Public Meeting Regarding Citicorp and Travelers Group
Friday, June 26, 1998
Transcript of Welcoming Remarks
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2 (8:00 a.m.)
3 MR. LONEY: If we could begin,
4 please. I want to welcome you all to this
5 public meeting. This is a continuation of the
6 public meeting that we are holding on the
7 application by Travelers Group to acquire
8 Citicorp.
9 Yesterday we held a meeting here. We
10 had approximately 90 witnesses, and I think it
11 was a very useful exercise for everyone
12 involved. I am confident that today's meeting
13 will be useful as well.
14 Let me first introduce myself. I am
15 Glenn Loney, Deputy Director of the Division of
16 Consumer and Community Affairs of the Federal
17 Reserve Board in Washington D.C. I am the
18 presiding officer for this meeting.
19 Our other panelists today, to my
20 immediate left Scott Alvarez, Associate General
21 Counsel from the Board's legal division, and to
22 his left is Jim Hodgetts, Senior Vice President
23 from the Federal Reserve Bank of New York, and
24 to his left is Barbara Kent, who is Acting
25 Deputy Superintendent of the Consumer Services
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2 Division of the State of New York Banking
3 Department, and we are particularly happy to
4 have the State of New York Banking Department
5 represented here today.
6 We are here today because Travelers
7 Group of New York has applied for the Federal
8 Reserve's approval to acquire Citicorp, also in
9 New York.
10 When the Federal Reserve system
11 considers one of these applications, we look at
12 a number of factors under the Bank Holding
13 Company Act. These include financial issues,
14 managerial issues, competitive issues and the
15 convenience and needs of the communities
16 affected. In doing so, we are particularly
17 looking at the record of performance of the
18 parties under the Community Reinvestment Act.
19 The Community Reinvestment Act
20 requires the Board to take an institution's
21 record of meeting the credit needs of its
22 entire community into account.
23 In addition, the transaction also
24 involves the proposed acquisition or retention
25 of nonbanking companies engaged in activities
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2 permissible for bank holding companies, as well
3 as a proposal to divest or otherwise conform a
4 number of other activities that are not
5 permissible for bank holding companies under
6 current law.
7 With respect to the proposal to
8 conduct permissible nonbanking activities, the
9 Board also must determine whether conducting
10 the proposed nonbanking activities can
11 reasonably be expected to produce benefits to
12 the public that outweigh possible adverse
13 effects, such as undue concentration of
14 resources, decreased or unfair competition,
15 conflicts of interest, or unsound banking
16 practices.
17 The purpose of today's meeting is to
18 receive information regarding these factors,
19 and we are very pleased that you have all been
20 willing to come and testify in our public
21 meeting.
22 Over the two days we will have had
23 over 120 witnesses, representing varying groups
24 or speaking on their own behalf at these
25 meetings. Let me make a few remarks about the
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2 procedures.
3 This is what is called an informal,
4 public meeting. Members of the panel, those of
5 us up here, may ask the people who are
6 testifying questions about their testimony in
7 this kind of a forum. This is not a formal
8 administrative hearing, so we are not bound by
9 rules regarding evidence, cross-examinations,
10 and some of those formal trappings of that kind
11 of a proceeding.
12 We will be here for a full morning
13 and, as you see from the agenda, we need to
14 stick to that schedule very rigorously in order
15 to give everyone a chance to say what they
16 would like to say. We are going to ask the
17 people today to help us stay on schedule. The
18 panels will be expected to keep within their
19 allotted time, so please be mindful of the
20 needs of others.
21 We have a very dramatic, and as it
22 turned out at yesterday's meeting, an effective
23 timekeeping system that you will see from the
24 first row will help people keep on target in
25 terms of their timing. The timekeepers, the
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2 lady sitting in the middle of the front row,
3 will give you a signal when you have two
4 minutes left to speak and another signal when
5 your time is up.
6 Thank you all for coming. There may
7 have been some individuals who haven't had a
8 chance to sign up in advance, and to the extent
9 possible we want to give them a chance to speak
10 as well.
11 At the end of the meeting, we will
12 throw the mike open to anyone who would want to
13 make a presentation at the end of the time,
14 time permitting.
15 Witnesses may submit a written
16 supplement to the oral testimony by July 2 and
17 then the record for this matter will be closed.
18 Any written supplements must be
19 received by close of business at 5 p.m. on July
20 2 and directed to Jennifer J. Johnson,
21 Secretary of the Board, Board of Governors of
22 the Federal Reserve System, Washington D.C.
23 20551. You may fax your submission to area
24 code 502-457-3462.
25 Also, if you haven't turned in copies
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2 of your written testimony or if you have any
3 other written statements to put in the record,
4 please leave them with the Federal Reserve Bank
5 staff at the registration table outside. It is
6 important that we get this material for the
7 record.
8 The transcript of the meeting will be
9 available by June 30 for the June 25 meeting
10 yesterday, and by July 1 for the June 26
11 meeting today to the Federal Reserve Bank of
12 New York.
13 In addition, the official transcript
14 will be available by close of business on June
15 29 for the June 25 meeting, and by the close of
16 business on June 30 for the June 26 meeting on
17 the Board's website on www.bog.frb.fed.us.
18 With that, I would like to begin this
19 morning's proceedings. The first panel, Number
20 Seventeen in the agenda is made up of Marie
21 Nahikian, George McDonald, Freddy Espaillat and
22 Julie Colon. If those folks would come
23 forward.