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Public Meeting Transcripts
Public Meeting Regarding NationsBank and BankAmerica
Friday, July 10, 1998
Transcript of Panel Twenty-Three
508 18 MS. SMITH: We'll first have David Noguera 19 speaking for Mayor Elihu Harris, Mayor of Oakland. 20 MR. NOGUERA: Thank you. On behalf of the Mayor 21 of Oakland. As the mayor of a city where the vast 22 majority of the population consists of families of color 23 and is in the shadow of the largest financial institution 24 in California, I would like to express some of my concerns 25 regarding the merger with an institution that will become 26 an absentee landlord for all of Oakland. . 509 1 Community reinvestment and economic redevelopment 2 must be more than a national pledge. To be meaningful, 3 there must be specifics for each affected community, 4 particularly communities that have historically been 5 underserved or redlined such as Oakland. 6 In California today, many financial institutions 7 have made specific pledges and set specific goals for 8 minorities and women for lending, for contracts and for 9 charitable contributions. I am concerned that NationsBank 10 is unwilling to do so. 11 Historically, our city and minority communities, 12 in particular, have been the object of general promises 13 that have failed to produce results. I'm also concerned 14 that the prestigious local community groups as well as 15 national minority organizations that know the work of 16 NationsBank, such as the National Black Chamber of 17 Commerce, the National Black Business Council and the 18 Asian Business Association and the Latin Business 19 Association, have all criticized this proposed measure due 20 to lack of specificity for underserved communities. I am 21 also concerned that, while other institutions have 22 committed to diversity goals that reflect our state's 23 extraordinary diversity, NationsBank has stated that it 24 will not set any goals or release any data on their 25 achievements. 26 Until the chairman of BofA and NationsBank put in . 510 1 writing the type of specifics that their competitors have 2 produced regarding minorities and underserved communities, 3 I believe that it would be best to either deny the merger 4 or, in the alternative, impose such a condition of 5 approval of the merger. Thank you. 6 MS. SMITH: Thank you very much. Mr. Mosher. 7 MR. MOSHER: Thank you. Good morning, my name is 8 Mark Mosher, I'm Executive Director of the Committee on 9 Jobs, a coalition of 33 of San Francisco's largest private 10 sector employers. 11 Our organization focuses on public policy issues 12 affecting the city's economic vitality and quality of 13 life. During its eight-year history, Jobs has organized 14 corporate community involvement in a few key areas, 15 including major youth hiring and welfare-to-work 16 initiatives. It is in this context that I would like to 17 address the proposed merger and what we believe to be Bank 18 of America's post-merger commitment to San Francisco. 19 In every initiative Committee on Jobs has 20 undertaken, whether it is our effort to replace cuts in 21 the federal Summer Youth Employment Training Program or 22 the organization of hundreds of business volunteers 23 through Christmas in April, Bank of America has taken a 24 leadership role. The bank has demonstrated to us that 25 this leadership role will not decline in the wake of a 26 merger. . 511 1 When the local business community came together 2 to address the challenge of welfare-to-work, Bank of 3 America led the way. Last year, the bank contributed 4 $250,000 to found San Francisco Works, an effort to help 5 transition 2,000 public assistance recipients into 6 self-sufficiency over the next three years. Bank of 7 America's involvement in this effort transcends checkbook 8 philanthropy. Bank Chairman Dave Coulter has personally 9 involved himself in the organization, participating in 10 board meetings, loaning his staff to counsel San Francisco 11 Works in current training methods and committing 12 employment opportunities to program graduates. The bank 13 has communicated to us that its commitment in each of 14 these areas will not decline after the merger. 15 I value Bank of America's role in San Francisco, 16 and I was surprised and disappointed when I heard the 17 headquarters would be moved to Charlotte. The move is 18 definitely a blow to the city's prestige. However, in 19 practical terms, David Coulter and half of the merged 20 bank's executive management team will remain in 21 San Francisco, several key operations will remain 22 headquartered in San Francisco, and the deep spirit of 23 community involvement and fostered by the bank's current 24 leadership will continue. 25 We urge approval of the merger. Thank you. 26 MS. SMITH: Ms. Duncan. . 512 1 MS. DUNCAN: Yes, I am Emily Duncan, the 2 Executive Director of the Snohomish County Private 3 Industry Council. Snohomish County is located in 4 Washington State and it is just north of King County where 5 Seattle is. 6 We are a private industry council and we are the 7 managing partner for the Job Training Partnership Act 8 which we administer in Snohomish County. This law is 9 enacted to provide training funds for low-income youth and 10 adults and dislocated workers, but it's not the Job 11 Training Partnership Act that I want to talk about today, 12 it's Down Home Washington. Because that's the other half 13 of us. 14 Down Home Washington started ten and a half years 15 ago as what has now come to be known as Microenterprise 16 Program. In those days, we didn't know the name. What we 17 wanted to do was provide entrepreneurial training for 18 low-income women, half of whom were welfare recipients. 19 And we did do this. What is remarkable about this 20 particular experiment is that, although we had the 21 operating funds through our own Job Training Partnership 22 Act moneys, we didn't have a loan fund. And in those 23 days, no one, to speak of, had heard of Microenterprise 24 and I don't even know if the word had been invented yet. 25 But Sea-First, which is Bank of America in 26 Washington State, stepped up to the plate and they . 513 1 provided the first dollars for that initial loan fund. It 2 wasn't a lot of money but it was incredibly important 3 because they were out front and in the leadership position 4 and it ended up leveraging many, many times, more than 15 5 times the amount of money that they contributed. So they 6 have been very responsive. And they are concerned about 7 the -- their position in the community and they try to 8 fill the gaps where those exist and where they understand 9 them. 10 One of the most incredible things about this 11 first program is that (unintelligible) came to all three 12 of the graduations over a three year period. She didn't 13 have to do that but I know that she enjoyed it as much as 14 I did. 15 We are very proud to be one of the grantees of 16 Sea-First/Bank of America in Washington State. Sea-First 17 also recognized the need for funding in rural areas and, 18 in fact, Bank of America now has a major rural area 19 initiative. 20 We support this merger. We do believe in the 21 commitment of the $350 billion over the period of time. 22 We do believe that greater resources will be made 23 available through it. We also know that NationsBank is 24 very supportive of the kinds of things that 25 Microenterprise is involved in. And without the support 26 of organizations like Sea-First, we would not be in the . 514 1 position we are today where we have about $4 million 2 available in loan funds that cover 16 counties in the 3 State of Washington. From an initial operating budget of 4 $29,000, we now have an operating budget of $375,000, and 5 that growth has been fueled by support from Sea-First/Bank 6 of America. 7 We do have a concern and that concern is in 8 Washington State, there are no banks headquartered in 9 Washington State of any size any longer. And our concern 10 is that we will be almost invisible, and so along with 11 other groups from the Rural 2,000 Committee, we support a 12 fair allocation of resources by region and also by rural 13 and urban and other designations. Thank you very much. 14 MS. SMITH: Thank you. Ms. Singla. 15 MS. SINGLA: Good morning, and thank you for the 16 opportunity to testify regarding the proposed merger 17 between NationsBank and Bank of America. My name is 18 Indira Singla and I'm the President and CEO of Automation 19 M.H, Incorporated of Dallas, Texas. 20 We are a small woman-owned computer systems 21 integration company based in Dallas. I was also a 22 delegate from North Texas to the White House conference on 23 small business in 1995. As a small business owner, I take 24 deep interest in the affairs that affect all small 25 businesses, including minority and women-owned businesses. 26 Our relationship with NationsBank is a three-fold . 515 1 relationship. First, as a business client, our banking 2 relationship with NationsBank goes back to over ten years. 3 This relationship is based on the commitment that 4 NationsBank has for small business development. I have 5 found them very sensitive to the needs of small business 6 community. NationsBank has supported us in times of need 7 through loans, lines of credit, and other services 8 numerous times. Over the years, we have come to depend 9 upon NationsBank and their employees for exceptional 10 quality service and commitment to assist small businesses. 11 The second relationship we have with NationsBank 12 is a vendor relationship. NationsBank has been our 13 customer for over three years. During this period, we 14 have supplied them with mid-range units, hardware, 15 software, integration consulting and network services. We 16 have worked with their Asset Management Interest 17 Department, Capital Markets Department and the Strategic 18 Technologies Group. Most recently, we provided service 19 for their E-mail capabilities between NationsBank and Bank 20 of America. 21 Over the years, NationsBank -- as a small 22 business owner knows, that all of this will not be 23 possible if NationsBank did not have a commitment to give 24 an opportunity to small business like ours to participate 25 in such opportunities. They have demonstrated this 26 commitment by participating in many, many small business . 516 1 development activities in Dallas. 2 Thirdly, as NationsBank, as it applies to the 3 community relationship, as a citizen of Dallas, I have 4 observed NationsBank to play a leading role being the 5 community investment expert in the financial services 6 industry through the delivery of special programs for low- 7 and moderate-income individuals and communities. 8 NationsBank is an active participate in the South Dallas 9 Economic Development Program. I see this merger bringing 10 more opportunities to thousands of small businesses across 11 the nation just like Automation Image. So I support this 12 merger. Thank you. 13 MS. SMITH: Thank you very much for your 14 testimony. Next, we have Mr. Esquibel. 15 MR. ESQUIBEL: Good morning. My name is Eduardo 16 Esquibel, I am the Executive Director of United Housing 17 and Educational Development Corporation. United Housing 18 is a nonprofit 501C3 organization formed in 1990 in the 19 State of Arizona that provides affordable housing in the 20 rural areas of Pima and Pinal Counties. United Housing is 21 currently under contract with the United States Department 22 of Agriculture, Rural Housing Services, to operate and 23 provide technical assistance under the 523 self-help 24 program. This program targets families in need of safe, 25 decent and affordable homes. Families qualify for a 26 housing loan from Rural Development called a 502 direct . 517 1 loan program based on their income and need. The families 2 income cannot exceed 80 percent of the area's median 3 income. Subsidy is awarded to families based on family 4 size and income. 5 These families are considered low and very low 6 based on income standards. United Housing is pleased to 7 be a partner with Bank of America's Community Development 8 Bank. Bank of America has already established an 9 effective partnership which has enabled local self-help 10 housing organizations like ours to expand the opportunity 11 for self-help families to achieve homeownership. 12 Bank of America in 1997 established its Rural 13 2,000 Initiative which is addressing rural concerns of 14 reaching out to markets that either no service is 15 available and/or is underserved. Bank of America's Rural 16 2,000 Initiative will make available funds to provide 17 mortgage loans by partnering with the Department of 18 Agriculture as well as with Fannie Mae to start the 502 19 direct blended loan program which is being piloted through 20 the Rural 2,000 Initiative. The 502 direct loan program 21 current funding level is $1 billion this fiscal year. The 22 rural initiative is assisting nonprofit organizations with 23 lines of credit for construction loans and infrastructure 24 loans that will provide critical resources to facilitate 25 development of building sites for low-income families who 26 are willing to commit the time and energy to build their . 518 1 homes for themselves and their neighborhoods. 2 United Housing has demonstrated success in the 3 development of self-help housing. In fact, since 1990, 4 United Housing has assisted 102 families in the successful 5 construction of their homes through the mutual self-help 6 program. The State of Arizona is currently ranked No. 2 7 in the United States for providing self-help homeownership 8 under the Department of Agriculture's national self-help 9 program. United Housing was nationally recognized in 1996 10 by the Fannie Mae Foundation as a recipient of the Maxwell 11 Award of Excellence for the production of low-income 12 housing. At the same time there are many families who are 13 waiting for the opportunity to join with their neighbors 14 to build better homes for themselves and their children. 15 One of the continuing obstacles we face is the difficulty 16 of acquiring affordable building sites. Bank of America 17 funds through the Community Development Bank has assisted 18 United Housing in the development of suitable building 19 sites. 20 The opportunity of this merger can provide 21 greater resources to nonprofits like ourselves in 22 partnering with the federal resource dollars that have 23 been available in the past to operate programs such as the 24 self-help program. The Bank of America/NationsBank $350 25 billion commitment to provide funding resources, as I have 26 discussed earlier, will have an impact on rural area . 519 1 markets that have been underserved and misunderstood for 2 years. 3 Bank of America has a proven track record in 4 effectively managing the Community Development Bank by 5 providing funds which has created homeownership 6 opportunities for hard working low-income families within 7 our service area and throughout rural America. United 8 Housing supports the merger between Bank of America and 9 NationsBank. 10 Thank you for the opportunity to speak on behalf 11 of the families that we served and United Housing. Thank 12 you. 13 MS. SMITH: Thank you very much. Mr. Price 14 MR. PRICE: Thank you very much. Good morning. 15 My name is Al Price, I'm from Beaumont, Texas, I'm a 16 retired captain for American Airlines, and for the past 21 17 and a half years, I've been a member of the Texas House of 18 Representatives. Today I represent the Southeast Texas 19 Community Development Corporation, Incorporated, SETCDC 20 which I serve as president. 21 SETCDC is certified as a CHDO by the Texas 22 Department of Housing and Community Affairs to serve rural 23 Texas and certified as a CHDO by the Cities of Beaumont, 24 Port Arthur and Orange. 25 In the past five years, SETCDC has completed new 26 construction and rehab in excess of $2.2 million. We . 520 1 anticipate construction of 250 new homes and the rehab of 2 over 100 in the next three years. As we expect to also 3 expand into rural Texas. 4 Some eight years ago, when we were reviewing the 5 lending practices of banks in our community, I met Ms. 6 Cathy Bessant of NationsBank, she came to Beaumont to work 7 with us to talk about achieving the aims of the Community 8 Reinvestment Act. She was very cooperative and I'm very 9 pleased to know that she will be involved in this great 10 effort. 11 Our organization has developed a business 12 relationship with NationsBank which includes the 13 arrangement of permanent financing of loans for our 14 homeowners. In this manner, we've been successful in 15 addressing the housing and banking needs of a clientele 16 that is traditionally below the regular commercial banking 17 floor. Through our Homebuyer Education Program, we work 18 with persons who are currently renters. We inform them, 19 encourage them, cajole them, if necessary, spurring them 20 to dare achieve the dream of homeownership. 21 Virtually every one of our clients utter in 22 disbelief at closing, "I never thought I'd ever own my own 23 home." These are new homeowners. These are first-time 24 home buyers, these are new mortgages in our community, 25 this is new money being generated, this is private 26 enterprise doing what it can do best and much better than . 521 1 the government. This is removing people from the public 2 dole. This is putting housing and economic development in 3 the private sector without dependency on public funds. 4 Upon learning of the proposal of NationsBank to 5 make $350 billion available to address the needs of 6 low-income and rural areas, I contacted NationsBank to 7 discuss ways that we and they could partner with local 8 officials and community leaders to plan and execute 9 locally conceived programs that would benefit the 10 community while concurrently achieving the goals of 11 NationsBank and SETCDC. This $350 billion infusion 12 represents a pool of resources that will allow communities 13 to do housing and economic development on a scale that 14 will be both trendsetting and transforming. And if done 15 correctly, it will allow a level of efficiency that can 16 significantly stretch those dollars. 17 I've submitted a proposal to NationsBank to 18 establish a pilot program in a small county in southeast 19 Texas. This proposal, which could be quickly implemented, 20 calls for our convening the county commissioners plus the 21 mayors and council members of each city with a population 22 of 10,000 family -- population in that county, along with 23 the officials of HUD, the State of Texas, local nonprofit 24 groups and the private sector for the purpose of assisting 25 local communities in the creation of a plan for housing 26 and economic development. . 522 1 Such a procedure could be replicated anywhere and 2 at will. Through SETCDC and other nonprofits, NationsBank 3 will then be able to extend its financial tentacles into 4 hamlets that are presently inaccessible, thereby 5 transforming old communities. 6 Homeownership is the cornerstone of safe, 7 desirable neighborhoods and, therefore, is essential to 8 any plan to revitalize communities. People who own their 9 own homes care about their streets, their property values 10 and their schools. They generate business, they pay 11 taxes, and more often than not, they vote. By providing 12 safe, sanitary desirable homes to low- to moderate-income 13 families, CHDO will work to fend off the renters' 14 mentality with this emphasis on dependency, consumership 15 and apathy and replace this renters' mentality with a 16 homeowners' mentality with this emphasis on independence, 17 productivity and involvement. 18 Ladies and gentlemen, because I'm so pleased to 19 see this expression of corporate responsibility and 20 goodwill and because I view this as a definitive measure 21 to put affordable housing and community development firmly 22 into the private sector and away from dependency on 23 government handouts. I'm very pleased to support this 24 merger. Thank you. 25 MS. SMITH: Thank you very much. Ken, you have a 26 question? . 523 1 MR. BINNING: I would like to ask Mr. Mosher a 2 question, please. We heard a number of speakers express 3 concern that support and understanding for California 4 needs would fall off when the headquarters is moved to 5 North Carolina. And I believe you stated that you and 6 your organization have been convinced by BofA that that 7 won't happen and I was just curious if you could elaborate 8 a little on what types of information or assurances from 9 them have given you that confidence? 10 MR. MOSHER: I have to admit that my experience 11 is very parochial in that my organization's jurisdiction 12 is that of San Francisco. I happen to know the chairman 13 of Bank of America through my organization and through a 14 lot of the community initiatives that we sponsor. And, if 15 anything, in the wake of the merger announcement, I think 16 we've seen really expanded commitment to some of the 17 programs that we've started, such as San Francisco Works, 18 the welfare-to-work initiative, and we've seen that in the 19 form of really a commitment that has gone from at the 20 outset a financial commitment to the program, what has 21 turned into, in some cases, senior executives of the bank 22 coming out and expressing an interest in helping local 23 nonprofit organizations do a better job of training people 24 coming off of public assistance to what I would 25 characterize as really up-to-the-minute specifications for 26 jobs that are available in the banking industry. . 524 1 So what we've seen is -- I mean, first of all, a 2 commitment to see this program through to whatever 3 conclusion, you know, its board of directors decides it 4 wants to reach. But also the bank giving more than 5 dollars sending senior executives to, in effect, go out 6 and serve as consultants to some nonprofits that are doing 7 job training in an effort to try and get public assistance 8 recipients trained for jobs in this particular bank. And 9 the commitment that has been made is that they not only 10 want to make a financial commitment and a commitment of 11 expertise, that they want to integrate former public 12 assistance recipients into the bank post-merger. 13 MR. MENDELL: Thank you. 14 MS. SMITH: Mr. Price, you used the term that 15 sounded like CHDO and you may have explained what it was 16 earlier but I missed it. 17 MR. PRICE: I'm sorry, that's an acronym for 18 Community Housing Development Organization. 19 MS. SMITH: So CHDO. 20 MR. PRICE: CHDO. Some bureaucrat thought that 21 up. 22 MS. SMITH: Do you have any questions? Well, 23 thank you very much, we appreciate your coming this 24 morning to talk to us. And if you have any additional 25 comments that you want to submit for the record, you have 26 until next Friday but not later than 5:00 o'clock eastern . 525 1 daylight time.
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