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Public Meeting Transcripts

Public Meeting Regarding Fleet Financial Group, Inc., and BankBoston Corporation

Wednesday, July 7, 1999

Transcript of Panel Seventeen

       22            MR. SARKISSIAN:  Thank you.
         23            In the first place, I appreciate the 
         24   opportunity to testify on behalf of ARC 
         25   Massachusetts.  Our organization's mission is to 
          1   enhance the quality of life for persons with 
          2   specific developmental disabilities, and we 
          3   accomplish this mission by promoting quality 
          4   community services and advocating for enlightened 
          5   public policy.  Our former name is the Massachusetts 
          6   Association for Retarded Citizens. 
          7            My comments are going to focus -- my short 
          8   comments -- on the needs of people with 
          9   disabilities.  And, basically, there have been 
         10   others here to speak about community reinvestment 
         11   which is also what I'm going to focus on in the 
         12   general sense.  And I presume the Board will be 
         13   looking at some objective figures in terms of what's 
         14   been realistic in the past, the community banks 
         15   versus larger institutions around the issue of 
         16   community reinvestment. 
         17            If it was any other time, and if things 
         18   were great for people with disabilities in terms of 
         19   affordable, accessible housing, I think this 
         20   wouldn't be an issue for me to come in front of this 
         21   Board; and it is pretty unusual for us to be present 
         22   in front of this Board.  But, in fact, only in 1998, 
         23   there was a report published; and it was called 
         24   "Priced Out in 1998."  I don't know if you are 
         25   familiar with it, but it was a report published by 
          1   the Consortium for Citizens with Disabilities and 
          2   the Technical Assistance Collaborative which is its 
          3   main office is actually housed in Boston. 
          4            And what that showed is the severity and 
          5   nature of the housing crisis for people with 
          6   disabilities, and it cited in the report that the 
          7   most evident part of this crisis was in the 
          8   affordability of efficiency or studio and 
          9   one-bedroom apartments.  On a national average, the 
         10   cost of such housing is 60 percent of the average 
         11   monthly income of people with disabilities who are 
         12   living primarily on SSI and related income.  For 
         13   many people, that's the situation, especially those 
         14   with cognitive or intellectual disabilities.  SSI 
         15   and related income is the primary source. 
         16            In Massachusetts, this income is under 17 
         17   percent of the one-person median income; and that's 
         18   a direct statistic from "Opening Doors" published in 
         19   May 1999.  And people with disabilities often end up 
         20   in the category of very low income.  HUD studies 
         21   estimate that 70 percent of households with incomes 
         22   below 30 percent of median income who are not 
         23   receiving any assistance in housing from HUD or 
         24   elsewhere, they have priority housing problems. 
         25            In Massachusetts, the percentage of that 
          1   income to rent an efficiency unit alone is 95 
          2   percent of income.  So just to give you the flavor 
          3   of how -- such a price it is, another piece, 
          4   families aren't much better off that are working 
          5   class, and, again, even lower income.  When they're 
          6   looking for affordable apartments that are also 
          7   accessible, it can be an impossible process.  We 
          8   hear from local advocates of people that work on a 
          9   local level, whether it's Boston or the South Shore; 
         10   and you hear about situations where people end up 
         11   renting apartments on the second floor, the third 
         12   floor.  They have to bring their child up, and they 
         13   go have to go back and bring the wheelchair up. 
         14            A great story, because we also happen to 
         15   have a wait list for people with disabilities who 
         16   are adults.  A gentleman and his wife who were in 
         17   their 70s.  Every day he would carry his daughter up 
         18   three flights of stairs and only three years ago was 
         19   he able to get housing for his daughter and some 
         20   State-supported funding program. 
         21            So, anyway, it is a crisis; and I won't --  
         22   I have other statistics that I have handed in.  I 
         23   won't repeat them publicly.
         24            But what we need, we have a megamerger here 
         25   so it is a great opportunity for some kind of 
          1   standard around megacommunity reinvestment; and I 
          2   would suggest that there be some kind of standard 
          3   developed around that.  Use this as an opportunity 
          4   to raise the stakes and take a look at what would be 
          5   reasonable given the scope of this merger, and let's 
          6   include housing for people with disabilities 
          7   affordable as part of the low-income piece. 
          8            We're not asking for set aside or anything, 
          9   you know?  We want to be part of the main stream of 
         10   this. 
         11            When you think about affordable housing, we 
         12   need to think about an accessible housing.  And 
         13   there are two types in this community reinvestment 
         14   aspect that I want to encourage.  One is, really, we 
         15   need to subsidize some heavy development of 
         16   apartments across metropolitan areas.  We really 
         17   need a dearth of those, again, accessible ones.  So 
         18   that's one area that community reinvestment can play 
         19   a role in low-cost mortgage financing for people who 
         20   are willing to develop such affordable housing. 
         21            And the second is for home ownership.  You 
         22   heard about that earlier for people with low income.  
         23   It is important for people with disabilities, too, 
         24   and something around community reinvestment where we 
         25   would have mortgage programs and downpayment 
          1   programs to enhance what is there already such as 
          2   soft second and programs that already exist. 
          3            One of the big programs for people with 
          4   disabilities is really the Fannie Mae program, and I 
          5   am embarrassed to tell them how many people -- it's 
          6   a great program.  I'm glad Fannie Mae's doing it, 
          7   bur really in terms of Massachusetts with 90,000 
          8   people with specific developmental disabilities 
          9   alone, not counting the physical disability world, 
         10   it really falls far short of what we need. 
         11            So we're going to have to come up with a 
         12   private partnership.  We're going to have to make a 
         13   merger.  And I really encourage the Board to think 
         14   in these lines of some kinds of standards 
         15   surrounding community reinvestment.
         16            Thank you very much for this opportunity.
         17            HEARING OFFICER SMITH:  Thank you.
         18            Mr. Van Meter.
         19            MR. VAN METER:  Thank you for the 
         20   opportunity to testify today.  My name is Bob Van 
         21   Meter, and I'm executive director of the Allston 
         22   Brighton Community Development Corporation and an 
         23   active member of the Massachusetts Association of 
         24   Community Development Corporations. 
         25            The Allston Brighton CDC is a 19-year-old 
          1   nonprofit, community-based organization in the 
          2   Allston-Brighton section of Boston, a neighborhood 
          3   of 70,000 people.  Our organization has worked 
          4   closely with both BankBoston and Fleet Bank for 
          5   several years and values the relationships we have 
          6   with each institution.  We view them both as 
          7   partners in community development. 
          8            However, we come to this hearing 
          9   disappointed at the stands taken by the two banks.  
         10   They have so far opposed making specific commitments 
         11   would give us confidence that one plus one is more 
         12   than two.  We, therefore, must oppose the proposed 
         13   merger unless and until the banks make specific 
         14   commitments to the community. 
         15            Past experience with bank mergers and the 
         16   track record of community lending post merger makes 
         17   it necessary to look for specific commitments.  
         18   Moreover, those commitments should be negotiated 
         19   with the community, not made unilaterally by press 
         20   release. 
         21            The Federal Reserve Bank should require 
         22   that Fleet and BankBoston develop a detailed and 
         23   verifiable community investment plan that assures 
         24   this merger is a net benefit to our communities. 
         25            We urge the Federal Reserve to extend the 
          1   public comment on the mergers as my colleagues 
          2   before have urged, and we urge that the Federal 
          3   Reserve not approve this merger until such a plan is 
          4   developed. 
          5            We also would look to the Federal Reserve 
          6   to ensure that consumer and worker interests are 
          7   interested.  Reduction of competition in 
          8   Massachusetts that will result from this merger is a 
          9   serious concern for all of us in the commonwealth. 
         10            I'd like to talk a little bit about the 
         11   area of small business lending and work in 
         12   commercial revitalization efforts in urban 
         13   communities.  I know that the hour is late, and I am 
         14   not going to talk about other aspects of community 
         15   development. 
         16            While both banks have some important 
         17   successes in small business lending and assistance 
         18   to commercial revitalization efforts, we see at the 
         19   neighborhood level a clear difference in the two 
         20   banks in that area; and we want to urge that if the 
         21   merger goes forward, that the merged bank build on 
         22   BankBoston's example of engagement. 
         23            We're active in Main Street's commercial 
         24   revitalization efforts in both of the major 
         25   commercial zones of our neighborhoods and also in 
          1   Brighton and are participating in the community 
          2   business network which provides technical assistance 
          3   and loan packaging to smaller micro-businesses in 
          4   our communities. 
          5            BankBoston has been a more consistent 
          6   presence and ally in local revitalization efforts.  
          7   Fleet's corporate policies on branch staffing mean 
          8   that rarely, if ever, are Fleet branch managers  
          9   able to play a leadership role in local 
         10   revitalization efforts, while BankBoston branch 
         11   managers are active in leadership roles.  If Fleet's 
         12   corporate culture and policies dominate the new 
         13   bank, we will see a further draining of energy and 
         14   leadership from neighborhoods. 
         15            BankBoston's First Community Bank has been 
         16   a welcome addition to the banking scene in our 
         17   neighborhood.  First Community Bank lenders have 
         18   gone the extra mile to work with immigrant 
         19   businesses in our community.  We have not yet seen a 
         20   similar commitment from Fleet to small business 
         21   lending in our community. 
         22            Within the past three years, our 
         23   neighborhood business districts have seen the loss 
         24   of several banks as Greater Boston Bank was acquired 
         25   by Grove, and Grove was acquired by Citizens.  Now 
          1   Allston and Brighton's major commercial districts 
          2   could each see the loss of one additional bank 
          3   because we don't think that after the sale of 
          4   branches, branches will continue necessarily.  We 
          5   haven't seen that evidence in the past with past 
          6   mergers.  We will he will also see additional branch 
          7   loss with the Citizens-U.S. Trust merger possibly. 
          8            Maintaining healthy community business 
          9   districts is part of maintaining healthy vital urban 
         10   communities.  Increasingly, banks which have been 
         11   the mainstays of these districts are a smaller 
         12   presence in the business districts. 
         13            The emphasis on banking electronically 
         14   means that resources are siphoned away from staffing 
         15   of branches.  Bankers who know the community are 
         16   becoming increasingly rare.  And the new emphasis on 
         17   mini branches in supersized grocery stores also 
         18   hurts the vitality of local business districts by 
         19   pulling people away from community business areas.  
         20   We hope that bank regulators will consider these 
         21   issues carefully. 
         22            Finally, it's important to note that 
         23   philanthropic support for community revitalization 
         24   is an essential complement to community 
         25   reinvestment.  It's important to maintain 
          1   community-based organizations with strong capacity.  
          2   Both banks have supported community development with 
          3   philanthropy.  But with the increasing pace of 
          4   change in the corporate world and the emphasis on 
          5   strategic high visibility, philanthropy by 
          6   corporations, including the banks, support by 
          7   financial institutions becomes increasingly 
          8   precarious; and it's very difficult to replace. 
          9            We urge a $5 million commitment to 
         10   community development in Massachusetts from the 
         11   merged bank in the next calendar year, and that 
         12   commitment would go to local and statewide 
         13   organizations and community development 
         14   intermediaries. 
         15            Thank you for the opportunity to testify 
         16   today. 
         17            HEARING OFFICER SMITH:  Thank you very 
         18   much. 
         19            We'll go to Mr. Grainger.
         20            MR. GRAINGER:  Thank you.  My name is 
         21   Andrew Grainger, and I'm appearing here today as 
         22   president of the New England Legal Foundation.  New 
         23   England Legal Foundation is a not-for-profit public 
         24   interest law firm which has as its mission a 
         25   balanced economic growth throughout our six-state 
          1   region and support of our system of free enterprise. 
          2            We are represented by a board of directors 
          3   which is comprised of general counsel and senior 
          4   partners from leading businesses and law firms 
          5   throughout New England. 
          6            In addition to that, we have an advisory 
          7   counsel network, one in each New England state, 
          8   which provides a foundation with an ear to the 
          9   ground so to speak on issues affecting business, the 
         10   economy, and property rights in the state and local 
         11   level. 
         12            Generally, what we do is engage in 
         13   courtroom advocacy on behalf of our constituents in 
         14   filing amicus briefs in the U.S. Supreme Court and 
         15   state and federal courts, mostly in New England.  We 
         16   also engage in advocacy outside the courtroom from 
         17   time to time when it's an important issue affecting 
         18   business interests and free enterprise; and in that 
         19   context, I'm here today to speak in support of the 
         20   proposed merger or acquisition, whichever it's 
         21   called.  It doesn't matter.  I think we know what 
         22   we're talking about. 
         23            The inescapable fact from our perspective 
         24   is that the economic well-being of New England, and 
         25   the best interests of individuals and companies 
          1   doing business here, and I would include in that all 
          2   the community groups that have testified here today, 
          3   are all better served if we can preserve a large, 
          4   strong, regionally-based commercial lender in New 
          5   England, which is what this merger contemplates.  It 
          6   is simply -- cannot be denied that institutions the 
          7   size of Fleet and BankBoston are vulnerable to 
          8   out-of-region acquirers many times their size. 
          9            I heard Mayor Albano from Springfield refer 
         10   to the problem of perhaps having to get approval 
         11   from 90 miles away.  That is probably what is 
         12   happening in the marketplace today, but it pales 
         13   compared with the problem of going to Charlotte or 
         14   San Francisco.  This merger may help to prevent 
         15   that. 
         16            Large, national, and international 
         17   businesses based in New England can select on a 
         18   national and international basis to meet capital 
         19   requirements.  Middle market, smaller companies are 
         20   hurt when deposit and credit decisions are moved to 
         21   other parts of the country.  In particular, the 
         22   branch system and cash management services that New 
         23   England-based lenders can provide are important to 
         24   New England businesses. 
         25            If the proposed merger does preserve a 
          1   local regional presence, Boston and the rest of New 
          2   England and everyone here will benefit. 
          3            Because New England Legal Foundation 
          4   represents business interests in all the New England 
          5   states, I have in the past week specifically 
          6   discussed this proposed merger with Board and 
          7   counsel members from my foundation throughout the 
          8   region.  I have got a list in my written remarks 
          9   which have been filed with you; and I won't go 
         10   through all of them, but I will note that sort of in 
         11   echoing what I think you heard in Panel 15, the 
         12   Connecticut Business and Industry Association, which 
         13   represents many, many, many businesses large and 
         14   small in that state; the New Hampshire Business and 
         15   Industry Association, are both among the 
         16   constituencies that I talked to, as well as 
         17   Jefferson Pilot Financial in Concord, New Hampshire; 
         18   the Maine Medical Center in Portland, Maine; IDX 
         19   Systems in Vermont; every state large and small, the 
         20   overwhelming consensus among the foundations, 
         21   participants, and supporters is that this merger in 
         22   the very least is necessary and in most cases 
         23   desirable in view of the consolidation we're seeing 
         24   today. 
         25            We do share the concern raised in some 
          1   quarters that competitive environment should not be 
          2   sacrificed to retain what we view as the important 
          3   economic advantages of local control.  We are in 
          4   favor of free enterprise and competition. 
          5            As I understand the divestiture proposal 
          6   that's been put forward today, it is really designed 
          7   to avoid any material change in market 
          8   concentration.  In that context, we believe further 
          9   that a competitive environment includes the right 
         10   and the ability of businesses to make and execute 
         11   management and strategic decisions which their own 
         12   thinking and which the market brings them to. 
         13            Businesses that have taken at least 
         14   reasonable steps to comply with the myriad of legal 
         15   and regulatory requirements that are imposed on them 
         16   by so many agencies and so many statutes should be 
         17   free to pursue their business plans and react to 
         18   market forces, which is what these two institutions 
         19   are seeking to do today. 
         20            I want to throw one slight curve ball at 
         21   you which is to say that I also served as chairman 
         22   of Arts Boston which is a local, not-for-profit 
         23   organization that serves as an umbrella group for 
         24   150 local and regional arts organizations. 
         25            In Copley Square today, there is a very 
          1   nice half-price ticket booth that helps us support 
          2   arts organizations, that helps us take inner city 
          3   school children to cultural events.  That booth 
          4   would not be there today except that Fleet stepped 
          5   forward and gave us financing for it.  I went to 
          6   many other banks to try to get that money first. 
          7            Thank you for your consideration.
          8            HEARING OFFICER SMITH:  We'll go to Mr. 
          9   O'Connor and then to Mr. Brown.
         10            MR. O'CONNOR:  Good afternoon.  I guess I 
         11   should say good evening.  My name is John O'Connor.  
         12   I'm a longtime community organizer with substantial 
         13   experience in consumer and urban department issues.  
         14   I also run a small business incubator, and I proudly 
         15   serve on State Senator Dianne Wilkerson's Community 
         16   Advisory Committee.  For all these reasons, I have 
         17   followed with great interest and growing concern the 
         18   planned merger of Fleet Bank and BankBoston. 
         19            I speak today to express my strong 
         20   opposition to that proposal.  This merger would 
         21   substantially lessen competition in Massachusetts 
         22   and around New England, nor would there be 
         23   sufficient, if any, net positive benefits to the 
         24   public interest to justify its approval. 
         25            Put simply, this is a deal that made 
          1   greenline the pockets of Fleet and BankBoston 
          2   shareholders, but it redlines the needs of -- but it 
          3   redlines the needs and concerns of Massachusetts 
          4   consumers, small businesses, and urban communities.  
          5   Let me start by stating the obvious. 
          6            Although what's being proposed here is 
          7   usually described as a merger of two, Fleet and 
          8   BankBoston, it in fact represents the consolidation 
          9   of what had been just a few short years ago four of 
         10   the largest banks in Massachusetts into a single 
         11   entity.  Surely going from four to two and now to 
         12   one cannot be a recipe for robust, healthy 
         13   competition, the heart of free enterprise. 
         14            Not surprisingly, even after divestiture, 
         15   this new Fleet Boston entity would utterly dominate 
         16   regional markets, commanding a roughly one-third 
         17   share across Massachusetts, and possibly more in 
         18   greater Boston. 
         19            In other areas, like Worcester, Hartford, 
         20   Rhode Island, Fleet's -- Hartford and Rhode Island, 
         21   Fleet Boston's overwhelming presence would even be 
         22   more dramatic.  Ironically, many of these markets 
         23   are already overconcentrated in the hands of Fleet 
         24   alone at its current site. 
         25            Likewise, the new Fleet Boston would be by 
          1   far the biggest holder of ATMs in Massachusetts.  
          2   Again, even after divestiture, Fleet Boston is 
          3   likely to control upwards of half of all the 
          4   bank-owned ATM machines in our state, many times the 
          5   number held by any other institution. 
          6            Some say the solution lies in recruiting 
          7   some financial behemoth from Charlotte or San 
          8   Francisco to come up to New England and compete with 
          9   Fleet Boston on its own terms, while others favor 
         10   helping our existing smaller banks do more. 
         11            Let's be clear.  This is a no-win 
         12   situation. 
         13            If history is the guide, small banks 
         14   probably will better serve their customers in our 
         15   communities than megabanks like the proposed Fleet 
         16   Boston, but they cannot effectively compete with the 
         17   super-heavyweight division occupied by a Fleet 
         18   Boston.  Eventually, many of these smaller banks 
         19   will be acquired, squeezed out, or just plain run 
         20   over. 
         21            So I for one cannot see how this proposed 
         22   merger, no matter how it's handled, can do anything 
         23   other than substantially lessen competition.  At 
         24   best, it pushes us further in the direction of a 
         25   market oligarchy, which is not an acceptable 
          1   substitute for true competition. 
          2            The question then becomes will consumers 
          3   and communities see sufficient new benefits from 
          4   Fleet Boston in terms of convenience or service to 
          5   offset the bad side effects of diminished 
          6   competition.  Again, the answer is a clear no. 
          7            BankBoston and Fleet are both plenty big 
          8   enough now to be able in theory, anyway, if not 
          9   always in practice, to offer the full range of 
         10   services and products needed by our consumers and 
         11   our economy. 
         12            This isn't a case of two little community 
         13   banks teaming up to be able to do more lending to 
         14   mid-sized businesses.  Nor is there any reason to 
         15   think that when it comes to banks, bigger inherently 
         16   means better for consumers.  Just the opposite in 
         17   fact.  A recent study pointed out that as banks get 
         18   bigger, they charge an average of about 15 percent 
         19   higher fees in terms of checking accounts and ATM 
         20   charges and the like. 
         21            Significantly, Fleet and BankBoston have 
         22   been very quiet on the subject of customer fees and 
         23   consumer issues.  So unless and until they make some 
         24   public commitments to the contrary, I see no 
         25   evidence to assume the outcome here will be any 
          1   different.  More money for less services. 
          2            Fleet and BankBoston may consider that 
          3   perfectly convenient, but consumers and small 
          4   businesses will probably think otherwise. 
          5            Finally, there is the vital issue of how to 
          6   deal -- of how this deal meets or fails to meet the 
          7   needs of all communities and whether the proposed 
          8   merger in the component banks are truly in 
          9   compliance with the purposes of the Community 
         10   Reinvestment Act. 
         11            A couple of weeks ago, Fleet and BankBoston 
         12   unveiled what they're touting as a 14-billion-plus 
         13   CRA commitment that allegedly addresses some of 
         14   these concerns.  Having examined it closely, I 
         15   concur totally with the many others who have 
         16   criticized it as both woefully insufficient in 
         17   funding, lacking in forward-looking innovations that 
         18   anticipate likely changes in the financial services 
         19   landscape, and critically missing an enforcement 
         20   mechanism. 
         21            Parse the numbers, and you find that the 
         22   Fleet-BankBoston CRA proposal fails short of 
         23   representing what the two institutions have achieved 
         24   separately.  The CRA plan will constitute a 12 
         25   percent decline in small business lending and a 
          1   whopping 46 percent drop in lending and investment 
          2   for community development. 
          3            Let me close by going back to the 
          4   beginning.  Fleet and BankBoston kicked off this 
          5   process some months ago with now famous phrase that 
          6   one plus one is greater than two.  Asked to attach 
          7   some specifics to that promise, Fleet officials soon 
          8   asserted their statement was meant to apply only to 
          9   supposed business synergies, a synonym, I take it, 
         10   for shareholder profits. 
         11            But I suggest today that Fleet must be held 
         12   to its word, and that the merits of this proposed 
         13   merger must be tested against the same benchmark 
         14   Fleet has set for itself.  Does Fleet plus 
         15   BankBoston really add up to more than the sum of its 
         16   part for all of our people and all of our 
         17   communities?  In short, it doesn't work for us; and 
         18   it doesn't work for all of us. 
         19            Or is it actually the case that 
         20   Fleet-BankBoston's deal asks us to work for them 
         21   through higher fees, fewer choices, and less 
         22   attention to the pressing needs of so many 
         23   communities? 
         24            I respectfully submit to you that this 
         25   proposal does not and will not pass these tests and, 
          1   therefore, should be rejected. 
          2            Thank you.
          3            HEARING OFFICER SMITH:  Mr. Brown.
          4            MR. BROWN:  Thank you very much for this 
          5   opportunity.  I'm here today to speak as a partner 
          6   of RDR Properties, and our company is based in 
          7   Asbury Park, New Jersey. 
          8            RDR is a low-income, single-family housing 
          9   developer.  A substantial part of our business is 
         10   also buying abandoned, boarded-up properties in 
         11   Asbury -- which are plentiful if any of you have 
         12   ever been down there -- and turning them into the 
         13   highest quality rentals in the area. 
         14            We have a for-profit side to our business 
         15   and a not-for-profit or 501(c)(3) side as well, 
         16   which I will explain as I go along the necessity of 
         17   doing that. 
         18            I want to touch briefly on three areas -- 
         19   an overview of Asbury Park so you get a feeling for 
         20   what we're up against and the banks in dealing 
         21   there; the focus and growth of our business; and, 
         22   finally, our relationship with Fleet Bank. 
         23            Asbury Park is a uniquely blighted area 
         24   from the top of Maine clear down the eastern 
         25   seaboard to Key West.  Thirty years ago, it was the 
          1   jewel and economic hub of the northern Jersey shore.  
          2   At one time, there were over 200 hotels in the area.  
          3   Now there is one.  Surrounding real estate prices on 
          4   the shore are at an all-time high.  In Asbury, the 
          5   total value of taxable property has shrunk each year 
          6   since 1993.  The downtown area is virtually deserted 
          7   and boarded up, but hopefully showing some signs of 
          8   life. 
          9            This recent article with a page and a half 
         10   in the New York Times a couple of months ago is 
         11   called "Blocks of Oceanfront Property in Asbury Park  
         12   Once a Magical Result Have Been Festering for 15 
         13   Years."  And the headline is "Caught in the 
         14   Undertow."  It kind of gets into more detail about 
         15   the problems in Asbury. 
         16            But the article described the waterfront as 
         17   looking like Beirut.  It's totally desolate.  The 
         18   city's population is 60 percent African-American, 
         19   and the unemployment rate is in the high teens.  
         20   Compared economically to Asbury, Bridgeport, 
         21   Connecticut, looks like the Silicon Valley. 
         22            RDR Properties, our company, is a unique 
         23   company; and here are a few reasons why.  We buy 
         24   almost exclusively abandoned, boarded-up properties 
         25   and rehab them for sale or rent.  We have our own 
          1   construction and management companies that are also 
          2   based in Asbury Park.  RDR is the only property 
          3   developer with a major physical presence in the 
          4   downtown Asbury area. 
          5            Our goal is to move our best renters from 
          6   the rental status to homeowners.  And we work very 
          7   closely with the faith-based organizations in the 
          8   area.  We have no local community home buyer 
          9   assistance programs, so we serve in that role 
         10   ourselves, hence, the nonprofit part of our 
         11   business. 
         12            In fact, we can put a family into a brand 
         13   new three-bedroom, bath-and-a-half home, built by a 
         14   modular builder for less than $50,000; and that's 
         15   with State assistance.  We also have our own 
         16   construction company, and a year ago that was almost 
         17   all white.  Today, it is more than 50 percent 
         18   minority, whether it is blacks, Latinos, and Asians.  
         19   And by next year, we expect that number to exceed 70 
         20   percent, with many of the minorities moving into 
         21   management positions.  We have our own skilled 
         22   training program because none of that exists in the 
         23   area. 
         24            What's been Fleet's role in all of this?  
         25   Three months ago, our company owned eight properties 
          1   comprising about 53 rental units.  By Labor Day of 
          2   this year, we will own and be converting at least 
          3   another 150 new abandoned units in the area.  We 
          4   have an existing three million line with Sovereign 
          5   Bank, which is LTS regulated; and we have a new line 
          6   of $2 million with First Union.  By the way, PNC and 
          7   Summit Bank are also in the area. 
          8            But I want to say that Fleet is by far and 
          9   away becoming our lead lender, not just in dollars, 
         10   but in creativity, flexibility, understanding, and 
         11   response.  When we need to move on a deal, they have 
         12   somebody who is there immediately; and they work 
         13   very closely with us.  It is a very competitive 
         14   situation.  They've done a very fine job. 
         15            We also want to give particular thanks to 
         16   Joyce Harley.  She is the senior VP and community 
         17   development officer for all of New Jersey for Fleet, 
         18   Bill Grossman who is the senior VP and head of 
         19   community lending for the head of the real estate 
         20   division, and, of course, our own representative 
         21   down there, Jim Maloney.  Of the five banks we deal 
         22   with, they are by far and away the most expert. 
         23            And, finally, let me just say we look 
         24   forward to staying in touch with Gail Snowden and 
         25   Agnes Bundy Scanlon.  I've known Gail for five years 
          1   in our work with the National Community Reinvestment 
          2   Coalition; and I've worked with Agnes since she 
          3   first arrived in Fleet from her former position in 
          4   the Senate Budget Committee. 
          5            And I want to thank Fleet for being part of 
          6   our company's success, and we look forward to an 
          7   even stronger relationship with them as a Boston 
          8   combination.
          9            Thanks very much.
         10            HEARING OFFICER SMITH:  Mr. Raff. 
         11            MR. RAFF:  Thank you.  First, let me say I 
         12   admire your stamina.  
         13            My name is Larry Raff.  I'm vice-president 
         14   of development and external affairs for Morgan 
         15   Memorial/Goodwill Industries, which is located in 
         16   lower Roxbury and in the heart of the recently 
         17   designated empowerment zone in Boston. 
         18            Goodwill provides a variety of job training 
         19   and other services to people with disabilities and 
         20   other barriers to work to help them maintain 
         21   self-sufficiency.  Goodwill is also an important 
         22   participant in the revitalization of the 
         23   economically-challenged communities in Boston. 
         24            I'm here this evening to speak to the issue 
         25   of philanthropy.  I'm a -- Goodwill is a 
          1   representative on the Community Advisory Committee 
          2   initiated by Senator Wilkerson and have hosted 
          3   several of these meetings.  We're very involved with 
          4   the Advisory Committee because we're deeply 
          5   concerned for the well-being of the physically- and 
          6   economically-challenged residents of our service 
          7   area which encompasses all of eastern and central 
          8   Massachusetts. 
          9            Access to affordable, user-friendly banking 
         10   services is especially important to people with 
         11   physical and educational challenges and to those 
         12   with limited and fragile financial resources.  Any 
         13   reduction in services in affordability as a result 
         14   of this merger would be an assault on an array of 
         15   public and philanthropic initiatives that have 
         16   sought to better and assimilate this population into 
         17   the mainstream and into the economic mainstream.  
         18   Many of these programs are supported by Fleet Bank 
         19   and BankBoston. 
         20            I want to share with you the support that 
         21   Fleet Bank has provided Goodwill.  Especially in the 
         22   last year, it has been quite generous. 
         23            Fleet has committed nearly a quarter of a 
         24   million dollars to Goodwill over the next three 
         25   years for a few programs that address job training 
          1   to help people acquire computer skills, to acquire 
          2   competitive employment, as well as to help them put 
          3   clothing on their backs for job interviews and for 
          4   being on the job so they can maintain their 
          5   employment. 
          6            Fleet's also been our banker for many years 
          7   and has supported and underwritten $4 million in 
          8   bonds to help us purchase our main headquarters 
          9   building in Roxbury. 
         10            In terms of corporate charitable giving, 
         11   both Fleet and BankBoston have been very generous to 
         12   Goodwill; and for that I thank them very much. 
         13            However, it's incumbent upon me to also 
         14   look at the larger picture; and I want to do that 
         15   now. 
         16            Fleet has clearly been generous to Goodwill 
         17   and many other organizations in Boston and in 
         18   Massachusetts; and this is emblematic of why it's 
         19   important to preserve the integrity and the level of 
         20   Fleet Boston's corporate philanthropy in 
         21   Massachusetts, which is what I want to speak to 
         22   directly.
         23            It's my concern, however, that this merger, 
         24   the proportion of Fleet Bank's combined corporate 
         25   giving that goes to Massachusetts will diminish 
          1   significantly and in favor of those marketplaces 
          2   where the new Fleet BankBoston or new Fleet Boston 
          3   will be expanding its business operations.  It's no 
          4   secret that corporate philanthropy in general is 
          5   based on enlightened self-interest for the benefit 
          6   of the business operations and for the community.  
          7   It is certainly understandable. 
          8            Given this reality, however, it is also 
          9   understandable for Fleet Boston to maximize its 
         10   charitable giving programs in those areas where the 
         11   bank is expanding its business operations.  Unless 
         12   precautions are taken by this body and the other 
         13   regulatory agencies addressing this merger, the 
         14   result will be a significant decline in charitable 
         15   giving in Massachusetts.  This will further diminish 
         16   the ability of human service organizations to 
         17   effectively benefit their constituencies and 
         18   assimilate them into the economic and social 
         19   mainstream, which benefits everyone. 
         20            In closing, I want to make an observation. 
         21            If I as a philanthropic or as a charitable 
         22   organization, a community-based organization were to 
         23   make application to Fleet Bank or BankBoston with a 
         24   proposal reflecting the integrity of the proposal 
         25   that has been put forth by the bank to you on behalf 
          1   of this merger, I can assure you Goodwill would not 
          2   receive a grant and would not receive a loan based 
          3   on the facts, figures, promises, and measurable 
          4   outcomes that have been provided by this proposal to 
          5   you. 
          6            I would suggest you apply the same 
          7   standards to this proposal for merger as Fleet Bank 
          8   and BankBoston would apply to their own 
          9   philanthropic program in your own considerations. 
         10            Thank you very much.
         11            HEARING OFFICER SMITH:  Any questions? 
         12            Thank you very much for taking the time to 
         13   share your views with us.
         14            (Pause)
         15            HEARING OFFICER SMITH:  Mr. Campen.

Last update: December 3, 2010