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Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Panel Twenty-Two


  16               MR. LONEY:  Do we have any other

  17     questions of the panel?  If not, I will thank

  18     you very much for coming in and talking to us.

  19               Mark Winston Griffith, who was

  20     scheduled to testify in Panel Twenty-two, is

  21     now here.

  22               Do you want to come up, Mr. Griffith.

  23               (Continued on next page)




   2               MR. LONEY:  Mr. Griffith, please

   3     proceed.

   4               MR. GRIFFITH:  Good morning.  Sorry

   5     for being late.

   6               MR. LONEY:  You'll stay after school.

   7               MR. GRIFFITH:  Okay.  I get all the

   8     special attention.  I appreciate that.

   9               Good morning.  My name is Mark

  10     Winston Griffith, and I'm the founding

  11     executive director of the Central Brooklyn

  12     Partnership and was the founding chairman of

  13     the Board of the Central Brooklyn Federal

  14     Credit Union.

  15               The Partnership serves the

  16     neighborhoods of Ft. Greene, Clinton Hill,

  17     Bedford Stuyvesant, Crown Heights, Brownsville,

  18     Prospect Heights, East Flatbush and Flatbush.

  19               I have a confession to make.  When I

  20     first learned of these hearings I was planning

  21     to be out of town, out of reach, or just plain

  22     out.  As I saw it, I would have to be out of my

  23     mind to show up today and testify.  No matter

  24     what stance I take on what is probably the most

  25     important merger prospect within the financial


   2     industry since CRA was enacted me and my

   3     organization are sure to be dragged through the

   4     mud one way or the other as a result of this

   5     testimony.

   6               To go on record against this proposed

   7     merger would be perceived as dismissing and

   8     betraying the efforts of one of the strongest

   9     supporters of my organization, and of the

  10     community development credit union industry

  11     which of course is Citibank.

  12               To advocate for the merger could risk

  13     ignoring some glaring threats to consumer

  14     interests, and more specifically to my

  15     community, an area that has endured its own

  16     history of betrayal and dismissal.

  17               But, ultimately, staying home while

  18     the future of financial services as we know it

  19     is to be discussed would be a disservice to my

  20     colleagues at Citibank and the people of

  21     Central Brooklyn.

  22               Simply put, too much is at stake and

  23     as one of the few organizations in Central

  24     Brooklyn that has and explicit mandate to serve

  25     as community reinvestment advocate and watch


   2     dog, staying home, no matter how convenient,

   3     would be irresponsible and ultimately

   4     unconscionable.

   5               I'm sure I don't have to tell you

   6     that Central Brooklyn has been a long-standing

   7     victim of bank redlining, discrimination and

   8     disregard.

   9               In the nation's largest black

  10     community in the last ten years alone we have

  11     seen twice as many bank branches close as we

  12     have seen open.  Nationally there is one bank

  13     branch for every five thousand people.  In

  14     Central Brooklyn there is one bank branch for

  15     every 23,000 people.

  16               A now somewhat outdated study of bank

  17     lending showed that for every dollar deposited

  18     in local banks, less than one penny was

  19     reinvested back into the community.

  20               Check cashing operations inevitably

  21     step in.  And in Central Brooklyn there are

  22     twice as many cash checking operations as there

  23     are bank branches.

  24               Into this environment came the

  25     Central Brooklyn Partner in 1991.  The


   2     Partnership provides education and training on

   3     financial literacy issues and organizers and

   4     advocates around community reinvestment issues.

   5     The Partnership runs the youth empowerment

   6     program, a leadership development and financial

   7     education program for young people, the Sisters

   8     Lending Circle, a financial self-sufficiency

   9     support group for people who receive public

  10     assistance, and an economic justice program

  11     which conducts research on local financial

  12     patterns, and, as I mentioned earlier, serves

  13     as a CRA watch dog.

  14               In 1993 the Partnership created the

  15     Central Brooklyn Federal Credit Union a

  16     financial cooperative that serves more than

  17     five thousand people who live, work, worship

  18     and do business in Central Brooklyn has almost

  19     five million in assets and has made millions of

  20     dollars of loans over the past five years.

  21               And yet the credit union, while one

  22     of the largest community development financial

  23     institutions in all of New York City struggles

  24     on many levels to remain healthy and robust in

  25     a credit parched area.


   2               Since the beginning, Citibank has

   3     been there for us.  As one of our first

   4     nonmember investors, Citibank helped capitalize

   5     the credit union and enabled us to make low

   6     interest personal and small business loans to

   7     our membership almost immediately upon the

   8     credit unions opening with a zero interest

   9     deposit of $100,000 dollars.

  10               Eager to support us in our early

  11     growth period, Citibank made a grant of

  12     $10,000.

  13               Over the years we have also received

  14     several grants for our youth program,

  15     participated in a Citibank technical assistance

  16     program for not-for-profit community developers

  17     and have turned to people like Janet Thompson

  18     for advice.

  19               As you know from the testimony of the

  20     National Federation of Community Development

  21     Credit Unions, Citibank has made a sizable

  22     development in community development credit

  23     unions nationwide and Central Brooklyn is

  24     scheduled to soon receive a $55,000 equity

  25     grant through Federation.


   2               Depending upon how Citibank responds

   3     to the rest of my testimony, I plan to make

   4     additional requests for grants for the

   5     Partnership and deposits for the credit union.

   6               Unequivocally, Citibank has been a

   7     full partner in our organizational efforts to

   8     rebuild the economy of Central Brooklyn, but

   9     although my organization quickly turned

  10     Citibank investments into the Partnership into

  11     an instrument that vastly improved the quality

  12     of peoples' lives, it would be arrogant and

  13     narrow minded to conclude that meeting

  14     organizational needs fulfills a financial

  15     institutions obligation to the people of low

  16     and moderate income neighborhoods.

  17               Let's be real.  Community

  18     reinvestment and the consideration of mergers

  19     are not just about measuring a bank's support

  20     of neighborhood-based community efforts, no

  21     matter how impressive.

  22               It's also more importantly about the

  23     quality accessibility and affordability of a

  24     bank's financial product and what the sum of

  25     this proposed mergers parts mean for the future


   2     survivability of my community.

   3               On that count I have deep-seated

   4     fears and reservations.  I am concerned that

   5     Citibank's record of mortgage lending, once the

   6     best in Central Brooklyn, has fallen

   7     precipitously over the last ten years.  I am

   8     concerned with Citibank's growing complacency

   9     in my neighborhood and its most recent failure

  10     to participate in a fund raising consortium to

  11     support the credit union, because it's based

  12     more value on it's rivalry with Chase then the

  13     future of my institution and the people we

  14     serve.

  15               I am concerned with Citibank's

  16     prohibitively high fees for its consumer retail

  17     services such as checking, where there is no

  18     low to mid range pricing between life-line and

  19     ridiculously expensive no-fee checking.

  20               I am concerned that Citibank's

  21     increasing global banking strategy is coming at

  22     the expense of communities like Central

  23     Brooklyn and that this merger will make them

  24     even less focused on our needs.

  25               I am deeply suspicious of any


   2     community reinvestment pledge, 115 billion, or

   3     otherwise made while a merger is being

   4     considered and I am disgusted at the way this

   5     proposed merger, which at this moment in time

   6     is illegal, has been treated as a foregone

   7     conclusion probably turning the hearing into a

   8     cynical exercise, yet again watching the

   9     restless natives jump up and down and shout

  10     ugga-bugga.

  11               I think that ACORN had the right idea

  12     yesterday when they came in here, shut the

  13     place down for a moment, and made us consider

  14     whether we even have the slightest bit of power

  15     to direct the effects of this monumental

  16     decision.

  17               I for one am not going to go home and

  18     passively sit by to a deal cut in the corporate

  19     hallway.

  20               I again acknowledge Citibank's

  21     financial support of Central Brooklyn through

  22     my two organizations, one of which makes loans

  23     to people that every other lender has now

  24     abandoned.  This is a testament to Citibank's

  25     reinvestment record and I'm here to bear


   2     witness to that.

   3               God knows I hope the support

   4     continues, and that Citibank approves the

   5     deposit request that I plan to submit next

   6     week.

   7               (Laughter)

   8               But at the risk of sounding

   9     ungrateful, that is simply not enough.  My

  10     recommendations are simple and broad.

  11               I challenge Citibank to either be a

  12     more aggressive supporter of community

  13     development, make more mortgage and small

  14     business loans in my neighborhood, and provide

  15     products that can be more widely used by people

  16     of low and moderate income or give up its

  17     merger plan.

  18               I know you have the power, Citibank,

  19     and resources.  Use them.  I challenge the

  20     Federal Reserve to enforce this, set higher

  21     standards for the consummation of this merger

  22     proposal and not be seduced or rolled over by

  23     the seeming inevitability of this deal.  Don't

  24     sacrifice my neighborhood for the sake of

  25     making financial history.


   2               Thank you.

   3               MR. LONEY:  Thank you, Mr. Griffith.

   4     Any questions from the panel?

   5               MR. ALVAREZ:  I have a question,

   6     Mr. Griffith, do you think that the Citi is

   7     learning at all from its Partnership with you

   8     about how better to meet the needs of Brooklyn

   9     directly?

  10               MR. GRIFFITH:  I think so.  I mean

  11     one of the advantages to working with us is

  12     that we sort of cover all bases.  Not only do

  13     we do financial literacy and advocacy, but we

  14     also include a financial organization itself,

  15     so we are in the business of making loans and

  16     provide financial services, and so not only are

  17     powerless but there are ways in which we can

  18     empathize with each other, and ways in which

  19     they can learn and we can learn from them.

  20               So I think that the relationship has

  21     been very beneficial.  I think the relationship

  22     that they have established with the National

  23     Federation of Community Development Credit

  24     Unions has been very helpful as well.

  25               Again, my fear is that they have


   2     rested on that, and they, I think, recently

   3     over the past few years, have not really gone

   4     beyond that and, again, I don't want to dismiss

   5     or discount those efforts, because it's a lot

   6     more than what most banks are doing to be quite

   7     frank, but, again, to work through

   8     intermediaries and organizations like ours,

   9     it's just, it's not enough.

  10               It's easy to say that you're doing

  11     things when you have middle class people who

  12     run these organizations coming up here and

  13     testifying and saying thank you for those

  14     contributions, but it does not necessarily,

  15     does not necessarily mean that those services

  16     are being translated into better product and

  17     community investment efforts for the people

  18     who, the low and moderate income people, who

  19     live and work there.

  20               MR. LONEY:  Any other questions?

  21               MR. ALVAREZ:  Thank you very much.

  22               MR. LONEY:  I will wish you luck on

  23     your grant request.

  24               MR. GRIFFITH:  Thank you.


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