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Public Meeting Regarding Citicorp and Travelers Group
Thursday, June 25, 1998
Transcript of Panel Thirteen


   4               MR. LONEY:  Before we begin, we are

   5     trying to organize the open microphone

   6     testimony for this afternoon, and we have a

   7     list of people who have signed up, and I would

   8     like to find out if they are, in fact, here.

   9               If you hear your name called, would

  10     you go out to the registration desk and make

  11     sure that they know you are in fact here and

  12     still want to talk.

  13               Miguel Miranda, Hector Ramirez,

  14     Constantina Jones, Lionell Ouellette, Lloyd

  15     Bethune.  If you will go out and make yourself

  16     known to the folks at the registration desk, I

  17     would appreciate it.

  18               The next panel is Panel Thirteen.  I

  19     understand only one person is here representing

  20     the East Fulton Street Group, and that is James

  21     Daniel.  Mr. Daniel, if you would come forward.

  22               Are there two people?  I guess

  23     Reverend Dillon is here and James Daniel, who

  24     is the son of Reverend Daniel, who was

  25     originally scheduled to testify.


   2               Since you are on my list first,

   3     Reverend Dillon, maybe you should start first,

   4     if you are ready to go.

   5               One thing, if you will notice we have

   6     a timekeeper here.  We are giving everybody

   7     five minutes.  We give you a two-minute warning

   8     and then a final times-up notice.

   9               REVEREND DILLON:  I thank you very

  10     much, and I am certainly grateful for the time

  11     to share this testimony, this information.  I

  12     am Reverend Dennis Dillon, the publisher of the

  13     New York Christian Times.  We publish a

  14     newspaper that serves the black church

  15     community here in the City of New York.

  16               The reason for our participation in

  17     support of the 21st Century Partnership is our

  18     information that we have developed over the

  19     years relative to the treatment of the black

  20     community by Citibank.

  21               I would like to draw our attention to

  22     a report that came out in the New York Daily

  23     News the 20th of April, 1997.  The report

  24     states that despite the fact that Citibank made

  25     quite some loans to the community here in New


   2     York, that only one out of every three blacks

   3     were considered for those loans.

   4               There is a report also that I would

   5     like to bring to our attention, and that is a

   6     report by Congressman Charles Schumer, and the

   7     report states that for the first quarter of

   8     1997, Citibank received a total of 8,000

   9     applications from the white community compared

  10     with 2,000 applications from the Hispanic

  11     community and only 665 applications from the

  12     black community.

  13               It concerns us greatly that here we

  14     are in a city we call New York where the black

  15     population is a fair one-third of the city, the

  16     black population deposits $13 billion in

  17     Citibank every year, and Citibank is only able

  18     to walk away with 665 applicants for mortgages

  19     in our community.

  20               We've been pretty focused on looking

  21     at how this impacts upon the economics of our

  22     community, and we have discovered that the fact

  23     that, with the HMDA data, the fact that this

  24     information is made public, the numbers are so

  25     pitiful relative to mortgages we cannot begin


   2     to imagine what the numbers look like relative

   3     to Citibank making loans to black businesses

   4     that are looking to make progress in our

   5     community.

   6               The end result is that the United

   7     States Department of Commerce came up with a

   8     report and study that shows that in 1996,

   9     despite the fact that we have a total of almost

  10     40,000 black-owned businesses in the City of

  11     New York, the average black-owned business in

  12     this city does less than $43 million a year in

  13     gross business.

  14               I think we are at a critical point as

  15     we look to the 21st century, and banks that are

  16     so serious about investing in the global

  17     market, such as a Citibank, need to seriously

  18     look at where their deposit base is coming from

  19     and need to seriously deal with how we reinvest

  20     in our community in a real sense.

  21               In conclusion, it appears to me that

  22     there is a facade, Citibank is presenting a

  23     picture, as they have worked hard last year,

  24     knowing of the merger, to present a good

  25     picture, to present a positive picture to the


   2     regulators.  But the end result, gentlemen,

   3     ladies, is that we have a bank that is showing

   4     a picture that is not true because they are not

   5     truly serving the black community, and I'm

   6     concerned that our deposits are ending up in

   7     Asia, across North America, and elsewhere, and

   8     it is not ending up in Harlem, Bedford

   9     Stuyvesant, and in our communities across this

  10     city.

  11               I thank you very much for your time,

  12     and we shall leave you some documents.

  13               MR. LONEY:  Thank you Reverend

  14     Dillon.

  15               Mr. Daniel.

  16               MR. DANIEL:  Unfortunately, because

  17     of a conference, my father is not able to make

  18     it, so I will be delivering his statement on

  19     behalf of him and the East Fulton Street Group

  20     21st Century Partnership.

  21               First let me state that the biggest

  22     merger in American history should be closely

  23     scrutinized before being passed.

  24               We of the 21st Century Partnership

  25     have had a relationship with Citibank for over


   2     ten years and believe that they mean well in

   3     their efforts to meet the credit needs of their

   4     service area; however, meaning well and doing

   5     well are distinctly different.  The bank's CRA

   6     ratings need to improve.

   7               Because the merging financial

   8     institutions have not at this point given any

   9     indication of how this proposed merger will

  10     serve the public interest and, more

  11     particularly, low- to moderate-income

  12     communities, the investment alliance believes

  13     consideration for approving the merger should

  14     be considered only based upon a definitive

  15     community reinvestment plan with a definitive

  16     action plan and a time line created in

  17     consultation with community organizations and

  18     elected officials from the impacted

  19     communities.

  20               We call upon the government bank

  21     regulators, members of the United States

  22     Congress and Senate to look more closely at

  23     this merger.

  24               This merger at face value does very

  25     little to expand credit and other needed


   2     financial services within inner city

   3     communities.  Right now it only increases the

   4     value of Citicorp and Travelers stock.

   5               It is important to note that Citicorp

   6     has a less than exemplary CRA record among the

   7     major banks.  Salomon Brothers and Smith Barney

   8     have never developed any community investment

   9     plans, and Travelers Insurance is a redliner

  10     with little presence in low-income communities.

  11               One can only hope that if this merger

  12     goes through that before it does there will

  13     have been a plan developed, in cooperation with

  14     the broader community, that succinctly details

  15     how the bank will do better than it presently

  16     does.

  17               Our concerns with these findings and

  18     Citibank's lack of substantiative involvement

  19     in support of community programs lead us to

  20     believe that if government regulators were to

  21     earnestly assess Citibank's reinvestment record

  22     they would rate them with a need to improve and

  23     stipulate such that before any merger is

  24     approved their rating must substantially

  25     increase.


   2               I at this time would like to raise

   3     another point.  This country already has enough

   4     crime, and in a number of circles it is

   5     believed that this merger is illegal.  The

   6     illegality stems from a notion that Alan

   7     Greenspan, the Federal Reserve chairman, in a

   8     closed-door weekend meeting with Citicorp,

   9     tentatively agreed to give Citicorp an

  10     exemption from the law without approval from

  11     Congress.  One can only hope and trust that

  12     such allegations are just that, allegations.

  13               When we hear that the chairman of

  14     Travelers made over $208 million on the day the

  15     merger was announced, just from the

  16     announcement of the merger, and that this

  17     amount is more than his company contributed to

  18     minorities over its entire history, we hope

  19     that such enormous amounts of money can somehow

  20     find their way back into areas where poverty

  21     still reigns.

  22               These are the issues as we now see

  23     them.  Alan Greenspan and/or Secretary of the

  24     Treasury Robert Rubin can delay or stop this

  25     merger if they want, and they should if as is


   2     alleged under present law the merger is illegal

   3     and if we accept that as a fact that something

   4     that starts out illegally is more than likely

   5     to end up the same.

   6               Last, consider the following:  If the

   7     merger deal is successful, Merrill Lynch and

   8     Wells Fargo would most likely disappear as

   9     separate entities.  Chase Manhattan Bank could

  10     consider purchasing Merrill Lynch, and even

  11     Bank of America could become a thing of the

  12     past if this proposed merger is approved, and

  13     after that, why not Fleet Bank, American

  14     Express or Allstate?

  15               We have laws against monopolies and

  16     with this merger leading the way, can America

  17     afford a monopolized banking industry under the

  18     guise of more efficient and low-cost financial

  19     services?  If the answer is yes, what

  20     assurances will low-income communities have

  21     that they will be better served because of

  22     these mergers, and will any of the alleged cost

  23     savings reach undeserved communities through

  24     greater access to credit?

  25               While we would like to believe this


   2     will happen, without a definitive plan as to

   3     how, we believe that any approval of this

   4     merger should be associated with a definitive

   5     plan worked out in consultation with the

   6     effective communities and in advance of any

   7     approval of the applications.

   8               While the 21st Century Partnership

   9     has enjoyed the support of Citibank and it

  10     would welcome the expansion of our

  11     relationship, we call upon them to act in a

  12     more responsible and accountable manner than

  13     what is exhibited in their present efforts

  14     concerning this merger and, more particularly,

  15     to commit to getting an outstanding CRA rating.

  16               There must be a direct correlation

  17     between what Citibank and Travelers do and put

  18     on paper and what they invest in communities

  19     through lending and philanthropy.  Presently we

  20     don't see that happening with this merger.

  21               In closing, we choose to believe that

  22     Citibank and Travelers want to do the right

  23     thing and if the merger's approved as is or in

  24     a modified state, we will work with them, to

  25     the degree it becomes possible, to assure that


   2     the delivery of quality financial products and

   3     financial services to the underbanked and all

   4     people in general is a reality.  We call upon

   5     the bank regulators and elected representatives

   6     to help them do just that.  For too much is at

   7     risk to do anything else.

   8               Thank you very much.  Signed, the

   9     21st Century Partnership.

  10               MR. LONEY:  Thank you very much,

  11     Mr. Daniel.

  12               Are there any questions?  If not, I

  13     will thank you very much for coming.


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