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