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 0441 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 0442 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 0443 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 0444 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 0445 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 0446 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 0447 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 0448 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 0449 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 0450 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 0451 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 0452 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 0453 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 0454 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 0455 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 0456 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 0457 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 0458 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 0459 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 0460 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, 0461 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 0462 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 0463 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 0464 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 0465 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 0466 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 0467 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 0468 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 0469 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