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Public Meeting Transcripts

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

Wednesday, July 7, 1999

Transcript of Panel Six

       19            REV. SHARPTON:  I'm Reverend Al Sharpton, 
         20   President of National Action Network, and we have 
         21   members throughout the area that if this merger were 
         22   to go forward would cover much of that area.  I come 
         23   as president of the Network with the vice chair,  
         24   Senator Ephraim Gonzalez, who heads the National 
         25   Coalition of Hispanic State Legislators, to express 
          1   our unilateral concern and at this hearing objection 
          2   to the merger that is proposed today for several 
          3   reasons. 
          4            I think that first you must distinguish 
          5   between business policy and philanthropy.  It is 
          6   very admirable that Fleet Bank gives away a lot of 
          7   money to certain charities.  That has nothing to do 
          8   with its business policies and the policies that 
          9   will service or not service the community.  You can 
         10   find I'm sure if you check in history slave masters 
         11   were good contributors to certain charities, but 
         12   their business was slavery.  We're not here to talk 
         13   about their philanthropy; we're here to talk about 
         14   their policy, and their policy has left a lot 
         15   wanting. 
         16            The proposal that they give you, the CRA 
         17   proposal, the $14.6 billion, is just about what they 
         18   spend in Massachusetts alone.  For you to approve a 
         19   merger where they would have more range, more states 
         20   for the same amount of money, in fact allows them to 
         21   reduce their commitment to borrowing and lending in 
         22   the community.  They would argue because of certain 
         23   disvestments this is what figure they could best 
         24   come up with, yet with their divestments they have 
         25   an opportunity with the Boston Bank of Commerce to 
          1   let a black bank that would service the communities 
          2   pick up some of those branches.  They have not 
          3   chosen to make that arrangement. 
          4            So it seems that there is a situation here 
          5   where they want it all on their side and not on the 
          6   side of the community that needs development, that 
          7   needs fair borrowing and lending practices, that 
          8   needs policies that are fair for the people that the 
          9   federal government, and therefore the Federal 
         10   Reserve, are sworn to protect. 
         11            If they had made the effort to try and work 
         12   out some equation, certainly many of us would not 
         13   take that position.  But clearly when you hear what 
         14   they have done with ACORN housing, when you hear the 
         15   problems that you have in mortgages and borrowing, 
         16   and when you hear their own proposal, which I think 
         17   falls far short of what is fair and equitable, we 
         18   have no choice but to appeal to you to block this 
         19   merger.  We have no problem dealing with a Fleet 
         20   Bank, but we do have a problem dealing with being 
         21   fleeced by Fleet Bank.  (Applause)
         22            As they expand into other states, if this 
         23   merger is approved, clearly we have the right to be 
         24   concerned.  The chairman, who the last panelist said 
         25   is such a nice guy, questioned why we would even 
          1   want to deal with this hearing.  Why would we be 
          2   here?  He's coming in our house with a record from 
          3   allies that gives us a lot to be desired.  It's like 
          4   me knocking on your door asking you "Why are you 
          5   answering it?"  You answer it because you live 
          6   there.  We live in New Jersey; we live in 
          7   Connecticut; we live in Massachusetts. 
          8            So, Mr. Chairman, all of us are not on your 
          9   payroll or your charity roll.  Some of us don't want 
         10   a donation.  We want fairness; we want equity; we 
         11   want parity.  (Applause)  We want to see loans to 
         12   those that seek mortgages and business loans that 
         13   are not at rates that are unbearable and not set up 
         14   with clauses that are unachievable.  We want to see 
         15   an amount of money there that is representative of a 
         16   commitment toward development.  If the Federal 
         17   Reserve passes this merger, where you have no real 
         18   commitment, with the dollar figures where they are 
         19   now, you have in effect already undone the purpose 
         20   of having CRA. 
         21            CRA is to have some redevelopment, not to 
         22   have bankers set their own bar, something they could 
         23   easily make, make all the profit they want and the 
         24   people be damned.  And we would encourage you to 
         25   block this merger until a respectable proposal has 
          1   been put forth on the divestment side, as I said, 
          2   with the Boston Bank of Commerce.  And clearly they 
          3   should increase what they propose in the borrowing 
          4   and lending department, and their policies around 
          5   loans, and their policies around what they do with 
          6   their housing money. 
          7            I would hope that you will not ignore the 
          8   will of many people.  Many say these hearings are 
          9   formality.  I would hope that as we are on the brink 
         10   of a new millennium that people's wishes will not be 
         11   just listened to, patted on the head, and you go 
         12   forward with business as usual, because we in other 
         13   parts of New England will resist being policed by 
         14   any means necessary.  Thank you.  (Applause)
         15            PRESIDING OFFICER SMITH:  Ms. Yager, on 
         16   behalf of Mr. Lee. 
         17            MS. YAGER:  Good afternoon.  Matthew Lee, 
         18   the executive director of Inner City Press/ 
         19   Community on the Move and Inner City Public Interest 
         20   Law Center was unable to attend today and asked me 
         21   to read his comments into is the record. 
         22            I see he is opposed to this 
         23   anti-competitive merger proposal.  After each of its 
         24   previous mergers, Fleet has dramatically reduced 
         25   lending to low- and moderate-income neighborhoods.  
          1   Fleet's lending record in New York reveals a bank 
          2   with a troubled history of discriminatory lending. 
          3            For example, in May 1996, Fleet settled 
          4   discrimination charges with the U.S. Department of 
          5   Justice that it systematically overcharged 
          6   minorities from its two New York City area mortgage 
          7   offices.  Fleet's record has not improved.  Fleet 
          8   acquired Shawmut in 1995 and NatWest in 1996.  In 
          9   New York State in 1995, Fleet made 4,994 home 
         10   purchase loans, NatWest made 2,995 such loans, and 
         11   Shawmut before being taken over made 70 such loans, 
         12   for a three-institution total in New York State of 
         13   8,059. 
         14            In 1996, in New York State the combined 
         15   entities made only 4,300 such loans, and by 1997 
         16   this number had declined to 2,415 loans.  The 
         17   combined Fleet's 1997 total was less than NatWest 
         18   alone in 1995.  Particularly troubling is that 
         19   Fleet's lending volumes have declined even more to 
         20   minorities and low income and moderate income census 
         21   tracts in communities overall.  The details are 
         22   included in the written testimony. 
         23            Fleet's combined entities home purchase 
         24   lending volume and LMI census tracts declined 76.6 
         25   percent between 1995 and 1997.  An even steeper 
          1   decline went to New York State communities overall.  
          2   Fleet's mergers have hurt entire communities.  They 
          3   have disproportionately harmed low and moderate 
          4   income neighborhoods and communities of color as 
          5   well. 
          6            For example, in the New York city 
          7   metropolitan statistical area, in 1997, for home 
          8   improvement loans, Fleet Bank NA in New Jersey 
          9   denied 74 percent of applications from African- 
         10   Americans and Latinos versus only 44 percent 
         11   applications for whites. 
         12            This proposed merger would be 
         13   anti-competitive.  Fleet proposes to acquire 
         14   BankBoston through consolidation of the four 
         15   previous competitors into a single institution.  The 
         16   proposal should not be approved.  Even since it has 
         17   been announced, it has triggered further 
         18   consolidation.  For example, People's Heritage 
         19   Corporation from Maine has proposed acquiring Bank 
         20   North of Burlington, Vermont, and Citizens Bank has 
         21   proposed acquiring U.S. Trust, and in Connecticut 
         22   Websters has made a recent proposal. 
         23            Even where Fleet claims to be proposing a 
         24   clean sweep in its divestiture, it discloses in 
         25   footnotes that it would be retaining a number of 
          1   Fleet's or BankBoston's operations.  For example, 
          2   see Fleet's antitrust memo, Page 15, stating in a 
          3   footnote that, quote, "The parties proposed to 
          4   retain certain special industry customers in Boston 
          5   and other New England markets, some of which may 
          6   have revenues less than $100 million." 
          7            This is not a clean sweep proposal.  It is 
          8   imperative that Fleet calculate and disclose the 
          9   amounts by which the proposed divestiture would be 
         10   reduced by the withdrawal and retention of deposits 
         11   associated with these retained lines of business. 
         12            Fleet would also gain an anti-competitive 
         13   share and market power in ATMs.  The Providence 
         14   Journal on May 21st wrote, "After its takeover of 
         15   BankBoston, Fleet would control about 36 percent of 
         16   all ATMs operated by banks and credit unions in 
         17   Massachusetts up from 12 percent."  This issue is 
         18   not addressed in Fleet's antitrust memo.  The 
         19   comment period should not close until Fleet reveals 
         20   more of the nature of its divestiture proposal and 
         21   until Fleet completes the proposal by naming the 
         22   banks that would buy the assets it proposes to 
         23   divest. 
         24            His last comment is that he requests that 
         25   the -- he asserts that the community commitment is 
          1   entirely inadequate and the details of that are in 
          2   the written testimony.
          3            PRESIDING OFFICER SMITH:  Thank you very 
          4   much.  (Applause)
          5            MR. MUHAMMAD:  Greetings.  My name is Abdul 
          6   Jabbar Muhammad, and I'm here on behalf of the 
          7   Nation of Islam under the leadership of the 
          8   Honorable Mr. Louis Farrakhan. 
          9            When Fleet merged with the Bank of New 
         10   England, we, the Nation of Islam, supported the move 
         11   based on a commitment to help the community, its 
         12   organizations, and its businesses.  However, Fleet 
         13   did not honor this commitment.  And the community, 
         14   its organizations, and businesses have paid the 
         15   price.  We have seen documents that show unfair and 
         16   unethical lending practices by Fleet Bank.  Are we 
         17   going to relive the mortgage scandal with this new 
         18   merger?  Will we see our seniors losing homes 
         19   because of unethical lending practices? 
         20            The merger at issue with Fleet Bank and 
         21   Bank of Boston has successfully created a scenario 
         22   of infighting within the community.  Your customers 
         23   are not sure what this merger will bring.  A survey 
         24   conducted by Survey USA asked the following 
         25   question:  What kind of service do you think 
          1   customers of the new bank will receive?  44 percent 
          2   don't think the merger will have an impact on 
          3   service while 42 percent think things will get 
          4   worse. 
          5            The banking and insurance business is the 
          6   most lucrative business in this country.  This 
          7   merger will serve your interests.  Bigger is not 
          8   necessarily better.  A nickel is bigger and weighs 
          9   more than a dime, but it is less in value.  When 
         10   airlines merged we were told to expect better 
         11   service, and we received peanuts and half a 
         12   beverage.  (Applause)
         13            Hospitals merged with the vision of better 
         14   service and healthcare for minority communities.  
         15   Division has been lost.  Minority communities have 
         16   not experienced better service or healthcare.  Will 
         17   this merger bring more personalized service to the 
         18   community?  We no longer have the word "trust" 
         19   within banking institutions, we need the word 
         20   "trust" reflected within the practices of banks, 
         21   your bank. 
         22            The only thing we have in our best interest 
         23   is the Community Reinvestment Act.  The Nation of 
         24   Islam has a suggestion on how you could honor the 
         25   CRA.  We want a letter of commitment to the 
          1   community.  You have an obligation to offer more 
          2   than lip service.  The letter should detail what you 
          3   propose to do for minority communities. 
          4            How can you, Fleet Bank, assure us that 
          5   things will not get worse?  William Sands wrote a 
          6   paper entitled "Proper Attitude is Key to Successful 
          7   Community Lending."  He states the CRA was one of a 
          8   series of laws passed by Congress to address 
          9   problems of unequal access to credit.  The CRA 
         10   emphasizes the continuing and affirmative obligation 
         11   of lending institutions to meet the deposit and 
         12   credit needs of the entire community, including low- 
         13   and moderate-income areas, consistent with safe and 
         14   sound lending practice. 
         15            What is your attitude towards minority 
         16   communities?  How will you ensure that the spirit 
         17   and intent of the CRA be met?  One way is for Fleet 
         18   to support the Boston Bank of Commerce.  The Boston 
         19   Bank of Commerce understands our needs and is 
         20   committed to fostering economic and social 
         21   development. 
         22            Yes, Fleet should make it a project to aid 
         23   and support this community by aiding and supporting 
         24   the Boston Bank of Commerce.  They're not your 
         25   competitor; they're the only African-American-owned 
          1   bank and the only minority-owned community 
          2   development financial institution in New England.  
          3   It is the right and moral thing to do.  It is good 
          4   business practice.  In fact, it is right in line 
          5   with the spirit of serving the convenience and needs 
          6   of the community. 
          7            I don't know what this merger will bring to 
          8   Boston, do you?  How will this merger, creating the 
          9   third largest lender in the nation, handle the 
         10   individual?  The small businesses?  The not-for- 
         11   profit businesses in minority communities? 
         12            I do know that the Boston Bank of Commerce 
         13   is in the best position to handle the needs within 
         14   minority communities.  They have provided over 15 
         15   years of community development and support.  They 
         16   have not lost sight of the individual.  They have 
         17   not lost sight of the small businesses.  They have 
         18   not lost sight of the not-for-profit businesses in 
         19   our communities.  Support the community by 
         20   supporting the Boston Bank of Commerce.  Anything 
         21   less than Fleet will leave us banking while black, 
         22   banking while brown.  Thank you.  (Applause)
         23            PRESIDING OFFICER SMITH:  Questions from 
         24   the panel? 
         25            MR. ALVAREZ:  Reverend Sharpton and 
          1   Honorable Muhammad, you both mentioned the Boston 
          2   Bank of Commerce.  Do you know, has the Boston Bank 
          3   of Commerce made a bid for any of the branches in 
          4   the Fleet package?  
          5            REV. SHARPTON:  It is my understanding that 
          6   they have made a bid.  I understand that the 
          7   thinking was that they wanted in the divestment 
          8   phase of this merger a major bank to take over most 
          9   of it and some 10 to 15 percent would be left.  I 
         10   think the Boston Bank of Commerce, if I'm not 
         11   mistaken, had only made a bid for like 18 branches 
         12   out of 280, which I think is clearly, as Minister 
         13   Muhammad said, not dealing with the competitiveness.  
         14   The fact that nothing has been made concrete there 
         15   shows to me an arrogance and an insensitivity on not 
         16   even trying to work with the community. 
         17            I don't think that's a reasonable proposal, 
         18   given the fact you're talking about 280 branches 
         19   will become available and the bid for the only black 
         20   bank in the region is only for about less than 10 
         21   percent of that. 
         22            MR. ALVAREZ:  But as far as you know, a bid 
         23   has been made.
         24            REV. SHARPTON:  A bid has been made.
         25            MR. ALVAREZ:  Bids haven't yet been 
          1   announced.
          2            REV. SHARPTON:  It might be while we're 
          3   here today. 
          4            MR. ALVAREZ:  Yes. 
          5            PRESIDING OFFICER SMITH:  If there are no 
          6   further questions, we thank you very much for coming 
          7   this morning and afternoon. 
          8            (A pause)
          9            PRESIDING OFFICER SMITH:  We are ready to 
         10   start with Panel Seven, and we have about five 
         11   different organizations with five minutes total 
         12   each. 
         13            So where we have Ms. Feingold and Mr. 
         14   Gornstein, is one of you speaking? 
         15            MS. FEINGOLD:  Just one.
         16            PRESIDING OFFICER SMITH:  Thank you very 
         17   much. 

Last update: December 3, 2010