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Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Thursday, July 9, 1998

Transcript of Panel Sixteen


         3            MR. GORDON:   Thank you.  My name is Andrew 

         4   Gordon.  I'm president of Arizona Multibank Community 

         5   Development Corporation.  I appreciate the Federal 

         6   Reserve Bank of San Francisco making this public meeting 

         7   possible, and I want to take this opportunity to bring to 

         8   the Fed's attention and all other interested parties Bank 

         9   of America's tremendous leadership and support in 

        10   creating and supporting Arizona Multibank.  

        11            Arizona Multibank does not take exception to the 

        12   proposed merger and, as you will hear, we have benefited 

        13   over the years from B of A's strong commitment to 

        14   addressing credit needs in the community that are 

        15   legitimate but under-met by traditional banks.

        16            Bank of America's commitment to Arizona 

        17   Multibank's efforts in the enterprise of community 

        18   development finance is above and beyond its substantial 

        19   $3 million share of Arizona Multibank's total 

        20   capitalization of 10.2 million.  

        21            By way of background, Arizona Multibank is a 

        22   501C3 corporation and recently certified by the US 

        23   Department of Treasury as a community development 

        24   financial institution.  Arizona Multibank provides 

        25   financing, technical assistance to small businesses, 

        26   affordable housing, projects -- affordable housing 

         1   projects, nonprofit organizations, and economic 

         2   development initiatives.  

         3            Since our first loan in December '92, Arizona 

         4   Multibank has provided $11 million to 170 projects 

         5   throughout the state of Arizona.  Combined with senior 

         6   debt provided by banks and equity funded by borrowers, 

         7   these projects represent total costs of 49 million.

         8            For Arizona Multibank, loans range from $500 to 

         9   a half a million dollars and 70 percent of our small 

        10   business loans are to minority and women-owned 

        11   operations.  Over 60 percent of the small business loans 

        12   are $25,000 and less.  

        13            Arizona Multibank also makes larger loans to 

        14   nonprofit corporations, including those serving 

        15   affordable housing needs, youth, special education 

        16   programs, and American Indians.  We are very proud of our 

        17   accomplishment.  B of A through its guidance and 

        18   commitment has played a central role in our successes.  

        19            Current chairperson of Arizona Multibank's 

        20   15-person board is a director from the community and not 

        21   from an investing bank.  This is a first for us.  And not 

        22   only is it a huge statement about our investing bank's 

        23   confidence in Arizona Multibank, it is testament to the 

        24   effectiveness of the immediate preceding chairperson of 

        25   three years, B of A's Arizona president and regional 

        26   executive for the southwest region.  

         1            The board was led with exuberance and the 

         2   standard was set for balancing fiscal responsibility to 

         3   all the investing banks with the responsibility of 

         4   proactively responding to community credit needs.  

         5   Although B of A is one of the corporations largest 

         6   investors, its leadership really comes from its 

         7   intelligent, sensitive, and informed approach to guiding 

         8   and assisting Arizona Multibank.  This approach has 

         9   proven to provide the Arizona Multibank with the solid 

        10   foundation for serving the community for years to come.  

        11            It is the executive management officers and 

        12   staff of B of A that help Arizona Multibank build its 

        13   capacity to respond to important and legitimate credit 

        14   needs in the community that would not be financed as 

        15   undertaken by a traditional lender alone.  The 

        16   chairperson of Arizona Multibank's investment committee, 

        17   the senior vice president, and senior credit officer at B 

        18   of A has been instrumental over the past seven years in 

        19   creating an underwriting culture that integrates a 

        20   disciplined credit assessment process with decision 

        21   making flexibility.

        22            In addition to volunteering for leadership 

        23   positions on the board and investment committee, many 

        24   areas of expertise and corporate resources at B of A have 

        25   provided Arizona Multibank with important assistance, 

        26   including senior staff in the offices of corporate 

         1   communications, appraisals, special assets, and human 

         2   resources.  

         3            The qualitative contribution by B of A to 

         4   Arizona Multibank has and will continue to be 

         5   significant.  But B of A's more easily measured support 

         6   has also been very meaningful to our operations, from 

         7   providing office space, to computer and photocopy 

         8   support, to setting Arizona Multibank up as a separate 

         9   bank on their commercial loan system for our loan 

        10   collections and servicing.  B of A stands out as our 

        11   largest in kind contributor.  It's in the neighborhood of 

        12   $125,000 a year.  

        13            Overall, B of A has focused a lot of corporate 

        14   muscle on its investment in Arizona Multibank and, as a 

        15   result, many small businesses, low and moderate income 

        16   families, community and economic projects have received 

        17   financing that would not have been available otherwise.  

        18            Regarding NationsBank, although my direct 

        19   contact with them has been limited, I have had the 

        20   privilege over the past couple years to work with Shore 

        21   Bank Advisory Services, which was commissioned by 

        22   NationsBank to draft guidelines for establishing 

        23   Multibank Community Development Corporations.  We are 

        24   pleased to be highlighted in that study which identifies 

        25   eight core characteristics of successful Multibank

        26   CDC's.  This is the report (indicating).  

         1            It is my understanding that NationsBank's 

         2   strategy is to invest in organizations that deliver 

         3   results and create a climate for sustained investments.

         4   Arizona Multibank is one of those organizations.  And I 

         5   anticipate a strong and serious working relationship with 

         6   Bank of America and NationsBank now and as a merged 

         7   corporation.  Together we can continue to provide 

         8   financing projects that are responsive and dynamic, as 

         9   dynamic as the every changing needs and vibrant dreams in 

        10   our community.  Thank you.  

        11            MS. SMITH:    Thank you.  Mr. Sweet.  

        12            MS. KEENER:   Ken Sweet wasn't able to be here.  

        13   I'm Margaret Keener.  I missed getting the little tag.  

        14   Ken is in the Bull Head City where it's 115, so I got the 

        15   treat to come.  

        16            Northern Arizona Council of Governments is a 

        17   voluntary association of local and county governments in 

        18   Northern Arizona.  There are 25 governments, four of 

        19   which are counties.  The other are small cities and towns 

        20   ranging from 540 persons to 52,000 people.  The average

        21   is about 2,500 persons to 5,000 persons.  We're a 

        22   nonprofit and our board of directors is made up of the 

        23   elected officials of those cities, towns, and counties.

        24            Since our inception in 1965, we have initiated 

        25   and developed a variety of programs with human services, 

        26   education, planning, community development, housing, 

         1   economic development, and small business development.  

         2            Our four counties are very rural and they're 

         3   economically distressed by federal definition.  Our 

         4   service area covers about 48,000 square miles and it's 

         5   mostly off reservation, but we do provide some programs 

         6   on Navajo Nation, Hobie, and White Mountain Apache.  

         7            Our service area has not benefited from the 

         8   booms that have occurred in Southern Arizona and Phoenix 

         9   and Tucson.  Our county unemployment rate still range 

        10   from 8.4 percent to 19 percent.  Our poverty rates are 

        11   generally twice the state's rate of 20 percent.  Our 

        12   average 1990 family income in the region was 29,490 per

        13   year compared to 40,110 for the state average.  The 

        14   average income of our client families was about $10,070. 

        15            Bank of America has been a very important 

        16   partner in our economic and housing development efforts.  

        17   They've generously given of their time and money, whether 

        18   it's been the branch manager assisting with setting up 

        19   interim revolving loan program for small business 

        20   development, serving on a small business loan committee, 

        21   or the community development division giving us funds to 

        22   initiate a first-time home buyers program so that we can 

        23   get some of our lower income clients into housing.  

        24            They are also very quick to respond to requests 

        25   to begin an innovative program where we're taking out 

        26   crummy mobile homes and replacing them with new modular 

         1   housing.  They developed a special consumer loan package 

         2   with reduced rate and underwriting criteria so that we 

         3   could do loans with rural development.  

         4            Their special willingness to try different 

         5   approaches and to create new solutions to old problems 

         6   needs to survive the merger.  The new bank must continue 

         7   the vision that Bank of America and it's Rural 2000 

         8   initiative has brought to Northern Arizona.

         9            We realize that 350 billion has been pledged for 

        10   the continuing support of the community development 

        11   lending and investment and that this is a large and 

        12   comprehensive effort launched by a bank.  However, our 

        13   concern does center around the resulting delivery system 

        14   and how it will function for our rural distressed 

        15   communities of Northern Arizona.  

        16            We feel that our solutions in these small 

        17   communities are often beyond the capacity of a national 

        18   cookie-cutter approach.  Our small rural community and 

        19   customers need continued attention and creative 

        20   approaches that meet local conditions.

        21            Our experience has been that Bank of America has 

        22   stepped up and joined us in efforts to work with the 

        23   communities.  We like the Bank of America's community 

        24   development division's past approach in our region.  

        25   They've listened to our needs and respect our ideas.  

        26   Bank of America has truly been a good partner with us and 

         1   a good corporate citizen in our communities.  The spirit 

         2   and methodology of the Rural 2000 initiative must be 

         3   preserved.  Thank you.  

         4            MS. SMITH:    Thank you.  Ms. Rogers.  

         5            MS. ROGERS:   Good evening.  I'm Sheila Rogers 

         6   from West Company, which is an economic development 

         7   corporation.  I've traveled today from Mendocino County, 

         8   which is located about 100 miles north of San Francisco.  

         9   It's a rural California county with a population of 

        10   86,000 and a traditionally high unemployment and poverty 

        11   rate.  

        12            Ten years ago, the organization which I direct 

        13   was founded to address economic self-sufficiency among 

        14   low-income people.  The West Company promotes 

        15   micro-enterprise as a strategy to increase economic 

        16   self-sufficiency for people with limited access to 

        17   economic resources.  

        18            One of the first community partners to join this 

        19   endeavor was Bank of America.  Originally the foundation 

        20   capitalized the micro-loan fund with $10,000.  Two years 

        21   later, in 1993, the foundation provided a 99,000-dollar 

        22   grant.  Sixty thousand went into the micro-loan fund and

        23   39,000 went for technical assistance.  Subsequently, the 

        24   bank came back with another $25,000 to keep us going.  

        25            During the same era, the local commercial Bank 

        26   of America branches provided human capital to West 

         1   Company, board of directors, and micro-loan fund 

         2   committee.  As well, Bank of America paid the salary and 

         3   placed a former Bank of America employee at West Company 

         4   for a period of six months to help us develop our loan

         5   program.  We were also able to obtain no-cost loans -- 

         6   excuse me, accounts for low-income customers.  

         7            The impact of Bank of America's investments on 

         8   one rural California county has been immense.  Among the 

         9   outcomes from those investments, Bank of America helped 

        10   to build the capacity of a community-based organization 

        11   to bring low-income entrepreneurs into the mainstream.  

        12   It enabled us to make $198,000 in micro-loans to 61 

        13   non-bankable customers.  That assisted with the startup 

        14   of 40 businesses and the expansion of 39 businesses.  All 

        15   in all, 83 jobs were created.  

        16            I am here today to commend these contributions 

        17   and the commitment that they demonstrate to rural 

        18   California communities and to micro-enterprise as an 

        19   economic engine.  I am here today to ask for renewed 

        20   commitment to the Rural 2000 initiative as developed 

        21   during the last year by Bank of America and its community 

        22   partners.

        23            I am here today to ask that the Bank of America 

        24   Foundation and the Bank of America Community Development 

        25   Bank, as they currently exist, be retained in 

        26   California.  Thank you very much for this opportunity to 

         1   testify.  

         2            MS. SMITH:    Thank you.  Mr. Vigil.  

         3            MR. VIGIL:   My name is Thomas Vigil from 

         4   Northern New Mexico.  I'm a member of the Jicarilla 

         5   Apache Tribe in Northern Mexico.  And there I operate 

         6   several businesses, one resort hotel and a guest ranch 

         7   for high-income guests and 32,000 acres, which I invite 

         8   you to come and you enjoy yourself.  Fish are this big 

         9   (indicating).  I know the time is limited.  

        10            Today I'm here as -- I come before you as 

        11   chairman of the board for First Nations Development 

        12   Institute, which is headquartered in Virginia.  As an 

        13   organization, First Nations Development Institute has 

        14   been assisting the culturally directed economic 

        15   developments of Native American tribes and organizations 

        16   for almost 20 years.  During this time, banks have been a 

        17   study focus of our efforts to bring about economic 

        18   relationships in the remote rural communities that 

        19   characterize Indian country.

        20            While First Nations does not specifically focus 

        21   on metropolitan native population, we know that they, 

        22   too, have often lacked access to credit.  For most native 

        23   individuals in any location, banking relationships have 

        24   not existed in the past.

        25            As a function of our normal effort to keep 

        26   Indian communities informed of their rights under the 

         1   Community Reinvestment Act and since the announcement of 

         2   the NationsBank/Bank of America merger, First Nations has 

         3   conducted a survey of banking needs in Indian 

         4   communities, the findings of which we have attached to 

         5   the document that we've provided to your staff.  

         6            Our survey of 177 tribal and nonprofit 

         7   organization in 22 states affected by the proposed merger 

         8   reveals a willfully inadequate collective encounter with 

         9   mainstream financial channels.  The vast majority of 

        10   tribes in native organization had not had any experience 

        11   with either NationsBank or Bank of America, nor did they 

        12   know of any NationsBank or Bank of America activities in 

        13   native communities.  

        14            The prevailing view among tribes and native 

        15   organizational representatives that big banks in 

        16   particular don't do business in Indian country.  And 

        17   notwithstanding the accelerated banking activity in the 

        18   past five years, only 91 percent -- only 91 home 

        19   mortgages have been closed on tribal land during the 

        20   past -- during this, the same period, ninety-one homes in 

        21   the market with an estimated need of 200,000.

        22            Despite the shortcomings revealed in our survey, 

        23   we remain optimistic that a critical mass problem 

        24   solvers, responsible borrowers, and business interest 

        25   will eventually bring full-fledged banking and financial 

        26   services to Indian communities.  We're pleased that 

         1   NationsBank/Bank of America has agreed to be a part of 

         2   this progress following the proposed merger.  

         3            Not only have they included a specific mention 

         4   of Indian country in their pledge of $10 billion in 

         5   lending and investment for community and economic 

         6   development in rural areas over the next ten years, but 

         7   in a meeting of June 16 with First Nations, other Native 

         8   American groups, they also agreed to work with First 

         9   Nations and the task force on an analysis of loan 

        10   products and financial services that would inform a 

        11   Native American specific lending goal.

        12            The stated commitment of the two banks will 

        13   greatly mitigate our original concerns regarding 

        14   competitive factors and the convenience and needs of 

        15   Indian communities under the merged entity.  Our concerns 

        16   were based on NationsBank lack of experience with Native 

        17   Americans due to the small number of reservations, native 

        18   urban population centers in the south and southeastern 

        19   states.  

        20            But NationsBank has provided assurances that the 

        21   merged bank would take positive approach in providing 

        22   banking and financial services to any community in the 

        23   newly acquired service areas.  And, for that reason, I 

        24   have other -- we support the merger.  

        25            In conclusion, I'd just like to say that we have 

        26   reached this decision based on considerable thought and 

         1   serious thought because, as you know, we have probably, 

         2   as a group, been promised more than any other group.  As 

         3   you remember, as long as the wind shall blow, the rivers 

         4   shall flow, and we're going to hold NationsBank and, if 

         5   this merger is approved, and Bank of America to their 

         6   promises, and hope that you will, too.  

         7            I'd just like to say that we appear here today 

         8   bearing letters of support from 29 tribes and nonprofit 

         9   organizations within service areas that would be affected 

        10   by the proposed merger and in cooperation of the 

        11   400-member National Indian Housing Council, the 

        12   200-member plus National Congress of American Indians, 

        13   and the American Rights Funds, and the Council of Energy 

        14   Resource Tribes.  Thank you.  

        15            MS. SMITH:    Thank you.  Mr. Beane.

        16            MR. BEANE:   Yes, my name is Sid Beane, and I'm 

        17   here today representing United Indian Nations Community 

        18   Development Corporation, which is the first American 

        19   Indian community development corporation established here 

        20   in the Bay Area.  I would also support much of which the 

        21   previous speaker said in that I'm also a Native 

        22   American.  I'm a Dakota, originally from South Dakota but 

        23   living here in the Bay Area for a number of years.  

        24            As we all know, Native Americans are among the 

        25   most invisible population and least understood in terms 

        26   of particularly financing since much of our land is 

         1   federal land in trust and difficult to approach in terms 

         2   of financing vehicles.  And that's why it's important 

         3   that we be understood by banks and special consideration 

         4   be given for special financing packages that also involve 

         5   Native Americans within the banks and within the 

         6   programming strategies for any banking services that 

         7   might be delivered.

         8            As a representative of an off-reservation 

         9   organization, I think it's important to keep in mind that 

        10   we are probably the most invisible of the Native American 

        11   population, because when you think of Native Americans, 

        12   you automatically think of Indians on the reservations.  

        13   Yet a majority of Indian people live and have been 

        14   relocated to the off-reservation areas.

        15            Our involvement in affordable housing and 

        16   community economic development has been rather new and so 

        17   our groups have not been well-represented within the 

        18   community development circles, nor within the financing 

        19   institutional strategies of any of the financial 

        20   institutions.  

        21            Our experience recently with the development of 

        22   the CDC and with Bank of America I would say has been 

        23   positive in that we have not had any difficulty in 

        24   approaching the bank and receiving assistance in planning 

        25   and with some planning dollars and further assistance in 

        26   looking at our affordable housing and community economic 

         1   development strategies.  

         2            We are concerned that as we've been developing a 

         3   relationship with this bank that the merger sustain the 

         4   Community Development Bank and the Community Foundation 

         5   that have been very forthcoming in outreach and looking 

         6   at strategies that might affect this most invisible 

         7   population.

         8            You may not be aware that our unemployment rates 

         9   are as high, if not higher, than any groups.  Our 

        10   drop-out rates are generally higher than any groups.  Our 

        11   poverty rates are as high, if not higher, than any 

        12   groups.  So we are probably amongst the least served and 

        13   the least understood.

        14            So the off-reservation population that I 

        15   represent is clearly one that needs to be looked at in 

        16   any merger and served and with a specific strategy that 

        17   includes within any particular initiative for surveying 

        18   rural, as well as Indian country, that the urban 

        19   community be clearly served.

        20            And I just want to say that, in summary, that we 

        21   are not taking opposition to any merger.  Thank you.  

        22            MS. SMITH:    Thank you.  Mr. King.  

        23            MR. KING:   Thank you.  My name is Johnny King.  

        24   I'm president and chief operating officer of the King 

        25   Group of Dallas, Texas.

        26            The King Group is one of the largest 

         1   African-American female-owned marketing firms in the 

         2   southwest and specializes in advertising, sales 

         3   promotions, and community relations that target the 

         4   African-American segment of the population.

         5            The King Group has worked with Bank of America 

         6   since its first year of operation as a retail bank in the 

         7   state of Texas.  Our primary function with the bank has 

         8   been to work with the bank in all of the above areas in 

         9   African-American communities across the state of Texas.

        10             I would like to address three areas.  First I 

        11   would like to address some of the unique banking needs of 

        12   African-Americans that our research and experience have 

        13   pointed out to us, along with some of the historical 

        14   basis for those needs.

        15            Next I would like to present some of the 

        16   programs and activities that Bank of America, with the 

        17   assistance of the King Group, has implemented to address 

        18   these needs in the African-American segment over the past 

        19   six years.

        20            And finally I would -- I believe that I would 

        21   like to address some of the concerns that must be, and I 

        22   think will be, addressed with the combined NationsBank 

        23   and Bank of America entity.  

        24            The King Group conducted extensive research on 

        25   banking as it relates to African-Americans on behalf of 

        26   Bank of America.  This research was conducted by 

         1   Dr. Delva King, our CEO, who is also recognized as one of 

         2   the top ethnic researchers in the country.  Our research 

         3   revealed some unique banking needs of African-Americans 

         4   and, more importantly, identified the historical basis 

         5   that contributed to those special needs.  

         6            In general, the belief is that banks are not 

         7   sensitive to the needs of African-Americans and the 

         8   barriers that African-American have historically faced in 

         9   attempting to do business with banks.

        10            The historical basis for this includes limited 

        11   success in accessing bank products and services, the fact 

        12   that few banks were located in African-American 

        13   communities, and a perception that banks did not value or 

        14   want to do business with African-Americans.  The term 

        15   "redlining" is what appeared in our research over and 

        16   over again.

        17            Finally, our research revealed that 

        18   African-Americans felt that banks have ignored our 

        19   history and some of the reasons that we have difficulty  

        20   in meeting the general criteria of banks.  

        21            Based on this research -- and I might add was 

        22   quite extensive -- we, together with Bank of America, 

        23   developed a comprehensive five-year plan that we used to 

        24   build market share for Bank of America and increase 

        25   accessibility to African-Americans and ensuring Bank of 

        26   America had the products, programs, and services to do 

         1   business with African-Americans.  

         2            First of all, and perhaps our greatest 

         3   challenge, was to deal with the image that has 

         4   historically -- African-Americans have historically had 

         5   about banks.  To this end, we created several programs,  

         6   the marquis one of which was the Black History 

         7   Chronicles.  The Chronicles was not only programmed to 

         8   celebrate the lifetime achievement of African-Americans 

         9   in local communities; it was our belief that by creating 

        10   such a program based on the rich heritage of 

        11   African-Americans that Bank of America could best and 

        12   rightfully so learn about this heritage and, at the same 

        13   time, assure African-Americans that we're concerned and 

        14   knowledgeable about the history of African-Americans.

        15            Today this program is the highest, most visible 

        16   program, and most intrusive program in the 

        17   African-American community in the state of Texas.  It has 

        18   been lauded by black clergy, elected officials, community 

        19   leaders, and others of all races and nationalities 

        20   throughout the state.

        21            The Chronicle program is an example of how we 

        22   used our research and knowledge of the segment to create 

        23   business for the bank and, at the same time, give back to 

        24   the community while attempting to overcome some of the 

        25   historical perceptions that banks have in the eyes of 

        26   African-Americans.  

         1            As for the accessibility, while we were working 

         2   on the perception problems with banks, Bank of America 

         3   was simultaneously planning two DeNovo's, one in Dallas 

         4   and one in Houston.  Three-fourths of the 

         5   African-American population in the state of Texas reside 

         6   in these two markets.

         7            We work with Bank of America on site selection, 

         8   grand openings, patronage programs, and others to make 

         9   sure that the state-of-the-art banks were successful in 

        10   the heart of the African-American community.

        11            With the share-building, branding, and access 

        12   initiative underway, Bank of America was creating the 

        13   products that we believed were appropriate to address 

        14   some of the needs in the African-American marketplace.  

        15   Products such as the ABC loan which was designed to 

        16   assist small businesses and with a line of credit product 

        17   that addressed the number one needs that we identified in 

        18   our research of our African-American businesses and that 

        19   was cash flow.

        20            The product simplified the loan process and 

        21   provided quick turnaround time and service.  The King 

        22   Group created advertising programs for these products but 

        23   at the same time created outreach programs such as the 

        24   Minority Opportunities Success Program, or M.O.S.T. as we 

        25   affectionately call it, to assist small businesses in 

        26   accessing these new products.  

         1            The M.O.S.T. Program is a training program that 

         2   assists African-American businesses in how to apply for 

         3   loans such as ABC, SBA, and other traditional banking 

         4   products.  The Neighborhood Advantage product at the same 

         5   time was rolling out and was designed to have a similar 

         6   impact in mortgages.  We took this product, which targets 

         7   LMI census tracts, and created a neighborhood advantage 

         8   club.  The club provided training and benefits beyond 

         9   what the products's initial intent was, again, another 

        10   part of our intent.  Thank you.  

        11            MS. SMITH:   Thank you very much.

        12            MR. KING:   We fully support the merger by the 

        13   way.  

        14            MS. BARRERA:   Thank you.  Good evening.  My 

        15   name is Janie Barrera, and I'm president and CEO of 

        16   Lexion Texas based in San Antonio.  We are a nonprofit 

        17   micro-lending organization that lends money to small 

        18   businesses who cannot access loans from banks.  

        19            We have disbursed since June of 1994 over 800 

        20   loans, which equals about close to $3 million to about 

        21   400 businesses, and we have lost $22,000.  That's less 

        22   than one percent of the portfolio, which means that doing 

        23   loans to small businesses really does work.  

        24            The commitment has been there from both Bank of 

        25   America and NationsBank from the very beginning.  We are 

        26   taking this model, then, and replicating it to the entire 

         1   state of -- well, the major cities in Texas.

         2            We opened up an office in the Rio Grand Valley, 

         3   which is one of the poorest sections in the United 

         4   States, in March of this year.  We will be opening a 

         5   second office in the area of McAllen, Texas.  We'll be 

         6   opening a second office in the Rio Grand Valley in 

         7   Harlingen, Texas in about four weeks, which will be 

         8   housed inside a NationsBank building.  Then we will be 

         9   also offering the same products and services in Houston 

        10   in August and, by the first quarter of next year, be in 

        11   Austin and Dallas, Texas, where we will also be officing 

        12   in a NationsBank property.

        13            What we are saying here is that the partnership, 

        14   not only from NationsBank and Bank of America but from 

        15   all banks, has allowed us to become the intermediary.  

        16   They lend us the money or they provide us the investment, 

        17   which NationsBank has committed 1.1 million for the 

        18   entire state network to be able to provide the working 

        19   capital to the small businesses.  

        20            Now, these small businesses are cab drivers, 

        21   beauticians, plumbers, painters, people that have 

        22   absolutely no way of providing or getting this, this 

        23   capital.  They're the -- the competitors are pawn shops 

        24   and they are money lenders who they go out and take maybe 

        25   25 to 35 percent in interest for these loans.  And these 

        26   loans are averaging -- our average loan size is $3,000.  

         1   We send from $25,000 -- from anything from $500 to 

         2   $25,000.  

         3            And, as we stated, too -- as I stated, also, the 

         4   repayment rate is definitely there.  Our stats show, too, 

         5   that after two loans from -- to our customers, their 

         6   take-home income increases by 38 percent, which is 

         7   substantial when you think about that 90 percent of our 

         8   customer base is in low and moderate income families, 

         9   neighborhoods.  It's also substantial when you think 

        10   about that close to about 43 percent are women and 81 

        11   percent are minority-based.

        12            So we are truly serving the populations that the 

        13   banks cannot or will not, and I encourage the 

        14   continuation of the community reinvestment act to pursue 

        15   this and also that the merger of these two major 

        16   institutions will also continue their commitment to 

        17   serving this population.  Thank you very much.  

        18            MS. SMITH:    Thank you very much.  We'll start 

        19   with Ms. Kitchen.  
Last update: December 3, 2010