16   Nations been donating 10,000 a year for the last seven

        17   years and Bank of America 5,000.  They helped us publish a

        18   newspaper that talks about the benefits of our community.

        19   Nations is financing a $600,000 building that we will own

        20   where 150 jobs will be created and Bank of America helped

        21   underwrite our micro-loan program where they provide us an

        22   $80,000 grant and we generated 500,000 from micro-loans.

        23            So we support this merger and are delighted to

        24   have the opportunity to work in an expanded way with both

        25   partners.

        26            MS. ARMENTA:  Good afternoon.  My name is Loretta


         1   Armenta and I am the President/CEO for the Albuquerque

         2   Hispano Chamber of Commerce in Albuquerque, New Mexico,

         3   and I want to thank you for the opportunity to be able to

         4   express some of our thoughts here today.  I'm here

         5   representing the Albuquerque Hispano Chamber of Commerce

         6   who is in support of the merger of NationsBank and Bank of

         7   America.

         8            The Albuquerque Hispano Chamber of Commerce has

         9   enjoyed a strong partnership with NationsBank and its

        10   predecessors for over 25 years.  In addition, we've

        11   developed a successful partnership with Bank of America

        12   since they entered our market in 1990.  The Albuquerque

        13   Hispano Chamber is the oldest Hispanic Chamber of Commerce

        14   in the United States and the second largest of 250

        15   Hispanic Chambers of Commerce in the United States.

        16            As strong advocates, NationsBank and Bank of

        17   America continue to contribute significant resources for

        18   the education of our Hispanic youth and the education and

        19   development of programs for our Hispanic business owners

        20   in New Mexico.  We have some wonderful leadership in

        21   Albuquerque, part of that leadership is through Alex

        22   Romero, Executive Vice President, who we're very proud who

        23   has also worked very hard with us to open up those other

        24   doors of opportunity.

        25            In sitting here this morning and listening to

        26   much of the testimony, one can't help but think how


         1   sometimes not everything appears the same on both sides of

         2   the street.  And I heard some very interesting things this

         3   morning and it is apparent that one of the things that

         4   does need to happen is that, for instance, those other

         5   groups that spoke up on the State of New Mexico in areas

         6   that they think need much attention, the chamber hopes to

         7   be able to work with them and them work with us and us

         8   work with this new merger and acquisition to make sure

         9   that their needs are addressed.

        10            We do have some recommendations.  We would like

        11   to see the implementation and process to maintain and

        12   expand procurement contracts for our local small business

        13   vendors.  That is critical, that when a bank goes in in an

        14   acquisition this large, that those local vendors are not

        15   displaced with their contracts with those institutions.

        16            We supported the increase and to simplify the

        17   business loans for our small business minority owners for

        18   their start-up and the expansion of their business.  We

        19   often see this, we are bombarded weekly by those small

        20   business owners who still have tremendous needs.  And it's

        21   not necessarily with NationsBank, with Bank of America,

        22   it's with banking institutions.  Although, we will say

        23   that NationsBank and Bank of America have initiated some

        24   procurement programs with us to make sure that at least

        25   our business owners have an opportunity to access the

        26   information and to be able to get the loans that they


         1   need.

         2            We support the increase and making available of

         3   loans to minorities who have a right for decent housing.

         4   It is criminal today that that is still an issue and that

         5   is an issue all across the country.  CRA loans and

         6   investors -- CRA loans and investments are profitable and

         7   continue to meet the credit needs of our underserved

         8   communities.

         9            We believe that NationsBank and Bank of America

        10   will continue to generate resources that will support the

        11   education and the advancement of our Hispanic community in

        12   New Mexico.  And New Mexico, by the way, is a

        13   minority/majority state, with Hispanic and Native American

        14   being the largest population base in this state.  And I

        15   think you heard some of that this morning.  One of the

        16   statements that I will also support very strongly was the

        17   need for what has happened in the rural areas, because

        18   they are always definitely never paid any attention to.

        19            Through our partnership with NationsBank and Bank

        20   of America, we hope to be able to maximize the financial

        21   benefits for our community and for our state that will

        22   improve the quality of life for all.  Thank you.

        23            MR. JOHNSON:  Good afternoon, my name is Calvin

        24   Johnson, I'm the president and CEO of Do The Right Thing

        25   which we trade the Athlete's Foot which is a national

        26   franchise.  I'm here this evening in support of the bank


         1   merger.  I am a franchisee and entrepreneur and I'm just

         2   speaking on behalf of us out of Washington, D.C.

         3            About two years go, we were trying to open up a

         4   national franchise in the metropolitan area which is also

         5   an inner city of Washington, D.C. and we were told by

         6   several of the banks that there's no money going to be

         7   available to lend to us to open up this type of store in

         8   the inner city of Washington.

         9            We went to NationsBank about two years ago with

        10   their SBIC program, and they were willing and able to loan

        11   us money to open up this store and take the chance for us

        12   to open this store up in the community.  From that, we

        13   were able to also employ about ten young people within

        14   that community to bring some viable jobs and some economic

        15   wealth back into the community.

        16            Within five months later, we were able to open up

        17   a second store and employ another ten -- eight to ten

        18   people to work and be managers and learn entrepreneurship.

        19   So just in real brief, I wanted to come here and I thought

        20   it was very important for a franchisee and entrepreneur to

        21   express the interest that we're very interested and we do

        22   support the merger of Bank of America and NationsBank

        23   because we feel that, hopefully, they can duplicate the

        24   programs that we go through in the SBIC on the east coast

        25   also on the west coast.  So I would like to say thank you.

        26            MS. HUGHES-JONES:  Good afternoon, panel, my name


         1   is Deborah Jones, I'm here representing LEDK Management

         2   Group of Atlanta, Georgia.  LEDK provides many facets of

         3   property management services in the southeast.

         4   NationsBank is one of our clients.  I am in support of the

         5   merger.

         6            NationsBank operates one of the first bank owned

         7   community development corporations in the southeastern

         8   United States.  Since opening an Atlanta office in 1993,

         9   NationsBank has invested more than $75 million in the

        10   acquisition and redevelopment of affordable housing in

        11   Atlanta's urban communities.

        12            In 1993, NationsBank engaged LEDK to manage more

        13   than 4200 apartment units in Georgia.  NationsBank takes

        14   an active role in community revitalization.  In addition

        15   to providing safe, affordable housing, NationsBank is also

        16   very concerned about family needs.  The Make A Difference

        17   Center concept was created in 1993 in the hopes of

        18   providing meaningful services to residents of large

        19   multi-family rental properties developed by NationsBank's

        20   CDC.

        21            NationsBank provides start-up and operating funds

        22   for the centers as a way to provide a safe place for

        23   children to go after school and enhance the living

        24   environment of our residents.  The first Make A Difference

        25   Center opened in Atlanta in 1995.  Our eighth center in

        26   Atlanta opened Monday of this week.  Since '95, we have


         1   opened 16 centers.  We have centers in North Carolina,

         2   Texas, Tennesse, District of Columbia, and Maryland.

         3            With the acquisition of Bank of America, we can

         4   envision centers from coast to coast and many more

         5   families impacted with the merger, children will benefit

         6   the most.

         7            In just three years, we have grown from one

         8   center to 16.  NationsBank has made a commitment to open a

         9   total of 25 centers by the year 2000.  NationsBank had the

        10   unprecedented foresight to make a different center.

        11   Imagine the obligation now to share this successful

        12   quality product.  NationsBank has demonstrated its

        13   responsiveness to the needs of our resident families.  Its

        14   corporate philosophy has set NationsBank apart from its

        15   competitors.

        16            Our goals for the Make A Difference Center are

        17   very simple, to strengthen the parent-child relationship

        18   through interactive educational activities.  To provide a

        19   diverse range of learning opportunities for all residents,

        20   to empower our youth through academic assistance,

        21   educational programs and other resources, to provide a

        22   nurturing and safe environment where children can learn

        23   and grow, to further self-esteem, self-identity, respect

        24   and responsibility in youth.

        25            Some of the programs we offer are structured

        26   after school programs from 3:00 to 6:00 daily, homework


         1   assistance for tutoring our youth, computer skilled

         2   training for youth and also our adults, money management

         3   courses for our youth and our adults, neighborhood watch

         4   meetings, health fairs, fire safety classes, bike safety

         5   programs, senior adult meetings, stress management for

         6   youth as well as adults, urban gardening, just to make a

         7   few.  Each Make A Difference Center is equipped with a

         8   computer lab and we're connected to the internet, a

         9   library with age appropriate books, reference materials,

        10   literature and games, a tutorial room and a large

        11   multipurpose room.  We always focus at all our centers on

        12   reading because it's very important to us.

        13            Many communities have already been revitalized

        14   with investments from NationsBank.  Thousands of families

        15   have been impacted.  We can touch the lives of many more

        16   through the various programs delivered by the Make A

        17   Difference Centers.  We strongly support the acquisition

        18   of Bank of America by NationsBank.  NationsBank has very

        19   high standards.  We have seen a significant measure of

        20   success as a result of NationsBank's caring, commitment

        21   and diverse investments.  I am grateful for the

        22   opportunity to be associated with NationsBank in making a

        23   difference in our children's lives.  I thank you.

        24            MS. SMITH:  Thank you.

        25            MR. ANESI:  Good afternoon, my name is Greg

        26   Anesi, I'm the President of Independent Mobility Systems


         1   in Farmington, New Mexico.  We manufacture lowered floor

         2   mini vans for America's 3 million plus disabled people.

         3   We sell them all over the country.  We're in a little

         4   town, 40,000 people, predominantly Native American.

         5            When I started to sell these vans, the most

         6   common question that always came back to us was, "That's

         7   great, I want it, but how much are the payments?"  We

         8   could never offer that answer.  When the disabled people

         9   go -- when a disabled person goes into a bank, many times

        10   they find that the loan officer in the bank is frightened.

        11   They look at him and they say, "How can he drive?  How can

        12   she work?  What does she do?  More importantly, how are we

        13   going to be paid back?"  Then when they think about

        14   financing a $42,000 adapted van, they say, "What's the

        15   collateral value?  What's the residual value?  How are we

        16   going to make this loan?"  A lot of times, most of the

        17   time, the answer was, "We can't do that."  Or they would

        18   look at it and say, "Okay, it's a $42,000 loan, there's no

        19   value for the added conversion, the lowered floor or the

        20   lift," they'd say, "We'll lend you 90 percent of the value

        21   of the chassis and you put up 100 percent of the

        22   conversion."  That places a disabled person having to come

        23   up with 40 percent of the downpayment.  I don't know about

        24   you but I wouldn't own a car if I had to come up with 40

        25   percent of the downpayment, who would?

        26            It was an unnecessary burden on disabled people,


         1   it lessened their lives.  Because transportation, it's

         2   more than just getting from one place to another, it's

         3   freedom, it's independence, it's a job.  I looked for a

         4   bank to try and solve this problem for over five years.  I

         5   had gone to Boatmen's, I'd gone to local New Mexico banks,

         6   I had gone to other banks which I won't mention, both

         7   national, regional and local, and they didn't want to

         8   touch that.

         9            So when NationsBank acquired Boatmen's back in

        10   1997, I wasn't a customer of that bank, I thought big

        11   national bank coming in, the chances of them being

        12   receptive to a little branch in a town of 40,000 people

        13   was pretty small.  I've got to tell you, I was shocked.

        14            Within a month of me asking the bank president, a

        15   special CRA team came out from Dallas, they listened, they

        16   were interested, they wanted to help.  Two months later, a

        17   team from NationsBank Dealer Financial Services came out

        18   of Greensborough or Jacksonville or someplace and they

        19   came out and they listened.  Within nine months,

        20   NationsBank offered a national program for all 48 states

        21   that would lend up to 90 percent of the total value of an

        22   adapted van for ten years.  That was unheard of.

        23            That changed, in my opinion, the banking

        24   industry.  Because now pretty soon other banks, Union

        25   Bank, Barnett Bank before it was acquired, those banks

        26   started to be competitive with NationsBank.  They made a


         1   difference in disabled people's lives.  I wish I could

         2   point and say it was one Nations banker that had a vision

         3   and was a strong leader, but I can't, it was a collage of

         4   NationsBank people.  And they really made a difference in

         5   this community.  I would urge you to approve this merger.

         6   Thank you.

         7            MS. SMITH:  Thank you very much.  Any questions

         8   for this panel?  I think we're ready for a break.

         9                         (Short break.)
Last update: December 3, 2010