Public Meeting Regarding NationsBank and BankAmerica - Applicant Presentation
Thursday, July 9, 1998
Transcript of Applicant Presentation
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2 MR. COULTER: Good morning, Madam Chairmen, my
3 name is David Coulter, with me is Hugh McColl, the CEO of
4 NationsBank. I also want to introduce Don Mullane on my
5 right, Executive Vice President of Corporate Community
6 Development for Bank of America. And Cathy Bessant, on my
7 far left, President of the Community Investment Group at
8 NationsBank.
9 We want to thank the Federal Reserve Board for
10 this opportunity to talk about the proposed creation of
11 America's first coast-to-coast bank.
12 The new BankAmerica will represent the triumph of
13 an idea that began nearly a century ago right here in
14 San Francisco when a local produce merchant named A.P.
15 Giannini founded the Bank of Italy.
16 The Bank of Italy later became the Bank of
17 America and it became a catalyst for economic opportunity,
18 moving capital between communities, funding the rise of
19 major industries and helping to house, feed and move the
20 population of a state that is now the world's seventh
21 largest economy.
22 The story of California is really Bank of
23 America's story. Here are just a few highlights. Through
24 the years and right up until today, Bank of America has
25 purchased the bonds that have built universities, highways
26 and, yes, even the Golden Gate Bridge.
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1 In 1929 when the City and County of San Francisco
2 ran out of funds to complete the Hetch Hetchy water
3 system, our bank stepped in and bought the bonds. Today
4 that water is in the drinking fountains in this building.
5 We financed farmers and ranchers at a time when no other
6 bank would entertain them. And today California boasts
7 the most fruitful agricultural industry in the world.
8 We helped build Hollywood, too. We lent money
9 for thousands of films ranging from Snow White and the
10 Seven Dwarfs to Gone With the Wind, from Lawrence of
11 Arabia to It's a Wonderful Life. In Hollywood we became
12 known as The Movie Bank.
13 The Dodgers came to Los Angeles with BofA's help.
14 Mattel and Disneyland were built with BofA financing. And
15 we've been there for Silicon Valley, too. From O'Malley
16 to Disney to Jobs, the great visionaries have turned to us
17 to finance their dreams. As have millions of individuals
18 who count on Bank of America when the time comes to
19 purchase their home, educate their children or start their
20 business.
21 I can assure you that Bank of America has brought
22 unparalleled commitment to the communities we serve. The
23 new Bank of America will continue in this manner but on a
24 much larger scale than ever before. In fact, it will be
25 positioned to create economic opportunity nationwide.
26 Long ago Bank of America sought to empower people
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1 by opening bank branches in hundreds of communities
2 throughout California. Today we're bringing a wide array
3 of financial services even closer to home and making them
4 available to customers 24 hours a day. And we are not
5 turning our backs on the communities that need financial
6 services the most.
7 In South Central Los Angeles, for example, we
8 have more branches than all other banks combined. We've
9 played a principal role in capitalizing one of Los
10 Angeles's three African American owned financial
11 institutions, Founders National Bank. And just last month
12 the CEO of that bank, Carlton Jenkins, said this in a
13 letter to the Federal Reserve Bank in Richmond. Quote,
14 "BankAmerica has been an extremely significant participant
15 in the growth and maturation of Founders National Bank.
16 This, in spite of the fact that several of our branch
17 locations -- in several of our branch locations, we are
18 clearly a competitive institution to them," unquote.
19 The BankAmerica Board of Directors has
20 established a goal that its major operating units receive
21 outstanding ratings for their CRA activities. We are
22 living up to that standard. BankAmerica Corporation has
23 five bank subsidiaries and all five currently hold
24 outstanding Community Reinvestment Act ratings. Two of
25 those have been earned under the new CRA regulations.
26 Our flagship institution, Bank of America
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1 National Trust & Savings Association, has received four
2 consecutive outstanding ratings. Our Federal Savings Bank
3 is rated outstanding by the Office of Thrift Supervision.
4 Our Community Development Bank is rated outstanding by the
5 FDIC. Bank of America Texas and our Credit Card Bank in
6 Phoenix are rated outstanding by the Office of the
7 Comptroller of the Currency.
8 We believe that allocating the resources and
9 performing at a level to achieve these outstanding ratings
10 is very, very important. We believe it is equally
11 important to reward outstanding banks by placing value on
12 their outstanding ratings at times like this.
13 I know that it's important to you to have
14 financial institutions that are committed to community
15 building. I hope you come away from today's hearing with
16 a better understanding of our commitment. To help in that
17 regard, let's take a brief look at Bank of America's
18 record.
19 We surpassed the ten year $12 billion community
20 lending commitment that was announced by the bank in 1992
21 in four and a half years.
22 Last year, we voluntarily set a new, very well
23 defined ten year goal of $140 billion in community
24 lending. It was an unprecedented move by a major bank,
25 once again on a voluntary basis. Mr. McColl will later
26 speak to an even larger voluntary commitment by the
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1 BankAmerica.
2 Since 1992, we have booked $2.5 billion in
3 affordable consumer loans to low- and moderate-income
4 borrowers.
5 Underscoring our commitment to neighborhood
6 revitalization is the success of Bank of America's
7 Community Development Bank which has become the west's
8 number one source of government guaranteed small business
9 loans and multi-family affordable housing finance. In the
10 last five years, we have booked nearly $1.5 billion in
11 community related small business loans and approximately
12 $2 billion in credit for multi-family affordable housing,
13 including more than $600 million in the first half of
14 1998.
15 Last year, Bank of America became the first major
16 bank to launch an initiative tailored specifically around
17 the banking needs of rural America. Our rural 2,000
18 Community Development Initiative includes a three year
19 $500 million community development lending goal. It also
20 calls for $5 million in grants that will benefit rural
21 communities and Indian country. Helping us to carry out
22 this initiative are four advisory committees that include
23 42 rural community experts and practitioners.
24 We were the founders of the California Community
25 Reinvestment Corporation which provides permanent
26 financing for multi-family affordable housing and serves
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1 as the model in the western United States for other bank
2 consortiums. We have invested in dozens of other similar
3 multi-bank organizations.
4 To help create jobs and stimulate economic growth
5 in minority communities, we have invested more than $32
6 million in minority venture capital funds.
7 We continue to expand homeownership opportunities
8 among low-income and minority borrowers through our
9 Neighborhood Advantage program which has generated loans
10 of more than $15 billion since its inception. In 1997,
11 nearly one-fourth of all our mortgage loans were made to
12 minorities and low- and moderate-income borrowers.
13 We've just introduced a new zero downpayment
14 mortgage program for low- and moderate-income borrowers
15 which has had stunning results in our demonstration
16 markets. In fact, we accepted nearly $300 million in
17 applications in just three months.
18 In 1992, we introduced Advantage Business Credit,
19 a lending initiative that has taken much of the paperwork
20 out of small business loan applications for $100,000 or
21 less. In fact, the application for this product is just
22 one page. During the last six years, our so-called ABC
23 program has generated loans of $4.1 billion.
24 And we've trained more than 15,000 of our
25 associates in diversity programs so that they can better
26 respect and cherish the differences that make our company
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1 and our communities unique. We believe that changing
2 demographics represent new markets and opportunities for
3 us to serve people. Or as my predecessor, Dick Rosenberg,
4 said so often, quote, "Service to low-income communities
5 is the right thing to do and the smart thing to do,"
6 unquote.
7 We're also helping to meet the financial needs of
8 a changing population by delivering ATM service in three
9 languages and staffing many branches with employees who
10 speak Spanish, Japanese, Korean, Chinese or Tagalog.
11 And since 1991, we have helped to strengthen
12 local education, economic development and environmental
13 quality with $206 million in contributions to nonprofit
14 organizations across the western United States.
15 We were the leading advocate for the revised CRA
16 regulations, encouraging banks, regulators and politicians
17 to give the regulations a chance. We recently commented
18 positively to the Federal Reserve on Regulation B which
19 calls for the voluntary collection of race and gender data
20 on small businesses. We've spoken out and taken
21 leadership positions on child care, Proposition 13, urban
22 sprawl, water, Hispanic higher education and other issues
23 important to all of our communities.
24 We've established ourselves as good corporate
25 citizens through an environmental program that has
26 resulted, among other things, debt for nature swaps to
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1 preserve Latin American rain forests. We were the first
2 major financial institution to sign the CERES Principles,
3 which hold signatories to a strict environmental code of
4 conduct.
5 Throughout the nation, Bank of America's record
6 is one of commitment, commitments made and commitments
7 kept.
8 I think the point is best made in a letter that
9 was forwarded to me a while back by then Comptroller of
10 the Currency Gene Ludwig. The letter was sent to
11 Mr. Ludwig in October of 1997 by the Greenlining
12 Institute's Executive Director and General Counsel who
13 wrote him about our CRA performance. Here's what they
14 said, quote, "The so-called outstanding rating given to
15 almost half of all very large financial institutions is
16 inadequate regarding Bank of America. As we previously
17 discussed, Bank of America is the overall CRA leader. We
18 believe the rating for Bank of America should be
19 outstanding plus," unquote.
20 I hope this helps give you a better understanding
21 of our community commitment.
22 NationsBank has a similar commitment to its
23 communities just as we are both committed to our
24 associates. Hugh McColl will elaborate on this for you
25 during his testimony. I'd like to turn it over to Hugh
26 but first allow me to close with this thought.
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1 A.P. Giannini once said, "When nationwide branch
2 banking is an accomplished fact, then America will have
3 come of age financially."
4 That's what our merger is all about, it will
5 produce an awesome combination and its power will be
6 unleashed for the benefit of this country.
7 Mr. McColl and I are convinced of this, that is
8 why we shook hand on this deal and that is why we'll
9 become teammates. And now I'd pleased to introduce my
10 colleague at NationsBank, Hugh McColl.
11 MR. McCOLL: Thank you, David. This meeting is
12 about the effects bank mergers have on communities. This
13 subject is close to my heart, as all of you know, my
14 company has been through many mergers over the past 20
15 years.
16 In each, our intention has been to employ more
17 people, win more money, do more business with minority
18 vendors, be more active in the community, and generally
19 make a bigger difference than our predecessor
20 institutions.
21 In fact, in reviewing the effects of these
22 mergers on our communities, we have found almost
23 universally that employment, lending, community
24 development efforts and charitable contributions actually
25 increase. That has been our vision and it will continue
26 to be so with this merger. In San Francisco and in
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1 Charlotte and throughout our coast-to-coast franchise.
2 Our goal is for the new BankAmerica Corporation
3 to be the best community development bank in this country.
4 So I welcome the opportunity to share with you the values,
5 efforts, and achievements that make NationsBank a positive
6 force in all the communities where we do business.
7 Now, as you know, NationsBank has a strong record
8 of community investment. We have achieved and maintained
9 outstanding CRA ratings. We have been a leader in our
10 local market and we have consistently sought out local
11 community based partners to help us achieve our community
12 development goals.
13 Let's consider some of the results. In 1997
14 alone, our mortgage lending to minority borrowers topped
15 $2.7 billion and our mortgage lending in low-income
16 neighborhoods topped $2.5 billion. NationsBank is the
17 number one bank lender to small businesses in this
18 country.
19 Our total production in 1997 was more than $11
20 billion, $2.3 billion of which was loaned in low-income
21 areas. We're also the number one bank originator of SBA
22 loans in the United States and we have preferred lender
23 status in every state in our franchise.
24 Our investment capabilities are significant and
25 unique with more than $520 million in community
26 development equity investments currently on our books.
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1 The NationsBank Community Development
2 Corporation, with the help of many local partners, has
3 involved a or re-habbed more than 14,000 units of
4 affordable housing, investing more than $300 million. Our
5 Community Development Corporation is the only bank owned
6 CDC that serves as both a developer of and investor in
7 affordable housing.
8 The NationsBank Small Business Investment
9 Corporation makes equity investments in small and
10 minority-owned companies. Through it, we've invested more
11 than $15 million in small businesses across the country.
12 Finally, we have invested more than $50 million in
13 minority-owned financial institutions and community
14 development financial institutions. These organizations
15 extend our reach to low-income borrowers and provide
16 capital to distressed neighborhoods in ways that no
17 traditional bank can.
18 Now, looking at what we've accomplished is
19 important, but to understand how we'll continue to be
20 successful in the future, we should look at how we've
21 achieved these results.
22 Our approach can be boiled down to three basic
23 principles. One, we build strategical alliances with
24 community based organizations. Two, we believe in a
25 national commitment delivered and differentiated locally.
26 And, three, we believe strongly in accountability.
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1 Our partners include national organizations as
2 well as hundreds of local community based organizations in
3 cities, towns, and neighborhoods where we do business.
4 These alliances will represent a fundamental way -- the
5 fundamental way that we do business. We seek partnerships
6 for the betterment of neighborhoods.
7 Our purpose in these partnerships is not to
8 compete against community based organizations but, rather,
9 to work with them to improve neighborhoods.
10 Our decentralized management philosophy means
11 that we understand that one size does not fit all
12 communities in need. In other words, associates across
13 the country do not get community development instructions
14 from Charlotte, North Carolina, they get the resources
15 they need and they get a corporate culture that backs them
16 up when they decide what needs to be done.
17 Our commitment to accountability is self-evident.
18 Since 1992, we have provided detailed reporting at the
19 local, state and national level on all of our results.
20 This process ensures that we continue to meet the evolving
21 needs of our communities. Equally important, it provides
22 further opportunities to gain feedback from community
23 groups, civic leaders and the public.
24 Now, let me be perfectly clear about one thing.
25 Our goal has never been simply to meet the requirements of
26 the Community Reinvestment Act. We strive to lead in
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1 everything we do, and that includes building strong
2 communities. Our commitment to our communities extends
3 throughout the company, to every business line and to
4 every associate throughout our franchise.
5 Beyond our core business activity, which fuels
6 the economy, supports the tax base and provides
7 employment, there are five areas in which NationsBank and
8 its associates are active in supporting our communities.
9 And they are, first, community leadership, an associate
10 volunteerism; second, individual and corporate
11 philanthropy; three, commitment to adversity; and, four,
12 minority business development; and, five, progressive
13 marketing programs and business policies.
14 Now, I'd like to touch on each of these areas
15 briefly. Community leadership and associate volunteerism
16 are important parts of the NationsBank culture. At the
17 corporate level we provide leadership to our communities
18 by putting our financial muscle behind important community
19 projects. By advocating for a stronger CRA and a
20 permanent low-income housing tax credit, and by working
21 with local governments and community organizations to
22 achieve shared goals.
23 We also have a strong culture of associate
24 volunteerism. Associate volunteers receive two hours of
25 paid time of every week to work in the schools. Local
26 councils within the bank identify volunteer opportunities
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1 for our associates, and our newest program, NationsBank
2 Neighborhoods, offers cash grants in an associate's name
3 to organizations at which the associates volunteer.
4 Now, the next area I mentioned is philanthropy.
5 Simply put, NationsBank is the most generous financial
6 institution in the country and the new BankAmerica will be
7 so by a long shot. Our combined budget this year will
8 exceed $100 million. No one else even comes close.
9 One of the most important aspects of our
10 decision-making process is that we put the control over
11 charitable dollars in the hands of local executives who
12 know best how to serve their communities. This policy has
13 resulted in not just increased giving but more effective
14 giving with dollars going where they are needed the most
15 throughout the franchise.
16 The third area in which we work very hard to
17 strengthen communities is building diversity among our own
18 associates. Our company will stretch from coast to coast
19 and will include the entire sunbelt, the Pacific
20 Northwest, the Midwest and the Mid-Atlantic. Now, while
21 we are unalterably opposed to quotas of any type, we will
22 continue to support affirmative action and we will have
23 one of the most diverse work forces of any large
24 corporation in this country.
25 And it is our intention that our board of
26 directors will be one of the most diverse corporate boards
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1 in the country. Not at some time in the distant future,
2 but on day one.
3 One of the most important areas of focus in
4 building strong communities is minority business
5 development.
6 NationsBank has been a pioneer and a national
7 leader in creating and sustaining a strong minority
8 business development program. NationsBank was the first
9 financial institution to be recognized by their Minority
10 Supplier Development Council as the corporation of the
11 year. And the first to receive this recognition two years
12 in a row.
13 In 1990, NationsBank set a goal of ten percent
14 for directing discretionary spending to women and
15 minority-owned businesses. Since then, we have averaged
16 more than 15 percent, amounting to more than $470 million
17 spent with women and minority-owned businesses. Once
18 again, our self-imposed goal turned out to be a floor, not
19 a ceiling. And in typical NationsBank fashion, we blew it
20 away.
21 Now, finally, we are supporting our communities
22 through progressive marketing programs and business
23 policies.
24 For example, we have had a formal Hispanic
25 Marketing Program for more than five years in an effort to
26 reach out to this growing segment of our population.
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1 We've installed bilingual ATMs, hired bilingual
2 tellers and telemarketers and formed partnerships with the
3 National Council of La Raza, the Hispanic Association on
4 Corporate Responsibility and SER-Jobs for Progress, Inc.,
5 as well.
6 Now, throughout these partnerships, we have begun
7 to develop programs and products that will make banking
8 with us easier and more accessible for all members of the
9 Hispanic community.
10 What we want to establish with our customers, all
11 our customers, regardless of race, ethnicity or economic
12 means are strong relationships and that's why we
13 implemented a relationship approach to fees and pricing
14 that minimizes fee increases for as many of our individual
15 deposit account customers as possible.
16 This spring NationsBank broke from the pack to
17 offer pricing benefits to a vast number of customers. We
18 eliminated check card fees for all customers, and fees for
19 a broad array of services associated with our two most
20 popular accounts were eliminated or frozen through the
21 year 2000.
22 Now, we've heard Dave Coulter talk about his
23 company's commitment to building strong communities across
24 the western half of the United States. And you've heard
25 me talk about my company's commitment to doing the same
26 across the NationsBank franchise.
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1 In fulfilling these commitments, both our
2 companies have a strong record of accessibility and
3 proactive partnerships with local community groups. In
4 fact, since our merger announcement, we've met with
5 hundreds of community organizations to talk about ways we
6 can best work together to improve our neighborhoods and
7 communities.
8 Bringing our companies together will only enhance
9 our ability to deliver on all of our commitments.
10 The company we will create will be the leading
11 American bank of the 21st Century and we will be this
12 country's premiere community development bank, as well.
13 This will benefit all of our constituents.
14 First, our customers will see a new standard for
15 choice, convenience, value and market presence. Second,
16 our associates will realize more opportunities from
17 working at a larger, stronger company. And, third, by
18 investing in our communities, by providing good jobs and
19 creating new ones and by helping to improve the quality of
20 life for customers and associates alike, we will be the
21 model for corporate citizenship.
22 We will build on the best initiatives from both
23 banks, retaining the Bank of America Community Development
24 Bank and NationsBank Community Development Corporation.
25 These vehicles, as well as new initiatives to promote
26 rural development and Indian country lending and
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1 investment, will be used to rebuild neighborhoods, create
2 jobs and provide access to the financial system as never
3 before.
4 We will keep decision-making in the hands of
5 local bankers and managers who know best how to serve
6 their communities.
7 We will continue to lead locally and nationally
8 and we will deliver on our commitments whatever and
9 wherever they may be.
10 Now, recently we announced a ten year $350
11 billion commitment to community development lending and
12 investing. The commitment targets $180 billion for small
13 business lending. 115 billion for affordable housing, $25
14 billion for economic development and $30 billion for
15 consumer lending. Now, let me underscore, this is a
16 floor, not a ceiling.
17 Furthermore, fulfilling this commitment will not
18 be easy, it will be a stretch. This commitment will push
19 our new company and each of us individually to be even
20 more proactive, more innovative and more creative than
21 we've ever been. We view this as a challenge, and as with
22 all challenges, we are ready and eager to take it on.
23 Both banks have a demonstrated record of working
24 with community partners. Yet, there are those who oppose
25 this merger because we have not signed, quote, unquote,
26 "CRA agreements" and because we have not itemized the
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1 commitment by market or by product.
2 I understand the passion these organizations have
3 for their specific communities. As I've said, we share
4 common goals. However, their desire to receive the
5 greatest financial support possible for their individual
6 causes should not overshadow the fact that our pledge, the
7 largest of its kind ever, is designed to benefit all of
8 our communities.
9 When we created this commitment, we decided not
10 to itemize the commitment by market or by product. And
11 there's a good reason for this.
12 Because community needs and circumstances are
13 always changing, we believe the best approach is a
14 flexible commitment that establishes goals on a nationwide
15 basis and relies on capacity and demand within each market
16 to determine how goals are met.
17 Our outstanding record of achievement,
18 accountability and public reporting of results
19 demonstrates the CRA agreements and itemized commitments
20 are unnecessary for our company, they are unwarranted,
21 they are burdensome to manage, they divert resources from
22 the areas most in needs and they prevent us and our
23 partners from meeting the changing needs of our
24 communities. In short, they're not in the best interests
25 of underserved neighborhoods.
26 Now, for our part, NationsBank is, and the new
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1 BankAmerica will be, devoted to building strong, growing,
2 vigorous communities everywhere that we do business.
3 Community development has been a part of both of
4 our cultures and it will be an integral part of our new
5 culture. It's a fundamental part of the way that we do
6 business. It's essential to the future health of our
7 company and perhaps, most important, as Dave said, it's
8 simply the right thing to do.
9 This is what we have always believed, it's what I
10 believe today and I assure you that it is not going to
11 change. Now, we'll be happy to take your questions.
12 MS. SMITH: Thank you. Bob.
13 MR. FRIERSON: Thank you very much. This is a
14 question to the panel, so anyone feel free to respond. I
15 have several. The board is required to consider the
16 effects of this proposal and the convenience and needs of
17 the communities served and this consideration takes into
18 account the records of performance under the Community
19 Reinvestment Act of NationsBank and BankAmerica.
20 In assessing the effects of the proposal on
21 communities, particularly communities in California,
22 should the board rely on NationsBank's record or
23 BankAmerica's record? If the board should rely on
24 NationsBank's record, how does NationsBank intend to
25 ensure that all individuals in all communities will have
26 access to a full range of products that assist in meeting
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1 credit needs that may differ substantially from community
2 to community? If the board is to rely on BankAmerica's
3 records, which programs -- and I believe I understood you
4 correctly to say you would be retaining BankAmerica's
5 Community Development Bank -- which programs in addition
6 to that would NationsBank expect to continue?
7 MR. McCOLL: Can I answer the last question
8 first? As to the last question, we intend to retain all
9 of what the Bank of America has been doing, including
10 their support through their foundation of local community
11 efforts and Don Mullane can outline all of the aspects of
12 what has been done.
13 We ask that you measure us on both of our
14 records. And what we believe we would do is bring
15 whatever we think is the best of NationsBank's efforts
16 also to California and to the west coast to supplement
17 whatever has been done by the Bank of America. In other
18 words, we think the sum will be greater than the parts.
19 And that's where I am on that.
20 I may have missed one of the questions. Oh, you
21 want to talk about making credit available to all
22 individuals?
23 MR. COULTER: Sure. I will be somewhat
24 repetitive but I would indicate that we are trying to
25 create a new company here. In fact, we refer to it today
26 as the new BankAmerica Corporation, and in that sense,
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1 we're trying to take the best of what we think are two
2 fine organizations today. We're blending this merger, as
3 indicated, from the establishment of a policy committee
4 with three senior individuals from Bank of America and
5 three senior individuals from NationsBank and we are going
6 to attempt to operate on a nationwide basis. This is the
7 first coast-to-coast franchise.
8 And in that sense, I think we have a clear
9 understanding that to be successful on a nationwide basis
10 size is not the only important criteria. To be successful
11 on a nationwide basis and take advantage of size, you have
12 to demonstrate local market or natural market leadership.
13 And that involves community investment efforts as well as
14 day-to-day business efforts in terms of relating the
15 products and services you provide in a natural market, be
16 it the Bay Area or be it St. Louis or be it Jacksonville,
17 Florida in a way that the market clearly believes that you
18 have the decision-making power to offer the products and
19 services that makes sense in that natural market.
20 MR. McCOLL: I would just like to add one thing.
21 As to the understanding of the difference in the markets,
22 which I think is a fair question, it should be noted that
23 NationsBank operates in 16 states now, four major regions,
24 each of which is different. For instance, the cattle are
25 more important in Texas by some staggering margin than
26 they are in South Carolina where cotton is more important.
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1 And we have different industries, from aerospace to the
2 furniture industry, just illustratively.
3 And we understand that the needs of the
4 individuals in each market are quite different and we
5 respond. I made the point earlier and I'd like to
6 underline it, that we have local market leadership that
7 makes decisions in the best interests of each individual
8 community.
9 So our response in Southern California may well
10 be quite different from South Carolina, albeit it will be
11 to achieve the same goals, which is support small
12 business, adequate housing at fair values and services
13 available to everyone in the areas where we do business.
14 So it's not something we're unfamiliar with.
15 We have earned our CRA ratings over a broad
16 number of states and broad regions and we have
17 demonstrably performed in facing the differences that are
18 existent in each of these markets and we will continue to
19 do so.
20 Let me say one last thing. We are Americans, we
21 understand what America is about, and it's about all of us
22 here in the room, even the right to disagree with each
23 other. And I just might -- in response to the earlier
24 statement, you need to understand that we support and, in
25 fact, furnish money to a large number of the groups that
26 are here protesting this merger.
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1 MR. FRIERSON: Let me follow up on the
2 characterization which has been used several times here
3 which is the coast-to-coast banking franchise. This
4 proposal has been characterized as allowing customers that
5 would have access to approximately 5,000 branches and I
6 believe 15,000 automated teller machines. In addition to
7 what you've told us already, can you provide us with any
8 more detail on how it's going to serve the convenience and
9 needs of those residents in communities who may only use
10 the branches and the ATMs that are located within their
11 own communities?
12 MR. McCOLL: Well, we'll try. The first and most
13 important thing that I believe that banks should do is to
14 provide the fuel for the economy, that is, provide credit.
15 Now, that's the first thing we should do.
16 We have a large deposit base, but in addition to
17 that, because of our strong earnings and capital base,
18 we're able to raise money across the world. And we have
19 demonstrated conclusively and can demonstrate empirically
20 that we're net importers of capital into every market in
21 which we operate. And so it starts with that, being a net
22 importer of capital and furnishing it to markets no matter
23 how large they are or how small they are. We start with
24 that and that's because of our strong ability to access
25 the world markets and to bring money into the market that
26 is beyond our deposit base.
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1 Secondly, because of our company's success, both
2 companies' success, we are able to develop software that
3 drives down cost, not only to us but to the customer, that
4 is it makes the products that are available to the
5 customer work better for them and facilitates the ease in
6 which they do their business. And that isn't a lot
7 different, candidly, from Wal-Mart which is a
8 coast-to-coast company which does the same thing.
9 Dave, you may want to comment further about that.
10 MR. COULTER: I have just a few comments. Even
11 if you're confined to a pretty small local market, I
12 didn't move very far out of the small town I grew up in
13 Port City, Pennsylvania for the first 16 or 17 years of my
14 life. I'd still argue that value and convenience that we
15 can provide are quite important.
16 Maybe you go to your normal -- maybe you go to
17 your branch on a weekly basis. But perhaps as technology
18 changes and the world continues to evolve and you don't
19 have transportation, if you can access your bank via your
20 interactive cable TV, that's of some value to you. If you
21 need information about sending a child to college in
22 another part of the United States and need to be able to
23 move money back and forth to that child, that's of value
24 to you.
25 So I think the basic benefits you laid out at the
26 start of the question are quite important and very
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33
1 valuable.
2 In addition to that, it's certainly my experience
3 here in California that it does not take a very small
4 business today to have international, if not global,
5 aspirations to look at this broad pacific rim which we're
6 fortunate to be on one edge of and desire to sell some of
7 its product offshore.
8 Now, we're in a little bit of a disruptive
9 economic period but I think that's a long-term desire and
10 a long-term need. And that's a case where I think the new
11 BankAmerica Corporation can bring a wide range of services
12 in how to do business in offshore markets that appear very
13 foreign and very distant to many small businesses today.
14 And as I said, I think most small businesses have those
15 kinds of aspirations and dreams.
16 MR. McCOLL: I'd like to add one thing. We have
17 about a hundred thousand teammates in our company and Bank
18 of America has approximately the same number of people who
19 are drawing a paycheck, in effect, from the company, so a
20 couple hundred thousand people working.
21 We live in these communities, large and small,
22 and if for no other reason, we all like our communities
23 that we live in and it's in our interests both personally
24 and corporately to support those communities and we're
25 going to do that.
26 Secondly, we are interested in making money. We
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34
1 cannot make money if we don't do the things that banks are
2 supposed to do. That is, if we don't lend money. If we
3 do not make service and products available at reasonable
4 prices, they can go somewhere else and we will lose the
5 business. So we are incented to do the right thing and
6 will do so.
7 MR. FRIERSON: I have one last question, I just
8 want to clarify the record. NationsBank has stated that
9 it will -- it intends to expand all aspects of the
10 BankAmerica rural 2000 Community Development Initiative.
11 Will the rural 2000 initiative be extended to all rural
12 communities that would be served by the combined
13 organization if the merger is approved and how will the
14 initiative be expanded?
15 MR. McCOLL: Well, we'll do that where it makes
16 sense. And it will be expanded under -- obviously, under
17 the leadership of the people who thought it up inside our
18 company. But we'll obviously have to bring more people to
19 the -- bring more people to it from our company, that is,
20 added staffing. Because of time zones, because of
21 different types of rural needs. As I said, a rural need
22 in eastern North Carolina or South Georgia is quite
23 different from what it is in Kansas or Iowa or in Southern
24 California or in -- right here in the valley. So it will
25 have to be tailored to be responsive to each region. But,
26 yes, we intend to continue with the outreach.
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35
1 MS. SMITH: Thank you very much for your
2 presentation and we will move on to the first panel.
3 MS. ORR-SMITH: Madam Chairman, I'd like to
4 address this letter to Mr. McColl and Mr. Coulter
5 requesting a meeting with some of the protestors to
6 discuss the specific issues raised. Thank you.
7 MS. SMITH: I think the first panel is mostly up
8 but if there's anyone who hasn't made it up. And if you
9 will just introduce yourselves to the audience as you are
10 seated and let's start with the person on the extreme
11 right.