Public Hearing Regarding Bank of America Corporation, and FleetBoston Financial Corporation

Held on Wednesday, January 14, 2004, at the Federal Reserve Bank of Boston

Unedited Transcript

          1                                         Volume I
                                                    Pages 1 - 423
          3                   FEDERAL RESERVE BOARD
                                Public Hearing Re
                   Application of Bank of America Corporation 
          6                        To Acquire
                        FleetBoston Financial Corporation
          9               Before Federal Reserve Panal:
         10             Dolores Smith, Presiding Officer
                                  Mac Alfriend
         11                     William McDonough
                                Patricia Robinson
                                    * * * * 
                                    Held at:
         16              Federal Reserve Bank of Boston
                               600 Atlantic Avenue
         17                   Boston, Massachusetts
                           Wednesday, January 14, 2004
         18                         8:30 a.m.
         21                    Jane M. Williamson
                            Registered Merit Reporter
         22                     Carol H. Kusinitz
                        Registered Professional Reporter
. 0002
          1                   P R O C E E D I N G S
          2            PRESIDING OFFICER SMITH:  I am pleased to 
          3   welcome you to this important public meeting on the 
          4   application by Bank of America Corporation to 
          5   acquire Fleet Financial Corporation.  And I'll start 
          6   by introducing myself. 
          7            I'm Dolores Smith, the Division Director 
          8   for Consumer and Community Affairs at the Federal 
          9   Reserve Board in Washington, D.C.  I'm the presiding 
         10   officer for this public meeting.  And I want to 
         11   introduce our other panelists. 
         12            At the far end is Bill McDonough, who is 
         13   general counsel from the Federal Reserve Bank of 
         14   Boston.  Next to him is Mac Alfriend, Senior Vice 
         15   President, Banking Supervision and Regulation from 
         16   the Federal Reserve Bank of Richmond.  And Pat 
         17   Robinson, Managing Senior Counsel, Legal Division, 
         18   from the Federal Reserve Board. 
         19            We are here today because Bank of America 
         20   Corporation, Charlotte, North Carolina, has applied 
         21   for approval to acquire FleetBoston Financial 
         22   Corporation, Boston, Massachusetts. 
         23            When the Federal Reserve system considers 
         24   one of these applications, we look at a number of 
. 0003
          1   factors under the Bank Holding Company Act.  These 
          2   include financial issues, managerial issues, 
          3   competitive issues and the convenience and needs of 
          4   the communities affected. 
          5            In doing so, we particularly look at the 
          6   record of performance of the parties under the 
          7   Community Reinvestment Act.  The CRA requires the 
          8   board to take into account an institution's record 
          9   of meeting the credit needs of its entire community. 
         10            The purpose of the public meeting today is 
         11   to receive information regarding these factors.  We 
         12   will be seeking to elicit this information and to 
         13   clarify factual issues related to the application.  
         14   We are really very pleased that so many witnesses 
         15   have been willing to come and testify at this public 
         16   meeting.  We will have more than 100 groups and 
         17   individuals represented. 
         18            I'll make a few remarks about the 
         19   procedures.  This is what we call an informal public 
         20   meeting.  Members of the panel may ask those who are 
         21   testifying about their testimony.  This is not a 
         22   formal administrative hearing, so we are not bound 
         23   by rules regarding evidence, cross examinations and 
         24   some of the formal trappings of that kind of 
. 0004
          1   proceeding.  And because we have so many witnesses, 
          2   we do need to stick to the schedule, so that 
          3   everyone who has asked to offer oral testimony will 
          4   have a chance to do so.  We are going to ask the 
          5   witnesses today to be mindful of the needs of others 
          6   and to help us stay on schedule. 
          7            The panels of witnesses have been assigned 
          8   times and will be expected to stay within those 
          9   allotted times.  We do have a signal system with 
         10   regard to timing.  We have two timers at the table 
         11   here in front.  And the timekeepers will be giving a 
         12   signal when the witness has one minute left to speak 
         13   and another signal when the time has expired. 
         14            There may be some individuals who were 
         15   unable to sign up in advance to offer testimony.  To 
         16   the extent possible, we want to give them a chance 
         17   to speak as well.  And so at the end of the meeting 
         18   today we will make the mic available to anyone who 
         19   would like to make a presentation, time-permitting. 
         20            One more comment about testimony.  
         21   Witnesses may submit a written supplement to their 
         22   oral testimony, but must do so by next Wednesday, 
         23   January 21st.  And then the record will be closed.  
         24   Any written supplements should be directed to -- and 
. 0005
          1   here I'm going to give information for the record -- 
          2   but the information also is available on a sheet 
          3   that is available out front at the registration 
          4   desk.  So any written supplements should be directed 
          5   to Jennifer J. Johnson, Secretary of the Board of 
          6   Governors of the Federal Reserve, Washington, D.C. 
          7   They must be received by 5 p.m. eastern daylight 
          8   time on January 21st.  You may also fax your 
          9   submission to 202-452-3462. 
         10            If you haven't turned in copies of your 
         11   written testimony or if you have any other written 
         12   statements to put into the record, please leave them 
         13   with the Federal Reserve staff at the registration 
         14   desk.  It is important for us to get this material 
         15   for the record. 
         16            A paper copy of the official transcript of 
         17   the meeting will be available on Tuesday, January 
         18   20th, through the Federal Reserve Bank of Boston and 
         19   the Federal Reserve Board.  In addition, the 
         20   official transcript will be available by close of 
         21   business on January 20th on the board's public 
         22   website.  And here again I'll say the address, but 
         23   the information is available at the registration 
         24   table.  The board's public website is 
. 0006
          1 meetings/. 
          2            With that, we are ready to begin.  I will 
          3   ask each of the panels to start by saying their name 
          4   and the name of their organization. 
          5            Mr. Lewis? 
          6            MR. LEWIS:  My name is Ken Lewis.  I'm the 
          7   CEO of Bank of America. 
          8            MR. GIFFORD:  My name is Chad Gifford.  I'm 
          9   CEO of Bank of Boston. 
         10            PRESIDING OFFICER SMITH:  Proceed.
         11            MR. GIFFORD:  Good morning.  Thank you, Ms. 
         12   Smith.  My name is Chad Gifford.  I'm chairman and 
         13   CEO Bank of Boston Financial. 
         14            I'm delighted to be joined by my new 
         15   partner, Ken Lewis of Bank of America.  On behalf of 
         16   both of organizations, I'd like to begin by thanking 
         17   the Federal Reserve for inviting us to address the 
         18   proposed merger of our two institutions.  We welcome 
         19   this opportunity to discuss some of the reasons 
         20   behind and benefits of this merger and why we 
         21   believe this merger is in the best interests of all 
         22   of our stakeholders -- customers, employees, and 
         23   communities, as well as our shareholders. 
         24            In the two months since we announced our 
. 0007
          1   intention to combine our two organizations, we have 
          2   worked diligently and honestly to communicate openly 
          3   about what this merger will mean to the residents 
          4   and businesses located here in the northeast. 
          5            Many of our colleagues of Bank of America 
          6   and Fleet have collectively met with more than 150 
          7   community-based organizations across this region.  
          8   The team's mission has been to ensure that we 
          9   understand and continue to do our very best to meet 
         10   the needs of our communities. 
         11            This is certainly not a new scenario for 
         12   the region and particularly for New England, since 
         13   it was just over four years ago that I sat before 
         14   many of you here today to present the case for the 
         15   Fleet/BankBoston merger.  At that time the level of 
         16   discussion was about preserving our Boston-based 
         17   institutions.  Looking back at the questions that 
         18   particular deal raised, we believe the merger was 
         19   the right decision at the right time for our two 
         20   banks and for the local communities. 
         21            The rightness of that decision has been 
         22   playing out in what most of you is a very successful 
         23   melding of two powerful competitors into a singular 
         24   customer community and employee-focused institution.  
. 0008
          1   The FleetBoston franchise brought to the region a 
          2   full range of community development efforts, most 
          3   notably through our $14.6 billion community 
          4   investment commitment.  I'm proud to say that we are 
          5   entering this new relationship with Bank of America 
          6   having already surpassed this five-year commitment 
          7   in just four years. 
          8            To date, the lending and investment efforts 
          9   total $18.4 billion across the northeast.  This has 
         10   been a truly bank-wide effort calling on the skills 
         11   and commitment of numerous businesses at Fleet.  In 
         12   other words, we followed through on what we said we 
         13   would deliver.  Incidentally, we are grateful for 
         14   the dedication of our community oversight committee, 
         15   a group of regional community leaders which has 
         16   faithfully met with us over these past four years to 
         17   provide feedback and community insights that helped 
         18   accelerate our results. 
         19            Through our efforts in the community, Fleet 
         20   received outstanding ratings from our chief 
         21   regulators, the OCC, in our last CRA exam, including 
         22   the overall rating as well as in each of the exam 
         23   categories of lending, investment and services. 
         24            Bank of America has also earned this 
. 0009
          1   highest rating, as Ken will outline in a few 
          2   minutes. 
          3            Specifically in our community, impact has 
          4   been felt through, one, focus on our serving low and 
          5   moderate income neighborhoods through our Fleet 
          6   Community Bank.  FCB is an absolute leader in the 
          7   nation in this effort. 
          8            Second, leadership and funding non-profits 
          9   that support economic activity, youth services and 
         10   arts and culture throughout the region with 
         11   approximately $25 million in charitable giving in 
         12   grants each year. 
         13            And finally, with the support of our 
         14   greatest assets, our own people, Fleet employees, 
         15   volunteers have contributed more than 120,000 hours 
         16   to community projects each year. 
         17            I'm proud of where our community's efforts 
         18   have taken us over these past four years, and I'm 
         19   proud of our employees and of the company we are 
         20   today.  However, over these past four years the 
         21   stakes within the financial services industry have 
         22   gotten much higher.  As successful and well 
         23   regarded, we believe, that the Fleet organization 
         24   has become, it is significantly more difficult to 
. 0010
          1   survive solely on a regional level. 
          2            Recognizing this industry reality, my own 
          3   struggle internally centered on considering the 
          4   alternative.  Preserving the hometown bank in our 
          5   region was a passionate and a very personal factor 
          6   for me. 
          7            I'm the son of a former New England banker 
          8   with deep roots in the financial services industry 
          9   in this region.  I take it very seriously.  But 
         10   doing what's best for our franchise, given the 
         11   realities of financial services, it became more 
         12   important than simply preserving the Boston base.  
         13   Thankfully we were in a position where we didn't 
         14   have to do a deal to survive. 
         15            We turned the corner on revenue, credit 
         16   quality, customer service and employee morale.  We 
         17   could operate from a position of strength.  We 
         18   therefore had the time to carefully consider a 
         19   partner that best matched our deeply-held values in 
         20   addition to business synergies.  We also looked to 
         21   create the least amount of disruption and change for 
         22   our customers in our community and our own 
         23   employees. 
         24            In that line of thinking, let us digest one 
. 0011
          1   national franchise, Bank of America.  The benefits 
          2   that this merger with Bank of America present to the 
          3   region will allow for a secure economic future by 
          4   providing the financial depth and resources that 
          5   will meet the competitive challenges raised by 
          6   worldwide financial service consolidation. 
          7            Our excitement at the prospect of being 
          8   part of one of the most respected corporations in 
          9   the United States is palpable throughout Fleet.  Our 
         10   people recognize the tremendous opportunities and 
         11   resources this merger will bring to our region and 
         12   to them personally and professionally. 
         13            I will tell you that a key component of our 
         14   agreement was the unprecedented commitment by Ken to 
         15   maintain Fleet's current employment level in New 
         16   England, as well as our charitable giving and 
         17   existing community commitments throughout the Fleet 
         18   region post-merger.  But the rationale and benefits 
         19   of this proposed merger go much deeper.  It creates 
         20   the second largest financial institution in the 
         21   United States; in fact, No. 1, when one looks at 
         22   only American assets. 
         23            The new organization, with increased size 
         24   and strength, will be in a position to achieve the 
. 0012
          1   economies of scale that allow us to invest more in 
          2   technology, more in people and to develop superior 
          3   products, the best, and services, such as online 
          4   banking, brokerage and investment services. 
          5            This strengthened portfolio of products and 
          6   services ensures that we can match the increasingly 
          7   sophisticated needs and expectations of both 
          8   businesses and the consumers we serve. 
          9            My confidence in this agreement and its 
         10   benefits to local communities rests in the 
         11   tremendous synergies between the two entities and in 
         12   the areas that mean an awful lot to me personally, 
         13   including the shared commitment to community 
         14   development, philanthropy and volunteerism I 
         15   mentioned a moment ago. 
         16            Both Fleet and Bank of America view 
         17   community development very broadly as a strategic 
         18   opportunity.  Our community investment efforts are 
         19   an integral part of our business strategy.  Both 
         20   banks embrace the concept of diversity -- valuing 
         21   individuals of all races, gender, sexual orientation 
         22   as customers and employees.  Each focus on employee 
         23   development and opportunity and holds the value of 
         24   inclusion among our highest priorities. 
. 0013
          1            Due to our unique franchises, there is 
          2   little to no overlap in our retail distribution.  
          3   Therefore, there will be no disruption of service to 
          4   our customers due to divestiture of bank branches.  
          5   Additionally, and as I referenced earlier, we will 
          6   sustain total employment levels in New England and 
          7   will sustain our levels of customer-facing 
          8   employees, which again mean continuity in delivering 
          9   our products and services to our customers. 
         10            For those who are opposed to this merger 
         11   based on the grounds that our headquarters city in 
         12   our region will be losing their local focus, I point 
         13   to all that has been committed to date on behalf of 
         14   the merger to preserve in advance the needs of the 
         15   northeast in community development, philanthropy and 
         16   employment. 
         17            That point is further demonstrated in the 
         18   executive leadership that has been advanced to date 
         19   to manage the new company.  Two of the most senior 
         20   executives of the new corporation will have national 
         21   responsibilities and yet be Boston-based; Brad 
         22   Warner in our premiere in small business and Brian 
         23   Moynihan in wealth and investment management.  In 
         24   addition, two of my closest colleagues at Fleet, 
. 0014
          1   Gene McQuade and Jay Sarles.  Gene will be president 
          2   of the new corporation.  Jay will be a very 
          3   important strategic advisor to Ken. 
          4            More specifically, in terms of maintaining 
          5   local leadership and decision-making for this 
          6   region, we were pleased to announce the appointment 
          7   earlier this month of Ann Finucane, as president of 
          8   the northeast.  In this new role, Ann, well-known to 
          9   Boston, will oversee the development of a strategic 
         10   plan focused on a successful transition in the 
         11   northeast, as well as continued business success in 
         12   the region.  She will ensure the cross-functional 
         13   coordination of the company's efforts in our 
         14   communities, including charitable giving 
         15   sponsorships, customer service issues, public 
         16   policy, government and media relations and other 
         17   strategic needs of the market.
         18            Despite all the compelling advantages of 
         19   the merger, I have to admit this was the toughest 
         20   decision I have had to make personally here in my 
         21   career, but I also believe with increasing 
         22   conviction that this has been one of the very, very 
         23   best.  I am personally committed to helping Ken and 
         24   our associates merge us into a company that indeed 
. 0015
          1   does value employees, customers and the community. 
          2            Earlier I mentioned the size and strength 
          3   of our new company.  It's compelling.  But this is 
          4   much more than about size or quantity.  It's about 
          5   quality as well.  I have heard Ken state on many 
          6   occasions that he wants Bank of America to be the 
          7   most admired company in the world, not necessarily 
          8   the biggest, not only the most profitable, but the 
          9   most admired.  This is a company with deeply-held 
         10   values and commitment, vibrancy and opportunity, and 
         11   I am very proud to be part of it. 
         12            In closing, let me thank each of you who 
         13   cared enough to come to offer your support and even 
         14   raise concerns about the significant transaction 
         15   before us. 
         16            And now I'm delighted to turn it over to my 
         17   new partner, Mr. Ken Lewis.
         18            MR. LEWIS:  Thanks, Chad.  I appreciate 
         19   your comments about the Bank of America and the 
         20   bright future our companies and our communities 
         21   share.  I could not agree with you more about the 
         22   assessment of where we stand and where we're headed 
         23   together. 
         24            I've talked a lot over the past two months 
. 0016
          1   about the competitive and business rationale for 
          2   this merger and why I believe our new company will 
          3   be better positioned to serve our customers and our 
          4   shareholders.  Chad covered some of this today, and 
          5   my thoughts are detailed in the public speeches I 
          6   made since we announced the merger. 
          7            Today's meeting, though, has a specific 
          8   purpose.  I'd like to use my time here to address 
          9   that purpose directly.  Today we're here to talk 
         10   about the effect the combination of our companies 
         11   will have on our communities and specifically those 
         12   in our communities who are most in need of 
         13   affordable, convenient access to financial services. 
         14            When I assumed the leadership of our 
         15   company three years ago, I set a simple, clear goal, 
         16   as Chad just mentioned.  I said we will aspire to be 
         17   the most admired company in the world.  Achieving 
         18   this goal requires that we set and achieve high 
         19   standards of performance for all of those who have a 
         20   stake in the company -- not only customers and 
         21   shareholders, but also the leaders, partners and 
         22   citizens with whom we work to make all of our 
         23   communities strong. 
         24            Our goal in any merger is to build a 
. 0017
          1   business.  This means that working with our new 
          2   teammates, we intend to lend more money, develop 
          3   more affordable housing, do more business with 
          4   minority suppliers, provide more charitable giving 
          5   and generally make a bigger difference in our 
          6   communities that a predecessor could have as an 
          7   independent institution. 
          8            Simply put, our goal is to be the most 
          9   admired, the most visible and most effective 
         10   financial institution in the communities where we do 
         11   business. 
         12            I'll respond directly to some of the 
         13   concerns we've heard from community partners in 
         14   regard to our planned merger, and I'll discuss my 
         15   company's accomplishments in community 
         16   development-related activities, as well as our plans 
         17   and goals in the following five areas:  Community 
         18   development banking; philanthropy; access to 
         19   financial services for low- and moderate-income 
         20   customers; minority business development; and 
         21   community leadership and associate volunteerism. 
         22            In each area our approach is based on three 
         23   principles:  One, national goals and corporate 
         24   values delivered and differentiated locally.  Two, 
. 0018
          1   proactive partnerships with local community-based 
          2   organizations to achieve shared goals.  And three, 
          3   fully transparent reporting and strict 
          4   accountability. 
          5            By adhering to these principles, we are 
          6   striving to set the highest standards of performance 
          7   and accountability, not only for our industry, but 
          8   for the business community in our country. 
          9            As you know, Bank of America has a strong 
         10   and consistent record of achievement in community 
         11   development banking.  We have achieved and 
         12   maintained outstanding CRA ratings throughout our 
         13   franchise for many years.  We've been a leader in 
         14   our local markets.  And we have consistently sought 
         15   out local community-based partners to help us 
         16   achieve our community development goals. 
         17            Consider some of our results:
         18            In the five years since we began our 
         19   ten-year, $350 billion commitment to community 
         20   development lending and investing, we have loaned 
         21   and invested more than $230 billion in traditionally 
         22   underserved American communities.  We said at the 
         23   time that the commitment represented a floor and not 
         24   a ceiling and our performance proves this point. 
. 0019
          1            We are ahead of schedule and at our current 
          2   pace would exceed the $350 billion goal before the 
          3   eighth year of the ten-year commitment.  This 
          4   performance -- in combination with our plan to merge 
          5   with Fleet -- is why we decided to set a new, even 
          6   more ambitious goal. 
          7            Last week we announced that starting in 
          8   2005, the new Bank of America will set a community 
          9   development lending goal of $750 billion over ten 
         10   years, once again setting a higher standard for 
         11   community development banking in our country. 
         12            In pursuing these goals, we have worked 
         13   with hundreds of community groups with shared values 
         14   and goals.  Examples are our partnership with the 
         15   Enterprise Foundation, through which we've helped 
         16   create thousands of units of affordable multi-family 
         17   rental housing over the past 20 years; our 16-year 
         18   partnership with ACORN, with which we've financed 
         19   new homes for more than 23,000 families in 18 cities 
         20   over the past four years; our seven-year 
         21   relationship with Neighborhood Assistance 
         22   Corporation of America, with which we helped 2,300 
         23   families in 21 cities buy homes in 2002 alone, and 
         24   our most recent work with National Council of 
. 0020
          1   LARASA, with which we have recently begun to work to 
          2   help Hispanic customers throughout the nation buy 
          3   their own homes. 
          4            We also maintain membership in the Federal 
          5   Home Loan Bank of Boston. 
          6            In addition to housing finance, we believe 
          7   small business lending is an important source of 
          8   economic support for underserved communities.  We 
          9   have been ranked the number one SBA lender in the 
         10   country for the past two years, with almost 27 
         11   percent of all small business or small farm loans 
         12   made in low- and moderate-income census tracts. 
         13            In addition, we made 22 percent of all our 
         14   government-guaranteed loans to minority-owned 
         15   businesses and 24 percent of such loans to 
         16   businesses owned by women. 
         17            Now, even as we consistently set and exceed 
         18   ever-higher standards in community development and 
         19   even as we demonstrate a record of working with 
         20   community partners to achieve shared goals, there 
         21   are those who oppose this merger because we have not 
         22   signed CRA agreements or itemized our goals by 
         23   market or product. 
         24            I understand the passion these 
. 0021
          1   organizations have for their communities.  As I've 
          2   said, we share common goals.  However, their desire 
          3   to receive the greatest financial support possible 
          4   for their individual causes or communities should 
          5   not overshadow the fact that our pledge -- the 
          6   largest of its kind ever -- is designed to benefit 
          7   all of our communities.
          8            When we created this pledge, we projected 
          9   that about $100 billion of it would be deployed in 
         10   the northeast region of the country.  But we decided 
         11   for good reasons not to itemize it by market.  
         12   Because community needs and circumstances are always 
         13   changing, we believe the best approach is a pledge 
         14   that establishes goals on a nationwide basis, yet it 
         15   is flexible so we can respond to capacity and demand 
         16   within each market. 
         17            We made the same case five years ago in 
         18   California, and our results are proof that our 
         19   approach works.  The state of California represents 
         20   about 34 percent of all deposits at our company, and 
         21   over the past five years 35 percent of all our 
         22   community investment dollars have been deployed 
         23   there. 
         24            Our outstanding record of achievement, 
. 0022
          1   accountability and public reporting of results 
          2   demonstrates that CRA agreements and itemized 
          3   commitments are unnecessary for our company.  Our 
          4   goal is to leverage the power of our financial 
          5   strength and geographic reach to serve all of our 
          6   communities with the products, services and 
          7   resources they need, when and where they need them. 
          8            Philanthropic investment in our communities 
          9   has been an important part of our culture throughout 
         10   the history of our company.  Contrary to what you  
         11   may have heard from some of our critics, 
         12   philanthropic giving at Bank of America is not 
         13   declining.  Far from it. 
         14            In 2002 we gave more than $75 million.  In 
         15   2003 we gave more than $81 million.  In 2004 our 
         16   Foundation budget is $84 million.  And this is cash.  
         17   Combined with Fleet's $25 million budget, we expect 
         18   to give at least $109 million to non-profit 
         19   organizations this year.  Decisions about how to 
         20   deploy these funds will be made in accordance with 
         21   the priorities identified by local leaders, 
         22   following our philosophy of neighborhood excellence 
         23   in corporate giving.  This simply means we believe 
         24   that local leaders are best able to identify the 
. 0023
          1   needs of their neighborhoods, so we use a 
          2   grassroots, bottom-up funding strategy. 
          3            We think this record and the trend it 
          4   represents is impressive.  But again, we have staked 
          5   ourselves out as the company that will set the 
          6   highest standards for American business.  So we're 
          7   raising the bar.  On the same day we announced our 
          8   new Community Development Lending Goal, we also 
          9   announced, for the first time ever, a goal for 
         10   philanthropy.  $1.5 billion over ten years, starting 
         11   in 2005.  This will make us the most generous 
         12   corporation in American by a wide margin. 
         13            With this pledge, our Foundation will be 
         14   better equipped than ever to work with our 
         15   businesses, our associates and our community 
         16   partners to support the vital programs and 
         17   organizations that make our communities strong. 
         18            In addition to our community development 
         19   and Foundation activities, we also work proactively 
         20   to ensure that we're providing affordable, 
         21   accessible products and services to all segments of 
         22   our communities.  Consistently, Bank of America 
         23   originates more mortgage loans to minority borrowers 
         24   than any other mortgage lender.  Also, Bank of 
. 0024
          1   America originates a higher percentage of mortgage 
          2   loans to minority borrowers than most lenders.  At 
          3   the end of 2002, 25 percent of our home loans were 
          4   made to minority customers, while the industry 
          5   average for all lenders is only 18.8 percent. 
          6            We also offer a basic checking product that 
          7   is well-suited to low- and moderate-income 
          8   customers: MyAccess Checking.  This product features 
          9   a low opening deposit of $25, free checking with 
         10   direct deposit, no minimum balance, unlimited check 
         11   writing, free online banking with bill pay, a check 
         12   card with Photo Security option, and unlimited 
         13   access to funds using the our nationwide ATM 
         14   network, online banking and telephone banking. 
         15            We are also constantly working with 
         16   community groups to develop new, innovative products 
         17   specifically targeted to the needs of minority 
         18   individuals and communities. 
         19            About 15 years ago our company began to see 
         20   a great need to take affirmative steps to support 
         21   small, entrepreneurial companies owned by women and 
         22   minorities through our supplier procurement process.  
         23   We immediately put a team in place and rapidly 
         24   became one of the nation's leading practitioners of 
. 0025
          1   supplier diversity.  In fact, we've twice been named 
          2   Corporation of the Year by the Minority Supplier 
          3   Development Council. 
          4            Five years ago we added companies owned by 
          5   disabled people to the program and continued to 
          6   pursue our goals aggressively.  We have a goal of 
          7   directing 15 percent of all supplier spending to 
          8   companies owned by women, minorities or the 
          9   disabled.  In 2002 we spent $545 million with these 
         10   companies, representing 7 percent of overall 
         11   spending. 
         12            While final figures for last year are not 
         13   yet available, based on results of the third 
         14   quarter, we expect to have reached nearly 9 percent 
         15   in 2003. 
         16            Our Multicultural Supplier Development team 
         17   is working with a number of organizations and 
         18   agencies to increase the percentage spent with such 
         19   firms.  We have hosted eight annual Supplier 
         20   Diversity Showcases in major markets to provide 
         21   vendors an opportunity to meet with our business 
         22   leaders.  And we are also a member and strong 
         23   supporter of the National Minority Supplier 
         24   Development Council. 
. 0026
          1            Finally, I'd like to take just a moment to 
          2   talk about one of the most important aspects of our 
          3   culture at Bank of America: community leadership and 
          4   associate volunteerism.
          5            At the corporate level we provide 
          6   leadership to our communities by putting our 
          7   financial muscle behind important community 
          8   projects -- by advocating for a stronger CRA and by 
          9   working with local governments and community 
         10   organizations to achieve shared goals.  At the local 
         11   level, we encourage all of our associates to provide 
         12   leadership to their communities, sharing their 
         13   personal talents and professional skills with the 
         14   public and private organizations that form the 
         15   foundation of community life. 
         16            We also have a strong culture of associate 
         17   volunteerism.  Associate volunteers receive two 
         18   hours of paid time off every week to work in a 
         19   school of their choice -- a program that has the 
         20   potential to generate up to 6 million volunteer 
         21   hours for our nation's schools each year.  Team Bank 
         22   of America supports local councils within the bank 
         23   that identify volunteer opportunities for 
         24   associates -- and a Volunteer Grants program offers 
. 0027
          1   cash grants in an associate's name to organizations 
          2   at which associates volunteer. 
          3            Like any successful business, we understand 
          4   that our associates are our most precious 
          5   resource -- not just for our customers, but for our 
          6   communities as well. 
          7            In conclusion, we believe this merger 
          8   raises no concerns under federal or state law, and 
          9   we urge the Board to swiftly approve our 
         10   application.  Both banks are well-managed and 
         11   well-capitalized, and our new company will continue 
         12   to be so upon completion of the merger.  Both banks 
         13   have strong records under the Community Reinvestment 
         14   Act.  The merger does not pose any antitrust 
         15   concerns and will not result in any merger-related 
         16   branch closures.  The surviving company will hold 
         17   9.94 percent of the nation's deposits, less than the 
         18   federal cap on deposits held by one institution.
         19            To date, the Board has received hundreds of 
         20   letters expressing support for the merger, while 
         21   less than a third of the letters received by the 
         22   Board have expressed opposition to the merger.  The 
         23   supportive letters have been sent by community 
         24   development corporations, state and local 
. 0028
          1   governmental agencies, business and civic 
          2   organizations, cultural, philanthropic, educational 
          3   and religious organizations, and customers from 
          4   across both banks' franchises.  Each tells a 
          5   different story about the positive difference we 
          6   have made in the communities where we do business. 
          7            As I said at the beginning of my remarks, 
          8   our goal at Bank of America is to become the world's 
          9   most admired company in the eyes of all our 
         10   stakeholders -- customers, shareholders, associates, 
         11   community partners and the general public.  We are 
         12   pursuing this goal by setting and achieving higher 
         13   standards every day in all we do.  Leveraging all 
         14   the parts of our company to support our communities 
         15   is a fundamental part of our culture and the way we 
         16   do business.  It's essential to the future health of 
         17   our company.  Most important, it's simply the right 
         18   thing to do. 
         19            This has been our history, and the proof is 
         20   in the public record of our performance.  It also 
         21   will be our future, as expressed in the new goals we 
         22   have set in community development, philanthropic 
         23   giving, business performance and service to our 
         24   customers. 
. 0029
          1            I look forward to working with all of our 
          2   community partners in the Northeast and across the 
          3   nation as we pursue our common goals.  And I look 
          4   forward to all we'll accomplish together for our 
          5   communities and for our country. 
          6            Thank you. 
          7            PRESIDING OFFICER SMITH:  Questions from 
          8   the panel? 
          9            MS. ROBINSON:  I have a question.  How and 
         10   where do you plan to administer your CRA programs in 
         11   the region where FleetBoston is located? 
         12            MR. LEWIS:  You said, how do we plan to 
         13   administrate?
         14            MS. ROBINSON:  Right.  How and where.
         15            MR. LEWIS:  Every region -- first, there's 
         16   a national organization and then subsequently 
         17   there's local teams and a foundation by which we 
         18   fundamentally -- there are a group of people who 
         19   would actually carry out the activities and then of 
         20   course make sure that the records are appropriate, 
         21   so that we can consolidate them on a national basis 
         22   for you in your assessment of how we do or the OCC.  
         23   And so it's both a national organization, but 
         24   delivered locally and sublevels of administration 
. 0030
          1   done.
          2            PRESIDING OFFICER SMITH:  Any other 
          3   questions?  
          4            (No response)
          5            PRESIDING OFFICER SMITH:  Thank you very 
          6   much. 
          7            Welcome, Mr. Congressman.
          8            MR. FRANK:  Thank you. 
          9            PRESIDING OFFICER SMITH:  Start by 
         10   identifying yourself for the record.
         11            MR. FRANK: My name is Barney Frank.  I am a 
         12   member of the United States House of 
         13   Representatives, representing the Fourth 
         14   Congressional District of Massachusetts, which 
         15   starts about three miles from here.  And I serve as 
         16   the senior democrat on the Committee on Financial 
         17   Services. 
         18            I want to note by saying at the beginning 
         19   I've been in touch with a number of my congressional 
         20   colleagues.  My colleague, Mr. Capuano, was at a 
         21   press conference with me yesterday.  I know Mr. 
         22   Lynch, who represents the place where I was sitting, 
         23   Mr. McGovern has spoken, and in fact, I appreciate 
         24   the fact by having this hearing, which is not 
. 0031
          1   automatic.  And all of the members of the 
          2   congressional delegation through the Massachusetts 
          3   House Senate did write to the Federal Reserve to ask 
          4   for this hearing, and I appreciate its being 
          5   granted. 
          6            I want to begin by some general comments 
          7   before getting to my specific ones.  And they 
          8   probably deal with what we've said.  I want to begin 
          9   by mentioning something that he didn't say, but some 
         10   of us have been asked, "Well, what's the 
         11   justification for going to this bank, this private 
         12   corporation owned by stockholders, and making these 
         13   requests, demands, et cetera?"  And I think we 
         14   should be very clear about that. 
         15            The banking system in America exists in 
         16   part because of governmental assistance.  It's a 
         17   private sector operation.  And the purpose should be 
         18   to make a profit.  I believe in the free market.  
         19   And I think the way the free market works is the way 
         20   in which we generate prosperity.  But we haven't 
         21   decided to have an unrestricted market. 
         22            For example, one of the reasons that people 
         23   put their money into banks is the existence of 
         24   Federal Deposit Insurance.  The Federal Deposit 
. 0032
          1   Insurance system is a very significant example of 
          2   government assistance to the banking system.  
          3   The Community Reinvestment Act is specific 
          4   in its intent. 
          5            It says that when a financial institution 
          6   takes advantage of the various federal rules and 
          7   goes into a particular community and provides this 
          8   financial intermediary function, there is some 
          9   obligation to make sure that the community in which 
         10   the money is raised is beneficiary, because 
         11   theoretically you could have a situation in which 
         12   money was put in and simply taken out.  And it is a 
         13   somewhat local statute. 
         14            Now, there is some suggestion from time to 
         15   time that we're being too parochial, and I must say 
         16   that in some of the conversations I've had in 
         17   requesting that some specific commitments be made, 
         18   I've gotten the impression that my intervention was 
         19   not entirely welcome.  I don't take that personally.  
         20   I am used to not being always welcome in various 
         21   venues.  It sort of goes with the job. 
         22            But I do want to give why I think there is 
         23   justification for some localism.  It's not simply 
         24   that money is raised in the community.  I spent much 
. 0033
          1   of last year at the request of, among other 
          2   institutions, Fleet and Bank of America working on 
          3   legislation which in the end said to every state in 
          4   this country, You may not pass legislation that 
          5   regulates the granting of credit to individuals, 
          6   because overwhelmingly the financial institutions of 
          7   this country said to us we cannot have states making 
          8   their own choices with regard to consumer protection 
          9   in this field. 
         10            We understand that consumer protection is 
         11   important, but we need to have a national system.  
         12   So I participated, and we passed a national law 
         13   which preempts state law.  The State of 
         14   Massachusetts by the law we passed cannot do certain 
         15   things it might wanted to have done with regard to 
         16   protecting consumers, with regard to identity theft 
         17   and the granting of credit, et cetera.  In return, I 
         18   believe we got very significant consumer protection. 
         19            But the point is this:  I do not think 
         20   institutions can tell us on one hand that at the 
         21   federal level we should pass legislation that 
         22   restricts what local governments can do, but then 
         23   tell the federal government that we should not then 
         24   intervene to try to be an advocate for local 
. 0034
          1   interest to make some of their own decisions here. 
          2            I think given the logic of a technological 
          3   economy today, that makes sense, but I think it also 
          4   justifies some local concerns.  So I want to be 
          5   clear.  We are talking here not about this 
          6   gratuitous intrusion on this purely private entity; 
          7   but rather, we are talking about an entity which 
          8   performs an enormously important service, which does 
          9   its job very well, which plays a very important role 
         10   in our capitalistic economy, which serves us very 
         11   well, but which benefits from Federal Deposit 
         12   Insurance, which benefits from a federal law that 
         13   preempts states from making some of their own 
         14   consumer protection laws.  This is an inter-mixed 
         15   system.  And I say that because -- and I don't mean 
         16   to address this to the people here in my dealings 
         17   with the people at Fleet and Bank of Boston.  I have 
         18   not found this to be their attitude.  I don't mean 
         19   to impute it to them.  I don't mean to impute it to 
         20   Bank of America.  I haven't had great dealings with 
         21   the Bank of America yet. 
         22            But there is an argument that essentially 
         23   becomes very one-sided.  It says that what the 
         24   government should do is, in fact, to protect the 
. 0035
          1   interests of the financial institutions -- by the 
          2   way, in addition to what I've talked about, we 
          3   passed a bill this year that allows financial 
          4   institutions, banks, to send only copies of checks.  
          5   We have given relief to banks -- it's called "check 
          6   truncation," which is very important to the Feds.  
          7   To use a technical term, you used to have to schlep 
          8   a lot of checks around, and you wouldn't have 
          9   to do that anymore.  And so we passed a law.  And 
         10   now you don't automatically get your checks.  You 
         11   can get copies of your checks. 
         12            We've done other things to facilitate this.  
         13   We are endangering America here -- and I really want 
         14   to set this in context, because again, we have 
         15   people acting as if this is somehow some intrusion 
         16   on or exception to what should be the free 
         17   enterprise system.  As I said, I'm a great believer 
         18   in capitalism.  I think it works very well.  The 
         19   rest of the world, where that has not been 
         20   discovered, is discovering it.  And the essential 
         21   element in capitalism is inequality.  We should 
         22   understand that if you are a believer in the free 
         23   market, you are a believer that inequality is an 
         24   important part of the system.  Because if people are 
. 0036
          1   not rewarded unequally, then the system does not 
          2   work. 
          3            I also believe, however, that left entirely 
          4   to its own, our capitalist system will produce more 
          5   inequality than is necessary for maximum efficiency.  
          6   And the Community Reinvestment Act in this 
          7   proceeding is one way in which we seek to diminish 
          8   inequality -- not abolish it -- diminish it, and 
          9   diminish it in a way that I do not think will in any 
         10   way interfere with the efficiency of the market 
         11   system. 
         12            So that's the context in which we are 
         13   operating.  It's a context in which banks receive 
         14   benefits from the federal government, receive 
         15   protection from the federal government, deposit 
         16   insurance, legislation that will improve the 
         17   efficiency.  Indeed, over the past few years there 
         18   have been a number of laws that have helped banks. 
         19            When I got to Congress, there were very 
         20   great restrictions on the ability of banks to branch 
         21   to different states.  There were very severe 
         22   restrictions on the ability of banks to get into the 
         23   securities business and vice versa. 
         24            When I first got there, many institutions 
. 0037
          1   resisted the banks being able to do that. 
          2            You said two minutes.  I thought I had more 
          3   than that.  What's my time obligation? 
          4            TIME KEEPER:  Ten.
          5            MR. FRANK:  Now let me get specific.  When 
          6   I approached the banks, I asked for some specific 
          7   commitments here in Massachusetts.  And here's where 
          8   I will take issue with Mr. Lewis on two grounds. 
          9            First of all -- and partly it's the 
         10   statute.  I am pleased to learn of past performance, 
         11   but I think it is legitimate also to be more future 
         12   oriented. 
         13            Now, I have to say I think there's a flaw 
         14   in the Community Reinvestment Act here.  The 
         15   Community Reinvestment Act does not, I think, 
         16   empower the regulators enough to look at things.  
         17   The Community Reinvestment Act comes into play here 
         18   for a very specific reason.  No one thinks that it 
         19   would be a good idea regularly to revoke charters to 
         20   financial institutions because they failed the 
         21   Community Reinvestment Act obligations.  It would be 
         22   very disruptive.  It is unlikely to be done.  And I 
         23   must say with all due respect, the Fed is 
         24   particularly unlikely to do it.  The notion that 
. 0038
          1   you're going to go and revoke charters because 
          2   people didn't do enough for poor people is a harder 
          3   one to accept than some others with which I have to 
          4   live with from time to time. 
          5            But when a decision has to be made to go 
          6   forward, that's when the Community Reinvestment Act 
          7   ought to be coming into play. 
          8            Secondly, I am glad to know about national 
          9   activity, but it's the Community Reinvestment Act.  
         10   And it's particularly important here because this is 
         11   a unique moment.  The last major financial 
         12   institution rooted here in Boston, in New England, 
         13   is about to be bought up by people outside.  That 
         14   means that national commitments won't work.  We need 
         15   to have some fairly specific commitments. 
         16            Now, I'm glad to know that some of them 
         17   have been made; staying in the Federal Home Loan 
         18   Bank system's affordable housing program, cashing 
         19   out part of the Mass. Housing partnership, agreeing 
         20   with Mass. affordable housing. 
         21            A week ago I would have been here asking 
         22   you to reject this because of a lack of specificity.  
         23   I'm not doing that today.  I wish I could be more 
         24   enthusiastic, but I have moved from opposition to 
. 0039
          1   saying it's incomplete.  And I know we will have 
          2   more work to do. 
          3            So I just want to close by saying this:  
          4   We've been told we're going to make some specific 
          5   commitments further on.  I do want to stress again 
          6   that I disagree with the suggestion that it's 
          7   somehow inappropriate to look for state-specific and 
          8   community-specific rules.  I think that violates the 
          9   spirit of the Community Reinvestment Act. 
         10            And all I can say is this:  I expect if 
         11   this is approved -- and I would not bet heavily 
         12   against that prospect -- as a member of the 
         13   Financial Services Committee, it will be my 
         14   intention to talk to the chairman of that committee.  
         15   And about seven or eight months from now, after 
         16   we've had a chance to get further, after the 
         17   November elections, to have a hearing here of the 
         18   Financial Services Subcommittee, in which we could, 
         19   several of us, review the progress that has been 
         20   made, both with regard to the specifics of this 
         21   merger and because I think this is the time to take 
         22   a look at the Community Reinvestment Act. 
         23            Thank you for your time.
         24            PRESIDING OFFICER SMITH:  Thank you very 
. 0040
          1   much.  We have Panel No. 2.  And you each have three 
          2   minutes.  I just want to remind you we have the 
          3   timer, who will give you the signal when you have 
          4   two minutes left, mainly to let you know how quickly 
          5   one minute goes.  And then when you have one minute 
          6   and then when your time has expired, if you're in 
          7   the middle of a sentence when the time has expired, 
          8   please finish, but make it a shortening. 
          9            I'd like for you to start by giving your 
         10   name and the name of your organization, if you're 
         11   representing one.  And then just to remind you that 
         12   if you have written testimony, either present it to 
         13   our registration folks or submit it.  You may submit 
         14   comments by a week from today, close of business 
         15   information at the registration table. 
         16            If you will start, Mr. Kriesberg.
         17            MR. KRIESBERG:  Good morning.  My name is 
         18   Joseph Kriesberg.  I'm the president of the 
         19   Massachusetts Association of CDCs, and I have two 
         20   minutes left now.
         21            We appreciate that the Federal Reserve is 
         22   having this hearing, and we think it's very 
         23   important because Massachusetts is not North 
         24   Carolina and it's not California.  And it's not just 
. 0041
          1   that the weather is different here.  I'm surprised 
          2   that you still want to buy this bank, given today's 
          3   weather, but it's because we have our own 
          4   Massachusetts state community reinvestment law that 
          5   must be conformed with.  And that law does require 
          6   the banks to show a net benefit to this merger going 
          7   forward. 
          8            And so it's a very different situation than 
          9   I believe any other state, but certainly most other 
         10   states.  And that is why from the beginning we have 
         11   asked Bank of America to do what Fleet and Citizens 
         12   and Sovereign and all the major banks have done in 
         13   the past decade, which is to lay out their plans 
         14   going forward for community investment in 
         15   Massachusetts. 
         16            And I am pleased to say that after a couple 
         17   of months of uncertainty about that, the bank has 
         18   agreed to adopt a business strategy for 
         19   Massachusetts and to make that available to the 
         20   public and to work with us in putting that together.  
         21   And we have made some progress on that, some of the 
         22   things that Congressman Frank mentioned.  But we 
         23   think that there is a lot of work that has yet to be 
         24   done.  And until such time that it is done, we would 
. 0042
          1   encourage the Fed not to improve the merger. 
          2            Some of the things involve money, 
          3   obviously -- lending, investments and so forth -- 
          4   and very much fit within the $750 billion national 
          5   commitment.  But it isn't just about dollars and big 
          6   dollars.  That commitment tells us that Bank of 
          7   America is a very large institution, and we already 
          8   knew that. 
          9            Some of the things that are most important 
         10   don't involve dollars at all.  They involve the 
         11   availability of branches in low income areas, the 
         12   availability of low cost checking accounts, like the 
         13   basic banking account here in Massachusetts. 
         14            Sometimes we want less dollars, not more.  
         15   We want small business loans, not big business 
         16   loans.  And so sometimes what we're looking for is 
         17   for the bank to make smaller loans which may result 
         18   in a lower total dollar amount, but more impact.  So 
         19   we think there's still a lot of work to be done in 
         20   terms of figuring out how this is going to affect 
         21   Massachusetts and my colleagues.  My board members 
         22   and members that are here with me today are going to 
         23   talk a little bit more about our experience in the 
         24   communities in Massachusetts and the needs that we 
. 0043
          1   have -- the credit and capital needs that we have in 
          2   our communities. 
          3            Thank you. 
          4            PRESIDING OFFICER SMITH:  Ms. Lattimore? 
          5            MS. LATTIMORE:  I'm going to read from my 
          6   testimony.  My name is Gail Lattimore.  I'm the 
          7   Executive Director of the Codman Square Neighborhood 
          8   Development Corporation, also known as "NDC." 
          9            The NDC is a non-profit community 
         10   development corporation located in the South 
         11   Dorchester neighborhood of Boston. 
         12            Our mission is to stabilize our inner-city 
         13   service area, on behalf of the 50,000 plus primarily 
         14   low and moderate-income residents, by implementing 
         15   initiatives that focus on real estate development, 
         16   assets and wealth-building and community planning 
         17   and organizing. 
         18            Over the past 23 years we developed over 
         19   600 units of affordable housing, 50,000 square feet 
         20   of commercial space, and have supported the 
         21   strengthening of a large number of civic and block 
         22   associations and small businesses. 
         23            Our accomplishments are due in no small way 
         24   to the impact of resources available through our 
. 0044
          1   advocacy around and involvement in key community 
          2   reinvestment issues. 
          3            As has been the case nationally, over the 
          4   past decade or more there have been a number of 
          5   mergers and acquisitions of locally-based banks in 
          6   New England.  As a member of the Massachusetts 
          7   Association of Community Development Corporation, 
          8   the Codman Square Neighborhood Development Corp. has 
          9   worked, as these transitions occurred, to ensure the 
         10   strong community investment plans which positively 
         11   impact community development needs in low and 
         12   moderate income neighborhoods are put in place.  I 
         13   want to speak a little bit about our past experience 
         14   with Fleet in this regard and then talk about some 
         15   of the concerns we have going forward around this 
         16   particular acquisition. 
         17            Fleet's early track record in our 
         18   neighborhood raised some significant concerns.  In 
         19   the early to mid 1990s certain census tracts in the 
         20   Codman Square area experienced the highest rate of 
         21   home foreclosures than any other area of Boston. 
         22            Upon investigation of this troubling 
         23   situation, the Codman Square NDC discovered, among 
         24   other things, that unscrupulous speculators were 
. 0045
          1   flipping dilapidated homes to unsuspecting and 
          2   unprepared low/moderate income homebuyers at well 
          3   above market sale prices.  These sales prices were 
          4   supported by questionable bank appraisals. Fleet 
          5   Bank was the investor in a number of these loans. 
          6            Around this same time, Fleet was involved 
          7   in acquiring Bank of Boston.  The development of a 
          8   local community investment plan was key to the 
          9   Codman Square NDC's ability to resolve this issue.  
         10   It was within this context an environment that the 
         11   Codman Square NDC was able to negotiate with Fleet 
         12   to address concerns related to Fleet's home mortgage 
         13   lending operations and practices in our service 
         14   area. 
         15            Based on Fleet's track record in our 
         16   community, prior to these negotiations, the Codman 
         17   Square's NDC Board's policy was to not do business 
         18   with Fleet.  Since these early days, things have 
         19   evolved more positively.  With the Fleet/BankBoston 
         20   merger and the development of a responsive local 
         21   community investment plan and Fleet's apparent 
         22   embracing of the First Community BankBoston 
         23   approaches to community development lending and 
         24   support, those working within the community 
. 0046
          1   development field have seen increasing partnerships 
          2   with Fleet.  The Codman Square NDC is currently 
          3   working with Fleet as a lending partner on the 
          4   development of 26 units of affordable housing with 
          5   the prospects of partnering to develop an additional 
          6   50 units within the next year.  This progress has to  
          7   continue and be further strengthened with Bank of 
          8   America's acquisition of Fleet. 
          9            A local community investment plan is 
         10   required to continue this progress.  The strong 
         11   existing network of community development 
         12   corporations and other such groups in Massachusetts 
         13   that understand and have successfully advocated for 
         14   the financial and community development needs of our 
         15   communities stands ready to continue to work with 
         16   Bank of America on this plan.  The Codman Square NDC 
         17   urges you to condition Bank of America's acquisition 
         18   of Fleet Bank on the development of such a plan so 
         19   that we don't lose the significant progress that 
         20   we've made with Fleet, as it is incorporated into 
         21   the Bank of America. 
         22            Thank you for allowing me to testify. 
         23            PRESIDING OFFICER SMITH:  Thank you. 
         24            MR. THAL:  Good morning.  My name is 
. 0047
          1   Richard Thal.  I'm Executive Director of the Jamaica 
          2   Plain Neighborhood Development Corporation. 
          3            Like a lot of inner-city neighborhoods, our 
          4   community for many years suffered the effects of 
          5   disinvestment.  In fact, some of the first 
          6   organizing efforts in this Commonwealth were 
          7   undertaken by residents of our community in response 
          8   to the systematic disinvestment in neighborhoods 
          9   similar to ours. 
         10            I'm happy to say, however, that especially 
         11   over the last ten years or so, we have seen a lot of 
         12   improvements.  And Fleet and its predecessor 
         13   entities have played an important role in some of 
         14   the changes that we've seen and some of the 
         15   investments that they've made, whether it's in 
         16   affordable housing cooperatives for low income 
         17   families -- the first major supermarket to come back 
         18   into the inner city in about 15 years in Boston that 
         19   Fleet was a major investor in, the creation of 
         20   opportunities for first-time home buyers on 
         21   long-abandoned sites.  And we are starting to see 
         22   over the last few years -- though the progress has 
         23   been slower -- starting to see progress in an area 
         24   that is very important to us, which is the lending 
. 0048
          1   activities with small businesses. 
          2            We have the largest Latino business 
          3   district in New England with over 100 businesses in 
          4   our main area, over 80 percent of whom are owned by 
          5   Latino individuals and families.  And the process of 
          6   improvement and openness to that market has been 
          7   slow. 
          8            I'm happy to say that where a few years ago 
          9   there was almost no opening and very little activity 
         10   with the entrepreneurs in our neighborhood, that 
         11   that has slowly been changing.  And that's a 
         12   positive development, but we certainly are very 
         13   concerned -- and especially looking at some of the 
         14   larger statewide and regional numbers of some of the 
         15   small business lending that Fleet has been involved 
         16   in and Bank of America, as it enters this market, we 
         17   feel that that emphasizes the need for a very 
         18   specific plan with specific targeted goals, so that 
         19   those low income business owners and people of 
         20   color, who are so important to our community, have 
         21   the opportunities that they need to move forward.  
         22   Thank you. 
         23            MS. VAN CAMPEN:  Good morning.  My name is 
         24   Jennifer Van Campen, and I'm the Executive Director 
. 0049
          1   of the Waltham Alliance to Create Housing, a 
          2   community development corporation in Waltham, 
          3   Massachusetts. 
          4            Waltham is a suburban community, but we 
          5   still have poor people.  WATCH serves about 350 low 
          6   and moderate income individuals and families each 
          7   year, but there are over 19,000 families in Waltham 
          8   who are eligible for affordable housing.  There are 
          9   over 8,000 low-wage workers in Waltham looking for 
         10   better jobs.  And there are over 2,000 recent 
         11   immigrants looking for English classes.  WATCH needs 
         12   to help more families in the coming years, not less.  
         13   We need to make sure that the Fleet/Bank of America 
         14   merger adds up to more, not less for our 
         15   communities.
         16            Fleet has been a strong partner of WATCH's 
         17   over the last few years.  Fleet's small business 
         18   products have met several of our company's needs 
         19   while their charitable donations have launched 
         20   several new initiatives in Waltham.  Fleet is a 
         21   major employer in Waltham and has lent volunteers to 
         22   several of our projects and programs.  Our 
         23   job-training program has placed several people in 
         24   Fleet's branches.  A recent Fleet donation has 
. 0050
          1   helped position us to acquire a 10-unit residential 
          2   property.  We have come to rely on Fleet.  Will we 
          3   have the same partner in Bank of America?  Without a 
          4   specific commitment to our cities and towns, how can 
          5   we be sure that this merger will help and not hurt 
          6   our efforts? 
          7            Banks will merge and local control will 
          8   evaporate.  Banks will become fewer and power will 
          9   consolidate in far-away places.  But we don't have 
         10   to accept less.  If huge national banks are the 
         11   trend, then let state-by-state plans be the trend, 
         12   too.  If banks can announce huge national plans, let 
         13   them announce detailed local plans, too.  They're 
         14   smart.  They can do both.  Thank you.  
         15            MR. VAN METER:  Thank you for the 
         16   opportunity to testify today.  My name is Bob Van 
         17   Meter.  I'm the Executive Director of the 
         18   Allston-Brighton Community Development Corporation 
         19   which serves Allston-Brighton, the western-most 
         20   neighborhood in the city of Boston with 70,000 
         21   residents.  I'm an MACDC board member and support 
         22   the overall goals articulated by Joe Kriesberg, our 
         23   president.  
         24            I'm here to speak about the variety of 
. 0051
          1   community development activities and initiatives 
          2   that Fleet Bank is now engaged with in our community 
          3   and how important it is that these initiatives 
          4   continue in the future here in Massachusetts.  As my 
          5   colleagues have stated, community reinvestment is 
          6   about communities and requires specific plans and 
          7   goals in local communities and perhaps even more 
          8   importantly, locally accessible and accountable 
          9   people to undertake the work. 
         10            Just five weeks ago we broke ground on 50 
         11   affordable new homes in our community.  Fleet Bank 
         12   is providing a construction loan of over $7 million 
         13   for that development, and we've been delighted to 
         14   work with knowledgeable and creative staff in the 
         15   Fleet lending group who have been of great 
         16   assistance in moving the project further.  Fleet 
         17   provided a technical assistance grant to the project 
         18   during the predevelopment period, which was also 
         19   very helpful. 
         20            Our CDC offers education and counseling for 
         21   first-time homebuyers, and Fleet has been a partner 
         22   in our first-time homebuyer program over the last 
         23   five years.  Over 40 graduates of our classes have 
         24   bought homes with mortgages from Fleet Bank over the 
. 0052
          1   last five years.  Fleet's support of the SoftSecond 
          2   Program continues to be very important to our 
          3   homebuyers. 
          4            We're part of a collaborative of ten 
          5   community development corporations here in Boston 
          6   called the Community Business Network, which 
          7   provides technical assistance to small businesses.  
          8   Fleet has supported the Community Business Network 
          9   with philanthropic grants and Fleet staff has served 
         10   on an advisory committee for the Community Business 
         11   Network and on the loan committee for one of our 
         12   member CDCs. 
         13            Our CDC, the Allston-Brighton CDC, is 
         14   pioneered in creating individual development 
         15   accounts or matched savings accounts to help low 
         16   income people build assets.  Fleet has worked very 
         17   hard with us over the last two years as we have 
         18   tested the development of a new model of account 
         19   management for individual development accounts.  
         20   With Fleet's support and the support of another 
         21   organization, Doorways to Dreams, 17 individuals 
         22   have saved for the last 18 months and are making 
         23   their savings deposits and managing their accounts 
         24   electronically.  It is our collective hope that this 
. 0053
          1   will be an important innovation which will help make 
          2   individual development accounts accessible on a 
          3   broad scale.  Fleet staff committed many hours to 
          4   the technical and other challenges involved in a new 
          5   banking product. 
          6            Fleet has also supported the development of 
          7   a statewide collaborative of community-based 
          8   organizations of which we are the lead agency, the 
          9   Massachusetts Individual Development Account 
         10   Solutions collaborative, which is promoting best 
         11   practices and training in building IDA programs. 
         12            Fleet's philanthropy has been consistent 
         13   and Fleet's philanthropy staff has been accessible 
         14   and knowledgeable about the issues facing Boston and 
         15   Massachusetts, taking the time to listen and learn 
         16   and to challenge us to think about new ideas as 
         17   well. 
         18            Finally, I'd like to add on a similar note 
         19   to my colleague, Jennifer Van Campen, the 
         20   Allston-Brighton neighborhood, like many Boston 
         21   neighborhoods, has experienced rapidly rising rents 
         22   and prices of homes and condominiums.  Despite this, 
         23   there is a substantial population of low and 
         24   moderate income people.  It's important that 
. 0054
          1   community reinvestment and community development 
          2   efforts support strategies to maintain diversities 
          3   in these communities, as well as meeting the needs 
          4   of low income communities.  
          5            Thank you.
          6            MR. WAITE:   Good morning.  My name is John 
          7   Waite.  I'm the Executive Director of the Franklin 
          8   County Community Development Corporation located in 
          9   Greenfield, Massachusetts, which is the western part 
         10   of Massachusetts. 
         11            I'm attending this public meeting, and I'm 
         12   making a statement on behalf of my Board of 
         13   Directors, who represent people from 26 towns in 
         14   rural Franklin County.  I am also on the Board of 
         15   Directors of the Mass. Association of CDCs.  I 
         16   represent some 68 members as well. 
         17            The Franklin County CDC has been involved 
         18   in community economic development for more than 25 
         19   years.  We have a lending program, a small business 
         20   incubator and a technical assistance program. 
         21            Fleet has provided us with funding for our 
         22   technical assistance program for the past year and a 
         23   half, and we are very grateful for its financial 
         24   support.  And we believe it's been made possible 
. 0055
          1   because Fleet understands western Mass. and they 
          2   know about our programs.  They have a staff person 
          3   out in Springfield.
          4            We are concerned that Bank of America will 
          5   not have the local community presence, knowledge and 
          6   decision-making to effectively work with 
          7   organizations like ours, who work with low and 
          8   moderate income people that have few, if any, other 
          9   options to start to improve the business. 
         10            We are concerned that Bank of America will 
         11   close branches in rural areas that have smaller 
         12   populations and in areas with low income residence.  
         13   In Franklin County we are lucky to still have two 
         14   local banks and one regional banks that have not 
         15   disappeared in all these mega-mergers.  However, 
         16   many rural and low-income areas have lost their 
         17   local banks and branches due to the consolidations, 
         18   and the residents depend on the services from the 
         19   branches that do remain. 
         20            I wrote this statement actually two days 
         21   ago.  This morning driving in I heard on the news 
         22   that our regional bank has actually just requested 
         23   to close the Conway branch, which is one of the 
         24   smaller towns in Franklin County.  This town has had 
. 0056
          1   a bank -- at least a branch since 1854.  So for 150 
          2   years they've had a bank located in this rural area 
          3   of western Massachusetts and now they're going to 
          4   lose it.  This is just a result and this is one of 
          5   the things that we're most concerned about when 
          6   these large banks move in. 
          7            We're also concerned that Bank of America 
          8   will not address the needs of small businesses.  
          9   Fleet has done a decent job of providing these loans 
         10   under $100,000 and to businesses with annual 
         11   revenues under a million dollars.  We would expect 
         12   Bank of America to establish aggressive goals for 
         13   the percentage of these types of loans as well. 
         14            In addition, we would want Bank of America 
         15   to employ a second look program for its small 
         16   business loans, which means that the applicants will 
         17   be looked at individually and not just put through 
         18   some computer-based assessment process.  Bank of 
         19   America should also refer declined loans to 
         20   technical assistance programs and non-traditional 
         21   lenders such as ourselves where appropriate.  And as 
         22   earlier, Bank of America should continue to expand 
         23   on Fleet's contracts with community-based 
         24   organizations that provide technical assistance. 
. 0057
          1            We do not support this acquisition because 
          2   it will take ownership and control even further away 
          3   from our community, which is contrary to our 
          4   organization's mission statement, which says we 
          5   strive to maximize community control over our 
          6   economic destiny.
          7            In closing, I want to tell you that in our 
          8   business technical assistance program we teach 
          9   business people about the triple bottom line  --  
         10   social and environmental as well as economic.  We 
         11   ask that Bank of America develop a meaningful plan 
         12   and be held accountable as a socially responsible 
         13   business. 
         14            Thank you very much.
         15            PRESIDING OFFICER SMITH:  Thank you all 
         16   very much.  Do we have questions from the panel?  
         17            (No response)
         18            PRESIDING OFFICER SMITH:  We are ready to 
         19   start with the panel.  And we are a little bit ahead 
         20   of schedule, so we can give them four minutes each.  
         21   If you are reading your comments, if you would try 
         22   to sort of glance toward the time-keeper 
         23   periodically.  So with that, we're ready to start 
         24   with Mr. Sanchez.
. 0058
          1            MR. SANCHEZ:  Good morning.  My name is 
          2   Jeffrey Sanchez.  I'm the state representative for 
          3   the 15th Suffolk District.  That includes the areas 
          4   of Jamaica Plain, Roxbury, Mission Hill, Brookline. 
          5            Thank you for this opportunity to come 
          6   before you today to testify regarding this merger.  
          7   I am also someone who has actually lived through 
          8   mergers myself.  I worked in the California banking 
          9   system and have seen a great deal in a span of about 
         10   five years at the time that I was there in 
         11   California. 
         12            While at times mergers can be good for 
         13   particular communities, at times there's a lot 
         14   that's left unclear.  And I think that that's the 
         15   case right now.  I know that there's been certain -- 
         16   there has been certain discussion that Bank of 
         17   America has worked with a few people within 
         18   particular segments of the community.  But I think 
         19   given the breadth of this merger, it behooves them 
         20   to continue to work with cross-sections of the 
         21   communities throughout the Commonwealth. 
         22            FleetBoston has worked diligently in terms 
         23   of working with particular communities.  And I think 
         24   that there were certain commitments that were made 
. 0059
          1   to communities that still haven't necessarily shown 
          2   total fruition right now in terms of the outcomes.  
          3   And I think that given that, we still need to make 
          4   sure that the Fleet/Bank of America merger respects 
          5   a number of those commitments that were made in the 
          6   previous merger with Fleet and BankBoston. 
          7            I'm aware that Bank of America has a 
          8   history of making few or small business loans under 
          9   $100,000 in smaller institutions, and I think it's a 
         10   concern because we have such a great number of 
         11   microenterprise within our communities.  While small 
         12   business is definitely a priority, microenterprise 
         13   makes up our small business communities in our main 
         14   streets districts, and we would like a significant 
         15   presence there. 
         16            Given the time frame that I have to 
         17   discuss -- I have a lot to discuss, but I'm going to 
         18   try and generalize a number of things.  While again 
         19   there were certain commitments that were made 
         20   through a press conference yesterday, I'm still 
         21   concerned that Bank of America has not addressed the 
         22   issue of work force development effectively and 
         23   completely yet, as well as procurement, as well as 
         24   the community development dollars; and given the 
. 0060
          1   presence the Bank of America will have in this 
          2   region, I feel that Bank of America should commit to 
          3   an increased percentage in the amount of community 
          4   development dollars which they disperse to 
          5   communities. 
          6            I would also again support the legislatures 
          7   of the banking committee and request that Bank of 
          8   America voluntarily submit to local regulations.  I 
          9   think it would be an extreme act of goodwill that 
         10   would show that Bank of America is willing to work 
         11   at a local level, not only at the national. 
         12            I would also like to -- I'll actually 
         13   conclude by saying that there was a group that was 
         14   working at the Community Advisory Committee, which 
         15   Senator Wilkerson here was sitting -- actually, I 
         16   think cochairing, if I'm correct -- that submitted a 
         17   lengthy list of pieces for Bank of America to 
         18   address.  And in looking at that, I feel it's 
         19   extremely detailed.  There are a number of issues 
         20   that are addressed through it.  I would ask 
         21   respectfully that the people that are involved in 
         22   this merger, both Fleet and Bank of America, sit 
         23   down with this Community Advisory Committee to 
         24   discuss these details to make sure that we get the 
. 0061
          1   biggest bang for our buck in your plans to move into 
          2   our communities. 
          3            There were certain -- when I got involved 
          4   in communicating myself with Bank of America, I was 
          5   happy to see that I received a letter from them.  
          6   Unfortunately, I didn't receive anything from the 
          7   Fleet side, and I was a little concerned with that.  
          8   And with the Bank of America, it was noted that they 
          9   would refer me to a public relations or a public 
         10   affairs person, and I'm still currently waiting to 
         11   hear from that person. 
         12            So again, I would hope that this is not an 
         13   indication of how the bank will come into our 
         14   communities.  We have active communities.  We have 
         15   felt positive impacts within the past with Fleet.  
         16   And while, again, it's unclear to me what the total 
         17   impact -- what the commitment to -- our previous 
         18   commitments were -- the commitments that currently 
         19   exist, I would encourage those to please -- those in 
         20   this merger to please stick with us in the 
         21   community, because we will also make your 
         22   institutions thrive. 
         23            Thank you very much. 
         24            PRESIDING OFFICER SMITH:  Thank you. 
. 0062
          1            Mr. Fort? 
          2            MR. FORT:  My name is Vincent Fort.  I 
          3   served the Third and Ninth District in Atlanta, 
          4   Georgia.
          5            Over the last four years I've led the fight 
          6   in Georgia against predatory mortgage lending.  
          7   During that time, we passed the strongest law to 
          8   restrict predatory mortgage lending in 2002.  That 
          9   same law was gutted just last year in 2003.  
         10   Councilmember Derrick Boazman, who is to my right, 
         11   authored an Atlanta city ordinance that prohibited 
         12   the city from doing business with companies that did 
         13   predatory lending.  In both instances Bank of 
         14   America opposed those legislative efforts to 
         15   restrict predatory lending. 
         16            While working on these issues, we've become 
         17   intimately familiar with predatory lending practices 
         18   of Bank of America.  And I'd like to talk very 
         19   quickly about five points that I'd like to make. 
         20            While Bank of America shuttered 
         21   NationsCredit and EquiCredit in 2001, we find that 
         22   many of these loans are still alive.  That is, 
         23   people are still paying on these loans, still 
         24   entrapped in these loans that are characterized by 
. 0063
          1   high interest rates and single premium financed 
          2   credit life insurance.  We know that Bank of America 
          3   in one instance acquired about $10 billion of 
          4   securities in their own subprime loans. 
          5            Over the years I have received complaints 
          6   regarding these loans.  One that comes to mind is 
          7   that of a minister in my community who was 
          8   downstreamed from Bank of America and sent over to 
          9   NationsCredit to get a loan.  Shortly thereafter, he 
         10   was foreclosed upon by NationsCredit. 
         11            These loans that are still in place ought 
         12   to be reformed.  They ought to be reviewed and their 
         13   terms adjusted, so that the victims of these loans 
         14   can be made whole. 
         15            From an examination of the available data, 
         16   Bank of America denies African-Americans in the 
         17   Metropolitan Atlanta area 2.66 times more frequently 
         18   than they do whites.  And Latinos are denied 3.5 
         19   times more frequently than whites.  These 
         20   discriminatory patterns -- and these are refinance 
         21   loans, by the way -- ought to stop.  These practices 
         22   fuel predatory lending.  People of color who are 
         23   turned down by Bank of America find themselves 
         24   forced into the subprime market. 
. 0064
          1            3.  Bank of America is further involved in 
          2   predatory lending by virtue of its purchasing of 
          3   subprime loans.  These loans contain prepayment 
          4   penalties and once again, very high interest rates.  
          5   For example, Bank of America purchases Option One 
          6   loans.  And I have a fax sheet of one victim in the 
          7   Atlanta area that I will share with you.  I don't 
          8   have it available now, but I will share a fax sheet 
          9   of one victim who has come to Atlanta Legal Aid for 
         10   redress.  So this is an issue that we need to deal 
         11   with. 
         12            4.  Bank of America fuels predatory lending 
         13   by securitizing subprime lenders in the last two 
         14   years, such as Ameriquest, Wells Fargo Home 
         15   Mortgage, and New Century.  Bank of America also 
         16   securitized Superior Bank loans which are 
         17   characterized by many of the features that I've 
         18   already mentioned. 
         19            5.  Bank of America has made capital 
         20   business loans to payday lenders, which are 
         21   increasingly becoming a legislative focus in 
         22   Georgia, particularly as they function around 
         23   military bases. 
         24            We have increasingly gotten complaints and 
. 0065
          1   a lot of media attention regarding servicemen near 
          2   these payday loan companies that Bank of America 
          3   finances who are being ripped off.  That's a 
          4   particularly, in my thinking, an egregious situation 
          5   where the servicemen who are in harm's way, so to 
          6   speak, servicemen who are committed to protecting 
          7   each and every one of our lives, are in a situation 
          8   where they are being ripped off by the payday loan 
          9   companies.  That is beyond the pale of my 
         10   estimation. 
         11            The merger of Bank of America with Fleet 
         12   should not go forward until they cease their 
         13   indirect and direct involvement in predatory lending 
         14   practices.  Otherwise, such a merger will create a 
         15   larger machine to do even more predatory lending. 
         16            MR. BOAZMAN:  Good morning.  I want to 
         17   thank the panel to allow me the opportunity to be 
         18   here this morning. 
         19            PRESIDING OFFICER SMITH:  Please state your 
         20   name.
         21            MR. BOAZMAN:  I'm Derrick Boazman.  I'm a 
         22   member of the Atlanta City Council, representing the 
         23   12th District of the City of Atlanta.  And I am here 
         24   really to be the voice for the thousands who could 
. 0066
          1   not be here.  I left sunny Atlanta where it's 60 
          2   degrees to come to the coldest day in Boston, 
          3   because I thought it important that this committee 
          4   hear from the voice of the voiceless. 
          5            Senator Fort really laid out the case, and 
          6   he has worked very diligently alongside me as my 
          7   partner over the state legislature as we dealt with 
          8   this issue at the city level.  But I wanted to make 
          9   sure that it get reemphasized. 
         10            When we see these mega-mergers, there's 
         11   also a human factor.  Unfortunately, on the Bank of 
         12   America side in particular, the human factor plays 
         13   out in predatory mortgage lending, the subprime 
         14   market we see, as Senator Fort has already stated, 
         15   people who are looking to refinance, as well as 
         16   people who are looking for loans on the first end, 
         17   oftentimes sent out of the door of the primary bank, 
         18   where the signal sets forth a certain reputation to 
         19   the subprime market, as it was said, which was 
         20   supposed to be closed in 2002.  NationsCredit and 
         21   EquiCredit have millions and millions of dollars 
         22   that are still being made off the securitization of 
         23   those loans which have been bought back by Bank of 
         24   America.  It's very problematic. 
. 0067
          1            I've sat in too many homes, most of them 
          2   widows.  The only thing that stands between them and 
          3   the one asset that they still hold is a slickster.  
          4   And oftentimes that slickster, whether he shows up 
          5   as a home repair company, goes straight to the 
          6   subprime lenders, EquiCredit and NationsCredit.  And 
          7   at the end of the day, they end up losing their 
          8   home.  But not only do they lose their home to this 
          9   pernicious practice, they oftentimes lose their 
         10   dignity and their self-worth. And we thought that 
         11   that was an effort to reform and make some mends to 
         12   this community. 
         13            No doubt you will hear small 
         14   community-based organizations, from Girl Scouts and 
         15   Boy Scouts, come and talk about how much uniforms 
         16   have been donated and how much money has been given.  
         17   But in those same communities grandma is losing her 
         18   home because of the practices of Bank of America. 
         19            What is particularly troubling is also the 
         20   capitalization and the continued funding at levels 
         21   that are just unheard of of organizations like 
         22   payday loan companies. 
         23            Payday loans are nothing more than modern 
         24   day sharecroppers.  It's a modern day sharecropping 
. 0068
          1   system that preys on sometimes the poorest of the 
          2   poor, who pay to cash checks, only because Bank of 
          3   America have pulled their branches out of these very 
          4   same neighborhoods. 
          5            So we see payday loan companies come when 
          6   the banks pull out on the front end.  And so those 
          7   are some very serious concerns. 
          8            Going back to those who we represent and 
          9   sitting in their homes and looking at the 
         10   devastation of their lives, when we see people, 
         11   particularly seniors moving out of our communities, 
         12   we think that they're just moving back in with their 
         13   children and their daughters and their sons because 
         14   that's what they want to do.  But oftentimes the 
         15   option is either be forced out into the street or to 
         16   move back into a housing arrangement back with 
         17   families, simply because they have been swindled out 
         18   of their homes.  And at the end of that transaction 
         19   is Bank of America in some form, whether it's 
         20   through their predatory lending or through the 
         21   capitalizations of payday loans and other kinds of 
         22   predatory practices.
         23            So we are very concerned about this merger, 
         24   because what it does is give a greater level of 
. 0069
          1   resource to continue the practices that have 
          2   devastated lives and devastated homes. 
          3            So we would ask you to look with a serious 
          4   discernment into this issue.  It may be legally 
          5   right, but it's morally wrong.  It may be legally 
          6   right to extend these loans, but it's morally wrong 
          7   to extend the loan when you know that this 
          8   individual has no possibility of making the payment 
          9   terms that is given to them. 
         10            So we would ask you to forego the moving 
         11   forward of this merger and to look very seriously 
         12   into this issue, because the human toll is 
         13   tremendous, and it is terribly unfair. 
         14            MS. WILKERSON:  Good morning to the 
         15   presiding officer and members of the panel.  Welcome 
         16   to Boston.  For the record, my name is Dianne 
         17   Wilkerson.  For 11 and a half years I've had the 
         18   privilege of serving as the State Senator from 
         19   Boston, of Boston Second Suffolk District.  And I 
         20   sit in that capacity, as well as in the capacity 
         21   this morning as the convener of the Statewide 
         22   Community Advisory Committee, which was actually 
         23   created in 1999.  The original name was the 
         24   Statewide Community Advisory Committee for the Fleet 
. 0070
          1   Bank/BankBoston merger. 
          2            Within three months of the creation of the 
          3   committee, Citizens Bank announced the plan to 
          4   acquire Sovereign Bank, so we changed our name to 
          5   the Community Advisory Committee on Bank Mergers.  
          6   We've been busy, busy, busy.  And we are here today 
          7   yet again. 
          8            I want to stay at the outset and make it 
          9   emphatically clear that I am here to speak in 
         10   opposition to the merger as it has been presented 
         11   today.  I am a realist.  I understand that this is 
         12   looking like a juggernaut, but I am appealing to 
         13   you, because it is my understanding that you are the 
         14   only avenue that we have to address what I think are 
         15   some very serious issues.  The Community Advisory 
         16   Committee is made up of about 45 organizations from 
         17   mostly eastern Massachusetts.  And we did believe 
         18   that it was important to have a unified voice, 
         19   because we didn't know just from the experience in 
         20   Roxbury or Dorchester what the banking experiences 
         21   were on the ground. 
         22            So organizations -- everyone from the 
         23   NAACP, the Lawyers' Committee for Civil rights, the 
         24   Burroughs Group, professional organizations, civil 
. 0071
          1   rights organizations -- the collective and common 
          2   interests that they all have is that they have a 
          3   customer base of regular folks who depend on access 
          4   to credit on a day-to-day basis.  And it is that 
          5   standard, the realization that your obligation and 
          6   our obligation to make sure that whatever merger 
          7   that is approved or acted upon, among other things, 
          8   meets the credit needs of the community.  That is 
          9   what I am here to speak to you today. 
         10            I sat on the Community Reinvestment 
         11   Committee in 1990, when Fleet came to Boston in the 
         12   demise of Bank of New England.  I sat on the 
         13   Community Negotiating Committee during the Shawmut, 
         14   BankBoston, BayBank.  In 1999 I sat on this stage 
         15   and appealed to you when Fleet took over BankBoston, 
         16   and we're here today.  In fact, the 1999 testimony 
         17   was the first time I ever testified in opposition to 
         18   a merger, and so today would certainly make the 
         19   second.
         20            I also happened to sit in the state 
         21   senate -- and I am sitting here today as the senate 
         22   sponsor of our state's predatory lending bill.  By 
         23   way of common interests with my colleague from 
         24   Georgia, I will tell you that we have not enjoyed 
. 0072
          1   the support -- in the very small list of our banking 
          2   financial institutions -- support of that bill.  
          3   Yet, the Federal Reserve Bank of Boston in the first 
          4   quarter of last year of 2003 in the quarterly report 
          5   published an article that said even the Federal 
          6   Reserve Bank understood that it appeared that the 
          7   predatory lenders were back.  And in fact, I think 
          8   one of the lines said they appear to be back with a 
          9   vengeance.  In my opinion, they have never gone 
         10   away.  I think that our vigilance against this has 
         11   waned; and in that void, they are back. 
         12            We are still in my office on a weekly basis 
         13   receiving phone calls -- we got one yesterday -- 
         14   from people who were in the throes of foreclosure 
         15   and about to lose their loans.  We are still 
         16   cleaning up the 1990 mess.  You may know that in 
         17   1990, Boston was the scene of an unprecedented 
         18   hearing in which the entire congressional delegation 
         19   convened in Boston over the Memorial Day weekend and 
         20   sat in Roxbury, in the middle of my district, to 
         21   hear testimony on the 8,000 homeowners whose homes 
         22   were destabilized as a result of that second 
         23   mortgage scam. 
         24            You may also remember that the major lender 
. 0073
          1   of the second mortgage scam artist was Fleet Bank.  
          2   And for the last ten years, we have spent time to 
          3   clean up their mess, and we are not done yet. 
          4            So I'm a little concerned when I read the 
          5   history of Bank of America and I look and I see what 
          6   they're doing around the country, because I think 
          7   that the experiences of both of these institutions 
          8   are relevant as we process going forward.  If, in 
          9   fact, Bank of America had a good record, then we 
         10   would feel relieved that they were coming in and 
         11   have some optimism.  I don't think that's the case. 
         12            I think that the statistics speaks for 
         13   themselves -- not mine, but theirs -- that their 
         14   mortgages -- the Bank of America, first, they're 
         15   only doing 16.8 of the mortgages, and the industry 
         16   did 21 percent.  For the fourth largest -- about to 
         17   be the largest -- that doesn't bode well for a 
         18   community like ours, where there are only going to 
         19   be three institutions left. 
         20            We have small business lending.  Bank of 
         21   America has consistently made less of the 
         22   under-$100,000 loans than their peers.  And we're 
         23   concerned about the work force reductions, because 
         24   we do not think that this was an issue that had the 
. 0074
          1   level of importance and focus by Fleet.  So if this 
          2   merger was to go forward, we would want to see that 
          3   the work force reductions be done in a way not to 
          4   further decrease the number of employees of color. 
          5            The predatory lending issue is real.  I was 
          6   especially cognizant that this whole issue of race 
          7   and the implication for black and Latino borrowers 
          8   has, for some reason, not been an issue that people 
          9   have wanted to address.  Even our prior panel, which 
         10   are people that I respect, our Community Development 
         11   Corporations, in the testimony, only one person on 
         12   the panel mentioned minorities. 
         13            Yet, the Mass. Community Banking Council 
         14   issued their report last week that we have continued 
         15   to see a spike in the racial and ethnic disparities 
         16   in mortgage lending for blacks and Latinos in 
         17   Massachusetts. 
         18            So I'm reading about how our current banks 
         19   are doing, and I'm looking at Bank of America's 
         20   status, and I'm concerned about that and hope that 
         21   you would be as well. 
         22            We submitted a comment letter to the Feds 
         23   for the December deadline.  And in fact, Bank of 
         24   America sent me yesterday a copy of their response.  
. 0075
          1   I have not had a chance to review it totally, but I 
          2   thought the issue on predatory lending was relevant 
          3   for this panel.  We set the stats about Ocwen.  I 
          4   think there's some testimony.  They are bad actors, 
          5   and they get their money from Bank of America.  The 
          6   HMDA data also speaks of the same things we speak 
          7   to, so it's not just our staff.
          8            The response from the Bank of America to 
          9   this issue that we raised was that the HMDA data 
         10   should be not determinative of their performance.  I 
         11   don't know what would be, unless they planned to 
         12   give me a report that they issued to Dianne 
         13   Wilkerson, because the only thing we have is that 
         14   data. 
         15            Ocwen is involved in several lawsuits 
         16   across this country where they're being charged with 
         17   unscrupulous lending and loan purchasing activity.  
         18   As I said, I spoke to the black and Latino mortgage 
         19   rates -- by speaking to another point -- and I'm 
         20   going to submit some further testimony in response 
         21   to the comments letter to this panel, but I want to 
         22   speak to the comments that were made last week in 
         23   response to the $750 billion loan commitment. 
         24            I'm sure that you are more aware of Dick 
. 0076
          1   Bove than I.  I'm learning he is a five-star 
          2   analyst, considered to be an all-American analyst.  
          3   Every bank in this country looks to him, because he 
          4   advises and influences investors. 
          5            The day after the announcement was made, 
          6   Mr. Bove said that he wanted to ensure investors who 
          7   were thinking about investing in Bank of America not 
          8   to worry, because there is no way that Bank of 
          9   America could in fact perform a $750 million.  
         10   Either Mr. Bove is wrong -- and I don't think he 
         11   could be wrong and have a five-star rating -- or we 
         12   don't have all the information. 
         13            So I think one of the things that we need 
         14   to get is an audit on the performance of the 
         15   commitment that's already been made.  When you have 
         16   the number one bank analyst in the country -- in the 
         17   world saying that they can't do what they're 
         18   promising to do, then I think we have to do more.
         19            Finally, the Sunshine Law --
         20            PRESIDING OFFICER SMITH:  Could we just 
         21   have those submitted in writing? 
         22            MS. WILKERSON:  We will.  We will have many 
         23   people testifying today.  I just want to suggest 
         24   that we have a right to have it made public that 
. 0077
          1   anybody who testifies in support of this merger who 
          2   has an agreement will be getting money that they 
          3   have to be made public.  And if they don't 
          4   acknowledge it to you, I would ask that you request 
          5   that they submit it, so we can access it from you.  
          6   I think it ought to be part of what you would be 
          7   processing as you process the comments and all the 
          8   support and data that you would hear today from 
          9   people who are going to be cashing those checks from 
         10   Bank of America, who got those checks from Fleet.  
         11   Even our United States Congress has acknowledged 
         12   this. 
         13            Black and Latinos are getting crushed.  The 
         14   access to capital in this market has been 
         15   decreasing -- it's decreasing the Bank of America's 
         16   market.  It's decreasing Fleet's market.  How we 
         17   could be better off with the two together is really 
         18   the challenge I think for them to prove to us. 
         19            And if and when they do, I will stand there 
         20   and I will support it.  But there is no information 
         21   that we have today that will suggest that we're 
         22   going to be better off or the credit needs for this 
         23   community will be met.  They are not being met now, 
         24   and I am appealing to you to make sure that those 
. 0078
          1   questions get asked and answered, or you have them 
          2   talk to us, because they have not been very willing 
          3   to do that either.  They don't want to talk to us 
          4   about the facts and about race.  And I'm appealing 
          5   to you, because this is the only place that we can 
          6   come for relief. 
          7            And I think you for your patience.
          8            PRESIDING OFFICER SMITH:  Thank you very 
          9   much. 
         10            Mr. Blumenthal? 
         11            MR. BLUMENTHAL:  Yes.  Thank you.  I 
         12   apologize for being a bit late, although I think 
         13   maybe --
         14            PRESIDING OFFICER SMITH:  You made it just 
         15   in time.
         16            MR. BLUMENTHAL:  I very much appreciate 
         17   this opportunity to be with you.  As you know, we 
         18   asked -- the treasurer of the State of Connecticut 
         19   and I, as Attorney General -- asked that a hearing 
         20   be held in Hartford, and we haven't received a 
         21   response from the board as yet, so we will convene a 
         22   hearing of our own that will give citizens there an 
         23   opportunity to be heard.  And we will make a record 
         24   and forward it to you.  But I very much appreciate 
. 0079
          1   this opportunity to be with you this morning. 
          2            I want to say right at the very outset that 
          3   we regard FleetBoston as an enormously productive 
          4   and important partner in the community reinvestment 
          5   effort.  Whenever each of our major banks in 
          6   Connecticut has been acquired, whatever its name or 
          7   identity, we have negotiated community reinvestment 
          8   commitments, as we did with Fleet in the latest 
          9   merger that took place.  And the partnership with 
         10   FleetBoston has been really exemplary.  We've made 
         11   enormous progress.  The $2.9 billion commitment over 
         12   a period of years has been profoundly significant.  
         13   And so we have very mixed feelings about losing that 
         14   partner through this acquisition.  We want to make 
         15   sure that the community reinvestment is real. 
         16            We have two concerns.  First, the total 
         17   amount that has been committed, the $750 billion.  
         18   Of that amount, $100 billion has been committed to 
         19   the area that FleetBoston covers.  We believe that 
         20   that amount is insufficient.  The total amount does 
         21   not take into account of the fact that 20 percent of 
         22   the assets and more than 20 percent of the deposits 
         23   from the merged institution will be from the Fleet 
         24   footprint area, but only 13 percent of the CRA 
. 0080
          1   commitment right now, according to what the 
          2   announcement has been, will go to that area. 
          3            Equally important, we are concerned about 
          4   the state-by-state allotments.  We recognize that 
          5   the Bank of America has said that state-specific 
          6   commitments would be unwieldy, inflexible -- those 
          7   are the terms they've used -- but we want to know 
          8   the specifics.  We need to know those specifics.  
          9   And we think that the Federal Reserve Board ought to 
         10   condition approval on commitments that specifically 
         11   outline what the allocations will be state by state, 
         12   region by region, at least in minimum terms. 
         13            I want to say that I recognize that New 
         14   England may be regarded nationally as one of the 
         15   more affluent areas.  Connecticut is one of the 
         16   wealthiest states in the country.  It also has four 
         17   of the poorest cities in the country.  The panel has 
         18   referred to two connectors.  And we think that kind 
         19   of community need on the part of certain of our 
         20   urban areas really requires those kinds of specific 
         21   state commitments.  And also that there be 
         22   allocations within communities through advisory 
         23   boards, through means that respond to communities 
         24   and provide for a governing structure, a community 
. 0081
          1   responsive mechanism.  Without those kinds of 
          2   specifics, much of what's been announced may simply 
          3   be eye candy -- looking good, smelling good, but 
          4   without the real center known at this point and 
          5   without also how much real energy and enduring value 
          6   there is. 
          7            Finally, let me just say that we have real 
          8   governance concerns relating to the ongoing 
          9   investigation by federal and state authorities into 
         10   improper trading activities.  We would require 
         11   specifically that there be a condition on 
         12   cooperation with those ongoing investigations.  Bank 
         13   of America has committed to cooperate, but we think 
         14   as a matter of public policy, this board has the 
         15   opportunity and obligation to condition approval of 
         16   this transaction on continuing cooperation.  And 
         17   we've raised in our testimony also the issue of 
         18   compensation as a matter of corporate governance.  
         19   We think there needs to be more accountability and 
         20   transparency on what would happen relating to 
         21   compensation if this merger is approved. 
         22            So we are concerned about the unanswered 
         23   questions.  We think the board has a right and 
         24   responsibility to demand answers.  And on behalf of 
. 0082
          1   the State of Connecticut as Attorney General, I urge 
          2   that all of these issues be addressed, including, as 
          3   has been raised before, the issue of employment and 
          4   layoffs.  We want a commitment as part of this 
          5   merger that there will be a four-year commitment to 
          6   no layoffs in the State of Connecticut, again, 
          7   consistent with some of the representations that 
          8   have been made by Bank of America, but more 
          9   specific, clear, transparent and accountable under 
         10   the terms that you will impose.
         11            I have submitted written testimony that 
         12   more fully outlines the concerns that Treasurer 
         13   Denise Napier and myself wish to bring to the 
         14   Board's attention. 
         15            In the interest of time, I will finish here 
         16   again with my thanks for giving me this opportunity.
         17            PRESIDING OFFICER SMITH:  Thank you very 
         18   much.  The written testimony will be made a part of 
         19   the official record.
         20            MR. BLUMENTHAL:  Thank you.
         21            MS. WILKERSON:  To the panel members, could 
         22   I just offer, on behalf of my colleague, State 
         23   Representative Gloria Fox, who was schedule to 
         24   testify -- she did submit a letter and ask that I 
. 0083
          1   present it to you.
          2            PRESIDING OFFICER SMITH:  Fine.  We have no 
          3   questions from the panel.  Thank you very much. 
          4            We have Panel 4 ready, and we were planning 
          5   to go ahead and have them make their presentations 
          6   before the break.  We'll go ahead with the break.   
          7   We'll reconvene in 15 minutes.  
          8            (Recess)
          9            PRESIDING OFFICER SMITH:   We'll move to 
         10   Panel No. 4.  You each have five minutes.  You will 
         11   get signals when it's two minutes to go and one 
         12   minute to go. 
         13            Please give your name and affiliation to 
         14   start, for the record. 
         15            MR. FONFARA:  Good morning.  For the 
         16   record, my name is John Fonfara.  I'm the state 
         17   senator representing the First District of Hartford 
         18   in Wethersfield, Connecticut. 
         19            Before I begin my formal remarks, I would 
         20   like to say that in listening to my Attorney 
         21   General, Richard Blumenthal, I, too, would ask that 
         22   you give attention to the issue of specifying the 
         23   community reinvestment that is done by region, as 
         24   opposed to the way it has been proposed so far. 
. 0084
          1            I am testifying today in support of the 
          2   acquisition of FleetBoston Financial Corporation by 
          3   the Bank of America Corporation.  The fact that I am 
          4   here today speaking in support of this acquisition 
          5   might surprise a number of my colleagues in the 
          6   Connecticut legislature. 
          7            In my former role as senate chairman of the 
          8   Banks Committee I resisted strongly for two years 
          9   Fleet's ultimately successful efforts to impose ATM 
         10   surcharges on non-customers.  My opinion of the bank 
         11   then was that it was an out-of-state giant more 
         12   interested in serving its own financial interests 
         13   than it was in serving the interests of Connecticut 
         14   and its residents. 
         15            My firmly-held view of Fleet was challenged 
         16   somewhat about five years ago, when the bank 
         17   invested $2.5 million to leverage $1 million in 
         18   state funds for the creation of a loan pool for the 
         19   Spanish American Merchant's Association, known as 
         20   SAMA, in Hartford.  SAMA, headed by its talented 
         21   executive director, Julio Mendoza, is the primary 
         22   advocacy organization for Latino small businesses in 
         23   Hartford, New Haven, New Britain, Meriden and soon 
         24   over the entire state of Connecticut. 
. 0085
          1            Under the leadership of Mr. Mendoza and 
          2   others who will be testifying today, SAMA has been 
          3   reversing the tide of urban small business 
          4   disinvestment that has impacted many Connecticut 
          5   cities.  The most important tool that SAMA has had 
          6   in this effort has been the ability to provide very 
          7   low interest loans for small business start-ups and 
          8   expansion. 
          9            I believe it is critical for regulators to 
         10   understand what the resources provided by Fleet to 
         11   SAMA has meant to my constituents.  In many cases it 
         12   has meant the difference between having a job and 
         13   being on welfare.  Some of my constituents who are 
         14   on welfare are now small business owners, thanks to 
         15   the loan pool administered by SAMA and funded 
         16   primarily by Fleet.  I recognize this acquisition 
         17   involves billions of dollars, but to me the state 
         18   senator representing one of the poorest cities in 
         19   America, it is about changing lives and improving 
         20   neighborhoods.  Fleet has happened to do both. 
         21            This fall, despite having no assurances 
         22   that the State of Connecticut would commit any 
         23   additional funds to SAMA, Fleet stepped up again.  
         24   This time for $3.7 million in a revolving fund for 
. 0086
          1   Hartford, New Haven, New Britain and other cities.  
          2   This investment, combined with $3 million from the 
          3   State, will enable SAMA to continue to help 
          4   stabilize neighborhoods, create jobs, redirect 
          5   private investment and give hope to communities and 
          6   individuals who have not had much. 
          7            I am here today to tell you why I support 
          8   Fleet Bank in this acquisition, but also to speak to 
          9   the regulators and to the Bank of America 
         10   representatives about the importance of acting 
         11   locally.  To have the Chandler Howards, the Carol 
         12   Hellers and the Joe Giannis, as Fleet does in 
         13   Hartford, attending meeting after meeting, 
         14   celebration after celebration as though their office 
         15   were right next door makes all the difference. 
         16            I've learned over the last seven years, 
         17   since I was chairman of the Banks Committee in 
         18   Connecticut, it's not about where a bank is 
         19   headquartered or whether your city is the hub of the 
         20   banks' financial commitment.  I've learned it's 
         21   about the commitment of the institution to have good 
         22   people at the local level who understand the 
         23   difference a bank headquartered hundreds or 
         24   thousands of miles away can make in the life of a 
. 0087
          1   Latino welfare mom with a dream in Hartford, 
          2   Connecticut, or Boston, Massachusetts. 
          3            While I am in no position today to say 
          4   categorically how beneficial this acquisition will 
          5   be ultimately to the communities I represent or the 
          6   many like it throughout the Fleet service area, I 
          7   can say to you today that my friends at SAMA and I 
          8   are sincerely optimistic.  We have heard of the 
          9   substantial resource commitment to community 
         10   investment made by the Bank of America.  We have 
         11   seen the commitment of Fleet Bank.  We believe the 
         12   joining of these two commitments will provide all of 
         13   us with an opportunity to affect the communities we 
         14   serve in ways we could never have thought of 
         15   previously. 
         16            I urge you to support the acquisition, and 
         17   I thank you for your time.
         18            PRESIDING OFFICER SMITH:  Mr. McCrory?
         19            MR. McCRORY:  First of all, my name is Pat 
         20   McCrory.  I'm serving my ninth year as Mayor of the 
         21   City of Charlotte, North Carolina.  I'm also proud 
         22   to serve as Chairman of the Housing and Community 
         23   Development Committee for the U.S. Conference of 
         24   Mayors, where I worked very closely with former 
. 0088
          1   president of that conference, Mayor Tom Menino. 
          2            Let me just say this in a very clear and 
          3   statesman-like way about Bank of America.  I have 
          4   never worked with a corporate citizen that doesn't 
          5   more clearly not only understand, but makes a 
          6   commitment to city urban centers and community 
          7   issues, primarily in three areas:  One, community 
          8   development; the second is understanding the 
          9   economic development efforts in creating jobs; and 
         10   third, getting involved in community leadership to 
         11   improve the quality of life for all citizens in 
         12   every community that they represent. 
         13            When they make a commitment, their word is 
         14   their bond.  In fact, Mr. Lewis mentioned they have 
         15   already met 45 percent of their ten-year goal.  And 
         16   Charlotte has felt an impact of that, along with 
         17   many cities throughout the United States of America.  
         18   In Charlotte, for example -- I just want to give you 
         19   a few examples where I have had a very successful 
         20   relationship with Bank of America during my 
         21   eight-year tenure as mayor. 
         22            One example is working with a low income 
         23   neighborhood, which we used to call a project.  It 
         24   was a blighted project with drugs, with crime, with 
. 0089
          1   no hope for the future.  Bank of America saw this as 
          2   not helping those residents or helping the 
          3   community.  Instead of building a project, we wanted 
          4   to build housing and a community all in one.  
          5   Because building housing wasn't just the answer, but 
          6   building a community was the answer. 
          7            Therefore, Bank of America helped us apply 
          8   for a Hope VI grant.  We came to the NationsBank to 
          9   help us create that vision, and we worked very much 
         10   in partnership with them in coming up with a master 
         11   plan for a community, which included multi-family, 
         12   single and elderly housing.  This is in the center 
         13   of our urban core, which was very important to us.  
         14   HUD approved this project.  In less than five years, 
         15   this project is a role model for the rest of the 
         16   nation. 
         17            It is a vibrant and unique community where 
         18   I have people who work for the banks and all types 
         19   of industry in our area, and they're living right 
         20   next door to people on welfare, and no one knows the 
         21   difference, because it is now an integral part of 
         22   our community, and it is now safe with good housing. 
         23            I am very, very proud of what has also 
         24   occurred around that development because of this 
. 0090
          1   vision.  13 acres were acquired by the bank of 
          2   surrounding land, and we've now redeveloped that 
          3   surrounding land, where we built a private school, 
          4   which was a reserved space for poor children, and it 
          5   is now a very nice developed neighborhood. 
          6            Not only have they helped everyday citizens 
          7   who are in need in urban centers, but I've been very 
          8   impressed with them helping the elderly in poor 
          9   neighborhoods.  Bank of America has also helped us 
         10   with some incredible developments, one called 
         11   Sycamore Green, which was a very distressed area in 
         12   our city. 
         13            They invested over $5.6 million.  We've got 
         14   190 units, and it's been a very, very successful 
         15   project.  There are many, many more examples I could 
         16   give you in Charlotte, but it's not just the 
         17   Charlotte perspective.  If you talk to Mayor 
         18   O'Malley in Baltimore, Mayor Hahn in Los Angeles or 
         19   former Mayor Hood in Orlando, there are examples of 
         20   Bank of America making investments -- over $100 
         21   million in loans and investments -- to build center 
         22   city, affordable housing in urban areas.  And that's 
         23   what's so impressive about this bank, is that they 
         24   really understand the urban ordinance issue. 
. 0091
          1            Very briefly, I also want to say they 
          2   understand the creation of jobs in economic 
          3   development.  In fact, I'm proud to say, due to Bank 
          4   of America's assistance in Charlotte, we now have a 
          5   satellite campus of Johnson and Wales University, 
          6   which was headquartered in Providence, Rhode Island.  
          7   And we're very, very pleased to have that 
          8   partnership, because that is creating new jobs for 
          9   many people in our communities.  There are many 
         10   examples of that also.  And of course, community 
         11   leadership.  No corporation is more involved in arts 
         12   and science, the United Way, Mentoring, which is a 
         13   passion of mine, and Habitat for Humanity, in which 
         14   Bank of America has built over 100 houses in 
         15   Charlotte.  This is leadership and commitment at all 
         16   levels. 
         17            I will say without any hesitation that Bank 
         18   of America is committed to building a community and 
         19   helping people of all income levels, and this comes 
         20   from a mayor of a city of 650,000 people within its 
         21   city limits, a very diverse community. 
         22            I'll conclude by saying this -- and I have 
         23   to say this -- and that is that I look forward to 
         24   meeting Tom Menino in Houston for the Super Bowl, 
. 0092
          1   when the New England Patriots meet the Carolina 
          2   Panthers. 
          3            Thank you very much. 
          4            PRESIDING OFFICER SMITH:  Thank you. 
          5            Mr. McMahon?
          6            MR. McMAHON:  Thank you.  I'm Michael 
          7   McMahon.  I'm here on behalf of Governor Carcieri, 
          8   the Governor of Rhode Island.  I'm in charge of 
          9   economic and community development.
         10            In a global economy, change is good.  And I 
         11   know change scares people.  But if I look at this 
         12   transaction, the name changes, but the heart stays 
         13   the same.  And as Fleet has demonstrated, in a 
         14   customer service business, particularly one as 
         15   intimate as banking, if an organization -- and more 
         16   importantly, it's people -- hold on to their moral 
         17   compass of their core values, they will thrive, 
         18   their communities will thrive, and all of their 
         19   stakeholders will thrive.  And they will stay 
         20   competitive.  And that's what this merger is all 
         21   about. 
         22            Given that the core values of Fleet and the 
         23   core values of Bank of America are so similar, we 
         24   believe that the merged institution will continue to 
. 0093
          1   be a driving force for community and economic 
          2   development in Rhode Island and the region. 
          3            My friends in Texas taught me that if you 
          4   tell people what you're going to do, it's bragging.  
          5   If you tell people what you've done, that's 
          6   reporting.  And if I report on what Fleet has done 
          7   in our community, it is a very impressive track 
          8   record.  Let me just share with you some of those 
          9   activities. 
         10            They have a strong record of contributing 
         11   to Rhode Island non-profits, $2.5 million to over 
         12   400 organizations. 
         13            It's the largest contributor to the United 
         14   Way of Rhode Island, over $1 million for the past 
         15   five years. 
         16            I think what's really extraordinary about 
         17   Fleet in our community is it is the "go to" 
         18   organization.  When we have a problem, when there is 
         19   a need, the first call goes to Fleet. 
         20            During the West Warwick Station nightclub 
         21   fire, Fleet volunteered right alongside of the Rhode 
         22   Island Emergency Management to support the victim 
         23   hotline.  They donated $25,000 to the Station Fund, 
         24   and they served as the collection point for the Red 
. 0094
          1   Cross donations. 
          2            For the Rhode Island Community Food Bank, 
          3   they contributed $500,000 to support a new facility.  
          4   And this will make Rhode Island the first 
          5   hunger-free state in the United States. 
          6            When it comes to Brownfield projects, 
          7   environmental projects, Fleet is the firm that steps 
          8   up to write the check time and time again. 
          9            If you look at small businesses, Fleet 
         10   serves over 13,000 small businesses in Rhode Island.  
         11   This is 30 percent of all Rhode Island small 
         12   businesses.  They instituted a financial education 
         13   program region-wide to help people who are not 
         14   sophisticated in dealing with finances get 
         15   comfortable and save for their future.  They're an 
         16   innovative leader.  They had the first 
         17   HomeLink/OfficeLink on line.  They have talking ATMs 
         18   to better serve the visually impaired. 
         19            So are we concerned that this merger is 
         20   going to adversely impact our community?  Absolutely 
         21   not.  I think that Mr. Lewis and Mr. Gifford 
         22   mentioned how many people in key management 
         23   positions are going to be continued to have roots in 
         24   this community. 
. 0095
          1            But more importantly, I look at it just 
          2   from a financial transaction.  You don't pay the 
          3   type of premium for what is in effect a retail and 
          4   community franchise and not expect to invest in your 
          5   customer's communities.  And so that going forward, 
          6   there is no doubt in our minds that Fleet will 
          7   continue to be the leading corporate citizen now 
          8   that they have changed their name to Bank of 
          9   America. 
         10            We have 4,000 employees in Rhode Island.  
         11   We expect to have at least that many, possibly more.  
         12   And this is a company that has been around for 210 
         13   years and has been a pillar of our community, and we 
         14   expect that to continue.  
         15            Thank you very much. 
         16            MR. WAINWRIGHT:  Good morning.  And thank 
         17   you for the opportunity to appear. 
         18            I am William Wainwright, North Carolina 
         19   State Representative for District 12, comprising the 
         20   four rural eastern North Carolina counties.
         21            I am pleased to speak before this 
         22   distinguished group to express my support of Bank of 
         23   America in its proposed merger with FleetBoston 
         24   Financial Corporation. 
. 0096
          1            As Chairman of the House Finance Committee, 
          2   I have had the privilege of working with Bank of 
          3   America's executives and government affairs 
          4   representatives.  Thus, I am here today to speak in 
          5   favor of the merger of Bank of America and 
          6   FleetBoston Bank. 
          7            I will begin by sharing with you that Bank 
          8   of America has been and continues to be an 
          9   outstanding corporate citizen in North Carolina.  
         10   Bank of America has been a leader in growing jobs in 
         11   our state.  I must tell you that predatory lending 
         12   is a serious issue in North Carolina, and the North 
         13   Carolina general assembly has dealt with this issue 
         14   with due diligence. 
         15            In 2003 Bank of America officials came to 
         16   the table and worked diligently with legislative 
         17   leaders and members of the general assembly for 
         18   changes in consumer lending practices that added to 
         19   stronger consumer protection.  While agreeing to the 
         20   many changes in the predatory lending law, it 
         21   allowed Bank of America to bring its home equity 
         22   business to North Carolina.  This resulted in 350 
         23   consumer real estate jobs and the creation of 370 
         24   additional jobs, for a total of 720 jobs at a 
. 0097
          1   much-needed time. 
          2            North Carolina's economy is changing.  And 
          3   industries such as manufacturing and agriculture are 
          4   no longer major players in the state's economy.  As 
          5   you are aware, North Carolina has lost more 
          6   manufacturing jobs than any other state.  We must 
          7   look at other resources for economic growth.  And we 
          8   have continued to count on the financial services 
          9   industry to be one of our growth entries in North 
         10   Carolina. 
         11            We all understand the importance of 
         12   financial literacy.  Bank of America's Financial 
         13   Literacy for Life Program has trained more than 
         14   18,000 teachers and 500,000 students in the area of 
         15   financial literacy.  Financial literacy is a 
         16   significant factor for the future prosperity and 
         17   growth of our citizens and our state.  Education is 
         18   a top priority for our legislative black caucus.  
         19   And Bank of America has consistently supported 
         20   higher education by providing scholarship 
         21   contributions to various North Carolina colleges and 
         22   universities. 
         23            Annually, our legislative black caucus 
         24   sponsors a scholarship weekend to support our 
. 0098
          1   historically black colleges and universities in 
          2   North Carolina.  Bank of America has been among our 
          3   biggest contributors, and their contributions have 
          4   allowed us to provide scholarships to many needy 
          5   students at these educational institutions. 
          6            Bank of America is considered a premiere 
          7   leader in the areas of community development.  The 
          8   reasons that the Bank has this distinction are:  
          9   Bank of America maintains an outstanding CRA rating.  
         10   Nationally, Bank of America has a $2.5 billion 
         11   portfolio of low income housing tax credit 
         12   investments.  Bank of America has approved over $100 
         13   million dollars in single-family and multi-family 
         14   affordable housing construction loans.  Bank of 
         15   America is not only investing in affordable housing 
         16   construction loans in urban and metropolitan North 
         17   Carolina, but it is committed and is investing in 
         18   affordable housing financing in rural North Carolina 
         19   also. 
         20            Bank of America has many success stories 
         21   working with community groups to provide affordable 
         22   housing to those in need in North Carolina.  I am 
         23   excited about one of several that they did in my 
         24   legislative district.  Bank of America financed a 
. 0099
          1   $2.2 million construction loan to create 50 
          2   much-needed units of housing at Gatewood Apartments 
          3   in Havelock, North Carolina.  This bank has won six 
          4   affordable housing awards in the Carolinas from the 
          5   Federal Home Loan Bank. 
          6            It is my belief that banking in the 
          7   northeastern part of our nation will be 
          8   substantially strengthened by this merger. 
          9            Thank you for the opportunity to speak.
         10            PRESIDING OFFICER SMITH:  Thank you. 
         11            Mr. Fowler?
         12            MR. FOWLER:  Thank you.  I am Ned Fowler, 
         13   E.G. Ned Fowler, founder and CEO of Northwestern 
         14   Regional housing Authority, headquartered in Boone, 
         15   North Carolina.  I bring you greetings from the 
         16   beautiful Blue Ridge, where it is also cold and 
         17   windy this morning. 
         18            For 25 years my firm has delivered 
         19   affordable housing opportunities to several tens of 
         20   thousands of our less fortunate neighbors in the 
         21   mountain counties of Northwestern North Carolina.  
         22   You may be interested to know for the first half of 
         23   our corporate tenure, most of those development and 
         24   construction activities were funded almost entirely 
. 0100
          1   by federal dollars. 
          2            For the most recent 12 years, we have 
          3   managed to position ourselves as worthy partners for 
          4   private investment and responsible borrowers for 
          5   local community lenders, most notably on both counts 
          6   with Bank of America. 
          7            We are proud of all of our developments, 
          8   but it is readily apparent that the newer product is 
          9   significantly a cut above the older model.  In the 
         10   late 1980s private investment in affordable housing 
         11   in our region had all but disappeared.  The 
         12   reintroduction of private participation with Bank of 
         13   America and other institutional investors has 
         14   resulted in rental and homeownership developments of 
         15   the highest quality that are marketplace-competitive 
         16   with long-term feasibility and performance. 
         17            This has been made possible, not in small 
         18   part, by the careful underwriting, due diligence and 
         19   asset management oversight which accompanies these 
         20   types of public/private partnerships.  Our successes 
         21   have been featured in the Community Development 
         22   Magazine of the Federal Reserve Bank of Richmond and 
         23   with Bank of America in the spring edition of the 
         24   newsletter of the comptroller of the currency.
. 0101
          1            What we need in banking partnerships and 
          2   what has been provided by Bank of America is a 
          3   strategic banking relationship -- not only direct 
          4   deposit disbursement accounts, but also advantage 
          5   construction financing, access to long-term GAAP 
          6   financing through the bank's membership in the 
          7   Federal Home Loan Bank system, and even direct 
          8   investment, as Mr. Wainwright mentioned, in low 
          9   income and historic credits. 
         10            Bank of America's community development 
         11   group has strengthened our development teams, with 
         12   the benefit of national expertise brought to bear on 
         13   our local solutions.  Their products have been 
         14   tailored to help us meet housing needs of a rural 
         15   dispersed population.  Strategic alignment with our 
         16   mission makes the bank a valued source of credit and 
         17   participation in our initiatives.  In our precious 
         18   little part of rural America, Bank of America, 
         19   together with us, has been providing affordable 
         20   housing, which in our corner of the world equals 
         21   economic development.
         22            Our development and management dollars 
         23   strengthen our mountain communities.  As to benefits 
         24   to clients and individuals, the individuals and 
. 0102
          1   families, we're proud to say that many are focusing 
          2   their efforts on educational and employment goals 
          3   through self-sufficiency initiatives.  Each year we 
          4   are graduating several households from dependency on 
          5   domestic assistance and using the bank's products -- 
          6   and that's provided by the Fannie Mae Foundation.  
          7   And many are going on to become first-time 
          8   home-buyers. 
          9            We are excited about Bank of America's 
         10   ongoing commitment to affordable housing.  In these 
         11   tenuous times, we feel like working together with 
         12   the bank, we are doing our small part for homeland 
         13   security.  Without decent affordable housing, how 
         14   can we be secure.  
         15            Thank you very much for your time and 
         16   attention.  
         17            PRESIDING OFFICER SMITH:  Thank you very 
         18   much.
         19            Questions from the panel?
         20            (No response)
         21            PRESIDING OFFICER SMITH:  We'll start with 
         22   Mr. Brown.  If you will state your name and 
         23   affiliation. 
         24            MR. BROWN:  Good morning.  My name is 
. 0103
          1   Richard Brown. And I am here on behalf of the North 
          2   Carolina Fair Housing Center.  Let me begin at the 
          3   end and finish at the beginning. 
          4            The North Carolina Fair Housing Center is 
          5   asking the Federal Reserve to require state-specific 
          6   strategic plans for meeting this ambitious, but 
          7   ambiguous CRA committee.  And we ask that you seek 
          8   assurance from the Bank of America that it set aside 
          9   resources to become more competitive in its home 
         10   state. 
         11            On July 9, 1998 at a public hearing held by 
         12   the Federal Reserve in San Francisco, the director 
         13   of the North Carolina Fair Housing Center gave a 
         14   spirited speech, raising her concerns about the fate 
         15   of North Carolinians as a result of the merger 
         16   between NationsBank and Bank of America.  I am here 
         17   mainly to give to you our assessment of how Bank of 
         18   America has addressed the issues raised during the 
         19   earlier hearing. 
         20            Bank of America continues to have a reduced 
         21   presence in North Carolina.  It has reduced the 
         22   number of community development specialists to work 
         23   with local communities to one person to cover the 
         24   entire Carolina footprint, which includes both North 
. 0104
          1   and South Carolina.  Bank of America has made no 
          2   effort to increase its market presence in North 
          3   Carolina and remains No. 4. 
          4            Our long-term concern is that the expansion 
          5   of Bank of America into the northeast will sooner, 
          6   rather than later, lead to the abandonment of the 
          7   people of North Carolina.  We continue to be worried 
          8   about our future with this bank.  How long will it 
          9   be profitable to remain headquartered in a state in 
         10   which you are not competitive.  Bank of America's 
         11   $750 billion commitment to the community 
         12   reinvestment continues to be all smoke and mirrors.
         13            The North Carolina Fair Housing Center's 
         14   other main concern is around whether or not the 
         15   merger with Fleet is a good fit for Bank of America.  
         16   The North Carolina Fair Housing Center recently 
         17   completed testing of FleetBoston in New York as part 
         18   of a large lending study.  We are pleased to report 
         19   that we have found no evidence of discrimination 
         20   among black, white and Latino testers.  They were 
         21   all treated exactly the same.  And they were all 
         22   treated horribly. 
         23            We believe that the management and the 
         24   leadership of Fleet has significantly underestimated 
. 0105
          1   the intellectual capital of the Bank of America team 
          2   and that this will not be a smooth integration.
          3            PRESIDING OFFICER SMITH:  Ms. Clement?
          4            MS. CLEMENT:  Thank you for the opportunity 
          5   to be here today.  My name is Brenda Clement, and 
          6   I'm executive director of the housing network, which 
          7   is the Rhode Island Association of 25 Non-profit 
          8   Community Development Corporation.
          9            Over 30 years ago I opened up my first 
         10   savings account with then Industrial National Bank, 
         11   which was a fine Rhode Island institution, having 
         12   been established in Rhode Island in the mid-1800s, I 
         13   believe. 
         14            Over this period of time over the past 30 
         15   years, I've watched as Industrial National has 
         16   changed and grown and become Fleet Bank and the 
         17   Fleet Bank that it is today; and in fact, have 
         18   watched many other banks and Rhode Island companies 
         19   and institutions grow and merge and be acquired by 
         20   others, but that observation has been with mixed 
         21   feelings. 
         22            In Rhode Island -- and we are proud to be 
         23   the smallest state in the country -- bigger is not 
         24   always better.  During this period of time that 
. 0106
          1   Fleet was growing and merging and acquiring, quite 
          2   frankly, we feel that they were not servicing the 
          3   banking needs and resources -- in providing the 
          4   resources that were needed by Rhode Islanders, 
          5   particularly those in the low- to moderate-income 
          6   neighborhoods in which our members focused their 
          7   efforts. 
          8            In 2002, for example, of the 17,673 home 
          9   purchase loans made in Rhode Island, Fleet's share 
         10   was only 525.  Not very impressive for the largest 
         11   bank in Rhode Island. 
         12            It's true that Fleet has been a strong 
         13   colleague and supporter of charitable giving in 
         14   Rhode Island, and it's also true that Fleet has made 
         15   significant improvement over the last couple of 
         16   years with some strong local leadership, and we look 
         17   forward to continuing to work at that effort. 
         18            Our concern, however, is that now that 
         19   Fleet is being acquired by yet a bigger fish, that 
         20   we will get lost in that sea.  We are concerned and 
         21   we want to be assured that Rhode Island's unique 
         22   capabilities and promises in neighborhoods and 
         23   communities will be met by Bank of America. 
         24            We have lots of great people in 
. 0107
          1   neighborhoods and communities, but we also have lots 
          2   of challenges in Rhode Island.  We have one of the 
          3   oldest housing stocks in the country, many of it is 
          4   historic housing stock, which presents its unique 
          5   rehab challenges.  We have one of the highest lead 
          6   levels in the country and have challenges related to 
          7   that and other environmental issues.  We also have 
          8   the highest escalation of housing prices in Rhode 
          9   Island that are dramatically impacted by flight from 
         10   Boston and other places, as people seek affordable 
         11   housing throughout the region.
         12            We want assurances prior to the merger that 
         13   high-level officials will remain in Rhode Island and 
         14   have local decision-making authority and resources 
         15   that they have access to to address these concerns. 
         16            We want Bank of America not to be in Rhode 
         17   Island.  We want them to be part of Rhode Island.  
         18   We want a Bank of Rhode Island, a Bank of 
         19   Massachusetts, a Bank of New Jersey.  Bigger is not 
         20   always better, and we want assurances that local 
         21   control and local decisions will be made. 
         22            Thank you. 
         23            PRESIDING OFFICER SMITH:  Thank you very 
         24   much. 
. 0108
          1            Mr. Cofield?
          2            MR. COFIELD:  Good morning.  I'm Juan 
          3   Cofield, President of the New England Area 
          4   Conference, commonly called "NEAC of the NAACP." 
          5            The New England Area Conference is the 
          6   coordinating/governing body for all of the branches 
          7   of the NAACP in the states of Rhode Island, 
          8   Massachusetts, New Hampshire, Maine and Vermont.  
          9   And I'd like for you to know that the executive 
         10   committee of the New England Area Conference met on 
         11   Saturday, and there was a unanimous vote to support 
         12   the position that I've taken here today. 
         13            NEAC is part of two coalitions that span 
         14   the Commonwealth of Massachusetts and advocate for 
         15   people of color and low and moderate income 
         16   communities.  One of the coalitions presented a 
         17   written proposal to the Bank of America and 
         18   requested that the Bank enter into a written 
         19   agreement to guide its banking activities in the 
         20   Commonwealth of Massachusetts.  The Bank has agreed 
         21   to adopt certain elements of the proposals, and 
         22   discussions are continuing regarding certain other 
         23   elements.  The Bank is to be complimented for its 
         24   commitment on the agreed-upon elements of the 
. 0109
          1   proposal.  However, until such time as the 
          2   discussions have reached a reasonable conclusion, 
          3   NEAC asserts that the Federal Reserve Bank of Boston 
          4   should delay and suspend action on the application 
          5   for approval of the proposed merger. 
          6            Two requested commitments about which 
          7   discussions are continuing relate to the Bank's 
          8   employment level of people of color and women and 
          9   the procurement of goods and services from 
         10   businesses owned by people of color and women.  
         11   Statistics clearly show that the percentage of 
         12   people of color and women employed by the Bank of 
         13   America nationally and FleetBoston in Massachusetts 
         14   are not matched by these categories of citizens' 
         15   percentages of the population.  An even worse 
         16   disparity is reflected regarding the goods and 
         17   services purchased from businesses owned by people 
         18   of color and women. 
         19            NEAC and the coalition have requested that 
         20   the Bank set a goal and develop a plan such that the 
         21   Bank's employment -- and this employment is at all 
         22   level, including senior and executive level 
         23   management -- of people of color reflect the 
         24   percentage of people of color in the general 
. 0110
          1   population in the Commonwealth of Massachusetts.  A 
          2   similar request has been made regarding the Bank's 
          3   procurement of goods and services.  Other large 
          4   banks operating in Massachusetts are diligently 
          5   working to end these disparities.  We should expect 
          6   no less from the Bank of America. 
          7            These disparities are certainly not unique 
          8   to Massachusetts.  And the Bank of America alone did 
          9   not create the disparity in our nation.  It is a 
         10   problem of our American society and economy.  
         11   However, Bank of America must be a part of the 
         12   solution.  The lack of employment in business 
         13   opportunities have attributed to economic 
         14   destabilization in communities dominated by people 
         15   of color.
         16            The Community Reinvestment Act begins by 
         17   reciting Congress' three findings in passing the 
         18   law.  First, banks are required to serve, quote, the 
         19   convenience and need, end quote, of the communities 
         20   in which they are chartered to serve.  Economic 
         21   stabilization is a dire need in many communities of 
         22   color.  Adequate employment and business 
         23   opportunities will greatly attribute to stabilizing 
         24   these communities.  Since Bank of America in its 
. 0111
          1   normal course of business provides employment 
          2   opportunities and opportunities for businesses to 
          3   sell the Bank goods and services, NEAC and the 
          4   coalition maintain that the Bank has an affirmative 
          5   obligation under the CRA to provide these same 
          6   opportunities on an equal basis to communities 
          7   dominated by people of color.  NEAC is willing to 
          8   work with the bank to achieve these goals.
          9            Further evidence of Bank of America's 
         10   affirmative obligation to provide employment and 
         11   business opportunities is found in the investment 
         12   test of CRA regulations for large banks.  The 
         13   investment test evaluates the bank's community 
         14   development investments.  Of the four measures of a 
         15   bank's investment, two are directly relevant: The 
         16   bank's responsiveness to community development needs 
         17   and the degree to which investments are not provided 
         18   by other private investors.
         19            Bank of America can present no reasonable 
         20   argument that providing equal access to jobs and 
         21   business opportunities to destabilize communities, 
         22   dominated by people of color, is not addressing a 
         23   community need.  Also, these investments are not 
         24   being sufficiently provided by other private 
. 0112
          1   investors.  NEAC and the coalition seek a reasonable 
          2   investment plan, of employment and business 
          3   opportunities, from the Bank, to address these stark 
          4   community needs.  At this point, Bank of America has 
          5   not presented NEAC and the coalition any plan 
          6   whatsoever. 
          7            Again, until such time that Bank of America 
          8   presents such a plan and NEAC and the coalition have 
          9   an opportunity for comment, the Federal Reserve 
         10   should defer further consideration of this merger.  
         11   The application is premature.
         12            PRESIDING OFFICER SMITH:  Thank you very 
         13   much. 
         14            Ms. Cohen?
         15            MS. COHEN:  Good morning.  My name is 
         16   Nadine Cohen.  I am here testifying today on behalf 
         17   of the Lawyers' Committee for Civil Rights Under Law 
         18   of the Boston Bar Association, and also the Fair 
         19   Housing Center of Greater Boston.  Both are member 
         20   organizations of the Community Advisory Committee. 
         21            We urge the Federal Reserve Board to deny 
         22   the merger application unless and until Bank of 
         23   America agrees to implement specific measurable 
         24   community investment plans that meet the credit 
. 0113
          1   needs of communities of color in Massachusetts, as 
          2   well as the needs of low and moderate income 
          3   communities.
          4            Bank of America's general community 
          5   reinvestment and fair lending performance is uneven, 
          6   at best, and in many areas throughout the country, 
          7   poor.  Bank of America has made substantially fewer 
          8   home purchase loans to minority borrowers than other 
          9   lenders in a number of the areas that they serve. 
         10            While we certainly think it is laudable 
         11   that the bank has given money to groups such as 
         12   ACORN, NACA, LARASA and others, that does not 
         13   relieve Bank of America of their obligation to serve 
         14   all segments of the community on an equal basis. 
         15            We call on Bank of America to agree to 
         16   specific measurable written community investment 
         17   plans that meet the needs of communities of color.  
         18   We call on Bank of America to make a commitment to a 
         19   specific dollar amount of home mortgage and small 
         20   business lending to communities of color in 
         21   Massachusetts and to put into place an aggressive 
         22   program to meet that goal.
         23            I want to note that lending to low and 
         24   moderate income communities is not always the same 
. 0114
          1   as lending to communities of color.  And I think 
          2   sometimes we lose that distinction, and communities 
          3   of color are severely disadvantaged and underserved.
          4            In Boston, the share of home purchase loans 
          5   that went to black borrowers fell to the lowest 
          6   level on record.  Blacks, who make up 21.4 per of 
          7   Boston's households, according to the 2000 census, 
          8   received just 10.3 percent of all loans.  
          9   African-Americans are the most residentially 
         10   segregated group in the United States, and they are 
         11   far less likely to own a home.  When they do get 
         12   mortgages, they often receive far less favorable 
         13   terms than comparable whites.
         14            If Bank of America were to come into our 
         15   community, they must make specific efforts to 
         16   increase minority homeownership through the 
         17   development of new low-cost mortgage products; to 
         18   ensure equal access to home purchase, home 
         19   improvement, home equity and refinancing loans for 
         20   people of color; and to ensure that people of color 
         21   are not steered to high interest loan products.
         22            Unfortunately, Massachusetts has a long and 
         23   shameful history of redlining and racial 
         24   discrimination in mortgage lending.
. 0115
          1            In 1992 the Federal Reserve Bank of Boston, 
          2   as I'm sure we all know, found that 
          3   African-Americans and Latinos were 60 percent more 
          4   likely to be denied mortgages even when factors such 
          5   as credit history, income and savings were 
          6   considered.
          7            The Feds should ensure that Bank of America 
          8   addresses its own history of high mortgage denial 
          9   rates for African-Americans and Latinos and ensure 
         10   that it will adhere to all non-discrimination laws 
         11   in mortgage lending before any merger is approved. 
         12            We also support a work force diversity goal 
         13   of 20 percent for people of color within all 
         14   employment levels, including management, and 
         15   diversity in procurement with a goal of 20 percent 
         16   from businesses owned by persons of color. 
         17            Again, it is important to note that by 
         18   combining statistics for women-owned businesses and 
         19   women in employment with people of color, we don't 
         20   always see the real picture.  So I would be cautious 
         21   about that.
         22            Bank of America must also stop doing 
         23   business with subprime lenders who engage in 
         24   predatory lending practices.  And they must 
. 0116
          1   institute safeguards against the purchase of 
          2   predatory loans.  We call on the bank to adopt 
          3   specific and strict due diligence standards and 
          4   procedures before adopting any subprime loans.  
          5   Specifically, there should be no purchasing of loans 
          6   with little or no income verification, loans with 
          7   single premium credit life insurance or with 
          8   mandatory arbitration clauses and prepayment 
          9   penalties. 
         10            We cannot rely on goodwill alone.  We must 
         11   see specific written agreements with specific dollar 
         12   amounts and goals.  As our friends in North Carolina 
         13   and other places have told us, too often, when Bank 
         14   of America has acquired other banks, communities of 
         15   color have lost out. 
         16            As we are about to celebrate Dr. Martin 
         17   Luther King's birthday, we should keep in mind what 
         18   he said.  "Every person" -- and I would add 
         19   corporation -- "must decide whether he will walk in 
         20   the light of creative altruism or the darkness of 
         21   destructive selfishness."  This is the judgment.  
         22   Life's most persistent and urgent question is, "What 
         23   are you doing for others?" 
         24            We call on Bank of America to tell us 
. 0117
          1   specifically what they will be doing for others 
          2   right here in Massachusetts. 
          3            PRESIDING OFFICER SMITH:  Thank you very 
          4   much.  
          5            Ms. Pizer?
          6            MS. PIZER:  Hi.  My name is Hillary Pizer, 
          7   and I'm here testifying for the Massachusetts 
          8   Affordable Housing Alliance. 
          9            Members of the Mass. Affordable Housing 
         10   Alliance reached agreement yesterday with Bank of 
         11   America whereby the bank will make 3,000 SoftSecond 
         12   Program mortgage loan programs over the next ten 
         13   years. 
         14            The SoftSecond Program is the state's most 
         15   affordable mortgage program, so yesterday was an 
         16   important day for low and moderate income families 
         17   struggling to achieve the security and safety of 
         18   owning their own home. 
         19            In the current environment, where home 
         20   prices have soared and the share of loans to low and 
         21   moderate income buyers and to buyers who are black 
         22   and Latino has been dropping, Bank of America's 
         23   substantial commitment to the SoftSecond Program is 
         24   especially important.  We are pleased to be 
. 0118
          1   partnering with them to make these opportunities 
          2   available for the people we serve. 
          3            Many people know the SoftSecond Program was 
          4   originally negotiated between the Mass. Affordable 
          5   Housing Alliance and bankers in 1990 in the wake of 
          6   a Federal Reserve Bank of Boston study documenting 
          7   racial disparities in mortgage lending in Boston. 
          8            We are very pleased to be here and to say 
          9   that since that time, Boston and across 
         10   Massachusetts there have been 7,000 low and moderate 
         11   income households who have been served by the 
         12   program.  In Boston the SoftSecond Program has 
         13   served almost twice as many low and moderate income 
         14   buyers in 2002 as the other targeted mortgage 
         15   programs combined.  It has served twice as many 
         16   borrows of color as the other targeted mortgage 
         17   programs combined.  That was what we set out to do 
         18   in 1990 with this program. 
         19            With that said about the SoftSecond Program 
         20   agreement, we also want to make clear that there are 
         21   other important community reinvestment issues that 
         22   impact our members.  There are a number of areas 
         23   that have already been alluded to where discussions 
         24   with Bank of America are in a much earlier stage.  
. 0119
          1   These include bank branches and services in low and 
          2   moderate income communities and communities of 
          3   color, conversion of interstate banking money to 
          4   equity available to the Mass. Housing Partnership.  
          5   It's important to us, because the SoftSecond Program 
          6   is a wonderful program, but we also need more 
          7   affordable homes constructed.  There are issues with 
          8   diversity in hiring and procurement and with 
          9   charitable giving. 
         10            Bank of America has pledged to work with 
         11   MAHA and other organizations to create a more 
         12   comprehensive Massachusetts investment plan.  We 
         13   moved forward in a meeting yesterday morning, but 
         14   there's still a lot of work to do.
         15            The agreement we reached on the SoftSecond 
         16   Program shows that Bank of America can and does make 
         17   specific state-by-state commitments on community 
         18   lending.  That was something that was in doubt when 
         19   we started the discussions at the end of November.
         20            We hope the Federal Reserve Board will 
         21   encourage the bank to come to agreement with 
         22   non-profit partners in Massachusetts on the 
         23   outstanding issues that we all care about. 
         24            Further, we hope that the Federal Reserve 
. 0120
          1   Board will encourage Bank of America to develop 
          2   detailed investment plans with our colleagues in 
          3   other states who are also seeking specific, 
          4   measurable commitments. 
          5            PRESIDING OFFICER SMITH:  Thank you very 
          6   much. 
          7            Mr. Hamilton.
          8            MR. HAMILTON:  Thank you.  My name is 
          9   Harmon Hamilton, Pastor of Presbyterian Church, 
         10   representing the Greater Boston Interfaith 
         11   Organization.  And sitting with me is Reverend Dr. 
         12   Roberto Miranda, the president of Parks Ministerial 
         13   Alliance for Latino-Americans that is for the New 
         14   England region. 
         15            We, together, with a number of clergy 
         16   yesterday, represented both organizations, COPANI 
         17   and GBIO, which together collectively represents 
         18   about 750,000 people and over $200 million in 
         19   resources. 
         20            I met with officials from Bank of America 
         21   and laid out various areas that have been 
         22   challenging for the folks we represent.  While we 
         23   commended Gail Snowden and Michael Galivan for their 
         24   tremendous work in our communities, we outlined a 
. 0121
          1   number of areas that had been deficits from our 
          2   perspective as it relates to Fleet's services to our 
          3   communities.  These particular areas fell in several 
          4   categories. 
          5            First, remittance of products, where 
          6   immigrant Americans are having trouble sending money 
          7   back home, being charged high interest rates.  The 
          8   involvement of Latino-Americans in natural banking 
          9   institutions and the large amount of 
         10   Latino-Americans who feel cut out and locked out of 
         11   that institution.  After-school programming, the 
         12   monies that have been invested and the significant 
         13   amount of dollars that need to be invested, 
         14   particularly around Latino-American and 
         15   Haitian-American involvement.  Affordable housing, 
         16   as well as capital investment at lending rates 
         17   through congregations who are trying to rehabilitate 
         18   their buildings and to strengthen themselves in the 
         19   area of environmental accessibility and rehab 
         20   categories.
         21            We were convinced by the representation of 
         22   those that we met with on yesterday that Bank of 
         23   America will have a strong commitment to working 
         24   with us in regards to these issues.  As a matter of 
. 0122
          1   fact, they put in place a series of meetings that 
          2   should lead to significant concessions in these 
          3   areas.  We were also persuaded by their commitment 
          4   to leave in place Gail Snowden and Michael Galivan 
          5   and others who locally have developed a significant 
          6   relationship with us. 
          7            So we find no reason to oppose this merger 
          8   at this point.  Rather, we look quite favorably on 
          9   the merger, and our request is that the Federal 
         10   Reserve Board will pay close attention to the 
         11   details of these commitments and other commitments 
         12   that Bank of America has made over the course of the 
         13   next 30 days to determine the credibility of such 
         14   efforts as they will happen here in the state and 
         15   around the country.  Thank you.
         16            PRESIDING OFFICER SMITH:  Thank you very 
         17   much.  Did you have some remarks?
         18            MR. MIRANDA:  Thank you.  I will take the 
         19   opportunity.  Just a couple of concerns I would like 
         20   to express. 
         21            Number 1, we were very impressed with the 
         22   sincerity projected by the members of the Bank of 
         23   America who were present at the meeting yesterday. 
         24            One concern that I do have of the Hispanics 
. 0123
          1   is that if Bank of America seeks to establish a 
          2   relationship with Hispanics here in the New England 
          3   area, it be very much aware of the diversity of the 
          4   Hispanic community; that they do not rely on 
          5   achievements that often relate more to the 
          6   Mexican-American component of the Hispanic community 
          7   of the United States -- California, Texas, even 
          8   Chicago -- and that they really be aware that 
          9   Hispanics in the northeast are a different 
         10   composition. 
         11            We have here a predominant number of 
         12   Caribbean people, people from central America and a 
         13   good number of South Americans as well.  So this 
         14   really presents a challenge and an opportunity for 
         15   Bank of America to engage us in a new, creative sort 
         16   of way and to see us as something to be acknowledged 
         17   for what we are, and that we enter into a 
         18   relationship that recognizes our specificity as a 
         19   community here.  And that therefore Bank of America 
         20   do not rely on past achievements in that regard. 
         21            One last thing concerns is our need to hear 
         22   of a specific, concrete commitment on the part of 
         23   Bank of America, as it refers to financial 
         24   investment in this community, that the Bank of 
. 0124
          1   America does not rely again on systems that have 
          2   been established in other contexts to sort of 
          3   bolster its image of being altruistic and being 
          4   engaged in the community, but really that they take 
          5   a close look at how they can invest here, how they 
          6   can increase their investments, how they can adjust 
          7   their investments to the conflicts that they are 
          8   facing here.  So these would be two concerns I'd 
          9   like to express.
         10            PRESIDING OFFICER SMITH:  Would you repeat 
         11   your name for the record.
         12            MR. MIRANDA:  My name is Roberto Miranda, 
         13   and I represent COPANI.
         14            MS. ROBINSON:  I have a question for Mr. 
         15   Cofield. 
         16            You said in your meetings yesterday that 
         17   you had reached agreement on two matters.  What were 
         18   those matters? 
         19            MR. COFIELD:  No.  We reached agreement on 
         20   several matters.  There were certainly two that 
         21   remained outstanding, which I wanted to present.  
         22   And those two were employment opportunities and 
         23   opportunities to sell goods and services on an equal 
         24   basis.
. 0125
          1            MS. ROBINSON:  What matters did you reach 
          2   agreement?
          3            MR. COFIELD:  The things you've heard 
          4   today, the SoftSecond Program, maintaining 
          5   membership in the Home Loan Bank Board.
          6            PRESIDING OFFICER SMITH:  Well, thank you 
          7   very much for coming this morning. 
          8            MR. BUTTS:  Good morning.  My name is 
          9   George Butts, and I'm Director of Housing Counseling 
         10   for ACORN Housing in Pennsylvania. 
         11            I wanted to give a quick overview of why we 
         12   have confidence that the merger between Bank of 
         13   America and FleetBoston will improve lending 
         14   opportunities in our communities. 
         15            In 1991 our leadership sat down with Ken 
         16   Lewis and his team at NCNB, and we hammered out our 
         17   first multi-state community reinvestment agreement 
         18   for low income mortgage lending with what became 
         19   NationsBank.  At the time this agreement was pretty 
         20   radical, but today no one thinks twice about the 
         21   appropriate use of low downpayments, non-traditional 
         22   credit, food stamps as income, voluntarily child 
         23   support, or cash on hand. 
         24            In the early days, plenty of lenders talked 
. 0126
          1   the talk, but NationsBank rewrote their mortgage 
          2   program and within a year we were doing 300 and 400 
          3   mortgages a year in cities like Houston and Dallas, 
          4   Texas, where other lenders told us about how low 
          5   income people could not handle owning a house. 
          6            Bank of America has recognized that 
          7   community organizations are the vehicle for real 
          8   access to the community.  We have too many banks 
          9   which believe that a few loans to a community 
         10   development corporation or a few small grants mean a 
         11   partnership.  Bank of America has invested in 
         12   building the infrastructure for non-profit community 
         13   organizations to grow and to produce.  We are now 
         14   working with them in 17 cities, and the results are 
         15   there today under Ken Lewis's leadership.  We are 
         16   doing 4,850 mortgages worth over $655 million this 
         17   year alone.  These are overwhelming African-American 
         18   and Latino, low and moderate income home-buyers. 
         19            FleetBoston has made its own unique 
         20   contribution to mortgage lending.  The northeast 
         21   United States housing stock in Boston, Providence.  
         22   Bridgeport, New Haven, Jersey City, and Paterson is 
         23   high-priced two- and three-unit houses.  Fleet has 
         24   been a national leader in letting us use the income 
. 0127
          1   from the rental units to subsidize the mortgage 
          2   payment and make these houses affordable to low and 
          3   moderate income buyers. 
          4            And Fleet has gone further than any lender 
          5   in the country to work with our housing counselors 
          6   to do exception lending -- common sense loans, which 
          7   fall outside of the rules, but make sense if you 
          8   know the full story.  These are the loans which used 
          9   to be done by your neighborhood lender, but in the 
         10   world of automated underwriting have stopped being 
         11   done.  There are $76 million in loans this year with 
         12   FleetBoston, and we're confident that Bank of 
         13   America can help us increase these numbers. 
         14            We know there's plenty more to be done to 
         15   keep homeownership affordable to low and moderate 
         16   income people in the northeast, to increase access 
         17   for recent immigrants, improving the quality of home 
         18   equity lending, combatting predatory lending, and 
         19   meeting the needs of people with credit problems.  
         20   But we also see that the merger of these two 
         21   problem-solving institutions improves our chances of 
         22   addressing these issues.
         23            Those were my prepared remarks.  My real 
         24   remarks is that, you know, we've had a relationship 
. 0128
          1   with them for a long, long time.  I understand their 
          2   commitment has been long and deep and real on both 
          3   sides.  I'm excited about this.  I've been waiting 
          4   for them to come to Philly for a long time.  So I'm 
          5   happy, because I know our life is going to be better 
          6   that they're going to be there. 
          7            The example with Fleet that we know, 
          8   because we do some stuff with them in Philly -- I'm 
          9   going to finish -- is that we have just not the 
         10   exception pool, but the banks in Philly have a 
         11   program which help provide alternatives to predatory 
         12   lending.  Fleet is involved in that.  They think 
         13   outside the box.  They stepped up when the other 
         14   banks did not and reduced the amount of credit 
         15   scores people would have to have to get into the 
         16   program, which is a viable alternative to predatory 
         17   lending.
         18            PRESIDING OFFICER SMITH:  Thank you very 
         19   much. 
         20            MS. HURD:  Good morning.  My name is Maude 
         21   Hurd.  I'm the national president of ACORN. 
         22            You probably know that when banks are 
         23   merging, ACORN looks at the record and usually say 
         24   the banks should do better and usually don't support  
. 0129
          1   mergers. 
          2            But ACORN and ACORN Housing have a long 
          3   history of working with both Bank of America and 
          4   Fleet.  And I am here to tell you that we support 
          5   this bank merger. 
          6            Bank of America is our largest lender.  
          7   This year the ACORN Housing Program had done over 
          8   4,850 mortgages with Bank of America, worth over 
          9   $665 million dollars.  Since 1991, we have done over 
         10   30,000 mortgages with Bank of America, and these 
         11   mortgages are worth over $3 billion. 
         12            This is a real community partnership.  Bank 
         13   of America and our leadership and staff work 
         14   together in 17 cities.  I want to tell you that 
         15   these are the loans that need to be made.  They are 
         16   loans to single parents, to people without lots of 
         17   downpayment money, to people in older neighborhoods, 
         18   to people who just came to this country, to people 
         19   who are the first people in their family to own a 
         20   home.  And they are not easy loans. 
         21            For the loans that Fannie Mae and Freddie 
         22   Mac wouldn't buy, Bank of America put them on their 
         23   portfolio.  For the loans that mortgage insurers 
         24   wouldn't insure, Bank of America approved the loans 
. 0130
          1   without mortgage insurance.  And the best news is 
          2   that these homeowners pay their mortgage on time.  
          3   We have less than 2 percent delinquent rate for 60 
          4   days or greater delinquencies.  This is a real 
          5   success story. 
          6            I want to talk about our friends at 
          7   Fleet/BankBoston.  Fleet is our second largest 
          8   lending partner.  We have closed 462 mortgages in 
          9   our ACORN Housing Program with Fleet this year.  
         10   This is $76 million in loans.  We work with Fleet in 
         11   Massachusetts, Rhode Island, Connecticut, New York, 
         12   New Jersey and Pennsylvania.  As you know, these are 
         13   high-priced markets with many two or three housing 
         14   units.  Fleet has been the leader in the mortgage 
         15   market in making these homes affordable to low and 
         16   moderate income home buyers. 
         17            This is a proud tradition, which for us 
         18   dates back to 1995, when Fleet and ACORN signed our 
         19   first agreement.  Both Fleet and Bank of America are 
         20   lenders who have proven that they can do the loans 
         21   that need to be done and work with community groups 
         22   to get where they can't reach.  So I would like to 
         23   thank you for that.
         24            PRESIDING OFFICER SMITH:  Thank you very 
. 0131
          1   much. 
          2            Mr. Hagan?
          3            MR. HAGAN:  My name is James Hagan.  I have 
          4   been the president of the Greater Providence, Rhode 
          5   Island, Chamber of Commence for the past 16 years.  
          6   We represent 3,400 businesses throughout Rhode 
          7   Island for the purpose of creating and maintaining a 
          8   healthy economic atmosphere in our region. 
          9            Fleet Bank has been a major partner in 
         10   creating investment and strengthening the cultural 
         11   and social infrastructure of our community.  They 
         12   have been a leader on affordable housing issues, 
         13   minority business lending, and community 
         14   development.  They have provided key leadership and 
         15   financial and human resources in the creation of the 
         16   Business Development Company of Rhode Island, the 
         17   Gordon Avenue Business Incubator, the Minority 
         18   Investment Development Council of Rhode Island, the 
         19   Options for Working Parents Program, the 
         20   Hispanic-American Chamber of Commerce and Leadership 
         21   Rhode Island, all programs or affiliates of our 
         22   Chamber, with the exception of the Gordon Avenue 
         23   Business incubator. 
         24            During my tenure with the Chamber, two 
. 0132
          1   former Fleet executives have served as Chairman of 
          2   the Chamber, and the current chairman of Fleet, 
          3   Rhode Island, serves as chair-elect.  Literally 
          4   hundreds of other Fleet employees have volunteered 
          5   their time, energy and expertise on a myriad of 
          6   Chamber community improvement projects. 
          7            In my opinion, Fleet has made an enormous 
          8   economic, cultural and social impact on our 
          9   community.  I do indeed support the merger of these 
         10   two fine organizations because of my past experience 
         11   with Fleet and because of the strong reputation of 
         12   Bank of America and their commitment to the 
         13   community.  I have talked with my colleague in 
         14   Charlotte regarding this matter, and he also 
         15   expressed the same high degree of enthusiasm for 
         16   Bank of America that we feel towards Fleet.  I am 
         17   confident the combined companies will bring about 
         18   tremendous benefits to our region. 
         19            Grow Smart Rhode Island, a statewide public 
         20   interest group representing a broad coalition of 
         21   partners fighting sprawl and leading the charge for 
         22   better-managed growth, also recently reported that 
         23   they were encouraged by the commitment of Bank of 
         24   America to the smart growth movement. 
. 0133
          1            Through community development lending, 
          2   contaminated properties redevelopment, growth 
          3   management and inner city revitalization, Bank of 
          4   America has demonstrated a commitment to sustainable 
          5   development initiatives in partnership with the 
          6   Urban Land Institute, according to Grow Smart Rhode 
          7   Island. 
          8            Also, the recent announcement by Bank 
          9   America that they would be lending and investing 
         10   $750 billion for community economic development over 
         11   the next ten years is further evidence of the impact 
         12   this merger will have on delivering a greater access 
         13   to capital and credit to low and moderate income 
         14   individuals, families and communities.
         15            And lastly, the United Way of Southern New 
         16   England reports that between the combination of 
         17   Fleet's corporate giving and their employee giving, 
         18   Fleet contributes over $1 million a year to the 
         19   annual United Way campaign.  This has been a 
         20   long-standing practice of Fleet that far surpasses 
         21   the activity of any other major Rhode Island 
         22   corporation and evidences a tremendous commitment to 
         23   the many social service agencies funded by the 
         24   United Way. 
. 0134
          1            And on my way up here this morning I just 
          2   happened to notice that just yesterday Fleet 
          3   received the Governor's Housing Heroes Award sought 
          4   to raise awareness about the need for affordable 
          5   housing by hosting a housing forum for business 
          6   leaders and commissioning a study on the connection 
          7   between housing and economic development.  
          8            PRESIDING OFFICER SMITH:  Thank you very 
          9   much.
         10            MS. GERECKE:  Good morning.  My name is 
         11   Sarah Gerecke.  I am the interim executive director 
         12   and chief operating officer of Neighborhood Housing 
         13   Services of New York City. 
         14            NHS of New York City was founded in 1982 
         15   and is a not-for-profit housing organization whose 
         16   mission is to promote investment in underserved 
         17   communities throughout the five boroughs. 
         18            In 2003, NHS of New York City was directly 
         19   responsible for an investment of over $215 million 
         20   in underserved neighborhoods and educated more than 
         21   13,000 New Yorkers in pre-purchase and post-purchase 
         22   homeownership classes.  About 80 percent of those 
         23   were people of color.  I have a more detailed 
         24   background report in your package. 
. 0135
          1            My organization does not generally testify 
          2   on merger applications.  We work with coalitions, 
          3   several of whom are here today, to represent us, and 
          4   they do a excellent job.  However, we felt strongly 
          5   that the experience that NHS of New York City has 
          6   had with both Fleet and Bank of America was 
          7   important to put before you directly as you review 
          8   this merger application.  We're testifying in 
          9   support of the merger application at our own 
         10   initiative and without any payment or reimbursement 
         11   of expenses from either bank. 
         12            NHS of New York City does its work in 
         13   partnership with the financial industry, government 
         14   and residents.  Both FleetBoston and Bank of America 
         15   have played key and unusual roles in helping us 
         16   reach underserved New Yorkers. 
         17            Since 1996, FleetBoston has been one of our 
         18   staunchest and most reliable partners in investing 
         19   in these neighborhoods.  We're also pleased to note 
         20   that the Bank of America through its mortgage 
         21   banking business in New York City has been a steady 
         22   partner to NHS since 1991.  I would like to 
         23   highlight just a few examples of our partnership for 
         24   the purposes of this hearing. 
. 0136
          1            FleetBoston's partnership with NHS allows 
          2   us both to reach minority and new immigrant 
          3   homeowners throughout the city, especially in 
          4   developing our innovative financial fitness literacy 
          5   education program.  Their charitable commitment has 
          6   been over $1 million.  In addition, when NHS of New 
          7   York City first engaged in real estate development 
          8   activities, FleetBoston and their team in real 
          9   estate finance worked closely in creating the 
         10   Storeworks Program, an innovative real estate 
         11   program to develop commercial space below 
         12   residential units that were donated by the City of 
         13   New York. 
         14            Fleet continues to partner with us in new 
         15   pilot programs for first-time home-buyers.  Not only 
         16   have both banks financially supported NHS programs, 
         17   but they also have extensive and unusual depth of 
         18   expertise that they have contributed to our 
         19   organization, permitting NHS to remain at the 
         20   cutting edge of community development and 
         21   investment. 
         22            FleetBoston volunteers include Jay Sarles, 
         23   who serves on our advisory board, and Bill McCahill, 
         24   who is the vice president of the NHS Board of 
. 0137
          1   Directors and serves as the chair of several of our 
          2   committees.  Susan Retzky of the Bank of America has 
          3   been a member of our Resource Development Committee 
          4   for a decade.  Many other members of both banks 
          5   serve on various committees that affect our nine 
          6   locations throughout New York City. 
          7            Our relationship has been strong and we 
          8   find their commitment to be genuine.  It is critical 
          9   to increase -- their large investments help us reach 
         10   our goal of serving low and moderate income families 
         11   throughout New York City. 
         12            PRESIDING OFFICER SMITH:  Thank you very 
         13   much.
         14            MR. SCHLEY:  Good morning.  My name is 
         15   Stephen J. Schley.  I'm the Executive Director of 
         16   Richmond Economic Development Corporation, also 
         17   known as REDC.  We are located in the state of 
         18   Richmond, Virginia.  I speak in support of the 
         19   merger between FleetBoston and Bank of America, 
         20   because we feel that such a merger will benefit the 
         21   small businesses and low income communities that 
         22   Fleet Bank -- FleetBoston is presently serving. 
         23            Our support is based upon the experience 
         24   and relationship that we have had and enjoyed with 
. 0138
          1   the bank since the inception of our lending 
          2   activities in 1996. 
          3            By way of information, REDC is a licensed 
          4   financial intermediary of the U.S. Small Business 
          5   Administration's microenterprise development loan 
          6   program.  Under that program, we can provide 
          7   financing up to $35,000.  We also provide training 
          8   and ongoing technical assistant services. 
          9            Bank of America provided initial seed 
         10   funding to REDC back in 1996 in support of that 
         11   program, which essentially facilitated us obtaining 
         12   the license through the SBA. 
         13            In 2000 REDC became a certified community 
         14   development financial institution, which facilitated 
         15   the establishment of our second loan pool, that we 
         16   call the Business Enterprise Zone Loan program.  
         17   Under that program, we provide financing up to 
         18   $100,000.  Again, it targets businesses that lack 
         19   accessibility to traditional bank financing.  Bank 
         20   of America also is participating in a bank 
         21   consortium that provides about $1.7 million in 
         22   funding for that program.
         23            The support that we have received from Bank 
         24   of America and others over the years has facilitated 
. 0139
          1   the growth of REDC into an organization with assets 
          2   exceeding two and a half million dollars.  We have 
          3   lowered our standards by $2 million.  We manage 
          4   another $4.8 million in community develop loan 
          5   programs for the City of Richmond.  It's because of 
          6   that support that we receive from the Bank of 
          7   America that has provided to the REDC and other 
          8   community development entities in the City of 
          9   Richmond -- if that support is indicative of what 
         10   can be expected in the northeast area, I would 
         11   support -- encourage the merger of Fleet, and it 
         12   should have significant impact on small businesses 
         13   located in this market and the low income 
         14   communities that they operate. 
         15            Therefore, I would encourage the Boston 
         16   community to support and embrace the proposed merger 
         17   between the two banks.
         18            MR. SERVAIS:  Good morning.  I'm Mike 
         19   Servais with the Salvation Army in Nashville, 
         20   Tennessee, testifying in support of the Bank of 
         21   America. 
         22            I know absolutely nothing about mergers.  
         23   Thank you, by the way for today.  I admire all of 
         24   you who are helping us make this possible.  The 
. 0140
          1   Salvation Army -- its greatest assets have always 
          2   been, since 1965, faith, trust and stewardship.  
          3   Those aren't just words.  Those are corporate 
          4   behaviors and belief systems.  And we are 
          5   faith-based. 
          6            We have no economic relationship with the 
          7   Bank of America that's on your radar screen at all.  
          8   We're not here because of a merger or an economic 
          9   relationship with the bank.  We're here because of 
         10   Willy's margin.  I do know a little bit about 
         11   margin.  I understand margin.  And Willy, one of our 
         12   best customers in Nashville, Tennessee, understands 
         13   margin, too, because it's because of Bank of 
         14   America, among other partners of ours, that he's 
         15   going to have a margin that's going to have a 
         16   profound impact on himself and his three children 
         17   very shortly.
         18            Bank of America's impact and the Salvation 
         19   Army's promise to you, in our opinion, are as 
         20   follows:  One, Bank of America has provided the 
         21   economic stimulus to redevelop the dignity and 
         22   self-worth -- I heard those words earlier today -- 
         23   to redevelop the dignity and self-worth of our 
         24   community that we serve. 
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          1            The Salvation Army, on the other hand, but 
          2   in partnership, is going to guard that dignity and 
          3   self-worth religiously -- and we mean that 
          4   literally -- as we continue our relationship with 
          5   Bank of America and with all of our community 
          6   partners and our 20,000 community customers.  We are 
          7   very serious about that accountability, and we will 
          8   hold a bank account for it, at least by prayer. 
          9            I want to paint a quick picture, to get 
         10   back to Willy's margin.  I want us to see this 
         11   through Willy's eyes for a change -- just a little 
         12   break in the rhythm of things.  The mother of these 
         13   three children is a crack addict, and we don't know 
         14   how much longer in her life she'll continue to be a 
         15   crack addict, but she has been for six solid years. 
         16            Willy is working really hard on a second 
         17   shift at Vanderbilt University in maintenance as a 
         18   supervisor.  That was a big community celebration; 
         19   that Willy makes supervisor.  And he is now 
         20   positioned, because of the community 
         21   redevelopment -- it's not the bank giving him any 
         22   money; it's community redevelopment, the stimulus 
         23   that the bank helped bring in, that is empowering 
         24   Willy to take his three girls out of foster care, 
. 0142
          1   with their permission, and move from a slumlord 
          2   apartment next-door literally to a completely new 
          3   home, three-bedroom.  And that's going to happen 
          4   within a few weeks.  I'm here to protect that margin 
          5   and that possibility. 
          6            Thank you very much. 
          7            PRESIDING OFFICER SMITH:  Ms. Bourdon.
          8            MS. BOURDON:  My name is Sister Mary 
          9   Bourdon, and I'm the administrator of a small middle 
         10   school for girls in the Anacostia section of 
         11   Washington, D.C. 
         12            I am very happy to have this opportunity to 
         13   tell you about the important contributions that the 
         14   Bank of America has made to our school.  The 
         15   Washington middle school for girls is 100 percent 
         16   African-American population.  It is housed in the 
         17   Washington View Apartment Complex, a property owned 
         18   and renovated by the Bank of America. 
         19            The entire building, which is called the 
         20   Make a Difference Center, has been dedicated by the 
         21   bank to provide services needed by the residents of 
         22   this complex and others in the neighborhood.  Not 
         23   only does the bank contribute this school space 
         24   rent-free; they had it constructed to our own 
. 0143
          1   specifications. 
          2            The executive officers of the Bank of 
          3   America have become our very good friends.  They 
          4   often come by to encourage and support our students.  
          5   They show up at our rehearsals, our recitals, our 
          6   basketball games.  They are there with us in this 
          7   very important journey for these young girls. 
          8            Their support is especially remarkable 
          9   because the Anacostia section of Washington, D.C. is 
         10   the most troubled and least prosperous area of D.C.  
         11   Most of our students come from 
         12   single-adult-family-headed households living below 
         13   the poverty level.  Children growing up in this 
         14   neighborhood experience problems of wide-spread 
         15   unemployment, substance abuse, teen pregnancy, 
         16   street and domestic violence.  The test scores for 
         17   students in this section of Washington, D.C., are 
         18   the lowest. 
         19            With the help of Bank of America, we are 
         20   trying to provide quality education to girls who are 
         21   at risk of dropping out of school prematurely.  None 
         22   of our work would be possible without the assistance 
         23   of the Bank of America.  If it were necessary for us 
         24   to pay rent, we simply could not do the work that we 
. 0144
          1   are doing. 
          2            We are very privileged, also, to be part of 
          3   a neighborhood that has been renovated by the Bank 
          4   of America.  Some years ago the bank purchased this 
          5   large apartment complex which was run-down and 
          6   poorly supervised, high crime rates.  Each of the 
          7   residential units has been renovated, and the 
          8   complex is now a pleasant, quiet place for tenants 
          9   and their families, with a mixed income.  We have 
         10   found student families in this neighborhood.  We 
         11   have also found volunteers and mentors for our 
         12   students.
         13            In short, we couldn't do any of our work 
         14   without the Bank of America.  Tomorrow our school 
         15   will be receiving the Martin Luther King Day Award 
         16   in Washington, D.C., and the Bank of America 
         17   deserves a part of this.
         18            PRESIDING OFFICER SMITH:  Thank you very 
         19   much.
         20            Mr. Guenther?
         21            MR. GUENTHER:  Good morning.  My name is 
         22   Bill Guenther.  I'm president of Mass Insight 
         23   Corporation and also president of the Mass Insight 
         24   Education and Research Institute.  The corporation 
. 0145
          1   is a think tank focused on Massachusetts.  And the 
          2   Education and Research Institute is the major 
          3   statewide group working on raising student 
          4   achievement using new statewide standards and MCAS 
          5   tests here. 
          6            We support the merger of these two 
          7   important institutions and are confident that the 
          8   critical role of Fleet and its CEO, Chad Gifford, 
          9   will play in education reform here will be carried 
         10   on by the merged institutions as partners with us 
         11   and many others in the state, two bookends for ten 
         12   years of education reform here in Massachusetts.  In 
         13   1993 a small group of business leaders went up to 
         14   the State House, met with legislative leaders and 
         15   the governor.  Jack Rennie, unfortunately deceased 
         16   now, was the leader of that effort on behalf of the 
         17   business community.  Chad Gifford and his 
         18   predecessor bank, BankBoston, were there as part of 
         19   that group in helping to lead the effort, as they 
         20   had done for educational reform in Boston in the 
         21   prior decade. 
         22            Just this last fall, the Class of 2003 -- 
         23   for all of you here from Massachusetts, as you know, 
         24   the Class of 2003 graduated, as the first class that 
. 0146
          1   had to meet the MCAS English and math standards and 
          2   exit tests in high school, with more than 95 percent 
          3   of the class graduating on schedule. 
          4            That was an extraordinary achievement, and 
          5   many in Massachusetts deserve credit for it.  But 
          6   Fleet and its leadership, along with a few others, 
          7   deserve special recognition.  Soon thereafter, our 
          8   state leaders group -- that interestingly, Cathy 
          9   Minehan from the Federal Reserve Bank here hosts and 
         10   has done twice a year over the last six years -- met 
         11   this fall.  Fleet hosted that meeting, announced a 
         12   major new initiative focused on math achievement, of 
         13   which we are one of the many partners they will have 
         14   around the state.  So they have not forgotten the 
         15   promise to students in schools around the state. 
         16            While we finished the first decade of 
         17   education reform, Fleet and their other partners are 
         18   focused on the next decade and the next challenges.  
         19   The key attributes that have made a difference is 
         20   bipartisan leadership, strong presence from the 
         21   business community, sustained support -- and that 
         22   means financial support, but it also means 
         23   personal commitments of leadership -- and a focus on 
         24   community and schools, because in education, all 
. 0147
          1   things are local in the end.  The states can only 
          2   play so much of a role.
          3            Several quick examples of important 
          4   initiatives Fleet has partnered with us on -- a 
          5   parent information newsletter that went out twice a 
          6   year over the last five years to one million parents 
          7   across the state working with the Department of 
          8   Education; an Effective Schools Program to document 
          9   what effective schools are doing and how to 
         10   translate those practices to other schools; and 
         11   finally, to keep the promise initiative, focused on 
         12   helping the class of 2003 with extra help programs, 
         13   assuring they're funded, and a three-year effort to 
         14   research effective practices; what's working and 
         15   what's not. 
         16            We look forward to partnering with the new 
         17   institution over the next decade.  And again, I'm 
         18   confident that the same leadership will be there 
         19   that we have been so pleased to proceed with over 
         20   the last decade.
         21            PRESIDING OFFICER SMITH:  Thank you very 
         22   much. 
         23            We have a subgroup from the same panel.  
         24   Mr. Marks was on Panel 6.  He asked to have three 
. 0148
          1   people join him, plus a translator.  I see that the 
          2   group has expanded somewhat, but the time has not.  
          3   So you have ten minutes in total.
          4            MR. MARKS:  I can't say it's good to be 
          5   here, because there's been too many mergers and 
          6   acquisitions in the past and we've been here too 
          7   often. 
          8            But given that, my name is Bruce Marks.  
          9   I'm the CEO of the Neighborhood Assistance 
         10   Corporation of America, NACA.  I think it's best 
         11   that we would have a major institution based in New 
         12   England, based in Boston, but that's not the 
         13   reality. 
         14            Given the reality, the best possible 
         15   circumstance would be that Bank of America comes 
         16   here, because we have had and we've seen them over 
         17   the ten years.  They are an institution that is good 
         18   to their word.  Let me not read the written piece.  
         19   Let me speak from our experience. 
         20            Our experience is that they do what they 
         21   say they're going to do.  And when they said that 
         22   they were going to respect working people, they not 
         23   only say it, but they put it into practice.  So they 
         24   put together a mortgage product that is the best in 
. 0149
          1   America; that working people, some of whom are here 
          2   today as the homeowners, can get a mortgage with no 
          3   downpayment, with no closing costs.  Bank of America 
          4   pays all the closing costs, pays all the fees.  
          5   There's no PMI.  You don't need perfect credit.  And 
          6   the interest rate is 1 point below market.  So 
          7   today's interest rate is 4.875 percent fixed, 30 
          8   years APR.  You can't beat it.  Bank of America does 
          9   it.  They do $6 billion worth of that that has been 
         10   committed.  That's a huge amount of money.  And that 
         11   says -- and we hear today about, Where are the 
         12   specifics.  That's as specific as you can get. 
         13            So with that, let me turn this over to Iris 
         14   Mathias, who is the Lawrence director for NACA.  And 
         15   she and her staff have transformed Lawrence with 
         16   over 2,500 loans and with being a community that 
         17   Fannie Mae said they would not lend in, Bank of 
         18   America and Fleet have and have changed that whole 
         19   city. 
         20            Iris, why don't you introduce some of the 
         21   home-buyers who are going to speak for just a few 
         22   minutes, because we keep hearing from the leaders.  
         23   Let's hear from the results of what's going on out 
         24   there on a community level.
. 0150
          1            MS. MATHIAS:  Hi.  My name is Iris Mathias.  
          2   I have some of the homeowners that we helped buy 
          3   them homes. 
          4            The first person that is going to speak is 
          5   Fiabola Camilo. 
          6            MR. CAMILO:  (Through Ms. Mathias, 
          7   Interpreter)  My name is Fiabola Camilo.  I bought 
          8   my house through the NACA program.  I bought a house 
          9   for $330,000, four-family house.  And it was very 
         10   good, because I didn't have to pay no downpayment or 
         11   closing costs.  I got an interest rate of 5.5 -- I'm 
         12   sorry, 5.25. 
         13            MR. MARKS:  When did you buy your house?
         14            MS. MATHIAS:  She just closed on December 
         15   1, '03.
         16            MR. MATALU:  My name is Eddie Matalu.  I 
         17   have five kids.  I always had big problem with the 
         18   kids because I had no room.  I was with two-bedroom 
         19   for $1,500 every month.  Then I go to NACA and I 
         20   talk to -- I only had $1,000 in my account.  I said, 
         21   I don't have no money.  NACA said, Okay, we're going 
         22   to help you. 
         23            When I go there, they give me credit for 
         24   $358,000.  I said, "How can I buy the house for 
. 0151
          1   350,000 when I have only $1,000?"  He said, "Okay, 
          2   I'm going to take care of you."  They said, "You're 
          3   going to go and buy any house you like.  I'm going 
          4   to help you."  They give me the house with no 
          5   downpayment and no closing costs.  I am glad for 
          6   that.  Thank you.
          7            Mr. Burgos:  (Through Iris Mathias, 
          8   Interpreter)  My name is Raymond Burgos.  I bought 
          9   my house through the NACA program.  It has been a 
         10   year.  I pay -- I got the house for $360,000, 
         11   four-family house, with an interest rate of 5.50, 
         12   with no downpayment, no closing costs.  NACA helped 
         13   me to resolve everything, and I am being very 
         14   grateful to NACA.  I am very happy with my family, 
         15   and I thank God because NACA helped me in 
         16   everything.  Thank you.
         17            MS. CABRERA:  (Through Iris Mathias, 
         18   Interpreter) My name is Gilmar Cabrera.  I bought a 
         19   house one year ago.  It cost me $260,000.  NACA 
         20   helped me a lot, because I didn't qualify in other 
         21   programs.  I bought a three-family house without a 
         22   downpayment and the closing costs.  I'm very happy, 
         23   and I thank God because I have my house now and 
         24   thank you to NACA.  And God bless you all.  And this 
. 0152
          1   is my testimony.
          2            MS. OLIVO:  (Through Iris Mathias, 
          3   Interpreter) My name is Angel Olivo.  I bought my 
          4   house through the NACA foundation, three-family 
          5   house for $275,000 with no closing costs and no 
          6   downpayment.  I am very happy in my house.  The 
          7   interest rate was 5.85.  And I hope that everybody 
          8   can get their house through the NACA program.  Thank 
          9   you and God bless you all. 
         10            MR. MARKS:  Because of what Bank of America 
         11   has done over ten years, because when they committed 
         12   $350 billion, people said it's the largest 
         13   commitment that was ever made.  And people said, 
         14   Well, we want to see the specifics.  Well, they've 
         15   shown me specifics over the last number of years and 
         16   they've exceeded what they said that they were going 
         17   to do. 
         18            So when they say they're going to commit 
         19   $750 billion, we take that to the bank.  So we 
         20   strongly support the merger.  But when you hear from 
         21   the Bank of America officials, when you hear from 
         22   the Ken Lewises and you hear from those -- they have 
         23   a staff that's as dedicated as the NACA staff is and 
         24   is as dedicated as the other community group staffs 
. 0153
          1   are around here.  A lot of the NACA staff is here.  
          2   And a lot of the Bank of America staff is here.  And 
          3   they are led by a person who the Bank of New England 
          4   will meet and who they'll respect and whose word is 
          5   golden, and that is Kathy Bessant.  She will be 
          6   here.  The first time we met with Bank of America 
          7   people said, this is the lady who's going to make it 
          8   work.  She made it work in other parts of the 
          9   country, and she will make it work in New England. 
         10            Thank you.
         11            PRESIDING OFFICER SMITH:  Let's go ahead 
         12   and start with Mr. Fishback.
         13            MR. FISHBACK:  Good morning.  First of all, 
         14   thank you very much for sponsoring this hearing.  I 
         15   hope that this better informs your decision-making 
         16   about this merger.
         17            I'm from the Rhode Island Community 
         18   Reinvestment Association.  We take a great interest 
         19   in this merger, because we're about to lose our 
         20   oldest bank in the state to a very large bank, and 
         21   that very much worries us in Rhode Island. 
         22            Our opposition to this merger is largely 
         23   based on Fleet's track record, because we've 
         24   witnessed our home-grown bank grow bigger and bigger 
. 0154
          1   and bigger and forget about us more and more and 
          2   more as time goes by.  We're particularly concerned 
          3   also, because we've seen other states -- community 
          4   groups in other states have conversations with 
          5   financial institutions about developing programs to 
          6   meet credit needs for low- and moderate-income 
          7   communities.  And that process has yet to begin in 
          8   Rhode Island.  And this reflects our concern that we 
          9   are being lost in an ever-growing, growing 
         10   footprint.  As everyone knows, Rhode Island is a 
         11   small state.  As the footprint gets bigger, we 
         12   become more of a spec, and that is very problematic. 
         13            There have been some meetings in our state 
         14   with people from Fleet.  And when we asked Fleet to 
         15   bring Bank of America to the table, Fleet tells us 
         16   that that will happen when there's something new to 
         17   report to us.  Well, this merger is a process.  And 
         18   these hearings are going on.  And we're waiting for 
         19   the news.  And we don't want the news to come after 
         20   the fact. 
         21            So we would hope that the Federal 
         22   Reserve -- in fact, we would urge the Federal 
         23   Reserve to defer acting on this application until a 
         24   process that's occurred elsewhere occurs in the 
. 0155
          1   state that's the home base of the institution that's 
          2   about to be bought up. 
          3            We have also some specific concerns that 
          4   relate to Fleet's record.  For one thing, we are 
          5   concerned that their record has been overstated.  
          6   There have been projects that Fleet has done that do 
          7   nothing to serve low- and moderate-income people and 
          8   yet, they're counting that in their $14.6 billion.
          9            A second concern we have has to do with 
         10   refinancing rejection rates and also home 
         11   improvement rejection rates for people of color, 
         12   which tends to be at times double that for white 
         13   people.  And this is a concern that the Feds should 
         14   be looking at in New England, because the rates for 
         15   all the banks don't look that great, but Fleet 
         16   stacks up even worse than the banks do generally.
         17            Finally, we do have one concern relating to 
         18   Bank of America as it relates to their scoring 
         19   community reinvestment points at the expense of very 
         20   low income public housing tenants. 
         21            Bank of America has participated in the 
         22   Hope VI program.  And through its participation, 
         23   there's been a net loss of scarce public housing 
         24   units.  This is very problematic in Rhode Island, 
. 0156
          1   because there are very few housing opportunities for 
          2   very low income people.  And if the bank is going to 
          3   use its community reinvestment record at the expense 
          4   of public housing tenants and Section 8 tenants, 
          5   that causes us much concern. 
          6            We've been told that we will be getting a 
          7   meeting soon with Bank of America, which we look 
          8   forward to, and we hope to be able to discuss our 
          9   concerns with them some more.
         10            Thank you.
         11            PRESIDING OFFICER SMITH:  Thank you.
         12            The panelists have five minutes each on 
         13   this panel, but do keep an eye on the timer.
         14            MS. KEEFE:  My name is Kirsten Keefe.  I'm 
         15   a lawyer with the Greater Upstate Law Project in 
         16   Albany, New York, and I'm here on behalf of the 
         17   Capital Region Community Reinvestment Task Force. 
         18            I thank you for this opportunity, and I'd 
         19   like to limit my comments to two points regarding 
         20   Bank of America's continued involvement in predatory 
         21   lending. 
         22            First, Bank of America's application to 
         23   acquire FleetBoston Corporation should be denied, 
         24   unless Bank of America displays that they have 
. 0157
          1   sincerely stopped the securitization of predatory 
          2   loans. 
          3            Bank of America's written and oral 
          4   commitment not to securitize predatory loans is 
          5   insincere.  Bank of America claims to conduct due 
          6   diligence prior to purchasing loans from third party 
          7   mortgage lenders, as well as for each pool of 
          8   mortgage loans purchased by BOA.  BOA refuses to 
          9   reveal, however, what exactly the due diligence is 
         10   that they conduct.  They have asked for confidential 
         11   treatment, as if due diligence were some sort of 
         12   trade secret that needs to be protected.  BOA should 
         13   make public what steps it is taking to ensure that 
         14   they are not capitalizing predatory loans.
         15            We do know that BOA uses the narrowest 
         16   possible definition of what it considers to be a 
         17   predatory loan.  In response to a California 
         18   community reinvestment group's comment letter, BOA 
         19   stated that it will not securitize, quote, high cost 
         20   mortgage loans as defined by the Home Ownership and 
         21   Equity Protection Act or subprime loans with terms 
         22   that would trigger similar state lending laws." 
         23            Congress never intended HOEPA to be the 
         24   complete definition of predatory lending.  If Bank 
. 0158
          1   of America is sincere in its commitment not to 
          2   securitize predatory loans, Bank of America must 
          3   expand its definition of predatory lending.  For 
          4   example, Bank of America should not securitize loans 
          5   which have high points and fees, regardless of 
          6   whether they meet the high HOEPA threshold; loans 
          7   that include mandatory arbitration agreements; loans 
          8   that contain prepayment penalties, especially when 
          9   those prepayment penalties are coupled with 
         10   adjustable interest rates; loans that have high 
         11   debt-to-income ratios, especially when made to 
         12   low-income folks; loans that leave homeowners with 
         13   substandard residual income; and loans that have 
         14   been flipped within at least the last 12 months.
         15            Despite rhetoric from the industry, it is 
         16   not difficult to determine whether a loan is 
         17   predatory.  An investor can tell from the documents 
         18   whether a loan is high cost.  BOA has easy access to 
         19   FICO scores, loan-to-value ratios, and 
         20   debt-to-income ratios on loans.  BOA can readily 
         21   track the default rates of loan originators.  They 
         22   can identify notoriously bad brokers, track hot 
         23   zones for predatory lending and look at other signs 
         24   that a loan may be predatory.  BOA can seek the 
. 0159
          1   advice of state attorney generals regarding problem 
          2   lenders and of advocacy organizations such as the 
          3   National Consumer Law Center. 
          4            Second, bank of America's application to 
          5   acquire FleetBoston should be denied because Bank of 
          6   America fails to provide a responsible subprime 
          7   lending product.  By this I mean a subprime lending 
          8   product to the public, not just a subprime lending 
          9   product to an organization such as NACA, as we just 
         10   heard. 
         11            Bank of America has no subprime product 
         12   currently and has no plans to develop a responsible 
         13   subprime lending product.  On December 15 BOA 
         14   acquired an equity interest in Oakmont Mortgage 
         15   come.  The HMDA data on Oakmont shows Oakmont's 
         16   lending practices to be questionable at best, 
         17   predatory at worse.  Oakmont is a broker-driven loan 
         18   model, similar to EquiCredit corporation, BOA's 
         19   former subprime subsidiary and a notorious predatory 
         20   lender.
         21            With the acquisition of FleetBoston, BOA 
         22   will become the second largest bank in the country.  
         23   With such a huge market share, BOA must develop a 
         24   responsible subprime product.  Broker-driven models 
. 0160
          1   for subprime lending leads to great abuses.  
          2   Vulnerable homeowners are targeted by unscrupulous 
          3   brokers.  Brokers who make their living based on a 
          4   percentage of the loan amount steer borrowers into 
          5   loans based on the amount of equity in their home, 
          6   not on the amount they requested.  It becomes 
          7   impossible for a homeowner to get a loan for minimal 
          8   home improvements.  I have heard too many predatory 
          9   lending victims repeat the ironic statement:  "The 
         10   broker told me I wouldn't qualify for a $8,000 loan, 
         11   but said I could get a $40,000 loan."  Homeowners 
         12   with below perfect credit must be able to get loans 
         13   directly through Bank of America loan officers, 
         14   rather than be pushed off to poisoned subprime 
         15   products pedaled by brokers through a subsidiary 
         16   company. 
         17            Bank of America must offer home repair 
         18   loans that don't mortgage all the equity in the 
         19   home.  Bank of America must offer a second mortgage 
         20   loan product that does not require the homeowner to 
         21   refinance their first mortgage at a higher interest 
         22   rate, just so that they can get $5,000 to weatherize 
         23   their home. 
         24            Bank of America needs to let borrowers know 
. 0161
          1   what kind of credit history leads to what kind of 
          2   rate and give folks who qualify for prime loans 
          3   prime rate loans. 
          4            Bank of America needs to refinance subprime 
          5   loans with prime rate loans once a homeowner 
          6   exhibits a regular payment history. 
          7            I have spent the better part of the last 
          8   five years litigating predatory lending cases on 
          9   behalf of low income homeowners against Bank of 
         10   America and its subsidiary, EquiCredit.  Although 
         11   the doors of EquiCredit were closed in 2001, the 
         12   opening of Oakmont frightens me and makes me think 
         13   that the same nightmare is going to come back for 
         14   low income homeowners.
         15            PRESIDING OFFICER SMITH:  Thank you very 
         16   much. 
         17            Ms. McNeilly?
         18            MS. McNEILLY:  My name is Louise McNeilly.  
         19   I'm a neighborhood organizer in the City of Albany. 
         20   I also work for a community development financial 
         21   institution.  I'm also here on behalf of the Capital 
         22   Region Reinvestment Task Force, which is a coalition 
         23   in our area of community development groups.  And I 
         24   want to share those community development groups' 
. 0162
          1   concerns about the pending merger with Fleet Bank 
          2   and Bank of America. 
          3            Fleet is currently one of the largest 
          4   financial institutions in our market by far.  Their 
          5   strength has been in their local presence, their 
          6   ability at a high level to make local decisions and 
          7   have that authority locally, and the involvement of 
          8   a locally-based CRA officer, who has been a good 
          9   partner to community development groups in our area.  
         10   Fleet Bank invests in local community development 
         11   financial institutions like mine, supports small 
         12   business development programs, and is a strong 
         13   contributor to housing groups in my area. 
         14            Bank of America has not had a presence 
         15   locally.  And representatives so far have declined 
         16   to meet with us and have not disclosed plans of what 
         17   to expect in our market.  Before approving a merger 
         18   of this size, regulators should require that Bank of 
         19   America hold meetings in New York's Capital District 
         20   with community groups.  While our market will be a 
         21   very small one for the new entity -- we're feeling 
         22   like Rhode Island in this -- the merged institution 
         23   will be a very significant financing institution for 
         24   us.  As banks in our area have merged, our community 
. 0163
          1   has been increasingly abandoned.  The new larger 
          2   entities have not had the same interest in our 
          3   community, and their local practice has been 
          4   lacking.  We are very concerned about Bank of 
          5   America's ability to be responsive to local capital 
          6   needs, considering that pre-merger, they're already 
          7   too big to meet with us. 
          8            We have been told by Bank of America 
          9   representatives that a community reinvestment 
         10   business plan will be developed for upstate New 
         11   York.  A pre-merger commitment to including 
         12   representatives of these important non-profit groups 
         13   in Albany, Schenectady and Troy in this business 
         14   plan task force would be an important first step and 
         15   would make the plan much stronger.
         16            We are also concerned that Bank of America 
         17   continues to -- has not yet committed to having 
         18   locally-based decision making CRA managers.  Before 
         19   approving the merger, regulators should insist that 
         20   Bank of America commit to the preservation of local 
         21   CRA-officer position with meaningful authority to 
         22   develop community relationships and be responsive to 
         23   community needs.  We need Bank of America 
         24   decision-makers that live in our community, care 
. 0164
          1   about our neighborhoods, understand our low-income 
          2   neighborhoods and market and are easily accessible.  
          3   Local decision-making is one of our greatest 
          4   concerns in our area.
          5            We cannot evaluate Bank of America's 
          6   lending in our area, but we do know that Fleet could 
          7   do better in home purchasing lending in Upstate New 
          8   York.  According to HMDA data, Fleet's distribution 
          9   of loans to underserved communities is lower than 
         10   that for other financial institutions in our area.  
         11   Fleet's market share in underserved communities and 
         12   among communities of color was lower than its total 
         13   market share in the Albany MSA.  And at the end of 
         14   my written testimony are some of the details on 
         15   that.
         16            So there is room for improvement by Fleet 
         17   Bank as well.  The acquisition by a bank 
         18   headquartered far from Upstate New York raises 
         19   concerns about their knowledge in meeting our credit 
         20   needs in underserved communities and providing 
         21   needed services to low and moderate income people 
         22   and minority populations. 
         23            On behalf of the low and moderate income 
         24   populations that we serve in the task force, we 
. 0165
          1   request that Bank of America prepare clear and 
          2   acceptable multi-year community development plans 
          3   for the capital region, which builds on and improves 
          4   on Fleet's investment performance, and that this 
          5   plan be in place before the proposed merger moves 
          6   forward. 
          7            In my written testimony I've also outlined 
          8   the community development needs in our area.  I 
          9   won't go into all of those, but just in the 
         10   following area the needs are in affordable 
         11   homeownership and housing.  There are some specific 
         12   products that we lack and require. 
         13            Under community revitalization and 
         14   financial services and banking services.  There is 
         15   much that can be done in micro enterprise and small 
         16   business lending; community development loans and 
         17   investments in our areas; there's opportunities for 
         18   improvement in commercial lending; and then of 
         19   course under maximize local decision-making control 
         20   and accountability.
         21            We hope that the Federal Reserve Board will 
         22   take our task force concerns into consideration, and 
         23   we appreciate the opportunity to be heard here 
         24   today.  Thank you.
. 0166
          1            PRESIDING OFFICER SMITH:
          2            MS. SALOWE-KAYE:  My name is Phyllis 
          3   Salowe-Kaye.  And for the last 19 years I've been 
          4   the Executive Director for the New Jersey Citizen 
          5   Action, the state's largest consumer watchdog 
          6   organization.  We have 60,000 dues-paying family 
          7   members and over 120 organizations affiliated with 
          8   us; labor, senior, community, environmental, 
          9   religious and -- a variety of groups. 
         10            We're a multi-issue organization, but we 
         11   spend a great amount of time working on housing and 
         12   community development issues.
         13            My testimony has been rewritten a million 
         14   times in the last four days.  It's sort of 
         15   schizophrenic, as we've had discussions with the 
         16   banks and other community groups.  However, what 
         17   hasn't changed and what isn't schizophrenic is our 
         18   belief that as banks get bigger, they must get 
         19   better. 
         20            Since Bank of America is a really big bank 
         21   that is buying New Jersey's biggest bank, we believe 
         22   that they have an obligation to become the best bank 
         23   in New Jersey. 
         24            Over the past 19 years we've negotiated 28 
. 0167
          1   community reinvestment acts with 28 different banks, 
          2   totalling more than $25 billion that's been pledged 
          3   in below market rate mortgages, discounted home 
          4   improvement loans, construction of permanent 
          5   financing targeted for non-profits, community and 
          6   economic development loans, tax credits and grants 
          7   and a variety of other products and services. 
          8            When banks come into New Jersey, they know 
          9   that they are going to negotiate an agreement, a 
         10   memorandum of understanding, write a letter, a 
         11   business plan, call it whatever you want, with 
         12   citizen action.  Some do it because they want to.  
         13   Some do it because they feel they have to.  Most do 
         14   it willingly and a few need additional 
         15   encouragement. 
         16            Fleet Bank did it when they came to New 
         17   Jersey and purchased NatWest.  They did it when they 
         18   purchased Summit.  They have become a really good 
         19   community partner in New Jersey, perhaps the best 
         20   that we deal with. 
         21            Part of that is a result of the 
         22   Fleet/BankBoston merger, which changed our 
         23   relationship with the bank, but this did not happen 
         24   by magic.  It happened because we had a specific 
. 0168
          1   document that we could refer to with specific 
          2   monetary commitments, product descriptions and 
          3   lending criteria that we came back to four and five 
          4   times a year to measure improvement, to set goals, 
          5   to reevaluate, if necessary. 
          6            This would be the point where I would read 
          7   a few sentences from the Governor of New Jersey, 
          8   Governor James McGreevey, who has submitted 
          9   testimony to the board. 
         10            "Since Fleet's takeover of Summit Bank in 
         11   2000, Fleet has made substantial commitments to New 
         12   Jersey.  Fleet has committed $1.2 billion in 
         13   community reinvestment agreements with tailored 
         14   products through March 2005. 
         15            "We have 430 branches in New Jersey, with 
         16   47 branches in major urban areas, representing 18 
         17   percent of the branches in these areas.  Fleet 
         18   employees thousands and represents a considerable 
         19   investment in New Jersey.  It is this level of 
         20   commitment that Bank of America should be required 
         21   to continue should the board approve this 
         22   transaction.  Indeed, we respectfully request as a 
         23   condition of approval of this merger that Bank of 
         24   America honor and extend the existing Fleet CRA 
. 0169
          1   agreement that they have in New Jersey."
          2            That's what the governor has to say. Now 
          3   we're back to me.
          4            Fleet's $750 billion mega-pledge is quite 
          5   impressive, but its lack of specificity is 
          6   disappointing, to say the least.  The bank has 
          7   agreed to develop a state-specific business plan for 
          8   New Jersey, but only after the merger is completed.
          9            There will be some product specificity.  
         10   However, specific product goals, lending goals have 
         11   not been committed to, nor is it our ability to make 
         12   those public if they were.  So what we've learned 
         13   over the past 19 years is that good intentions don't 
         14   count.  And we are urging the board to require that 
         15   a specific document be put in place in each state.
         16            The $100 billion dollars set aside for 
         17   states in the Fleet footprint falls far short -- 
         18   about $80 billion dollars short -- of being a fair 
         19   allocation, since only 13 percent of the total 
         20   commitment will go to states that will eventually 
         21   hold 24 percent of the combined bank deposits after 
         22   the merger.  While we have had several meaningful 
         23   discussions with Bank of America -- and like Mr. 
         24   Lewis said earlier, the people that we have met with 
. 0170
          1   have been diligent, honest, likeable, even charming, 
          2   and some of them quite sincere.  What they haven't 
          3   been is specific in terms of committing to what they 
          4   are going to actually do in New Jersey. 
          5            We need Bank of America to provide us with 
          6   straight answers and prove that when they enter New 
          7   Jersey, they will have a stronger commitment to 
          8   consumer service, community and economic 
          9   development, and corporate citizenship.
         10            MS. WOLFRAM:  I'm Tanya Wolfram from the 
         11   Community Reinvestment Association of North 
         12   Carolina.  And I'm here to tell you that bigger is 
         13   not better. 
         14            Since the 1980s, NCNB has grown from a 
         15   one-state bank with 172 offices in North Carolina to 
         16   Bank of America, which will have 5,700 branches in 
         17   29 states after its acquisition.  But while Bank of 
         18   America executives strive to make it America's bank, 
         19   they have left the community behind.  Bigger is not 
         20   necessarily better for the community. 
         21            Bigger is not better for access.  Bank of 
         22   America now has 209 branches in North Carolina.  But 
         23   Bank of America's gain is North Carolina's consumers 
         24   net loss.  Since 1986, Bank of America has closed 
. 0171
          1   147 branches in North Carolina, leaving many markets 
          2   altogether.  What happened in Murfreesboro, 
          3   Lillington and Harmony, North Carolina, sets 
          4   precedent for places like Orange, Turners Falls and 
          5   Fiskdale, Massachusetts, and I'm afraid it doesn't 
          6   bode well.  $750 billion dollars is a big number; 
          7   but like my colleague up in North Carolina Fair 
          8   Housing Center said, it is ambitious, but ambiguous. 
          9            Without state and local commitments, the 
         10   number has no meaningful impact on the community.  
         11   What does it mean in Jacksonville, North Carolina, 
         12   where the bank has closed four branches since 1992, 
         13   and the only Community Development Corporation in 
         14   the area has no relationship with Bank of America. 
         15            Indeed, it is difficult to cultivate 
         16   relationships on a local level when there is one 
         17   community development officer for all of North and 
         18   South Carolina.  Bigger is not better.  Bigger is 
         19   not better for lending.  Bank of America's size does 
         20   not translate into more loans for small businesses 
         21   or more loans for low and moderate income borrowers 
         22   in North Carolina. 
         23            In its own hometown of Charlotte, North 
         24   Carolina, where it has the largest bank presence, 
. 0172
          1   Bank of America is only the ninth largest lender in 
          2   lending to businesses with less than a million 
          3   dollars in gross annual revenue.  In fact, in 
          4   mortgage lending, in every North Carolina MSA, Bank 
          5   of America underperformed the market in lending to 
          6   low and moderate income lending borrowers.  Bigger 
          7   is not better.  Bigger is not better when it fosters 
          8   predatory lending. 
          9            Bank of America sold NationsCredit and 
         10   EquiCredit, only to participate in predatory lending 
         11   under a different guise.  Bank of America is buying 
         12   subprime loans on the secondary market without 
         13   screening them for predatory lending.  Predatory 
         14   loans destroy communities.  CRA-NC pledges to fight 
         15   Bank of America on predatory lending.
         16            What does it profit a man if he gains the 
         17   whole world, but loses his soul?  Can Bank of 
         18   America avoid losing its soul?  Only if the bank 
         19   makes a commitment to stay committed to the 
         20   community by developing state and local CRA 
         21   commitments that are meaningful; committing to 
         22   improve lending to small businesses and minority 
         23   borrowers; engaging regional managers in community 
         24   economic development issues; in screening subprime 
. 0173
          1   loan portfolios to ensure that they are not 
          2   purchasing predatory loans that are destroying 
          3   communities. 
          4            Therefore, we petition the Federal Reserve 
          5   to deny the merger until Bank of America 
          6   meaningfully fulfills these commitments.  Because as 
          7   it stands now, I can tell you, bigger is not better.
          8            MR. BEAULAC:  Thank you very much.  My name 
          9   is Lee Beaulac.  I'm the Senior Vice President for 
         10   Housing and Economic Development for Rural 
         11   Opportunities.  We're based in Rochester, New York.  
         12   We're a 34-year old rural regional development 
         13   organization.  We have been directly responsible for 
         14   almost three-quarters of a billion dollars of 
         15   investments into rural communities in the form of 
         16   affordable mortgages, small business lending, 
         17   services to farm workers, and other residents of 
         18   disinvested rural communities. 
         19            Last year we served 102,000 people in the 
         20   states of New York, Pennsylvania, Ohio, Indiana and 
         21   Puerto Rico.  We are a CDFI.  We are also an 
         22   intermediary for the U.S. Department of Agriculture, 
         23   a lending intermediary, as well as an intermediary 
         24   for the U.S. Small Business Administration. 
. 0174
          1            Our first-time home buyer program has put 
          2   over 2,000 folks into first-time homeownership, and 
          3   we have financed over 260 small business 
          4   enterprises. 
          5            Access to credit and capital is critical to 
          6   the health of any community.  And I'm talking today 
          7   from the perspective of a Community Development 
          8   Corporation.  And my remarks are really directed to 
          9   the need to have an ongoing relationship with a bank 
         10   wherein there are predictable sources of resources, 
         11   there are products that are ongoing that are 
         12   dependable and aggressive and meet the needs of the 
         13   local communities.
         14            The creation of individual wealth depends 
         15   upon the credit and capital that is required to 
         16   finance assets.  Private financial institutions play 
         17   a key role.  Notwithstanding the fact that we have 
         18   resources through the CDFI Fund and SBA and the 
         19   USBA, we could not do anywhere near what we have 
         20   done without the direct involvement of commercial 
         21   banking institutions. 
         22            Banks that are seriously committed to rural 
         23   revitalization, community development, that approach 
         24   communities with the understanding that these are 
. 0175
          1   important markets for them as an institution and are 
          2   prepared to be inventive and flexible and responsive 
          3   to local conditions are our best partners. 
          4            It's with this in mind that we greeted the 
          5   news of this merger with a fair amount of anxiety.  
          6   At the start, let me say that I have never really 
          7   ever met a merger that I liked, with the possible 
          8   exception of one, and I won't tell you what that one 
          9   is. 
         10            So I'm not taking a position in favor or 
         11   against this particular merger.  My experience in 
         12   general has been that mergers don't usually result 
         13   in improved levels of service to local communities, 
         14   particularly where the bank that is serving that 
         15   local community is merged into something larger and 
         16   from out of state.  I'm not here to talk about my 
         17   experience with Bank of America.  I don't have any 
         18   experience with BOA. 
         19            I've heard from others from the west that 
         20   they've been unhappy with the coverage from their 
         21   community development professionals in the field 
         22   working with community development corporations.  
         23   And that's of concern to me. 
         24            On the other hand, I'm aware of their 
. 0176
          1   substantial rural commitment, which I think is 
          2   probably one of the largest rural commitments that 
          3   any bank has made to date.  Fleet, on the other 
          4   hand, I know very well.  I will tell you from the 
          5   perspective of a full disclosure, I'm on the Fleet 
          6   COC, Community Oversight Committee.  I'm also on the 
          7   committee that advises Fleet folks in Rochester. 
          8            It's been a great experience, but it's not 
          9   a bowl of roses or whatever the expression is.  I 
         10   can't think of it.  I mean, we've worked for a year 
         11   and a half to try to get Fleet to disaggregate their 
         12   CRA data, so folks could better understand what the 
         13   performance was at the local level.  That issue was 
         14   resolved along with other issues.  And I think it's 
         15   because that Fleet has been listening to other 
         16   members of the committee that there is a COC.  I 
         17   don't know if BOA has a similar group.  But I think 
         18   one of the things that Fleet has really done well is 
         19   listen to the community. 
         20            Fleet's been very important to us.  We have 
         21   cash advance, cash management.  We have operating 
         22   lines of credit, equipment lines of credit, grant 
         23   support.  We've got folks sitting on their boards 
         24   and they're sitting on our boards. 
. 0177
          1            Two initiatives that I want to talk about:  
          2   One is Fleet's commitment to the affordable lending 
          3   alliance, which we have put together in conjunction 
          4   with a secondary market, private mortgage insurance 
          5   industry and rural development and the banks. 
          6            This is a terrific system, we think, where 
          7   ROI -- and now we're bringing other groups into the 
          8   fold -- are originating, processing, underwriting 
          9   loans for the banks.  We deliver the loans to the 
         10   banks and they fund it.  Fleet is making available 
         11   the affordable advantage loan product, which is I 
         12   think the only below-market product in the Rochester 
         13   region I think to date; no PMI, one point below 
         14   market, so on and so forth.  We want BOA to 
         15   recognize that this product is appropriate for the 
         16   local community, and we'd like them to continue it. 
         17            The other thing is, we understand that BOA 
         18   does not do this, and Fleet has just agreed to 
         19   become a part of the rural home loan partnership 
         20   program, which blends rates from rural development 
         21   with their 502 product, with commercial lending 
         22   products.  We're getting blended rates as low as 3 
         23   percent.  So we'd like to encourage BOA to join that 
         24   program as well. 
. 0178
          1            My final remark is that we've been working 
          2   with Fleet.  They expressed their desire to join the 
          3   Federal Home Loan Bank of New York.  The Housing 
          4   Finance Board has put up some roadblocks to that.  
          5   They're in line to do that, and we encourage BOA to 
          6   essentially pick up where they have left off, if 
          7   this merger does go forward, and join the Federal 
          8   Home Loan Bank of New York.
          9            PRESIDING OFFICER SMITH:  Ms. Maker?
         10            MS. MAKER:  Good afternoon.  My name is 
         11   Ruhi Maker.  I'm presenting testimony on behalf of 
         12   Matthew Lee, who could not be here today. 
         13            This is the testimony of Inner City 
         14   Press/Fair Finance Watch, in opposition to the Bank 
         15   of America's applications to acquire FleetBoston 
         16   Corporation. 
         17            Inner City press and its Fair Finance Watch 
         18   have submitted five detailed written comments 
         19   opposing Bank of America's application.  Among other 
         20   things, these comments have demonstrated that Bank 
         21   of America is deeply involved in problematic 
         22   subprime lending.  For example, it purchases and 
         23   securitizes subprime loans from Option one, New 
         24   Century, Accredited Home Lenders, and Wells Fargo, 
. 0179
          1   whose subprime loans are being criticized, 
          2   correctly, in many states.  Even more directly, Bank 
          3   of America on December 15, 2003 -- less than a month 
          4   ago -- bought a controlling equity state in the 
          5   California-based subprime lender Oakmont Mortgage.  
          6   Significantly, Bank of America is working with the 
          7   same ma'am that was at First Franklin, a subprime 
          8   lender BofA owned from 1996 to 1999, before selling 
          9   it to National City corporation.  Bank of America 
         10   made big claims about getting out of subprime, but 
         11   the reality is that it is still involved, simply 
         12   under other names -- the Oakmont purchase was 
         13   through Bank of America subsidiary CIVC, or 
         14   Continental Illinois Venture Corp. -- and in other 
         15   ways.  Most of Bank of America's securitizations of 
         16   subprime loans are done through Bank of America 
         17   subsidiaries with a misleading generic-sounding 
         18   name:  "Asset Backed Funding Corporation" or "ABFC." 
         19            Here's a quote from a press release issued 
         20   by the rating agency Fitch on August 20, 2003 
         21   concerning ABFC, Asset-Backed Certificates in 2003:  
         22   "The mortgage loans will be sold to the depositor by 
         23   Bank of America N.A., an affiliate of the depositor 
         24   and one of the underwriters, which acquired the 
. 0180
          1   mortgage loans from Option One, the originator." 
          2            This is significant, particularly in terms 
          3   of the Comptroller of the Currency's announcement, 
          4   the same day as BofA's pledge, to which we'll turn 
          5   in a moment, that it would preempt all states' 
          6   anti-predatory lending laws, because supposedly no 
          7   national bank or operating subsidiaries is involved 
          8   in predatory lending in any way. 
          9            From Fitch's press release and the 
         10   underlying SEC filings, it's clear that Bank of 
         11   America, N.A., the national bank, buys subprime 
         12   loans from Option One.  Consider, as to Option One, 
         13   that this subprime lender applied for a savings bank 
         14   charter, but was unable to obtain one due to 
         15   compliance issues that arose, and ultimately 
         16   withdrew its application.  ICP knows this because it 
         17   commented to the OTS and FDIC in opposition to 
         18   Option One's applications, including evidence of 
         19   predatory lending. 
         20            Regarding Wells Fargo, for the record, the 
         21   Prospectus Supplement for ABFC Mortgage Loan 
         22   Asset-Backed Cert., Serial No. 2003-WF1, states that 
         23   the pool consists of subprime mortgage loans secured 
         24   by first liens on residential real properties, 91.42 
. 0181
          1   percent of which have the consumer trapped in 
          2   subprime loans by means of prepayment penalties.  
          3   Bank of America, hiding behind its subsidiaries 
          4   Asset Backed Funding Corporation and CIVC, plays a 
          5   predatory lending name-game. 
          6            BofA's most recent subprime purchase, it's 
          7   now clear, was made without even the most cursory 
          8   due diligence review of Oakmont Mortgage Company and 
          9   its HMDA data. 
         10            Oakmont's 2002 data shows that 50 percent 
         11   of loans nationally originated to homeowners were to 
         12   minority homeowners.  Another 20 percent had a race 
         13   unknown next to them, and only 30 percent were in 
         14   fact to white homeowners, a very different disparity 
         15   as compared to a prime lender. 
         16            Oakmont's 2003 HMDA data shows that in the 
         17   Detroit MSA, Oakmont reported 130 applications for 
         18   conventional home purchase  loans from 
         19   African-Americans, all approved and originated, and 
         20   48 applications from whites, all approved and 
         21   originated. 
         22            Oakmont targets a protected class with 
         23   higher-cost credit, whereas BofA redlines, with 
         24   normal cost credit, having made in this MSA in 2002 
. 0182
          1   fully 38 such loans to whites for every one loan to 
          2   an African-American, while subprime Oakmont made 2.7 
          3   times more loans to African-Americans than to 
          4   whites. 
          5            BofA's responses about its relationships 
          6   with subprime lenders and its supposed due diligence 
          7   must be released under the Freedom of Information 
          8   Act and otherwise, and the comment period must be 
          9   extended until that is done. 
         10            Bank of America would clearly like this 
         11   process to become a referendum on its $750 billion 
         12   announcement.  Is it a big number or not?  Well, 
         13   it's a big number, but it doesn't mean.  Even the 
         14   Federal Reserve says that the focus in this process 
         15   is supposed to be on the bank's actual record, not 
         16   on future projects. 
         17            Bank of America's spin machine, or which 
         18   the pledge is only the most recent example, allows 
         19   these disparities to fester and grow worse.  On past 
         20   experience, when BofA and NationsBank made their 
         21   mega-pledge in 1998, it turned out that they counted 
         22   toward the pledge loans that have nothing to do with 
         23   CRA, such as small business loans.
         24            Finally, the 10 percent deposit cap.  Using 
. 0183
          1   the official numbers from the FDIC, the pro forma 
          2   institutions would go over 10 percent. 
          3            And in summary, ICP would request that this 
          4   merger be denied.  Thank you.
          5            PRESIDING OFFICER SMITH:  Thank you very 
          6   much.
          7            MS. MEIZHU:  My name is Meizhu Lui.  We're 
          8   concerned with the growing economic divide in this 
          9   country and the damage that it does to our 
         10   democracy. 
         11            We're opposed to this merger, because we 
         12   think it will contribute to increasing economic 
         13   inequality in general and to racial economic 
         14   inequality in particular. 
         15            The wealth gap between whites and blacks is 
         16   still a yawning chasm, more than a century and a 
         17   half after the end of slavery.  In 2001, the typical 
         18   black household had a net worth of just $19,000, 
         19   including home equity, compared with $121,000 
         20   dollars for whites. 
         21            38 percent of whites would run out of 
         22   savings in three months, which is bad enough.  But 
         23   79 percent of African-Americans would last less than 
         24   three months without income. 
. 0184
          1            These disparities did not happen by 
          2   accident or due to the poor saving habits of 
          3   African-Americans or other peoples of color.  They 
          4   are rooted in government policies and practices, 
          5   some of which have allowed U.S. banks to make money 
          6   from the exploitation of African-American labor and 
          7   the expropriation of the assets of hard-working, 
          8   low-income people and particularly of people of 
          9   color. 
         10            Fleet's predecessor company, the First 
         11   National Bank of Boston, was built on profits from 
         12   loans used to finance the highly lucrative slave 
         13   trade.  The sons and daughters of slaves are still 
         14   paying the price, and the inheritors of those who 
         15   invested in slavery are still reaping the benefits.  
         16   Both wealth and disadvantage have cumulative effects 
         17   over generations, and we're still seeing those 
         18   effects today. 
         19            Now that we're in the 21st century, we can 
         20   choose to either continue the process or to 
         21   interrupt the process of growing the economic 
         22   divide. 
         23            While FleetBoston has provided some 
         24   community benefits, as we've heard over the more 
. 0185
          1   recent years, its vast wealth rests on the legacy of 
          2   profiting from the buying and selling of humans as 
          3   property. 
          4            Institutions should be and have been held 
          5   liable for human rights and human health violations.  
          6   Fleet has dismissed the reparations lawsuits as 
          7   immaterial. 
          8            If we think back a couple of decades, we 
          9   will recall that cigarette and asbestos 
         10   manufacturers took a similar view to suits facing 
         11   them.  In the ensuing years, many firms in both of 
         12   these industries have been bankrupted by the 
         13   lawsuits. 
         14            In the case of this proposed merger, the 
         15   assets of Bank of America are put at risk by the 
         16   liabilities faced by the reparations lawsuit against 
         17   Fleet.  A successful suit could absorb all of the 
         18   assets of the combined banks.
         19            The Federal Reserve's job is to protect the 
         20   financial institutions, their depositors, but also 
         21   all of us as taxpayers.  Because in the end, it is 
         22   U.S. taxpayers that will be stuck bailing out these 
         23   banks.  Sound public policy would not expose 
         24   taxpayers to the risks involved in such a merger.  
. 0186
          1   Our tax dollars would be much better spent on 
          2   programs designed to close the wealth gap rather 
          3   than to perpetuate them. 
          4            Thank you.
          5            MR. SAMPSON:  My name is Reverend Al 
          6   Sampson.  I am pastor of Fernwood United Methodist 
          7   Church located in Chicago, Illinois.  I am also 
          8   Economic Commissioner of N'COBRA, the National 
          9   Coalition of Blacks for Reparations in America, the 
         10   premiere organization fighting for slavery 
         11   reparations today; co-chair of the ministerial 
         12   commission of a coalition of over 100 organizations 
         13   working on reparations with Dr. Conrad Worrill, 
         14   Chairman of the National Black United Front, and 
         15   Minister Louis Farrakhan, leader of the Nation of 
         16   Islam, also personal friend and advisor to Chicago's 
         17   Alderwoman Dorothy Tillman, who authored the Slavery 
         18   Disclosure Ordinance of Chicago. 
         19            And since we are on the eve of Dr. Martin 
         20   Luther King Jr.'s birthday, I must add that I am the 
         21   only person from the Southern Christian Leadership 
         22   Conference that Dr. King ordained in the ministry. 
         23            Esteemed panel, I come to you today to 
         24   express concerns about the merger of FleetBoston 
. 0187
          1   Financial Corporation and Bank of America.  Of 
          2   particular concerns are reports of FleetBoston's 
          3   history of financing the transatlantic slave. 
          4            It is widely noted that the Providence Bank 
          5   of Rhode Island, a key predecessor bank of 
          6   FleetBoston, played a significant role in the 
          7   financing of the transatlantic slave trade through 
          8   its exclusive banking relationship with United 
          9   States Customs in Rhode Island.  This was done at a 
         10   time when the slave trade was illegal under Rhode 
         11   Island and United States law. 
         12            Historical documentation shows that the 
         13   economy of Rhode Island was so dependent on the 
         14   transatlantic slave trade, that it was virtually 
         15   impossible to launch effective prosecution against 
         16   violators of slave trade prohibition laws. 
         17            Indeed, shareholders of the bank came from 
         18   some of the largest slave trading families in the 
         19   United States.  Some of these shareholders, such as 
         20   Charles DeWolf, were known for engaging in acts of 
         21   terrorism against American citizens to prevent 
         22   prosecution under the prohibition laws.  In an 
         23   effort to thwart a trial against Charles DeWolf of 
         24   Rhode Island's largest slave trading family, a 
. 0188
          1   private Attorney General was attacked by thugs who 
          2   visually attacked him, cutting off one of his ears. 
          3            Many shareholders of Fleet's earliest bank 
          4   were also notorious for the murder of enslaved 
          5   people on ships they owned or commissioned for the 
          6   transatlantic slave trade.  One example is the case 
          7   of James DeWolf whose, ship Captain tied an enslaved 
          8   African woman to a chair and discarded her into the 
          9   Atlantic Ocean alive because she was suspected of 
         10   having smallpox.  Later he only regretted the loss 
         11   of the chair. 
         12            The number of illegally enslaved Africans 
         13   by the DeWolfs and other slavetraders of Rhode 
         14   Island exceeded over 41,000, covering periods when 
         15   the bank was the exclusive collector of customs 
         16   duties for ships engaged in trade -- including the 
         17   illegal slave trade.  According to the slave 
         18   prohibition laws, the bank could have been fined 
         19   substantially if ever brought to justice. 
         20            The African-American community has engaged 
         21   FleetBoston to answer for their crimes against 
         22   humanity -- to account for wealth they inherited 
         23   through past mergers as a result of the destruction 
         24   of African families, forced immigration and brutal 
. 0189
          1   exploitation of African men, women and children 
          2   solely for economic gain. 
          3            We have asked that the bank atone by 
          4   apologizing and paying reparations.  Certainly it 
          5   can afford to pay this debt.  To date, the bank has 
          6   not acknowledged any apology nor shown any remorse 
          7   for this shameful behavior. 
          8            We ask that the board consider the fact 
          9   that the African-American community has not 
         10   forgotten what this bank did to our ancestors or 
         11   recognize any successor in interest to the assets of 
         12   this bank is the successor in liabilities of the 
         13   bank. 
         14            With each day that passes, another person 
         15   learns of Fleet's ties to slavery and is outraged, 
         16   and a new law is passed to serve as ammunition to 
         17   rectify the injustice. 
         18            As it stands, the City of Chicago requires 
         19   that companies that do business with it disclose any 
         20   connection they or their predecessors have to 
         21   slavery, or risk losing lucrative contracts with the 
         22   City.  As you know, Bank of America merged with the 
         23   Continental Illinois National Bank and Trust.  Now 
         24   Bank of America has a significant presence in 
. 0190
          1   Chicago and services the African-American community.  
          2   Certainly, if the merger goes forward, Bank of 
          3   America will become tainted with the crime of 
          4   enslavement that presently looms over FleetBoston 
          5   and will inherit the growing disdain many Americans 
          6   have for Fleet.  The bank will be forced to publicly 
          7   disclose this deplorable history as its own or lose 
          8   lucrative business with the City of Chicago.
          9            Before FleetBoston is allowed to launch a 
         10   new era in its banking history, we implore them and 
         11   Bank of America to convince African-American slave 
         12   descendants, and you -- the regulators -- that they 
         13   will do everything in their power to rectify the 
         14   great injustice from the past, or it will continue 
         15   to haunt them from the courtrooms to the boardrooms, 
         16   from the streets to the suites. 
         17            And the question before you as regulators 
         18   is, are there any blacks on either Fleet Bank's 
         19   board or Bank of America's board, because we haven't 
         20   been able to find any. 
         21            Thank you very much for your time.
         22            MR. BARBER:  Madam Chairman, before I 
         23   start, I have a special request of your staff, 
         24   because I was sitting in the back and I've been 
. 0191
          1   observing this public hearing.  I'm a Baptist 
          2   deacon; and for the little fellow holding those 
          3   signs, one or two minutes is not sufficient time to 
          4   address this issue.  So I would like to have anyone 
          5   for the rest of the day yield at least a minute or 
          6   two for me, so I can finish my testimony.
          7            PRESIDING OFFICER SMITH:  Well, there's no 
          8   way to get them to yield in advance.  Why don't we 
          9   give you five minutes.
         10            MR. BARBER:  That's fine.  Before I start, 
         11   I want to invite all of you to New Jersey and to 
         12   visit one of my great philosophers.  There's a 
         13   museum on the campus of Montclair State University, 
         14   and it's the Yogi Berra museum.  Yogi's one of my 
         15   great philosophers.  There's a Yogi-ism that says 
         16   basically that you can see a lot just by observing. 
         17            And I've been observing for a long time 
         18   now, and I just want to finish these remarks, 
         19   because I didn't get a chance to get it completed 
         20   until about four this morning.
         21            My website, first of all, is 
         23            Good morning, Madam Chairman and Members of 
         24   the Board.  I'm very happy to be here.  My name is 
. 0192
          1   Richard E. Barber, Sr., President of the United 
          2   States ReparationS group. 
          3            The group was organized as a not-for-profit 
          4   corporation in the State of New Jersey in August of 
          5   2002.  Our primary mission is to conduct initiatives 
          6   to improve the economic, educational and social 
          7   status of the descendants of enslaved Africans. 
          8            This historic undertaking challenges the 
          9   black community to embrace our self-help philosophy 
         10   and work ethics and to achieve these objectives.  I 
         11   welcome the opportunity to address you today and add 
         12   my voice to the many others who have and will 
         13   provide testimony on the proposed merger of 
         14   FleetBoston and Bank of America.  I surmise that 
         15   many may speak on the financial viability of this 
         16   merger and its potential positive or negative 
         17   impacts on the global or domestic economy.
         18            Madam Chairman, I will do neither.  But 
         19   rather, I would take you on a journey to inform you 
         20   as to how I came to sit before you this morning and 
         21   why I am here, why I came up to Boston on what I 
         22   call a Moses mission.  I came up -- and also, I'd 
         23   like to remind this group that I am a senior 
         24   citizen.
. 0193
          1            I hope to challenge and encourage you to 
          2   not only focus on the potential mega economic force 
          3   of this proposed merger, but also to consider the 
          4   history of Fleet Bank and how they, too, got here.  
          5   I think the question must be answered as Reverend 
          6   Sampson just indicated, What road did Fleet travel 
          7   to get to this point in time today. 
          8            I will take you on a journey that has taken 
          9   me from the tobacco fields of North Carolina, 
         10   through the capitals of Europe as a military officer 
         11   with a NATO unit, through the private and public 
         12   sectors, and through urban areas with Dr. Leon 
         13   Sullivan's OIC, trying to implement economic and 
         14   community development initiatives for communities. 
         15            In far too many cases along this journey I 
         16   have encountered those with the power, the authority 
         17   and the abundance of financial resources to change 
         18   the status quo, and create a climate for self-help 
         19   and progressive community development opportunities, 
         20   but they chose not to do so. 
         21            In the spirit of several characters in that 
         22   Biblical story of the "Good Samaritan," they looked 
         23   the other way from the real needs and pressing 
         24   community problems and passed on the other side of 
. 0194
          1   the road. 
          2            50 years ago this year, I was a 14-year-old 
          3   student down in a rigidly segregated and so-called 
          4   separate, but equal school in Jones County, North 
          5   Carolina.  My school was very much separate, but in 
          6   no ways equal.  A school with hand-me-down books, 
          7   broken chalk, outdated educational materials, 
          8   outdoor toilets and a school board with members who 
          9   looked the other way and passed on the other side of 
         10   the road when it came to providing not equal, but 
         11   just meager resources so that we could get a decent 
         12   education. 
         13            Notwithstanding the Supreme Court 1954 
         14   ruling on Brown versus the Board of Education, many 
         15   school officials in the south closed schools or 
         16   offered firm and stiff resistance, rather than abide 
         17   by this new law of the land.  For me, the Brown 
         18   versus Board of Education decision offered new hope, 
         19   new vision and promise for a brighter future. 
         20            I am the grandson and the great grandson of 
         21   slaves who worked without a payday, and full 
         22   employment was the official labor policy of that 
         23   peculiar institution called "slavery." 
         24            My father was a sharecropper, which was a 
. 0195
          1   new and improved version of slavery.  Loan officials 
          2   of the Farm and Home Administration of the United 
          3   States Department of Agriculture did not even have 
          4   to give him a reason for rejecting his loan 
          5   application, even though he owned his own farm at 
          6   that point on my journey. 
          7            By now you must be getting the picture and 
          8   beginning to understand that for me, life has not 
          9   been a crystal stair.  So I sit here before you 
         10   today with both a plea and a request.  But before I 
         11   present either one, let me remind you that my 
         12   colleague from New Jersey, Phyllis Salowe-Kaye, gave 
         13   the many compelling reasons that if the merging is 
         14   to be, it must come firmly committed with an 
         15   agreement, state-by-state, and with sufficient funds 
         16   for affordable housing, economic and community 
         17   development initiatives in Jersey City, New Jersey, 
         18   Patterson, New Jersey, Trenton, New Jersey, and the 
         19   other communities across this nation.  Phyllis knows 
         20   all too well of our battles in New Jersey over the 
         21   last two years with the mortgage banking industry as 
         22   our coalition for fair lending sought to get 
         23   meaningful anti-predatory lending legislation 
         24   enacted. 
. 0196
          1            Deadria Farmer, a fellow plaintiff, my 
          2   colleague from New York, will provide data and 
          3   information on the reparations movement, I hope, and 
          4   hopefully her journey from South Carolina to New 
          5   York, through law school libraries in search of 
          6   historical records to prove that many American 
          7   corporate entities stand today on economic 
          8   foundations created by the blood, sweat and tears of 
          9   enslaved Africans.  Lest we forget and look the 
         10   other way, many of those economic foundations were 
         11   built with the wealth created by enslaved Africans 
         12   who worked for 246 years without a payday. 
         13            On my way here on my journey, I stopped by 
         14   Washington in the late '80s, and I marched on a 
         15   picket line when there was the South African 
         16   divestiture movement going on.  During this journey, 
         17   I resided in Pittsburgh, Pennsylvania, for 12 years, 
         18   founded New World National Bank and used that 
         19   institution to leverage financial resources from 
         20   Melon Bank, Pittsburgh National Bank, and the Small 
         21   Business Administration into the Hill district and 
         22   Homewood communities of Pittsburgh.  On this journey 
         23   I've seen banks with numerous Community Reinvestment 
         24   Act violations and much, much too high CRA ratings, 
. 0197
          1   yet bank regulators looked the other way and passed 
          2   on the other side of the road.
          3            Now, Madam chairman, I will very quickly 
          4   present my plea. 
          5            Subsequent to the acquisition of Summit 
          6   Bank in New Jersey by FleetBoston, when the 
          7   financial health and future independence of Fleet 
          8   was being questioned by Wall Street stock analysts, 
          9   when this newly merged Fleet Bank could not 
         10   seemingly get its economic traction, in short, it 
         11   seemed that Fleet Bank management and the board of 
         12   directors had lost its way.  I remember a statement 
         13   by Michael Mayo, an analyst at Prudential Securities 
         14   and a critic of Fleet's corporate governance, and I 
         15   quote -- if you had to pick a song to go with Fleet, 
         16   it would be Bob Seger's, "We felt the lightning, and 
         17   we waited on the thunder."  We felt the lightning 
         18   and we waited on the thunder. 
         19            Madam chairman, part of the reason that 
         20   Fleet Bank never seemed to get productive --
         21            PRESIDING OFFICER SMITH:  Could you sort of 
         22   wind it up? 
         23            MR. BARBER:  One minute?
         24            PRESIDING OFFICER SMITH:  Half a minute.
. 0198
          1            MR. BARBER:  Fine. 
          2            Members of the Board, I hope you understand 
          3   and reflect on my journey over the last 50 years.  
          4   You may understand the real message that I am 
          5   conveying to you today.  And that message is that a 
          6   financially viable merger of Bank of America and 
          7   FleetBoston, coupled with a truly committed and 
          8   productive community partnership, will enable future 
          9   travelers to live their lives with greater economic 
         10   stability and social well-being.  We seek a 
         11   partnership so that investors from Wall Street to 
         12   the main streets of urban, suburban and rural 
         13   communities will truly reap tremendous economic 
         14   benefits and an improved quality of life. 
         15            Thank you very much. 
         16            PRESIDING OFFICER SMITH:  Thank you very 
         17   much.  I know that the time we have allotted you is 
         18   very short.  Where you have written statements, 
         19   those statements will be part of the written record, 
         20   so all of your records will be in the record.  If we 
         21   don't have a chance to hear them, we will have a 
         22   chance to read them.  So thank you very much.
         23            MS. FARMER-PAELLMANN:  Thank you for this 
         24   opportunity to testify.  My name is Deadria 
. 0199
          1   Farmer-Paellmann.  I'm Executive Director of the 
          2   Restitution Study Group, a not-for-profit 
          3   organization that examines approaches to securing 
          4   restitution for injuries inflicted upon oppressed 
          5   people.  I am also lead plaintiff in class action 
          6   litigation pending against FleetBoston Financial 
          7   Corporation and 18 other corporations due to their 
          8   historical roles in the enslavement of Africans. 
          9            This testimony is being given on behalf of 
         10   the Restitution Study Group and the National Black 
         11   United Front, a coalition made up of individuals and 
         12   organizations working together for the benefit of 
         13   all people of African descent.
         14            I come before you today to inform you about 
         15   the dangers of allowing the merger of FleetBoston 
         16   Financial Corporation with Bank of America, if Fleet 
         17   does not adequately address the reparations demands 
         18   of slave descendants.
         19            The pending lawsuit sets forth that 
         20   FleetBoston Financial Corporation is the successor 
         21   in interest to the Providence Bank of Rhode Island 
         22   that was founded by Rhode Island businessman John 
         23   Brown.  Brown owned ships that embarked on several 
         24   slave-trading voyages during the time the bank was 
. 0200
          1   in existence.  Brown was one of very few people 
          2   prosecuted in federal court for participating in the 
          3   international slave trade after it had become 
          4   illegal under federal law.  Just prior to John 
          5   Brown's death he prepared an estate inventory that 
          6   indicated that Fleet's early bank lent him 
          7   substantial sums of money at a time that he was 
          8   engaged in the illegal practice of slave trading.  
          9   That document is attached to the testimony.
         10            Through its earlier bank, FleetBoston also 
         11   collected custom fees due from ships transporting 
         12   slaves and earned profits maintaining bank accounts 
         13   of people who acquired their wealth in the slave 
         14   trade.  Well over 41,369 Africans were enslaved 
         15   during the time that FleetBoston's early bank 
         16   collected customs duties and fees on ships engaged 
         17   in the illegal slave trade.
         18            In the Year 2000, I approached Fleet with 
         19   this information and asked that they verify it with 
         20   documents from their corporate archives and atone by 
         21   apologizing and paying restitution on their unjust 
         22   gains.  They chose not to take responsibility for 
         23   their history.  Instead, they issued vague public 
         24   statements distancing themselves from their early 
. 0201
          1   bank, or denied a connection to the earlier bank and 
          2   John Brown.  All this, while their own company 
          3   literature boasted about their connection to the 
          4   earlier bank and identified John Brown as a 
          5   respected Rhode Island business leader and founder 
          6   of FleetBoston's earliest predecessor.  That 
          7   document is also submitted to the record as an 
          8   exhibit. 
          9            Equitable liability and moral 
         10   responsibility for the kidnap, forced immigration, 
         11   slave-ship rape, murder, and torture and the 
         12   subsequent forced uncompensated labor and forced 
         13   breeding of African people will survive any merger 
         14   FleetBoston may undergo.  Slavery reparations 
         15   lawsuits will follow Fleet wherever it goes. 
         16            This reality presents factors the Federal 
         17   Reserve Board is required to consider under the Bank 
         18   Holding Company Act -- such as the financial and 
         19   managerial resources and future prospects of the 
         20   companies and banks involved in a merger proposal. 
         21            The prospects for this merger are clear -- 
         22   news reports indicate that high profile litigation 
         23   teams are preparing new reparations lawsuits against 
         24   companies, including FleetBoston, and will file them 
. 0202
          1   if justice does not prevail in the pending lawsuit.  
          2   The new Bank of America will be stuck fighting 
          3   expensive legal battles that FleetBoston could 
          4   resolve right now.  The prospect is that their 
          5   financial resources will be adversely affected by 
          6   this litigation. 
          7            In addition to the litigation, there is the 
          8   prospect of more financial woes due to actions by 
          9   state and local governments.  Laws are being passed 
         10   around this country requiring disclosure of ties to 
         11   slavery.  Los Angeles and Chicago have slavery 
         12   disclosure laws, and New York City and Cleveland, 
         13   Ohio, have pending disclosure bills.  Disclosure 
         14   laws are making life more difficult for companies 
         15   that are trying to hide their tainted histories.  
         16   The laws force them to tell the whole truth about 
         17   their connections to slavery.  When a company 
         18   reports, it becomes exposed to more reparations 
         19   lawsuits.  If a company is found to have failed to 
         20   disclose the truth, they could lose lucrative 
         21   contracts with state and local governments. 
         22            One example of a company caught in the 
         23   cross-hairs of Chicago's slavery disclosure law is 
         24   Lehman Brothers.  Alderwoman Dorothy Tillman 
. 0203
          1   introduced the slavery disclosure bill that became a 
          2   city ordinance in October of 2002 and took effect in 
          3   the beginning of 2003.  Consequently, Lehman 
          4   Brothers was forced to disclose its connection to 
          5   slavery, or forego a $145 million contract with the 
          6   City.  Last week, just one month after the media 
          7   reported on the disclosure filing, a new class 
          8   action lawsuit for reparations was filed against 
          9   Lehman Brothers.  In addition, an investigation is 
         10   underway to determine whether or not the disclosure 
         11   was incomplete.  If Lehman Brothers is found to have 
         12   distorted their history, they could lose their 
         13   contract with the City. 
         14            In October, the Providence Journal reported 
         15   that, if allowed, the FleetBoston merger with Bank 
         16   of America would create the fourth largest company 
         17   in the world.  If this is true, FleetBoston and Bank 
         18   of America's financial exposure to ongoing slavery 
         19   reparations litigation and disclosure laws could 
         20   have a profound impact on the nation's banking 
         21   system and the national economy.  These are key 
         22   areas of the Federal Reserve Board's mandate.  
         23   Considering these factors, this merger should not be 
         24   allowed to go forward until the reparations issue is 
. 0204
          1   properly addressed. 
          2            Reparations now.
          3            PRESIDING OFFICER SMITH:  Thank you very 
          4   much.
          5            MR. FARASH:  Hello.  I'm Isidior Farash, 
          6   and I'm the guy who had two separate accounts 
          7   purchased by Fleet.  The first time the incoming 
          8   bank management froze over half million dollars of 
          9   our company's cleared assets without a reason.  It 
         10   took over six weeks to obtain a court order 
         11   releasing the funds.  The stress created by this 
         12   event contributed to the early death of one of our 
         13   company's partners. 
         14            The second time Fleet acquired our account,  
         15   they disregarded long-standing contracts and revoked 
         16   lending commitments without a reason.  Numerous 
         17   families have lost jobs due to this event.  I have 
         18   not cashed a paycheck in months.  I should also note 
         19   that a large number of the bank's management was 
         20   replaced upon acquisition by Fleet.  This makes it 
         21   extremely difficult to continue any long-standing 
         22   bank policies, as the new managers use such an 
         23   opportunity to crack their collective whips and, in 
         24   fact, renegotiate written agreements.
. 0205
          1            The incoming management also makes it a 
          2   point to tell the acquired customers of their deep 
          3   desire to continue with the policies and methods of 
          4   the old bank.  We were told that Fleet greatly 
          5   valued its acquired borrowers, when in fact, that 
          6   was never true.  Fleet had intended to liquidate a 
          7   portion of its acquired borrowers, or in the 
          8   alternative, to squeeze them through a variety of 
          9   techniques for changes, making these accounts more 
         10   lucrative for the bank.
         11            Fleet's legal firms, in my case, have based 
         12   their claims on documents that do not exist and 
         13   asserted that existing signed documents inherited 
         14   from their predecessor banks are somehow invalid.  
         15   They actually expect us to pay their ridiculous 
         16   legal expenses; and accordingly, have been on a 
         17   litigative spending-spree. 
         18            Fleet's strategy is to drive its 
         19   adversaries into bankruptcy and thereby run them out 
         20   of resources to continue the litigation.  Fleet also 
         21   overstates any reasonable cause of action they might 
         22   indeed have to portray their adversaries as 
         23   criminals. 
         24            As a documented September 11th victim, my 
. 0206
          1   company has received no help from the government, 
          2   and Fleet has actually officially accused us of 
          3   committing fraud against Uncle Sam by attempting to 
          4   borrow SBA disaster relief funds, which were made 
          5   available specifically for that purpose.
          6            I would also ask the Federal Reserve to 
          7   consider the practical reality that local bank 
          8   monopolies are bad for business in general. 
          9            While the federal antitrust provision may 
         10   not apply to local monopolies, banks are somewhat 
         11   unique, in that everyone needs them.  And also, 
         12   people make the majority of their market choices 
         13   based on geography.  Therefore, since the basis for 
         14   antitrust laws in general is to promote market 
         15   choices, I would ask the Federal Reserve to consider 
         16   that three semi or many regional bank monopolies has 
         17   the same practical effect as a single, giant 
         18   monopoly.  If the bank saturates communities, as has 
         19   been Fleet's practice, they have succeeded in 
         20   limiting market choices; and thus, have gotten 
         21   around the intent of the antitrust rules.
         22            Lastly, while most Massachusetts people are 
         23   kind and decent, there is a core group of Fleet 
         24   executives -- and they know who they are -- whose 
. 0207
          1   primary interest in this merger is to prevent having 
          2   done to them and their communities what they did to 
          3   other jurisdictions in the northeast.  And to these 
          4   people, I would join in harmony with my fellow New 
          5   Jersey brothers and sisters in saying, Let my people 
          6   go. 
          7            To the Federal Reserve Board, I would 
          8   kindly mention that any borrower who can afford to 
          9   litigate with a bank as big as Fleet does not need 
         10   to borrow money.  And that would only go more so for 
         11   any merged entity which would be far larger than 
         12   Fleet. 
         13            Thank you and thank everyone for listening.
         14            PRESIDING OFFICER SMITH:  Thank you very 
         15   much.
         16            MR. TARE:  My name is Ramkrishna Tare.  I'm 
         17   informally representing those who are affected by 
         18   Fleet's previous merger with Summit.  I think Mr. 
         19   Farash provided some information on that, and I 
         20   think I have a lot more to amplify on that. 
         21            Accordingly, my testimony today focuses on 
         22   my firsthand experience involving Fleet's 
         23   acquisition of Summit Bancorp that affected me and 
         24   thousands of other customers like Mr. Farash.  I 
. 0208
          1   hope that by discussing my findings on that merger 
          2   will avoid a repeat of a similar catastrophe going 
          3   forward. 
          4            Since we are told that a large portion of 
          5   Fleet's management will remain in place, Fleet's 
          6   track record in regulatory compliance and managing 
          7   mergers -- or rather, the lack of it -- is also 
          8   important. 
          9            My experience and findings come from 
         10   litigation in which Fleet prematurely put in 
         11   default, as a result of a chaotic merger, an alleged 
         12   $5 million credit in the Year 2001, barely three 
         13   months after the signing of the credit agreement 
         14   with Summit.  Later, the loan officer was terminated 
         15   and subsequently deposed and confirmed that the loan 
         16   was not in default at the time alleged.  Yet, the 
         17   new officers at Fleet put the loan in default three 
         18   months retroactively, after they took over the 
         19   management of the loan. 
         20            During litigation, numerous former officers 
         21   of Summit testified that there was total chaos and 
         22   turmoil during the merger with Fleet.  Employees 
         23   were terminated mass-scale, transition of loans was 
         24   not done in an orderly fashion to new loan officers, 
. 0209
          1   and record retention regulations were systematically 
          2   violated as important loan documents and brokerage 
          3   complaint records were destroyed.  All this is 
          4   confirmed by multiple officers during official 
          5   deposition and/or by other evidence found during 
          6   litigation. 
          7            The most important adverse impact of this 
          8   chaos during that merger was that numerous loans 
          9   were put into default prematurely.  It is unclear if 
         10   this was the result of the chaotic merger alone or 
         11   if it was an intentional policy of the newly formed 
         12   entity to restructure its customer base.
         13            In any event, the period after the merger 
         14   saw the shutdown of hundreds of businesses and left 
         15   numerous broken families in its destructive path.  
         16   Litigating with Fleet -- and I have to add I concur 
         17   fully with Mr. Farash on that -- in New Jersey for a 
         18   small business, is almost an impossibility, because 
         19   not only of its size, but because Fleet resorts to 
         20   every possible tactic, including flagrantly 
         21   concealing conflict of interests with trustees, 
         22   receivers and adversary attorneys. 
         23            I do not make these statement in a vacuum.  
         24   At least for New Jersey, I can back my statements 
. 0210
          1   with solid data.  I extracted litigation data from 
          2   New Jersey from a system called the Automated Case 
          3   Management System, maintained by the New Jersey 
          4   State Courts, and came to some shocking statistics:  
          5   In the quarter immediately after the previous 
          6   merger, the number of litigations initiated by Fleet 
          7   had increased eight-fold.
          8            Fleet had filed literally thousands of 
          9   lawsuits after the merger.  Even on a per branch 
         10   basis, Fleet had the largest number of litigations 
         11   per branch in New Jersey.  Thanks to Congressman 
         12   Dingell's interests very recently, this matter, as I 
         13   understand it, is now under investigation by the 
         14   OCC, based upon evidence that I have been presented 
         15   with. 
         16            I have contacted numerous customers of 
         17   Fleet affected during the merger and have heard many 
         18   sad stories.  I'm here to request that if this 
         19   merger is to be approved, at the minimum, a thorough 
         20   investigation be undertaken of those affected by the 
         21   previous merger and an adequate compensation plan be 
         22   put into place for those victimized by it.
         23            Beyond the antitrust issue of offering 
         24   banking choices to customers, an issue that has been 
. 0211
          1   approved by the antitrust division already, there 
          2   are other ways in which a bank can exert its market 
          3   power as it expands.  For example, an analysis of 
          4   Fleet's litigation statistics and the law firms that 
          5   represent Fleet, at least in New Jersey, indicates 
          6   that Fleet has established strong ties with all of 
          7   the major law firms in New Jersey and particularly 
          8   those law firms whose attorneys work as bankruptcy 
          9   trustees or receivers. 
         10            While concealing such conflict of interest 
         11   is itself illegal, let alone unethical, Fleet 
         12   practices it with impunity, because most customers 
         13   are simply not aware that the very trustee or 
         14   receiver assigned to this case also represents 
         15   Fleet. 
         16            If this merger is approved, the new entity, 
         17   now a larger one, will have more power to expand 
         18   such conflicts at the serious detriment to the 
         19   customers.  This is therefore a very important issue 
         20   that should be addressed before the merger is 
         21   approved.  The newly formed entity should be asked 
         22   to publicly, and at regular intervals, disclose the 
         23   list of law firms with which it maintains a 
         24   relationship or disciplinary actions should be 
. 0212
          1   initiated to prevent this abuse.  Small businesses 
          2   simply do not have the resources to litigate such 
          3   issues.
          4            Fleet also has total disregard to 
          5   compliance and banking rules and regulations.  In 
          6   fact, one senior vice president, who was also senior 
          7   in-house counsel for Fleet in New Jersey, when asked 
          8   if Fleet had a compliance department, he answered he 
          9   did not know.  The word "compliance" sounded like a 
         10   foreign word to him. 
         11            The issues I've discussed today also fall 
         12   under the statutory requirement of adequate 
         13   management and compliance for approving a merger.  
         14   Therefore, I respectfully request that these issues 
         15   be addressed before the new merger is approved. 
         16            Thank you. 
         17            PRESIDING OFFICER SMITH:  Mr. Edwards?
         18            MR. EDWARDS:  Good afternoon.  Before I 
         19   start, I want to note that I am acutely aware that I 
         20   am the last speaker before lunch, so I'm going to 
         21   try to make my remarks brief.  And I would note that 
         22   I'm submitting written testimony to back up my oral 
         23   testimony today. 
         24            Thank you for the opportunity to be here.  
. 0213
          1   I'm Bill Edwards.  I'm Executive Director of the 
          2   Association for Enterprise Opportunity, AEO, and 
          3   AEO, our national association.  We are submitting 
          4   testimony based on our role as the national trade 
          5   and membership association for over 500 
          6   microenterprise organizations across the United 
          7   States. 
          8            Our organization and our members work hard 
          9   to provide low and moderate income entrepreneurs 
         10   with the opportunity to work their way out of 
         11   poverty and towards economic stability and 
         12   prosperity.  Our position in polling our members and 
         13   our background is that the Bank of America has 
         14   failed to meet the microenterprise credit needs of 
         15   low and moderate income individuals.
         16            I'm here to request that the needs of 
         17   microenterprise -- not small business; it's a subset 
         18   of small business -- that the needs of 
         19   microenterprise be put on the table at this hearing. 
         20            I'd like to acknowledge a good meeting that 
         21   we had with senior Bank of America officials at our 
         22   office on December 18, 2003 in Arlington, Virginia, 
         23   where we discussed the needs of microenterprise and 
         24   how Bank of America can make a forward commitment to 
. 0214
          1   the microenterprise needs in the nation and in their 
          2   banking area.  But I just wanted to take a minute 
          3   and make a clear distinction between microenterprise 
          4   and small business. 
          5            Let's first understand that when the Small 
          6   Business Administration defines "small business" in 
          7   the United States, they're talking about businesses 
          8   of 500 and fewer employees, with capitalization 
          9   sometimes in the millions and hundreds of millions 
         10   of dollars. 
         11            Now, when we talk about microenterprise, 
         12   we're talking about a business with five or fewer 
         13   employees, we're talking about capitalization that 
         14   generally is $35,000 in most markets.  It's more in 
         15   a market like Manhattan or some of the urban areas.  
         16   We were amazed this year to work with some 
         17   researchers at the University of Vermont, who did a 
         18   study on a 2000 census data that showed that over 
         19   16.9 percent of employment in the United States 
         20   comes from microenterprise.  So we're not talking 
         21   about some small negligible niche.  We're talking 
         22   about a solid part of the American economy. 
         23            Microentrepreneurs that we serve and our 
         24   members serve tend to be low to moderate income 
. 0215
          1   individuals with relatively limited credit 
          2   histories.  Thus, the approach to developing jobs 
          3   and working in microenterprise is for the private 
          4   sector and non-profit organizations to collaborate 
          5   together. 
          6            As a national trade association for 
          7   microenterprise, we're not in a position to refute 
          8   the claims of Bank of America in their small 
          9   business lending.  We're also not here to talk about 
         10   Bank of America in their work in community 
         11   development and affordable housing.  Again, what we 
         12   want to focus in on is microenterprise. 
         13   Unfortunately, our research shows that BofA has 
         14   failed to meet the microenterprise needs in the 
         15   nation. 
         16            Many of our member organizations have 
         17   voiced great concerns over Bank of America's past 
         18   record of acquisitions and mergers, which show a 
         19   decline in the bank's activity in the 
         20   microenterprise development communities. 
         21            Conversely, our members in the Fleet Bank 
         22   footprint are especially worried about this, as it 
         23   would damage some of the very positive and 
         24   constructive relationships that currently exist 
. 0216
          1   between Fleet Bank and microenterprise. 
          2            In California, many of our members mark 
          3   what they call a pattern of abandonment after a 
          4   merger between Bank of America and other banking 
          5   institutions.  And California, of course, is the 
          6   original home of Bank of America.  Our state member 
          7   in California says, quote, a "...significant 
          8   decrease has been noted in Bank of America's 
          9   contributions and sponsorships to non-profits that 
         10   help low and moderate income individuals start their 
         11   own businesses." 
         12            And we have several members who will be 
         13   testifying on the needs of microenterprise at the 
         14   San Francisco hearing on Friday. 
         15            Absent a forward commitment to 
         16   affirmatively meet the obligation to address these 
         17   microcredit needs, AEO expressly opposes the merger 
         18   of Bank of America and FleetBoston; however, I noted 
         19   the meeting that we had with Bank of America on 
         20   December 18th.  We look forward to working with Bank 
         21   of America to cooperatively develop microenterprise 
         22   in the United States.  An investment in 
         23   microenterprise development can be an excellent 
         24   business strategy for Bank of America, just as this 
. 0217
          1   has been found to be an excellent business strategy 
          2   for Fleet Bank. 
          3            Thank you all very much.  I hope we all 
          4   have a good lunch. 
          5            (Lunch Recess)
. 0218
          1                     AFTERNOON SESSION
          2            PRESIDING OFFICER SMITH:  We try to use 
          3   whatever flexibility we have on the timing, and 
          4   given the size of the group, what we'll do is give 
          5   you four minutes instead of three.  We'll be a 
          6   little behind schedule, but I think we'll be okay. 
          7            Were you here this morning for the 
          8   introduction?   Basically what we're asking is that 
          9   if you have -- that you do have the opportunity to 
         10   supplement your oral comments by submitting written 
         11   testimony if you brought it with you. 
         12            If you didn't, we are giving you one week 
         13   to submit your testimony or any additional comments 
         14   you may have.  The registration desk has the 
         15   information about where to send it or fax it.  And 
         16   your deadline is five o'clock a week from today, 
         17   Wednesday -- if this is Wednesday -- the 21st.  So 
         18   it's five o'clock, Eastern Daylight Time. 
         19            With that, we'll go ahead and start.  The 
         20   timekeeper will give you signals when you have two 
         21   minutes level and when you have one minute left and 
         22   when your time has expired.  So with that, we're 
         23   ready to start. 
         24            MR. FORTE:  Thank you.  My name is Dan 
. 0219
          1   Forte.  I'm President of the Massachusetts Bankers 
          2   Association, which represents all the banks in 
          3   Massachusetts, 220 banks, including some throughout 
          4   New England, primarily community banks, 95 percent 
          5   of which are under $2 billion in size, as well as 
          6   all of the regional banks in the area. 
          7            From the industry perspective, while we 
          8   hate to lose another member, we are supportive of 
          9   the merger and do welcome B of A to Massachusetts 
         10   from a retail perspective, as they have been up here 
         11   for a number of years from the lending side. 
         12            I guess the general consensus of the 
         13   industry has been that this is really an 
         14   evolutionary part of the banking business as it 
         15   evolves into the financial services industry.  And, 
         16   yes, competition will increase for the banking 
         17   industry itself, but that also brings with it a lot 
         18   of benefits for consumers as well as small business 
         19   customers. 
         20            We may be unique here in Massachusetts, but 
         21   we've never really or at least seldom have seen 
         22   issues that have come up as far as big banks and 
         23   small banks.  The competition that we've often been 
         24   very concerned about are the nonbank competition 
. 0220
          1   which often doesn't have the same type of regulatory 
          2   platform that the banking industry does. 
          3            We often point to -- right now we're 
          4   working on a legislation for CRA for mortgage 
          5   companies, which do predominant lending in many of 
          6   the local communities.  And you often hear us talk 
          7   of credit unions that now have even gotten into 
          8   business lending.  The competition has gotten so 
          9   great that the top 40 credit unions in Massachusetts 
         10   now make more profits than the entire cooperative 
         11   banking industry here, which is twice in number and 
         12   size as far as institutions are concerned. 
         13            The consolidation will continue, but we do 
         14   believe here in Massachusetts and New England it 
         15   will be somewhat retarded in the sense that the high 
         16   concentration of mutual banks here -- 65 percent of 
         17   all the institutions are not stock-owner owned here, 
         18   and that really compresses the consolidation.  I 
         19   think we're going to have a large number of 
         20   community banks for a very long time to come going 
         21   forward. 
         22            Despite the consolidation, I guess one 
         23   point that's often made is, as the number of banks 
         24   have gone down, the actual number of branches has 
. 0221
          1   increased, giving consumer access for retail and 
          2   commercial business as well. 
          3            From a product standpoint, I think Graham- 
          4   Leach-Bliley has been a big help.  We still have our 
          5   squabbles with the insurance agents and now the 
          6   realtors.  But the banking industry has truly grown; 
          7   it has become more financial services oriented. 
          8            And for community banks there have been a 
          9   number of joint ventures, some of which have been 
         10   initiated by Mass. bankers, including the SUM ATM 
         11   program, where we have over 200 banks and credit 
         12   unions that offer surcharge-free access to over 1800 
         13   machines, and that's been a good competitive balance 
         14   in the marketplace as well. 
         15            I think in technology, Y2K has been a great 
         16   equalizer for many of the banks, and I think that's 
         17   allowed institutions to provide not only a high- 
         18   touch performance on customer service, but also 
         19   high-tech in giving them more convenient access and 
         20   services. 
         21            As was pointed out today, it's very 
         22   unlikely that any divestitures are anticipated.  
         23   That would make it very easy for consumers.  They're 
         24   not going to have to switch branches at all. 
. 0222
          1            We have advocated in the past and we have 
          2   been very supportive of the model that was created 
          3   by Fleet/BankBoston, when there are in-market 
          4   mergers, that smaller institutions, local 
          5   institutions, do get a shot at those branches, and I 
          6   think that worked very well the last time.  It's 
          7   going to be very convenient for consumers in this 
          8   consolidation.  We have no concerns. 
          9            From the B of A perspective, with B of A 
         10   and Fleet getting together, we see them as a very 
         11   good competitor.  They've had a strong history of 
         12   consumer-oriented products, a solid reputation for 
         13   customer service.  And I think the fact that they're 
         14   headquartering their asset management group here in 
         15   Massachusetts really solidifies Boston as the 
         16   capital city for that type of business in the 
         17   future. 
         18            And last but not least, I think their 
         19   commitment to community, to their investments, and 
         20   to the market itself is evidenced in their past 
         21   history, as well as the industry have seen in the 
         22   past that doing business with the local community is 
         23   not only the right thing to do, but it's also good 
         24   for business.  And we look forward to supporting 
. 0223
          1   them as they move forward here. 
          2            Thank you. 
          3            PRESIDING OFFICER SMITH:  Thank you.  
          4            Mr. Washington. 
          5            MR. WASHINGTON:  Good afternoon.  My name 
          6   is Joseph Washington, and I'm Chairman of the Board 
          7   of Directors and also CEO of the Organization for a 
          8   New Equality.  We are a 20-year-old organization, 
          9   and our work is primarily in financial literacy and 
         10   asset building. 
         11            We have our national headquarters here in 
         12   Boston, Massachusetts, with offices in Queens, New 
         13   York, and Myrtle Beach and affiliates in Kansas 
         14   City, Missouri, and Washington, D.C. 
         15            The history of financial institutions 
         16   merging in the United States of America leaves 
         17   community leaders and nonprofits understandably 
         18   skeptical and fearful.  Boston knows too well the 
         19   cost of mergers and acquisitions, BankBoston, 
         20   BayBank, and now Fleet Bank.  We as community 
         21   leaders are now striving to ensure that low-to- 
         22   moderate-income communities and communities of color 
         23   do not bear the full weight of these mergers and 
         24   their costs. 
. 0224
          1            Over the past few months, many concerns 
          2   regarding Bank of America's commitment to 
          3   Massachusetts have been expressed.  However, since 
          4   the announcement of the merger, ONE has seen a 
          5   strong commitment from Bank of America to 
          6   communities in Massachusetts, especially communities 
          7   of color.  Over the past few months, Doug Woodruff, 
          8   Cathy Bessant, Gail Snowden and Michael Glavin have 
          9   been working closely to meet with community groups 
         10   and leaders throughout the State of Massachusetts. 
         11            While mergers have presented challenges for 
         12   ONE and other nonprofits and the community as a 
         13   whole, ONE believes that this merger could be good 
         14   for the communities of colors and communities 
         15   throughout Massachusetts for several reasons. 
         16            First and foremost, Bank of America has 
         17   shown a strong commitment to working with community 
         18   groups throughout Massachusetts and a willingness to 
         19   address the concerns of the community. 
         20            Bank of America has reinforced their stated 
         21   commitment to maintaining employment and charitable 
         22   giving levels by naming several senior leaders among 
         23   Fleet's top leadership to join the ranks of senior 
         24   management within Bank of America.  They have also 
. 0225
          1   committed to lend and invest $750 billion for 
          2   community economic development over the next ten 
          3   years, and $100 billion of this new goal will be 
          4   achieved through lending and investments in Fleet's 
          5   markets. 
          6            Bank of America has also committed 
          7   $6 billion to Boston-based Neighborhood Association 
          8   Corporation of America and another $500 million for 
          9   3,000 local mortgage loans to low-and-moderate- 
         10   income residents. 
         11            Thirdly, in terms of philanthropic grants, 
         12   Bank of America has committed $1.5 billion over the 
         13   next ten years, which is a 40 percent increase for 
         14   both banks. 
         15            I have also had personal relationships with 
         16   Fleet and Bank of America, and while it has been 
         17   challenging at times with Fleet, we have maintained 
         18   a strong and solid relationship over the last 
         19   several years.  Both banks have committed to 
         20   financially empowering communities of color through 
         21   financial literacy and asset development, an 
         22   integral part of economic and community development. 
         23            Bank of America also is a national 
         24   diversity leader.  According to Diversity, 
. 0226
          1   Incorporated, Bank of America was ranked ninth on 
          2   the Top 50 Companies for Diversity list.  Also, Bank 
          3   of America was ranked fifth on the Top Ten Companies 
          4   for African-Americans and ranked seventh on the Top 
          5   Ten Companies for Latinos. 
          6            Additionally, as a national bank, Bank of 
          7   America has the ability to bring more resources to 
          8   our communities.  Also, our community agencies have 
          9   the opportunity to work with a national bank and use 
         10   our best practices across the nation as a whole, 
         11   which could give rise to making local 
         12   initiatives scale to a national level. 
         13            With these mergers the banks can never do 
         14   enough for our communities, but it is important to 
         15   maintain a relationship with these institutions.  We 
         16   have a relationship with FleetBoston Financial, and 
         17   it has sometimes, as I said, been quite a challenge.  
         18   But nonetheless, Fleet continued to work with us and 
         19   we continued to work with them to address the needs 
         20   of the community. 
         21            We've also had a relationship with Bank of 
         22   America and strongly look forward to building a 
         23   stronger relationship with them.  We are certain 
         24   that they too will be responsive to the needs of the 
. 0227
          1   community and continue to work with community 
          2   leaders to ensure that this merger will benefit the 
          3   community. 
          4            Lastly, we believe that Bank of America 
          5   will stand by its financial commitments to low- 
          6   income communities of Massachusetts and the 
          7   remainder of New England, and for these reasons ONE 
          8   supports the merger. 
          9            Ken Lewis stated that the Bank of America 
         10   is determined to be the number one community leader 
         11   and the bank of choice in our growing ethnically and 
         12   culturally diverse markets.  In order to do this, 
         13   Bank of America must work in collaboration with the 
         14   community organizations of Massachusetts and the 
         15   entire nation as well. 
         16            Thank you.
         17            MS. COMPERE:  Good afternoon.  My name is 
         18   Lauren Compere.  I'm the Chief Administrative 
         19   Officer at Boston Common Asset Management, a social 
         20   investment firm here in Boston.  I appreciate the 
         21   opportunity to express our concerns about the 
         22   proposed merger of FleetBoston with Bank of America. 
         23            I've been following personally both banks 
         24   since the mid-1990s as a social researchers.  Boston 
. 0228
          1   Common filed resolutions with FleetBoston and Bank 
          2   of America, asking for a detailed report on the 
          3   impact of the merger on director and executive 
          4   compensation, job losses, charitable giving and 
          5   community reinvestment initiatives.  We were joined 
          6   by a broad-based coalition of our colleagues within 
          7   the social investment community in asking these 
          8   questions. 
          9            The members of our colleagues include the 
         10   Interfaith Center on Corporate Responsibility, a 
         11   coalition of faith-based institutions with assets of 
         12   almost $100 billion, mutual funds like Domini Social 
         13   Investments and Ethical Funds, and other social 
         14   investment firms, such as Trillium Asset Management 
         15   and Walden Asset Management also here based in 
         16   Boston. 
         17            I would like to submit for the public 
         18   record a copy of the shareholder resolution we filed 
         19   with the Bank of America and a letter that we 
         20   jointly wrote with Domini and Walden asking for more 
         21   information on the impact of the merger on all 
         22   stakeholder groups. 
         23            In addition to significant financial risks 
         24   posed by large mergers, mega-mergers like this one 
. 0229
          1   with Bank of America may pose broad risks to 
          2   society, the environment and the economy.  Boston 
          3   Common and our colleagues in the social investment 
          4   community are specifically concerned about the 
          5   impact of the merger on three critical stakeholder 
          6   groups:  employees, communities and customers. 
          7            In terms of job losses, while Bank of 
          8   America officials have stated they expect to save 
          9   almost $1.6 billion in cost savings from the merger, 
         10   some of it will come from job cuts.  Boston Common 
         11   is concerned that these job cuts will mostly hit 
         12   back-end employees, the lowest paid and least 
         13   equipped to deal with layoffs.  We would like more 
         14   detailed information about the company's plans for 
         15   those layoffs and any plans to mitigate the impact 
         16   of these layoffs on its employees. 
         17            Executive compensation:  We're interested 
         18   in understanding what incentive structures are in 
         19   place for the successful completion of the merger, 
         20   most particularly what bonuses and other financial 
         21   benefits will accrue to senior management and 
         22   directors at both companies. 
         23            In terms of the community, Fleet has been a 
         24   leader in everything from volunteerism to community 
. 0230
          1   reinvestment.  Losing this leadership will be a blow 
          2   not only to Boston but all the communities served by 
          3   the newly merged bank. 
          4            Fleet has won accolades for the work of its 
          5   subsidiary First Community Bank, under Gail 
          6   Snowden's leadership, who we really see has an 
          7   innovative approach to serving multicultural and 
          8   multilingual customers.  We would hope that Bank of 
          9   America would maintain the First Community Bank 
         10   post-merger and build on this unique model 
         11   everywhere Bank of America does business. 
         12            In terms of charitable giving, Fleet's 
         13   annual $25 million in regional philanthropic giving 
         14   makes it the most generous locally.  Chairman 
         15   Gifford has committed to maintaining Fleet's current 
         16   level of charitable giving.  However, we remain 
         17   concerned that the charitable giving will lose its 
         18   regional focus post-merger. 
         19            We would encourage Bank of America to 
         20   maintain the FleetBoston Financial Foundation or 
         21   similar entity to ensure the continuation of Fleet's 
         22   strong legacy of civic leadership, community 
         23   service, and enduring community partnerships. 
         24            We are encouraged by the advertisements 
. 0231
          1   from the banks stating that that merger will benefit 
          2   the banks' customers, employees and communities.  We 
          3   believe that positive relationships with all 
          4   stakeholder groups are essential to a company's 
          5   long-term prosperity. 
          6            Through constructive dialogue, Boston 
          7   Common and others in the social investment community 
          8   look forward to hearing specifically how the bank is 
          9   planning to improve relationships with these 
         10   stakeholders by means of the merger and how the bank 
         11   is working to mitigate any potential damage to these 
         12   critical relationships. 
         13            PRESIDING OFFICER SMITH:  Thank you very 
         14   much.
         15            Mr. Harvey. 
         16            MR. HARVEY:  Thank you.  I'm Bart Harvey, 
         17   Chairman and CEO of The Enterprise Foundation, which 
         18   is a national nonprofit that has invested over 
         19   $5 billion to help produce 155,000 homes for very- 
         20   low-income people across the country and helped put 
         21   to work into entry-level jobs over 40,000 people and 
         22   improve neighborhoods through a network of 2,400 
         23   nonprofits in 850 cities or localities across the 
         24   country. 
. 0232
          1            We support this merger.  We have had a ten- 
          2   year relationship with Bank of America, starting 
          3   when it was NationsBank and Hugh McColl was running 
          4   it and Cathy Bessant was the principal community 
          5   investment officer. 
          6            I think some principles are important here.  
          7   Their commitment -- this was Hugh's and Cathy's -- 
          8   was to find every possible profitable way to meet 
          9   the needs of the underserved in NationsBank's 
         10   service area in order for the bank to be able to 
         11   grow at a rate that exceeded the population growth 
         12   of that service area. 
         13            They put two important principles to work 
         14   at NationsBank.  The first was that community 
         15   reinvestment was to be an integral part of the 
         16   normal services of the bank, that it was to get 
         17   extra attention in order to be implemented, and that 
         18   it would be field-tested.  This commitment was 
         19   communicated from the CEO down throughout the bank. 
         20            Secondly, NationsBank wanted to get an 
         21   Outstanding CRA rating, and NationsBank would 
         22   support community reinvestment as a critical part of 
         23   its mission and at a level that would result in an 
         24   Outstanding rating reflective of full implementation 
. 0233
          1   of community reinvestment throughout the bank. 
          2            These two principles have been at work over 
          3   the last ten years, and we have worked with 
          4   NationsBank when it became B of A and with the 
          5   change of the CEO from Hugh McColl to Ken Lewis.  
          6   Enterprise has found a continuing willingness by 
          7   Bank of America to lend people, resources, capital, 
          8   innovation and the persuasion of its most senior 
          9   executives to carry out its community reinvestment 
         10   principles. 
         11            We have worked with B of A and have 
         12   committed over $800 million of B of A's resources -- 
         13   that's equity, lending, grants -- to meet the needs 
         14   of very-low-income people in neighborhoods across 
         15   the country.  And the recent announcement of an 
         16   extremely large, $750 billion commitment for 
         17   affordable housing and community development, and a 
         18   substantial increase in the merged companies' 
         19   combined charitable contributions, is merely the 
         20   latest reaffirmation of B of A's commitment to 
         21   communities. 
         22            Furthermore, it should be noted that this 
         23   acquisition is of two financial institutions with an 
         24   Outstanding rating for community reinvestment. 
. 0234
          1            I am certain, from the printouts that I get 
          2   of the ratings of B of A's CRA performance on a 
          3   state-by-state basis, that there are areas where 
          4   improvements in aspects of community reinvestment 
          5   can be made and should be made.  There is no 
          6   question that advocates need to be vigilant in 
          7   keeping such a large institution operating at a high 
          8   level across each state and each area it serves. 
          9            At different times, improvement in specific 
         10   places is necessary, and Bank of America should be 
         11   accountable to its own goal of excellence in 
         12   community reinvestment.  Such advocacy serves an 
         13   important role that allows a very large institution 
         14   to carry out its CRA mandate across all of its 
         15   markets. 
         16            Bank of America has the same information I 
         17   do.  The key question for us is whether there is the 
         18   will, capability and talent to rectify situations 
         19   that may arise.  From our experience with Bank of 
         20   America's senior management, there certainly has 
         21   been a long track record of will, capability and 
         22   performance, and that is why we -- with that 
         23   outstanding performance, that is why we are 
         24   supportive of this merger. 
. 0235
          1            Thank you. 
          2            PRESIDING OFFICER SMITH:  Thank you. 
          3            MR. STITH:  My name is Charles Stith, and I 
          4   was intimately involved in crafting the first 
          5   comprehensive CRA agreement in the country, which 
          6   was done right here in Boston.  And among the other 
          7   jobs that I've had since then, I formerly worked 
          8   for -- I was employed by the organization that Mr. 
          9   Washington now heads. 
         10            At the onset, let me say I support the 
         11   merger.  In a perfect world, as has been said by a 
         12   number of my colleagues on the dais, FleetBoston 
         13   would continue to exist as a separate entity.  When 
         14   you lose a flagship institution like that, it 
         15   impacts on a community in a sundry of ways. 
         16            But having said that, I know the record of 
         17   all the institutions involved.  I've known 
         18   intimately the top level leadership in all of the 
         19   institutions, from Dick Rosenberg and Terry Murray 
         20   to Hugh McColl and Chad Gifford.  And I think that 
         21   we can expect, as a result of this merger, to see 
         22   comparable commitments to those that we've seen in 
         23   the past. 
         24            As was mentioned earlier, that Bank of 
. 0236
          1   America has committed to maintain the asset 
          2   management group here in Boston is a plus; that Bank 
          3   of America had no substantial franchise in the 
          4   region also probably means that there will be less 
          5   in terms of jobs loss. 
          6            But that a merger of this consequence would 
          7   cause some anxiety is to be expected.  The 
          8   unprecedented numbers of individuals and 
          9   institutions offering testimony is a reflection of 
         10   this fact.  And herein lies the challenge for this 
         11   merger to be deemed a success. 
         12            The biggest challenge will not be in 
         13   merging systems or consolidating product lines.  The 
         14   biggest challenge is in reassuring the community and 
         15   the market that this bigger bank will be responsive 
         16   to the extent that it's always been.  The fears and 
         17   apprehensions in this region and the broader market 
         18   will only be assuaged if this new and improved bank 
         19   continues to do what it has done well over the 
         20   years, and that is communicate clearly its 
         21   commitments to service and then follow through. 
         22            The bank must demonstrate that it's 
         23   sensitive enough to hear the varying communities' 
         24   needs and savvy and nimble enough to develop product 
. 0237
          1   consistent with those needs.  The bank also needs to 
          2   articulate that the economies of scale that come 
          3   from a merged and efficient institution do not 
          4   result in, quote-unquote, economies of options and 
          5   opportunities.  Folks need to be reassured that the 
          6   sum of the parts will not be less than the whole 
          7   they've come to rely on relative to their banking 
          8   needs. 
          9            Given what I know about these institutions, 
         10   I have no apprehension that it will pass the test.  
         11   Given what I know about these institutions, in the 
         12   final analysis, I feel like this merger will be an 
         13   asset to the region.
         14            PRESIDING OFFICER SMITH:  Thank you very 
         15   much. 
         16            MR. GUZZI:  Good afternoon.  My name is 
         17   Paul Guzzi, and I'm president and CEO of the Greater 
         18   Boston Chamber of Commerce.  Let me try to summarize 
         19   written testimony to move the process along.  We 
         20   represent more than 1700 businesses in the Greater 
         21   Boston area, and I testify in support of the merger 
         22   essentially for four reasons. 
         23            First, the record of leadership of Fleet in 
         24   the entire community and in this business community 
. 0238
          1   has been and continues to be significant.  My 
          2   understanding of Bank of America is of the same 
          3   caliber of leadership.  And the fact that Chad 
          4   Gifford and others in the senior management team 
          5   will continue here over a predictable period of time 
          6   is significant.  That record and that capital is 
          7   important. 
          8            Second, employment.  There is a commitment 
          9   to maintain levels of employment within our region.  
         10   The fact that there is not duplication of branches 
         11   essentially within this area is very significant.  
         12   It has been noted, obviously mergers and 
         13   acquisitions result in some downsizing.  I think 
         14   this is a better model in terms of employment. 
         15            Third, it's already been referenced, 
         16   commitment to community.  It's very important to 
         17   have a healthy community.  It's very important for 
         18   major institutions to be involved philanthropically, 
         19   to spend time as well as money in the community.  
         20   And it's already been noted, there has been and 
         21   continues to be a significant commitment to 
         22   community, including philanthropy. 
         23            And lastly, let me mention the area of 
         24   housing.  It may sound somewhat strange that a 
. 0239
          1   Chamber of Commerce is very committed to and 
          2   understands that housing is a competitive issue.  
          3   The commitments that Fleet and the new entity have 
          4   made are very significant.  They will help us 
          5   maintain a competitive advantage. 
          6            For these and other reasons, I testify in 
          7   support of the merger, and we look forward to having 
          8   another world-class financial services institution 
          9   here within Boston. 
         10            Thank you.
         11            PRESIDING OFFICER SMITH:  Thank you very 
         12   much. 
         13            Mr. Jones. 
         14            MR. JONES:  Thank you.  My name is Dewitt 
         15   Jones, and I'm the Chief Operating Officer of Boston 
         16   Community Capital and the President of its affiliate 
         17   Boston Community Loan Fund.  On behalf of Boston 
         18   Community Capital and Elyse Cherry, our CEO, who is 
         19   out of town today, I'm here to support the merger of 
         20   FleetBoston Financial and Bank of America. 
         21            Boston Community Capital is a community 
         22   development financial institution whose mission is 
         23   to help build healthy communities where low-income 
         24   people live and work. 
. 0240
          1            Our lending has focused on loans and 
          2   projects that are unbankable, nonconforming, or 
          3   otherwise difficult to get financing from 
          4   conventional institutions.  Throughout 
          5   Massachusetts, we have financed over 4500 units of 
          6   affordable housing, child care facilities and 
          7   schools that now serve 1300 low-income children, and 
          8   450,000 square feet of inner-city commercial space. 
          9            In addition, our equity investments support 
         10   businesses across the Northeast and have helped 
         11   create or preserve more than 1300 jobs in low- 
         12   income communities. 
         13            Boston Community Capital has grown from a 
         14   tiny Boston-focused nonprofit, capitalized with just 
         15   $3500 of religious money, to a regional organization 
         16   able to operate at a scale sufficient to have a real 
         17   and positive impact on the communities we serve. 
         18            Moreover, although our immediate focus is 
         19   the Northeast region of the United States, our 
         20   interests are national.  Together with our peer 
         21   institutions across the country, we work to create a 
         22   national industry, now with more than $10 billion 
         23   under management, capable of effectively serving 
         24   low-income communities and of helping those 
. 0241
          1   communities harvest the benefits that can emerge 
          2   from increased access to commercial capital markets. 
          3            Our growth at Boston Community Capital and 
          4   the growth of our industry would not have been 
          5   possible without the firm and unwavering support and 
          6   partnership of many institutions and individuals.  
          7   Banks have particularly been important partners, and 
          8   within that larger banking community, Fleet's 
          9   support has been significant, timely and innovative. 
         10            For example, Fleet was the lead investor in 
         11   our two community development venture capital funds, 
         12   and its early commitment encouraged investments from 
         13   other banks and investors.  Fleet has also been an 
         14   important and innovative partner in our affordable 
         15   housing lending. 
         16            For example, Fleet committed funds for a 
         17   first-in-the-nation secondary market transaction 
         18   that reduced interest costs and generated 
         19   substantial equity for two nonprofit organizations 
         20   providing housing for homeless and low-income 
         21   families on Cape Cod. 
         22            Fleet partnered with us in an innovative 
         23   structure that provided a low interest rate, an 
         24   interest rate cap and reduced transaction costs for 
. 0242
          1   low-income housing projects in Mattapan and Mission 
          2   Hill.  And working with Fleet, we have been able to 
          3   provide early stage financing for construction of 
          4   new homes in both Holyoke and Roxbury, projects that 
          5   have turned large, long-vacant sites into vibrant 
          6   new residential communities. 
          7            In addition, through the development of 
          8   First Community Bank under Gail Snowden's 
          9   leadership, Fleet has created a national model for 
         10   the effective distribution of banking services in 
         11   low-income and minority communities.  In short, by 
         12   partnering with CDFIs and other community 
         13   institutions, Fleet has effectively extended its 
         14   reach and ours to the benefit of the communities we 
         15   serve. 
         16            Mergers of large banks create uncertainties 
         17   for low-income communities and for the institutions 
         18   that serve them.  Questions inevitably emerge about 
         19   the ongoing commitment of the newly merged and 
         20   substantially larger institution about whether 
         21   investment promises will be made and kept, about 
         22   whether decision makers will continue to be 
         23   available in the local market. 
         24            In this instance, however, we believe the 
. 0243
          1   proposed merger of Fleet and Bank of America 
          2   presents an opportunity for two strong financial 
          3   institutions to join together to commit new 
          4   resources to finance underserved and low-income 
          5   communities, to enhance support for the innovative 
          6   financial products we seek to develop, and to 
          7   generate access to capital markets and create strong 
          8   and effective partnerships with CDFIs regionally and 
          9   nationally. 
         10            We look forward to an expanded relationship 
         11   with a much larger institution with far greater 
         12   means that can expand the resources and 
         13   opportunities available to its community development 
         14   partners.  Indeed, as our industry grapples with the 
         15   challenge of growing to scale within a vastly 
         16   changed economic landscape, access to the strongest, 
         17   largest and most sophisticated bank partners is 
         18   critical to ensuring that the low-income communities 
         19   we serve are not left further behind. 
         20            We believe that the merger of Fleet and 
         21   Bank of America will provide new and expanded 
         22   opportunities, as we continue to build a national 
         23   industry of effective CDFIs, and we are therefore 
         24   pleased to support the application. 
. 0244
          1            Thank you.
          2            PRESIDING OFFICER SMITH:  Thank you very 
          3   much.  Thank you for coming this afternoon. 
          4            This panel has been allocated four minutes 
          5   each, and so with that, we'll start with Mr. 
          6   Phillips. 
          7            MR. PHILLIPS:   Thank you very much.  My 
          8   name is Ron Phillips, and I'm President of Coastal 
          9   Enterprises in Maine, and I came down here from some 
         10   cold weather to get this warmer weather, and so I 
         11   appreciate the opportunity to talk to you. 
         12            I'm a founder of this organization, which 
         13   is a community development corporation and a 
         14   community development financial institution.  I'm 
         15   also on the Board of Directors of the National 
         16   Community Capital Association and the National Board 
         17   of Directors of the Local Initiatives Support 
         18   Corporation, and also part of LISC's Rural Advisory 
         19   Council. 
         20            So I have been quite active with this field 
         21   for many years, in fact for 25 years, and I have 
         22   here a storybook of our organization which 
         23   chronicles the rise and growth of our entity to 
         24   finance small businesses, micro-enterprises, 
. 0245
          1   affordable housing, community facilities such as 
          2   child care, and a number of other projects, 
          3   particularly the natural resource industries in the 
          4   State of Maine. 
          5            Fleet Bank has been a major supporter of 
          6   Coastal Enterprises.  Bank of America has not been 
          7   in this region.  I have tried to get them there, but 
          8   they have not been.  This will be an opportunity for 
          9   us to try to induce them to be involved in our 
         10   organization. 
         11            Fleet Bank and CEI are in a strong 
         12   partnership.  They serve on our Board of Directors.  
         13   Currently a commercial loan officer, Suzanne Dargie, 
         14   chairs our investment committee.  There is a lot of 
         15   hard work and volunteer work that goes into that, to 
         16   put out the millions of dollars we put out annually 
         17   in targeted social investing.  So this is very 
         18   helpful. 
         19            Before I came here, I calculated the level 
         20   of Fleet Bank's involvement in CEI.  I was quite 
         21   surprised.  Out of $100 million worth of community 
         22   investing, of socially directed investing, Fleet 
         23   Bank has participated in something like $25 million 
         24   worth of that. 
. 0246
          1            And without their leadership, and without 
          2   their involvement in anything from our venture 
          3   capital funds, which they have helped start up -- 
          4   and by the way, we're also doing venture capital 
          5   outside of Maine, in other parts of New England -- 
          6   they have also been involved with our 
          7   micro-enterprise programs. 
          8            They have also supported our work with 
          9   refugees, new immigrants.  They have even supported 
         10   our efforts to help the Native Americans in Maine.  
         11   I don't know how much you have been aware of the 
         12   fact that the Native Americans in Maine tried to get 
         13   a casino established to create some economic 
         14   opportunity for their tribes, and that failed in the 
         15   referendum in the State of Maine. 
         16            But outside of that, institutions like 
         17   Fleet, the Governor, all of us are trying to find 
         18   ways to do major development projects, and we think 
         19   Fleet has been stepping up in that regard. 
         20            Now, a couple of things I want to say if I 
         21   could about rural markets and rural regions, because 
         22   one of the things we're more experienced with in 
         23   community development is rural development and the 
         24   challenges we face there. 
. 0247
          1            We have aging populations.  We have out- 
          2   migration of youth.  We face real challenges in 
          3   liveable-wage jobs.  For example, in the State of 
          4   Maine alone, which has experienced, like the country 
          5   as a whole, a rapid decline in manufacturing jobs, 
          6   probably 25 percent of the net new jobs created, 
          7   mainly in the service sector, pay a liveable wage. 
          8            There is rural sprawl, there is 
          9   encroachment on farmland, there is acquisitions of 
         10   waterfront properties for other development other 
         11   than access for fisheries or other traditional uses.  
         12   The State of Maine has a coastline, I think, of 
         13   something like 3,500 miles.  Only 25 miles of that 
         14   are currently involved in working waterfront 
         15   activities. 
         16            Fleet Bank, by the way, is looking at 
         17   helping us to capitalize and expand our 
         18   capitalization of a working waterfront loan fund.  
         19   So that gives you an example of at least that 
         20   institution's interface with an important rural 
         21   development strategy. 
         22            Micro-enterprises in the small business 
         23   sector are vital to the rural economies, and the 
         24   smaller size of the spectrum creates much more of 
. 0248
          1   the employment opportunities than the larger 
          2   businesses.  And this continues to be a challenge 
          3   for all of us, including Fleet Bank, and it will be 
          4   for Bank of America. 
          5            Let me try to conclude with the points I 
          6   want to make here.  There are several things that we 
          7   think would be important to go forward with this 
          8   merger.  We're not actually taking a position for or 
          9   against it, but believe, if it goes forward, the 
         10   Federal Reserve Board should make sure that state 
         11   plans are developed with the specific types of 
         12   measurable outcomes that have been listed here, and 
         13   I won't go into those for lack of time.  But they 
         14   can include such things as micro-enterprise 
         15   development, commercial real estate, support for 
         16   community groups like the Native Americans and so 
         17   forth.  We can work very closely with them. 
         18            Another point that I think would be 
         19   important is that the Bank of America or Fleet Bank 
         20   take a good hard look at the Federal Home Loan Bank 
         21   membership they would have in New England and see 
         22   what they can do to create a type of an economic 
         23   development initiative similar to the affordable 
         24   housing program.  This is a leadership question that 
. 0249
          1   these banks like Fleet or a merged bank can step up 
          2   and do something more innovative within that system. 
          3            The next thing they can do is talk about 
          4   specific goals around the capitalizing of the 
          5   revolving loan funds, micro-funds, and those sorts 
          6   of things.  And that's a very important part of the 
          7   work we do to create new ventures and jobs in these 
          8   rural communities. 
          9            Finally, let me say one more thing.  There 
         10   is one federal program that is currently active 
         11   called the New Markets Tax Credit Program.  You may 
         12   have heard about it.  This is a $15 billion 
         13   initiative.  Fleet Bank is now and Bank of America 
         14   are getting involved with that.  We think it is very 
         15   important that they get involved in that through the 
         16   CDFI and CDC networks that initiated that program 
         17   and that are targeting those kinds of investments 
         18   and can bring those to the table. 
         19            And last but not least, I would like to 
         20   mention that we're doing a little bit of research 
         21   now about predatory lending in Maine.  I've been 
         22   listening to some of the comments here.  We've been 
         23   discussing this issue with the Attorney General's 
         24   Office in the State of Maine. 
. 0250
          1            We have been doing some work on it, and we 
          2   have seen already a surge in sub-prime lending.  We 
          3   don't know a lot of the details behind all of this, 
          4   but we think it's a very important issue to keep 
          5   track of, and we would like to help Fleet Bank and 
          6   Bank of America come up with policies or apply 
          7   policies that are not going to violate people's 
          8   opportunities in that area. 
          9            Thank you very much. 
         10            PRESIDING OFFICER SMITH:  Thank you.
         11            Mr. Taylor. 
         12            MR. TAYLOR:  Thank you, Madam Chair.  
         13   Before I begin my remarks, I want to recognize that 
         14   this may be the last or second-to-the-last such 
         15   hearing that you will preside over, because after a 
         16   very distinguished career with the Federal Reserve 
         17   Bank, you are retiring.  And I wanted to recognize 
         18   you for the commitment and the stand you have made 
         19   for community development in that capacity. 
         20            PRESIDING OFFICER SMITH:  Thank you. 
         21            MR. TAYLOR:  I want to thank the Federal 
         22   Reserve Bank in general for hosting this incredibly 
         23   important event, this discussion about the merger 
         24   between an important regional bank, Fleet Bank, and 
. 0251
          1   the Bank of America. 
          2            I am the President of the National 
          3   Community Reinvestment Coalition, which is a 
          4   coalition of 500 community organizations.  We've 
          5   come together actually for this kind of purpose.  
          6   We've been around since 1990, and our purpose is 
          7   economic justice, to see to it that traditionally 
          8   underserved communities are not overlooked by the 
          9   private financial sector. 
         10            So this hearing is precisely what the 
         11   National Community Reinvestment Coalition is all 
         12   about.  The fact is, though, probably most citizens 
         13   in this Commonwealth and New England actually have 
         14   very little interest in this merger, ironically.  
         15   But for those of us who would testify today and 
         16   later in California, we know the profound 
         17   significance of this merger. 
         18            We also know that in the future, those 
         19   average citizens, who really aren't following this 
         20   as closely as many people in this room, will be 
         21   greatly impacted depending on the quality of forward 
         22   commitments and performance of the Bank of America 
         23   as it absorbs this incredibly important financial 
         24   institution from this area. 
. 0252
          1            What the average citizen may realize 
          2   probably not too much later, is that Boston and this 
          3   State in New England is increasingly becoming a 
          4   banking colony, not uncommon for a lot of states. 
          5            But by this I mean that one more of the 
          6   ultimate decision makers, the people who run these 
          7   institutions, are going to be people who no longer 
          8   live or reside in the states where the institution 
          9   has branches, and this will be no exception for the 
         10   Fleet Bank.  While there will be obviously people in 
         11   management capacities, for the most part, the 
         12   ultimate decision makers will be from outside of 
         13   Massachusetts and outside of New England. 
         14            In Massachusetts we call ourselves a 
         15   Commonwealth.  And make no mistake about it, much of 
         16   our common wealth, of our assets, our capital, will 
         17   now be managed by new stewards who at the highest 
         18   levels, as I mentioned, will be from other areas of 
         19   the country. 
         20            As regional economies ebb and flow, these 
         21   new financial stewards will determine how much risk 
         22   tolerance they have for New England and elsewhere, 
         23   and such tolerance must relate to the Bank of 
         24   America's national business model and strategies. 
. 0253
          1            What will be the commitment to invest in 
          2   Boston, Worcester, Hartford, Concord, Newark, New 
          3   Jersey, and Portland, Maine?  What will be the 
          4   commitment when the micro-economies of these 
          5   communities are challenged?  What about the rural 
          6   areas in our New England states?  Will Bank of 
          7   America be there through thick and thin?  What will 
          8   be their commitment to underserved communities? 
          9            As you know, there is a law that 
         10   affirmatively obligates this institution to serve  
         11   the credit needs of low-and-moderate-income 
         12   communities.  What can we expect to be their 
         13   commitment to small businesses, affordable 
         14   multifamily housing, to operate full service bank 
         15   branches that employ people and make basic banking 
         16   services available to the people in this 
         17   Commonwealth and throughout New England? 
         18            To give credit, the Bank of America has 
         19   made an incredible announcement that represents the 
         20   single largest financial commitment in the history 
         21   of this country from a financial institution.  They 
         22   are to be applauded for this. 
         23            That commitment, though, lacks details and 
         24   specific targets for individual loan geographies.  
. 0254
          1   Not having these clarities is like having an all-pro 
          2   athlete without a team or a city to play in.  We 
          3   know his commitment is great, but without a forward 
          4   commitment of what city and team he intends to play 
          5   for, it's hard for us to get excited. 
          6            In the case of the Bank of America's 
          7   commitment, they have put forward a whole team of 
          8   super-athletes, but we don't know what sport they 
          9   will be playing and what towns will benefit from 
         10   that athleticism.  Enough of the sports analogy. 
         11            Congress gave the Federal Reserve Board the 
         12   responsibility to ensure that our capitalist system 
         13   works for all citizens.  The Federal Reserve Bank 
         14   has been given the specific charge with ensuring 
         15   that all our citizens have fair and equal access to 
         16   credit and capital. 
         17            The decision here today is simply not a 
         18   matter of considering the approval of this merger, 
         19   but to provide direction, oversight and guidelines 
         20   to the banks in this merger as it relates to the 
         21   interests of consumers in this Commonwealth, in New 

         22   England, New York, New Jersey, and the rest of the 
         23   Bank of America's footprint. 
         24            This decision by the Federal Reserve Bank 
. 0255
          1   will have a pervasive and historic impact on the 
          2   future of community development, affordable housing, 
          3   small business lending and overall bank lending, not 
          4   only in New England, but for us as a country as 
          5   well.  The decisions you make or don't make 
          6   regarding the forward commitments of this financial 
          7   institution will be the future standard for other 
          8   banks that will undoubtedly merge. 
          9            The Federal Reserve Bank must encourage and 
         10   support these community efforts that seek clarity 
         11   and forward commitments from the bank.  Bank of 
         12   America must make clear and quantifiable lending 
         13   commitments to serve the credit needs of those 
         14   cities and towns currently served by Fleet Bank.  
         15   There must be a detailed commitment to serve 
         16   minority and low-and-moderate-income geographies in 
         17   all of Bank of America's footprint. 
         18            Some nonprofits, community organizations 
         19   today have applauded the Bank of America for what 
         20   they have done and what they have done through those 
         21   organizations, and they should do that.  NCRC 
         22   recognizes the Bank of America and Fleet for their 
         23   commitment to these partnerships and the resulting 
         24   good that has come from it. 
. 0256
          1            But we must keep in perspective that 
          2   serving the credit needs of underserved communities 
          3   is more comprehensive than simply making grants or 
          4   loans to intermediary organizations.  We are just 
          5   that, we are intermediary organizations that are 
          6   there to serve and to assist the lender in serving 
          7   low-and-moderate-income consumers. 
          8            But it continues to remain the 
          9   responsibility of the bank to in fact successfully 
         10   provide the needed loan products and banking 
         11   services to underserved populations.  It remains the 
         12   responsibility of the bank regulatory agencies to 
         13   ensure that the actual volume and types of loans to 
         14   low-and-moderate-income borrowers meet the 
         15   respective credit needs of the various geographies. 
         16            Grants to nonprofits organizations are but 
         17   one measurement in this effort.  The ultimate 
         18   measurement is the percentage of mortgage and small 
         19   business loans, the presence of full service bank 
         20   branches, the amount of community development 
         21   lending and investment that this bank makes in 
         22   traditionally underserved communities. 
         23            NCRC urges the Federal Reserve Bank to 
         24   support the community calls for two things:  One, a 
. 0257
          1   substantial community reinvestment plan; and two, a 
          2   commitment from the Bank of America that ensures 
          3   that it will put safeguards into place to ensure 
          4   that any of their sub-prime purchasing doesn't 
          5   contain any predatory lending practices. 
          6            Let me close -- I'll finish by saying, it's 
          7   in this building that 20 years ago I challenged the 
          8   First Bank, and it was then called Somerset Savings, 
          9   on the very top floor, with then an employee, who is 
         10   still an employee of the Federal Reserve Bank of 
         11   Boston, Bill Spring, sitting there with the bank and 
         12   myself discussing what needed to be done in the City 
         13   of Somerville, that I had my first experience. 
         14            And it was a good experience, because the 
         15   Federal Reserve then, and I hope now, really got the 
         16   import of what these hearings mean and what these 
         17   discussions mean, and the fact that a forward 
         18   commitment, clarity on what that commitment is -- 
         19   and we've heard bits and pieces of it.  I don't mean 
         20   to say that there's been nothing.  There certainly 
         21   has been.  And I can speak to the character of many 
         22   of the people involved, in both banks.  And, you 
         23   know, if that was the only measurement for me, I 
         24   think things would look terrific. 
. 0258
          1            But the fact of the matter is, employees in 
          2   banks change, boards of directors change, things 
          3   change as time goes on.  And to the extent that you 
          4   have a written document that commits very 
          5   specifically to underserved communities by 
          6   geographies, by loan products, by amounts, we can be 
          7   assured that that commitment will be followed 
          8   through.  That's what happened when I met with this 
          9   bank. 
         10            I know that some of the bank personnel kind 
         11   of -- it's kind of difficult for them to hear some 
         12   of this criticism, but they need to understand that 
         13   it is difficult for us, as we work in underserved 
         14   communities, with all the people who are trying to 
         15   create their own dream of home ownership, of 
         16   starting small businesses, of having the kind of 
         17   quality of life that they deserve as hard-working, 
         18   tax-paying Americans, that all banks, not just Bank 
         19   of America, are incredibly important to that dream 
         20   and that goal. 
         21            So that is what this is all about, it is 
         22   about fairness.  So NCRC urges the Federal Reserve, 
         23   when the hearings are over and the doors are closed, 
         24   to the extent that you can get as much detail about 
. 0259
          1   that forward commitment, I really applaud you and 
          2   urge you to do that. 
          3            Thank you very much. 
          4            PRESIDING OFFICER SMITH:  Thank you. 
          5            Mr. Anderson. 
          6            MR. ANDERSON:  My name is John Anderson, 
          7   and my company is called The Real Estate Analyst, 
          8   and I have a couple of caveats first.  I'm going to 
          9   use a couple of examples speaking, and there is more 
         10   information in the text which is submitted to the 
         11   Fed.  And so you can look at it and read more about 
         12   it, or you can use it to line the birdcage or 
         13   whatever the case is. 
         14            Two is the fact that one of the things that 
         15   I concentrate on is not, for example, the $9 billion 
         16   that Bank of America gave to Bruce Marks and his 
         17   organization, NACA, but I look at how that money 
         18   transfers down to the individuals who are buying 
         19   houses and what the results of that money are.  So I 
         20   would like to go on from there. 
         21            Unlike a lot of people who support this 
         22   merger, I think the merger should not be allowed.  
         23   As some of you know me, eight years ago at the 
         24   Fleet/Shawmut hearings, I pointed out that convicted 
. 0260
          1   felons and others were buying and flipping real 
          2   estate in Dorchester, Roxbury and Mattapan, using 
          3   the targeted loan products of Fleet. 
          4            The Fed required Fleet to look at a very 
          5   small subset of the data that I gave them, and they 
          6   corrected far fewer.  I've been told they only 
          7   corrected three.  In the past year, two homes of 
          8   that subset were sold before the foreclosure auction 
          9   because prices have gone so high, and a third 
         10   property was refinanced before the second scheduled 
         11   foreclosure auction. 
         12            For this reason alone, the merger should 
         13   not be allowed, but of course the Fed did nothing 
         14   then, and the Fed will do nothing now.  So let's 
         15   move on to another issue. 
         16            There is much in the news on targeted loan 
         17   programs.  There is much about the amount of money 
         18   being loaned, the number of loans, the racial and 
         19   ethnic makeup of the buyers, but very little on the 
         20   results of home ownership. 
         21            Several years ago I pointed to out to Dr. 
         22   Jim Campen over at UMass Boston that it was common 
         23   to see homeowners with targeted mortgages in 
         24   foreclosure or bankruptcy or borrowing from 
. 0261
          1   predatory lenders.  He acknowledged that it happens, 
          2   but asked, "How often?"  I told him, "Every day," 
          3   from what I could tell, and started a little e-mail 
          4   list to send out examples of how often this was 
          5   taking place. 
          6            I could give you lots of examples, but I 
          7   decided to let the Boston Globe pick an example for 
          8   me.  Nine years ago the Boston Globe ran an article 
          9   that showed an Ana Martinez and the home that she 
         10   purchased through Fleet with the assistance of Bruce 
         11   Marks's UNAC, now NACA.  She was ecstatic at the 
         12   time she purchased her house, which should be 
         13   wonderful.  But it's a different story after the 
         14   last eight years. 
         15            After initially borrowing additional money 
         16   from Fleet and from other prime lenders, she turned 
         17   to sub-prime lenders.  Her principal now is three 
         18   times what it was when she purchased her home.  Is 
         19   this a success story?  Does anybody know this is 
         20   taking place, and does anybody look at it? 
         21            Then I would like to -- skipping over a few 
         22   other examples for the Fed that the Fed has, I would 
         23   like to give you an example combining some of the 
         24   elements I've been talking about, which is 
. 0262
          1   speculators who are using targeted loan programs to 
          2   get minority and other low-income buyers to pay far 
          3   more for their homes than they're worth, and two 
          4   elements that the Fed likes to pretend they care 
          5   about, which is sub-prime and predatory lending. 
          6            A few years ago, at the hearing the Boston 
          7   Fed held on predatory lending, I testified that 
          8   while I was working with Bay State Banner reporter 
          9   Yawu Miller, we stumbled upon an 82-year-old woman 
         10   who was losing her home to the second of two 
         11   sub-prime loans she received.  Nobody stepped 
         12   forward to help her, and she lost her house. 
         13            That should be bad enough, but the buyer of 
         14   the home at the auction was a speculator who doubled 
         15   the price of the property and sold it again to a 
         16   buyer with a NACA-originated Fleet loan. 
         17            But the bad news doesn't stop there.  The 
         18   owner starts borrowing additional money from Fleet 
         19   before starting to borrow sub-prime money.  The 
         20   principal on the latest mortgages is now more than 
         21   twice what the original mortgage was, and that's in 
         22   a three-year period. 
         23            While activists and others are wringing 
         24   their hands over the lack of equity in the black 
. 0263
          1   community, just look at that property.  Equity is 
          2   removed when the woman loses her home of 48 years.  
          3   Then equity is lost when the buyer pays twice what 
          4   the speculator paid for it a few months earlier.  
          5   And then more equity is lost when the homeowner 
          6   borrows against the value of his property.  That's 
          7   how you lose equity in the black community, and 
          8   there is NACA and Fleet right in the middle of it. 
          9            But it's not just NACA.  One more example 
         10   I'll bore you with.  There is a group of people who 
         11   are -- I'm supposed to be finishing, so I won't give 
         12   you the last example. 
         13            I'll simply finish by saying I've been 
         14   bringing this to the Fed's attention for the last 
         15   eight years, several people here have had to put up 
         16   with me, and still nothing has been done about it, 
         17   and it's happening now.  We do know one thing:  The 
         18   only good thing that will definitely come out of 
         19   this merger is that we'll no longer have to waste 
         20   our time in these hearings. 
         21            PRESIDING OFFICER SMITH:  Thank you very 
         22   much. 
         23            MS. PSORAS:  Hello.  My name is Andrea 
         24   Psoras, and thank you also for having this forum to 
. 0264
          1   address this proposal between FleetBoston and Bank 
          2   of America. 
          3            Although I'm not an urban activist, I am 
          4   here to oppose this proposed merger, this proposed 
          5   acquisition of FleetBoston Financial by Bank of 
          6   America, based materially out of North Carolina, a 
          7   non-New England state. 
          8            I am here as an expert of sorts who has 
          9   provided bank and thrift consulting services not 
         10   exclusive to business combination advice and 
         11   recap/bailout work for sick banks and thrifts, with 
         12   that work often having engaged New-England-based 
         13   banks and thrifts in the late '80s and '90s.  One of 
         14   my former employers actually was owned by Advest 
         15   Group, a regional broker/dealer based in Hartford, 
         16   an area where FleetBoston provides its banking 
         17   services and products. 
         18            While engaging in our advisory services to 
         19   the financial community throughout New England, I 
         20   observe that its economy had and has suffered more 
         21   deeply and more broadly during economic slowdowns 
         22   than virtually any other region in the United 
         23   States. 
         24            One can look at the headlines of a lot of 
. 0265
          1   the community investment and/or merger-related 
          2   contributions into community reinvestment activity.  
          3   A recent one, "Bank of America pledges $756 billion 
          4   for affordable housing," and another, "Communities 
          5   benefit from bank partnerships." 
          6            Since the Community Reinvestment Act of 
          7   1997, and more frequently of late, when community 
          8   activists have pressured bank management and the 
          9   Federal Reserve Bank to withhold approvals for 
         10   mergers unless banks and similar depository 
         11   institutions committed to reinvesting in the 
         12   communities from which the banks are looking to 
         13   obtain business of any sort, we regularly have been 
         14   seeing headlines describing community development 
         15   assistance to improve those neighborhoods that had 
         16   suffered from bank redlining and other forms of 
         17   discrimination, flawed federal, state and local 
         18   policies, and urban planning that have produced 
         19   urban battlefields and scorched earth, some areas 
         20   which still bear these scars. 
         21            I coincidently live in Harlem, and I can 
         22   attest to the fact that that area of the city still 
         23   reflects the redlining, in spite of all of the 
         24   contributions with regard to community reinvestment 
. 0266
          1   and merger activity. 
          2            Despite these nice proposals for more 
          3   banking welfare, and this particular from Bank of 
          4   America, formerly North Carolina National Bank, 
          5   perhaps because Acorn and a number of these other 
          6   community groups have relied heavily on these CRA 
          7   proceeds, they are dependent and biased, you know, 
          8   by the financial influence that the banks have. 
          9            You know, without Wall Street merger 
         10   experience, however, many of these activist groups 
         11   are looking at the seemingly large ransom they can 
         12   leverage from these banks -- to which they would 
         13   have access anyway, even without the merger, under 
         14   the current Community Reinvestment Act -- but their 
         15   ignorance of the law promotes their thinking that 
         16   they need to get the proceeds from bank mergers. 
         17            Although some would laud, on behalf of New 
         18   England, the sort of business headlines that I had 
         19   mentioned, and it would augur well for any bank to 
         20   commit to broad and deep community development in 
         21   its market area, these shallow proposals and 
         22   well-meaning endeavors remain insufficient to 
         23   address the deeper needs of the New England region, 
         24   and arguably throughout the economy around the 
. 0267
          1   United States. 
          2            This scorched earth, the banks themselves 
          3   have contributed to this, and CRA, although it has 
          4   really helped improve the situation, I can't see 
          5   that, unless these banks address some of the other 
          6   practices that have promoted -- I wouldn't go quite 
          7   so far as to say urban decay, but have somewhat 
          8   impaired the thriving economies, one of which had 
          9   been New England. 
         10            I attribute these serious problems in part 
         11   to, although this is not a forum for this particular 
         12   subject, to free trade.  Anyone well informed on the 
         13   commercial fraud of free trade understands the only 
         14   benefactors of it are the corporate management, the 
         15   lobbyists and the politicians receiving the campaign 
         16   contributions in order to get access to imported 
         17   goods without tariffs. 
         18            New England's economy was based on various 
         19   sorts of value-added manufacturing and primary 
         20   manufacturing, which has been seriously eroded and 
         21   negatively impacted by things like free trade. 
         22            If you follow the argument that I 
         23   described, the domestic market for which we produce 
         24   disintegrates when our neighbors feel that what we 
. 0268
          1   produce and what they in turn will be charged for 
          2   our work is perceived to be too expensive. 
          3            Since my time is at an end, I'll submit the 
          4   rest of my comments, already having added that. 
          5            Although today I'm here to oppose this 
          6   proposed acquisition of FleetBoston by Bank of 
          7   America, I will further condemn the offenders who 
          8   are looking to benefit from it, as well as 
          9   condemning the perpetrators of the economic 
         10   deterioration in New England due in part to the 
         11   things I've described, I believe again one of which 
         12   would be Bank of America, which I think would ignore 
         13   the real needs of the New England economy. 
         14            I think too-big-to-fail has enabled large 
         15   institutions to engage domestically and globally in 
         16   marginal commercial and banking practices.  Both 
         17   Fleet and Bank of America have practiced this, based 
         18   on an ability to have protection with regard to the 
         19   doctrine of too-big-to-fail. 
         20            As an expert, I worked on bank and thrift 
         21   recap work.  Many of the little banks were just 
         22   severed, closed, whatever the rest of the lingo, but 
         23   the large banks were given largesse.  And although 
         24   not directly on the taxpayer's wallet, 
. 0269
          1   unfortunately, it weakened the banking environment. 
          2            I think FleetBoston's investment and 
          3   banking/stock strategies had its costs, and I could 
          4   go on with regard to its forays into what eventually 
          5   deteriorated with the bubble. 
          6            But I would propose either fire the board, 
          7   you know, which you can do.  You don't have to sell 
          8   the bank in order to get the bank to, you know, 
          9   operate in a more efficient way.  But by selling the 
         10   bank to another potentially more harmful competitor 
         11   would be a serious misstep for the other 
         12   stakeholders, one of which is the New England 
         13   economy.  The price is too low to give up such a 
         14   strategic position in this region. 
         15            Management should be more cautious than to 
         16   reveal their glee at the thought of getting their 
         17   pot of gold at the end of the rainbow, while 
         18   shafting many of the other stakeholders not enjoying 
         19   the millions that the FleetBoston senior management 
         20   and Bank of America management will enjoy with 
         21   regard to the exercising of their golden parachutes. 
         22            I believe we see an agency problem 
         23   dramatized in this acquisition proposal.  And since 
         24   that is the case, it would also disserve so many if 
. 0270
          1   the Fed permitted this merger.  Management has 
          2   everything to gain with little to lose, while 
          3   virtually everyone else in two regions in the 
          4   Eastern U.S. have more to lose with little upside 
          5   gain under the Bank of America banking model. 
          6            As we ignore the root of the problem that 
          7   acts as an undertow on which the sale of the bank is 
          8   predicated, selling FleetBoston to the Bank of 
          9   America would maintain the dysfunctional status quo, 
         10   and this we must oppose.
         11            Thank you.
         12            PRESIDING OFFICER SMITH:  Thank you. 
         13            Mr. Cole. 
         14            MR. COLE:  Thank you very much.  My name is 
         15   Chris Cole.  I am Regulatory Counsel for the 
         16   Independent Community Bankers of America.  It is a 
         17   trade association representing approximately 4600 
         18   banks nationwide, at 17,000 locations.  We represent 
         19   many of the community banks in New England, and in 
         20   particular many of the mutual thrift associations in 
         21   the New England area. 
         22            ICBA is very concerned with the continued 
         23   concentration of banking assets in the U.S. and the 
         24   effect that concentration has not only on bank 
. 0271
          1   competition, but on consumers, on small businesses, 
          2   and on communities.  This merger will catapult Bank 
          3   of America into the second largest bank holding 
          4   company in the United States, in terms of assets, 
          5   and will mean that the top eight financial 
          6   institutions in this country will control 
          7   approximately 51 percent of total U.S. banking 
          8   assets. 
          9            Unfortunately, the evidence shows that 
         10   increased concentration in the banking industry has 
         11   not benefited bank customers and has not had a 
         12   positive effect on the convenience and needs of the 
         13   communities served by the acquired banks. 
         14            For example, large bank mergers often have 
         15   an adverse effect on consumer deposit pricing and 
         16   often result in higher fees to consumers.  We have 
         17   several studies to support that.  We therefore urge 
         18   the Federal Reserve Board to examine closely the 
         19   effect that this merger will have on deposit pricing 
         20   and on fees in the New England area. 
         21            Since large bank mergers often have an 
         22   adverse effect on small business lending, we urge 
         23   the Board to look at the impact that the merger will 
         24   have on small business lending in the New England 
. 0272
          1   area. 
          2            Along with consumers and small businesses, 
          3   it is often the case that local communities are 
          4   adversely impacted when statewide banks are acquired 
          5   by large national bank franchises located outside of 
          6   the state. 
          7            ICBA notes that Bank of America has pledged 
          8   $750 billion for community economic development over 
          9   the next decade, and that $100 billion of that is 
         10   earmarked for loans and investments in Fleet's 
         11   markets in the New England area. 
         12            However, the details of this commitment are 
         13   unclear, as everybody has been bringing up.  In this 
         14   regard, ICBA thinks that the large national banks, 
         15   like Bank of America, should be examined locally, 
         16   under the CRA, as community banks are examined right 
         17   now, instead of simply at the main office of the 
         18   bank. 
         19            During the first two CRA exams following 
         20   the merger, we would urge bank examiners from the 
         21   OCC to review Bank of America's commitment to the 
         22   New England community, to see if they are indeed 
         23   spending the money they have pledged to spend, and 
         24   to compare their actual community spending in New 
. 0273
          1   England with Fleet's programs prior to the merger. 
          2            Finally, we note that Bank of America has 
          3   interpreted the Reigle-Neal Act very broadly to 
          4   comply with the 10 percent cap in that statute, 
          5   which prohibits a merger if the resulting bank would 
          6   control more than 10 percent of the total deposits 
          7   in this country.  ICBA is not convinced that it was 
          8   Congress's intention to interpret that statute that 
          9   broadly. 
         10            In any case, consumers, small businesses 
         11   and local communities often suffer when large 
         12   national banks merge and dominate the banking 
         13   industry.  That is why community banks will resist 
         14   any attempt to increase the 10 percent cap imposed 
         15   by the Reigle-Neal Act or to try to broaden the 
         16   definition of deposits under that statute. 
         17            Thank you very much for this opportunity to 
         18   testify. 
         19            PRESIDING OFFICER SMITH:  Thank you.
         20            MR. MARSICO:  Good afternoon.  My name is 
         21   Richard Marsico.  I'm substituting for Jim Campen, 
         22   who could not be here this afternoon.  I will be 
         23   presenting Professor Campen's testimony. 
         24            PRESIDING OFFICER SMITH:  Four minutes or 
. 0274
          1   less. 
          2            MR. MARSICO:  In four minutes or less. 
          3            Professor Campen is Associate Professor of 
          4   Economics at the University of Massachusetts Boston 
          5   and a member of the Boards of Directors of the 
          6   Massachusetts Affordable Housing Alliance and the 
          7   Fair Housing Center of Greater Boston. 
          8            Although the proposed merger raises many 
          9   issues, this testimony will address just one of 
         10   them, the very dramatic decline of home purchase 
         11   mortgage lending in Boston and in Massachusetts by 
         12   Fleet since its merger with BankBoston in 1999. 
         13            On July 7th, 1999, Professor Campen 
         14   testified at the public hearing on the Fleet/ 
         15   BankBoston merger that was held here.  The previous 
         16   month he had released a report entitled "Does One 
         17   Plus One Equal More Than Two or Less Than One:  A 
         18   Study of Mortgage Lending Before and After Recent 
         19   Mergers by Fleet and BankBoston." 
         20            The main finding of this study was that, 
         21   both in the City of Boston and in all of 
         22   Massachusetts, lending to African-American, Latino, 
         23   and low-and-moderate-income borrowers by Fleet in 
         24   1998 was approximately half of the total lending to 
. 0275
          1   these borrowers by Fleet and Shawmut combined in 
          2   1995.  That is, the result of the Fleet/Shawmut 
          3   merger was one plus one equals one. 
          4            Fleet's performance, but not that of 
          5   BankBoston, fell far short of meeting the criteria 
          6   of one plus one is greater than two that was 
          7   emphasized by CEOs Murray and Gifford at their March 
          8   15th, 1999, press conference announcing the proposed 
          9   merger. 
         10            In his testimony, Professor Campen cited 
         11   the example of LMI borrowers purchasing homes in the 
         12   City of Boston.  In 1995, such borrowers received 
         13   274 loans from Fleet and 400 loans from Shawmut, for 
         14   a total of 674 loans.  In 1998, Fleet made 335 
         15   loans, for a decrease of almost exactly half, 50.3 
         16   percent. 
         17            This particular finding was chosen as 
         18   representative, not extreme.  The same general 
         19   pattern existed whether one looked at Boston or the 
         20   entire state, at loans to African-Americans, to 
         21   Latino or to LMI borrowers. 
         22            The point of Professor Campen's testimony 
         23   at the 1998 hearing was to highlight the possibility 
         24   that the Fleet/BankBoston merger would turn out like 
. 0276
          1   the Fleet/Shawmut merger and that total mortgage 
          2   lending would dramatically decrease after the merger 
          3   was completed.
          4            It turns out that Professor Campen's 
          5   worries, shared by many of those who testified at 
          6   the July 1999 hearing, were fully justified.  Home 
          7   purchase lending by Fleet in 2002 was dramatically 
          8   lower than lending by Fleet and BankBoston combined 
          9   in 1999, the year of their merger. 
         10            Professor Campen focuses on home purchase 
         11   lending because of its great importance to creating 
         12   home ownership and because that was the focus of his 
         13   1999 testimony. 
         14            In this testimony Professor Campen will 
         15   focus on what has happened to the level of Fleet's 
         16   lending in the City of Boston during the 1999 to 
         17   2002 period.  Fleet and BankBoston combined made 
         18   1,006 home purchase loans in Boston in 1999, but 
         19   Fleet made only 400 loans in 2002, a decrease of 
         20   60.2 percent.  The 2002 total was less than one 
         21   quarter of the 1,714 home purchase loans made in 
         22   1995 by BankBoston, BayBank, Fleet and Shawmut 
         23   combined. 
         24            When we consider the number of these loans 
. 0277
          1   that went to minority and lower-income borrowers, we 
          2   find similar trends that are included in the tables 
          3   that he submitted in his testimony. 
          4            In each of these cases, the result of the 
          5   Fleet/BankBoston merger was one plus one is less 
          6   than one, a very long way indeed from the one plus 
          7   one is greater than two that Chairmen Murray and 
          8   Gifford said would result. 
          9            Professor Campen believes that these very 
         10   substantial falls in home purchase lending in the 
         11   City of Boston, the Boston MSA and the State of 
         12   Massachusetts in the aftermath of the 
         13   Fleet/BankBoston merger deserve your careful 
         14   scrutiny, and he thanks you for the opportunity to 
         15   present these comments. 
         16            PRESIDING OFFICER SMITH:  Thank you very 
         17   much.  Any questions?  
         18            Thank you for coming this afternoon. 
         19            We'll start with Ms. Callahan. 
         20            MS. CALLAHAN:  Thank you.
         21            PRESIDING OFFICER SMITH:  You have four 
         22   minutes each. 
         23            MS. CALLAHAN:  Distinguished members of the 
         24   Panel, thank you for allowing me to appear today to 
. 0278
          1   express the perspective of small property owners on 
          2   the proposed merger of Bank of America and 
          3   FleetBoston.  Further consolidation in the banking 
          4   industry is detrimental to the interests of local 
          5   communities, citizens and taxpayers.  Therefore, the 
          6   application of Bank of America to acquire 
          7   FleetBoston should be denied. 
          8            I am Pat Callahan.  I live in Washington, 
          9   D.C., but was born and raised in Boston.  I'm also 
         10   the president and founder of the American 
         11   Association of Small Property Owners, the voice of 
         12   small landlords and real estate investors.  I am a 
         13   community organizer from the property-owning class.  
         14   I have been working with groups in Massachusetts and 
         15   around the country for ten years.  I consider our 
         16   most notable accomplishment getting rid of rent 
         17   control in Massachusetts in 1994. 
         18            Unlike many others in this room, I am not 
         19   here to extort money from the banks.  I am here to 
         20   demand accountability from the banks and from the 
         21   regulators. 
         22            You, the regulators, are supposed to be 
         23   protecting the public from fraud.  Fleet Bank and 
         24   others like them can treat customers and the public 
. 0279
          1   with impunity.  They act like they are accountable 
          2   to no one.  Fleet has no fear of you. 
          3            You have heard extensively about community 
          4   development and other services and programs, like 
          5   education, but you need to look at management to get 
          6   and evaluate the basics of banking. 
          7            FleetBoston is the poster child for bad 
          8   corporate behavior.  The management problems at 
          9   Fleet are so severe that the Federal Reserve should 
         10   delay any merger considerations and immediately 
         11   undertake an investigation to determine why 
         12   FleetBoston is not using due diligence to protect 
         13   customers' monies from fraud. 
         14            While my experience with AASPO would 
         15   provide a wealth of reasons to support our position 
         16   to deny the bank merger, my own personal story 
         17   graphically illustrates what is wrong with the 
         18   present trend toward consolidation. 
         19            I had money taken from my account on a 
         20   forged signature in Boston at Fleet Bank six years 
         21   ago, and despite my considerable effort and 
         22   resources -- I am a lawyer -- I have been unable to 
         23   get my money returned.  Fleet Bank has at every 
         24   juncture treated it as my problem, not theirs. 
. 0280
          1            In 1998 I discovered that Fleet Bank had 
          2   cashed three checks totaling $88,000 with my 
          3   endorsements forged.  Five and a half years later, 
          4   after stonewalling, they now claim that the statute 
          5   of limitations has run, and, "Hey, lady, you're out 
          6   of luck." 
          7            Fleet doesn't deny that my signature was 
          8   forged.  You can see for yourself, in the materials 
          9   I provided, how different the signatures are.  Fleet 
         10   cashed a $50,000 check, apparently without requiring 
         11   identification.  Fleet will not accept 
         12   responsibility and reimburse me for my loss.  Fleet 
         13   instead engaged in a cover-up with such consistency 
         14   that I suspect that this MO has been applied to many 
         15   others. 
         16            First Fleet said that I was not an owner, 
         17   that I was a mere convenience, but I disproved that.  
         18   They then hid behind the UCC, claiming that the law 
         19   creates a legal presumption that all signatures on 
         20   negotiable instruments are valid, and that if they 
         21   thought it was genuine, it was genuine.  Well, 
         22   that's pretty twisted logic.  Finally, Fleet 
         23   produced a phony affidavit that had nothing to do 
         24   with the checks, but my money still has not been 
. 0281
          1   returned. 
          2            Before Fleet disappears and Gifford takes 
          3   his millions, I want my money returned.  The only 
          4   way to hold this arrogance in check is by 
          5   regulation, oversight and penalties, with the money 
          6   from penalties going to the U.S. Treasury, not Bruce 
          7   Marks. 
          8            I have written more than six times to Fleet 
          9   officers and directors, specifically Chad Gifford 
         10   and Gary Spiess, and seven outside directors, 
         11   including the Dean of Faculty at the Harvard 
         12   Business School, but they have all ignored me.  
         13   Having been a lawyer at SEC, I know that corporate 
         14   governance requires directors to exercise 
         15   independent judgment over corporate management.  
         16   Here there is a glaring failure to do so. 
         17            FleetBoston has not protected customers or 
         18   the public from financial fraud, and in fact Fleet 
         19   management has established a pattern of avoiding 
         20   responsibility, even when criminal acts are brought 
         21   to their attention. 
         22            Finally, in determining whether to approve 
         23   a bank merger, the Board considers several factors.  
         24   The fifth factor is managerial resources and 
. 0282
          1   includes consideration of the competence, experience 
          2   and integrity of the banks' officers and directors.  
          3   Clearly and unequivocally, Fleet's officers and 
          4   directors fail on this point. 
          5            Thank you. 
          6            PRESIDING OFFICER SMITH:  Thank you. 
          7            Mr. Wong. 
          8            MR. WONG:  Aloha.  My name is Al Ku'ahi 
          9   Wong.  I am the President of the Boston Hawaiian 
         10   Club here in Boston.  We're a group of about 100- 
         11   plus folks from Hawaii, both folks who have the 
         12   native blood, in addition to those who have lived 
         13   there or like our culture.
         14            Our core mission in our club is to preserve 
         15   and perpetuate native customs and Hawaiian values.  
         16   Notice "perpetuate."  We cannot perpetuate and 
         17   pursue the life, liberty and happiness unless we 
         18   have the common tools to do so, such as mortgages. 
         19            I'll be surprised if those in the audience 
         20   here have not seen an article in the Boston Globe 
         21   today -- I got a call yesterday from the writer -- 
         22   which starts off, "Unless Bank of America provides 
         23   more mortgages to Native Hawaiians, the Boston 
         24   Hawaiian Club in adamant.  It wants the Federal 
. 0283
          1   Reserve Board to deny approval of the bank's merger 
          2   with FleetBoston Financial Corporation." 
          3            Here is why.  Excuse me.  You have copies 
          4   of my full written testimony, and if you care to 
          5   follow it, I'm on Page 1, the second paragraph, 
          6   which starts, "Bank of America's $150 million 
          7   Hawaiian Commitment to FHA-247.  In December of '93, 
          8   based on evidence of illegal discriminations against 
          9   Native Hawaiians and Filipinos, the Hawaii Fair 
         10   Housing Coalition proceeded to formally protest Bank 
         11   of America's application to the Office of Thrift 
         12   Supervision for regulatory approval to merge with 
         13   Liberty Bank. 
         14            "The Coalition then transmitted its 
         15   analysis of Bank of America's lending practices to 
         16   the U.S. Department of Justice.  As a result, the 
         17   DOJ began investigating Bank of America for 
         18   violation of fair lending laws.  Confirmation of 
         19   this investigation was made in a January 4, 1994, 
         20   letter from the FBI's Honolulu office to a key 
         21   member of the Coalition.  
         22            "The protest was deemed substantial, and 
         23   five months later the OTS held a hearing in Hawaii 
         24   on the matter.  In May of 1994, as a result of the 
. 0284
          1   Coalition's actions, the Federal Reserve Board order 
          2   approving Bank of America's acquisition of Liberty 
          3   Bank incorporated the fact that Bank of America 
          4   recently announced a comprehensive program to 
          5   enhance service to the Native Hawaiian and Filipino 
          6   communities.  The program included a four-year 
          7   commitment," four years, "to provide $150 million in 
          8   residential mortgage loans for Native Hawaiians 
          9   seeking housing on Department of Hawaiian Home 
         10   Lands." 
         11            As you can see, I have the appropriate 
         12   citation down there that gives where that 
         13   information is from. 
         14            I am now on the last paragraph on Page 2:  
         15   "The $150 million commitment to FHA-247 loans was to 
         16   be carried out between July of 1994 and June of 
         17   1998.  This was one of the primary commitments made 
         18   by Bank of America to the Federal Reserve Board in 
         19   connection with the Liberty Bank application, and 
         20   pursuant to its regulations the Board made the 
         21   commitment a written condition of its approval." 
         22            Since then $30 million was spent in this 
         23   effort.  Five and a half years late, there are 
         24   monies owed still.  If we as a mortgage owner were 
. 0285
          1   five days late with a lending institution, they 
          2   would say something.  If we're five months late, we 
          3   don't have a home. 
          4            Now I'm on Page 4, the last paragraph:  
          5   "NationsBank and Bank of America Executives arrive 
          6   in Hawaii.  On August 10th, 1999, Cathy Bessant, 
          7   President of NationsBank Community Development 
          8   Group" -- she is currently the chief marketing 
          9   officer for BOA -- "Doug Woodruff, as well as 
         10   another NationsBank executive and an executive for 
         11   BOA, arrived in Hawaii for meetings regarding BOA's 
         12   commitments to the Hawaiian people.  On August 11, 
         13   1998" -- I want to backtrack.  August 8, 1998, was 
         14   the 100th anniversary of the legal annexation of the 
         15   Kingdom of Hawaii, a sovereign nation, to the United 
         16   States, so on August 11th there were thousands of 
         17   people in Hawaii recognizing this occasion.
         18            Anyway, these bankers met with, as I say, 
         19   all these elders and all these folks on the Palace 
         20   of Iolani, Iolani Palace in Honolulu.  At this 
         21   occasion they confirmed that BOA would complete the 
         22   $150 million Hawaiian obligation without delay.  
         23            I can see that I have been given a 
         24   heads-up, so I'm going to see if I can move along 
. 0286
          1   faster.  It's not easy.  I'm not a banker.
          2            PRESIDING OFFICER SMITH:  Why don't you 
          3   just decide what last point you want to make. 
          4            MR. WONG:  Okay.  I'll close with saying 
          5   that we urge the Federal Reserve Bank not to approve 
          6   the application of this merger until this commitment 
          7   has been satisfied.  They have made no notions of 
          8   their intent to do so. 
          9            I appreciate this opportunity. 
         10            PRESIDING OFFICER SMITH:  Thank you very 
         11   much. 
         12            MR. COLEMAN:  How much time do I have?  Is 
         13   it three minutes?
         14            PRESIDING OFFICER SMITH:  You have four 
         15   minutes.
         16            MR. COLEMAN:  I'll read a little more 
         17   slowly, then. 
         18            My name is Joseph Coleman, President of 
         19   RiteCheck Financial Services Centers in New York, 
         20   and director of FiSCA, Financial Service Centers of 
         21   America, a national trade association representing 
         22   over 5,000 check cashers in local communities across 
         23   the country. 
         24            I come before you today as a mythological 
. 0287
          1   beast.  According to myths told around the campfires 
          2   of some banks and federal offices, the so-called 
          3   check-casher beast preys on low-income Americans, 
          4   charges them high fees, deprives them of bank 
          5   accounts, and launders money to boot. 
          6            One glance at the real life lived in low- 
          7   income areas, as opposed to this invented 
          8   mythological realm, and this beast undergoes a 
          9   metamorphosis into the local hard-working 
         10   businessmen and women who provide an absolutely 
         11   essential bottom rung on the ladder out of poverty. 
         12            Check cashers provide transaction-based, 
         13   low-cost financial services.  Check cashers provide 
         14   three critical low-income necessities that banks, 
         15   with their relationship-based business model, cannot 
         16   provide.  These necessities are liquidity, access 
         17   and service.  I would love to elaborate on those 
         18   three more, but I'll go on. 
         19            Check cashers provide these necessities at 
         20   lower costs than banks can.  In short, ours is the 
         21   model that succeeds at providing financial oxygen to 
         22   low-income Americans and minorities. 
         23            Another myth is that check cashers are high 
         24   risk for money laundering.  This is a particularly 
. 0288
          1   pernicious myth that some federal examiners use to 
          2   scare bankers away from check cashers. 
          3            Check cashers are less prone to money 
          4   laundering than banks.  Check cashers are 
          5   structurally encumbered from money laundering.  
          6   Launderers want to get money off the street and into 
          7   the banking system.  The check casher earns his 
          8   living by taking money out of the banking system and 
          9   putting it onto the street. 
         10            Our association was in the vanguard of 
         11   developing comprehensive training programs for our 
         12   member companies to comply with the Bank Secrecy Act 
         13   and the U.S. Patriot Act.  And if that is not enough 
         14   to convince, James Sloan, previous director of 
         15   Treasury's Financial Crimes Enforcement Network, 
         16   stated that, quote, check cashers do not represent a 
         17   heightened risk for money laundering, unquote. 
         18            So what does all of this have to do with my 
         19   industry's opposition to this acquisition?  Echoing 
         20   an unproven assertion by the OCC that check cashers 
         21   are at high risk for money laundering, both these 
         22   institutions have summarily closed all of their 
         23   check casher accounts. 
         24            Check cashers cannot operate without a bank 
. 0289
          1   to provide cash and clear checks.  When two banks of 
          2   such extensive geographical reach take such a 
          3   draconian position regarding an entire industry, it 
          4   puts upward pressure on the fees that check cashers 
          5   must charge and threatens the very existence of 
          6   these companies in the areas that most need them. 
          7            And make no mistake, many people use our 
          8   services because what banks offer is useless to 
          9   them.  Driving out check cashers does not somehow 
         10   magically lead to people having bank accounts.  It 
         11   just pushes the bottom rung up out of poverty even 
         12   more out of their reach. 
         13            It is FiSCA's view that the Federal Reserve 
         14   Bank should require, as a condition to approving the 
         15   acquisition, that Bank of America make commercial 
         16   banking facilities available to check cashers and 
         17   prohibit the bank from enforcing its discriminatory 
         18   blanket withholding of services from the entire 
         19   industry. 
         20            If we can improve the quality of 
         21   partnerships between check cashers and banks, we 
         22   will see the beauty in the beast. 
         23            Thank you for this opportunity. 
         24            PRESIDING OFFICER SMITH:  Thank you.
. 0290
          1            Ms. Maker. 
          2            MS. MAKER:  Good afternoon.  My name is 
          3   Ruhi Maker, and I'm here testifying under my own hat 
          4   today, as it were.  And I am here to testify against 
          5   the approval of this merger.  I co-convene the 
          6   Greater Rochester Community Reinvestment Coalition 
          7   in Rochester, New York. 
          8            We are requesting that the Federal Reserve 
          9   condition this merger on Bank of America making 
         10   Upstate New York specific commitments on how it will 
         11   address community credit needs in Upstate New York. 
         12            It is Bank of America's position that they 
         13   will work out the specifics of their $750 billion 
         14   pledge post-merger.  That, in my opinion, is not 
         15   good enough.  The last Fleet merger with BankBoston, 
         16   in which I testified here as well, Fleet announced a 
         17   five-year commitment that broke out the pledge by 
         18   small business loans, affordable mortgage lending, 
         19   consumer lending, et cetera. 
         20            In 1999, right in this room, the details of 
         21   that pledge were shared with this community.  
         22   Ironically, we felt that was not detailed enough at 
         23   the time.  However, we hope we can prevail upon 
         24   Fleet to advise Bank of America what made sense in 
. 0291
          1   1999, with two Mass. banks merging, makes even more 
          2   sense with the creation of a 29-state bank. 
          3            Fleet also provided breakouts in its 
          4   progress reports so that a community group can 
          5   ascertain by state and type of commitment, i.e., 
          6   affordable housing, community development, et 
          7   cetera, where Fleet is in making progress on that 
          8   five-year commitment. 
          9            We have gone to the Website of Bank of 
         10   America and tried to reconstruct where this $165 
         11   billion has been spent, and we haven't been able to 
         12   do that.  I was told this morning by one of Bank of 
         13   America's officials that such detail does in fact 
         14   exist, and I would urge the Fed, as this merger goes 
         15   ahead, that everyone should know publicly where this 
         16   trillion dollar bank is spending this money by 
         17   assessment area and by type of loan. 
         18            We are pleased that Bank of America has 
         19   come to Rochester, New York, and has met with me and 
         20   with coalition members, and they have agreed to a 
         21   business plan post-merger.  However, unfortunately, 
         22   it still hurts me to say that it's not enough to 
         23   say, "Trust us.  This is a good merger for 
         24   Rochester," particularly in light of the concerns 
. 0292
          1   that the colleagues in North Carolina and California 
          2   have raised post the NationsBank merger. 
          3            I'm particularly disturbed about the true 
          4   value of this commitment when I read a quote in the 
          5   Boston Globe that says, and this was a quote that 
          6   was referred to in this morning's testimony, "I feel 
          7   pretty certain that they're not putting $750 billion 
          8   into high-risk lending, which is what minority 
          9   lending tends to be.  The term 'community economic 
         10   development' in my view can mean just about 
         11   anything." 
         12            This quote is not a community activist who 
         13   is disaffected; this is in fact Richard Bove, who is 
         14   a managing director at Hoefer & Arnett, and this is 
         15   referred to in the Boston Globe story. 
         16            The reality is today -- and I represent a 
         17   lot of minority lending clients; I think I have over 
         18   100 clients, and I stopped counting after the first 
         19   100, most of whom are members of the protected 
         20   classes, and most of whom are senior African- 
         21   American women -- racism still results in disparate 
         22   impact in access to credit in minority communities 
         23   in this country, and in particular to African- 
         24   Americans, and we must not forget that. 
. 0293
          1            This lack of lending hurts, and hurts 
          2   deeply, as we have heard from other groups, and I 
          3   think that needs to be addressed. 
          4            I would like to end on a positive note.  
          5   While we have been working on increasing access to 
          6   lending for over ten years, we found that there were 
          7   minority census tracts in Rochester that, despite 
          8   all our goals that were met for the city and for 
          9   blacks and Hispanics and low-income households, 
         10   there were still census tracts with no prime loans, 
         11   all they had were sub-prime loans. 
         12            In a previous merger with another Rochester 
         13   bank, we specified 34 census tracts, and we said, 
         14   "We know you have met all your other goals in the 
         15   past, but in this agreement we want loans in these 
         16   34 census tracts."  It was a three-year term.  They 
         17   met their goal in one year. 
         18            We met with them recently and said, "That's 
         19   amazing.  This is fantastic.  How did you do it?"  
         20   They said, "Well, we used our branch network, and we 
         21   did a radius around the branches, and we made the 
         22   loans, and it made good business sense." 
         23            So in light of this, I urge the Fed to 
         24   condition this merger on specifics, and perhaps it 
. 0294
          1   is naive of me to believe that, in light of the 
          2   testimony presented today, the Fed will do the right 
          3   thing.  Thank you. 
          4            MR. MARSICO:  My name is Richard Marsico, 
          5   and I now I am presenting my own testimony. 
          6            I am a professor at New York Law School and 
          7   director of the school's Justice Action Center.  I'm 
          8   also a member of the National Community Reinvestment 
          9   Coalition. 
         10            Thank you for this opportunity to testify 
         11   here today on the proposed merger of Bank of America 
         12   and Fleet, the largest bank merger up to this point 
         13   in United States history.  If approved, the merger 
         14   would create one of the largest banks in the United 
         15   States, with branches and customers throughout the 
         16   country. 
         17            One cannot underestimate the significance 
         18   of the Federal Reserve's decision on this 
         19   application.  Your decision will have an impact on 
         20   tens of thousands of low-and-moderate-income and 
         21   minority persons in communities across the country 
         22   who seek banking services and loans for homes, small 
         23   businesses and small farms.  They face a reduction 
         24   of banking services and loans if this merger is 
. 0295
          1   approved without conditions and, as frequently 
          2   happens when bank services are reduced, an increase 
          3   in predatory lending. 
          4            Your decision will have an impact on 
          5   sub-prime lending practices and supporting 
          6   activities, not only for the banks before you, but 
          7   for all banks involved in the sub-prime market. 
          8            Finally, your decision will tell banks in 
          9   the community whether banks can get away with vague 
         10   and unilateral commitments to lend, or whether the 
         11   Federal Reserve will seek meaningful, detailed 
         12   promises, negotiated with and based on input from 
         13   community organizations. 
         14            For these reasons I'm testifying in 
         15   opposition to the merger unless the Federal Reserve 
         16   conditions it on submission of a plan by the Bank of 
         17   America that includes at least the following three 
         18   components: 
         19            First, a plan to increase lending in its or 
         20   Fleet's areas where their lending lags behind 
         21   industry averages. 
         22            Second, a promise to at least maintain 
         23   lending and service levels in areas where Fleet's 
         24   and Bank of America's lending equals or is better 
. 0296
          1   than industry averages. 
          2            And finally, a promise by the Bank of 
          3   America to follow the best practices of Fannie Mae 
          4   and Freddie Mac regarding sub-prime lending, which 
          5   would be an agreement not to purchase sub-prime 
          6   loans with single premium credit insurance, loans 
          7   with points and fees exceeding 5 percent of the 
          8   loan, loans that have mandatory arbitration clauses, 
          9   and loans that have prepayment penalties after three 
         10   years. 
         11            There is not sufficient time to review in 
         12   detail all the relevant data, but research that has 
         13   been done by the National Community Reinvestment 
         14   Coalition and its member organizations, much of 
         15   which has already been submitted to the Federal 
         16   Reserve in individual comment letters including my 
         17   own, show the following salient facts about Fleet 
         18   and Bank of America's lending: 
         19            First, in many cities and rural areas 
         20   around the country, Bank of America or Fleet's home 
         21   mortgage and small business lending to low-and- 
         22   moderate-income and minority persons and communities 
         23   lags behind the industry's averages.  These areas 
         24   include New York City, Los Angeles, San Diego, 
. 0297
          1   Chicago and Baltimore. 
          2            In 2002 in New York City, for example, Bank 
          3   of America was 48 percent below industry averages in 
          4   home mortgage lending to African-Americans and 
          5   Latinos, 35 percent below in loans to low-and- 
          6   moderate-income persons, 28 percent below in lending 
          7   to low-and-moderate-income census tracts, and 38 
          8   percent below in lending to predominantly minority 
          9   census tracts. 
         10            Second, following Bank of America's merger 
         11   with NationsBank in 1998, the lending of the 
         12   combined bank decreased in many states, including 
         13   California, Illinois, Indiana, Massachusetts, 
         14   Nevada, and North Carolina, at rates faster than 
         15   other banks, or the lending increased more slowly 
         16   than other banks.  Its percentages of branches in 
         17   low-and-moderate-income neighborhoods declined, 
         18   compared to an increase for all lenders. 
         19            Bank of America's commitment to make 
         20   $750 billion in community economic development loans 
         21   is not sufficient to address these concerns with its 
         22   record.  The commitment does not contain details 
         23   such as where it will make the loans and what they 
         24   will be for. 
. 0298
          1            A Wall Street analyst quoted in the Wall 
          2   Street Journal agrees.  He said, "The term 
          3   'community economic development' in my view can mean 
          4   just about anything.  This is such a big, broad, 
          5   meaningless statement that we don't have to worry 
          6   about it," while residents of low-and-moderate- 
          7   income and predominantly minority neighborhoods do 
          8   have to worry about it. 
          9            I therefore ask the Federal Reserve not to 
         10   grant this application unless the Bank of America 
         11   makes a meaningful and detailed commitment to meet 
         12   the credit needs of the communities it serves.
         13            Thank you.
         14            PRESIDING OFFICER SMITH:  Thank you very 
         15   much for your comments this afternoon. 
         16            We are back to three minutes, please.   
         17   We'll start with Ms. Richter.
         18            MS. RICHTER:  Thank you.  Madam Chairman, I 
         19   ask your indulgence and that of the panelists 
         20   because I need to make an airplane, so I'll try to 
         21   do the three minutes. 
         22            My name is Lisa Richter, and I thank you 
         23   for the opportunity to testify on behalf of National 
         24   Community Investment Fund in favor of the Bank of 
. 0299
          1   America/Fleet merger. 
          2            I will describe Bank of America's support 
          3   for NCIF and the support for improved delivery of 
          4   banking services in low-to-moderate-income 
          5   communities that it represents. 
          6            In so doing, I would like to suggest that 
          7   Bank of America approaches its community development 
          8   investing, lending and partnerships with an approach 
          9   that exceeds the letter of the law, seeks innovative 
         10   and substantive solutions for underserved 
         11   communities, includes significant risk taking, and 
         12   works closely with community partners and other 
         13   financial institutions to manage that risk. 
         14            Since I'm submitting comments, very 
         15   briefly, NCIF is a certified CDFI, it's a nonprofit 
         16   trust, and we invest in insured depositories, that 
         17   is, banks and credit unions, operating in distressed 
         18   communities with a primary mission of community 
         19   development. 
         20            We were launched in 1995 through then 
         21   NationsBank, which funded our organizational costs 
         22   and supplied additional capital in the form of an 
         23   extremely flexible $15 million loan for ten years at 
         24   1 percent. 
. 0300
          1            The vision at that time and still today was 
          2   that NCIF would increase the number and capacity of 
          3   domestic depository institutions that are both 
          4   effective agents of local community development in 
          5   distressed markets and sound financial institutions. 
          6            With Bank of America's backing, combined 
          7   with its commitment to creative and innovative 
          8   product development and its guidance, delivered by 
          9   numerous senior executives over the years who have 
         10   interacted with NCIF as trustees or loan officers, 
         11   we have been able to build a fully national 
         12   investment fund with $23 million in assets and 
         13   investments in 28 development banking institutions  
         14   that provide credit and financial services in  
         15   distressed urban, rural and reservation communities. 
         16            I might note that while this by no means 
         17   begins to meet the need, one example would be 
         18   Hawaiian Community Assets, which is an entity 
         19   designed to promote and enhance home ownership by 
         20   Native Hawaiians.  NCIF has an investment, and I 
         21   believe Bank of America also has a direct investment 
         22   with that entity. 
         23            Their extremely flexible financing set a 
         24   precedent for us to raise additional capital from 
. 0301
          1   institutions like MBNA and Washington Mutual.  And 
          2   when those later investors came in, although BOA's 
          3   investment was much larger, they conceded any 
          4   priority in terms of how the funding would be 
          5   directed, and they set a standard for sort of a 
          6   strategic use of proceeds where investments were 
          7   made nationwide where they were most acutely needed, 
          8   such as on the Hawaiian homeland, and where they 
          9   could be most effectively deployed. 
         10            The vast majority of NCIF's investment are 
         11   in banks or credit unions that serve minority, low- 
         12   income urban or rural communities, with the balance 
         13   in rural underserved communities that may not have 
         14   high minority populations.  70 percent of the 
         15   institutions in our current portfolio are in urban 
         16   and 40 percent in rural and reservation markets.  
         17   Some are in both.  82 percent are minority focused, 
         18   and 67 percent of the dollars are in minority-owned 
         19   institutions. 
         20            Since we began tracking the activities of 
         21   these portfolio institutions in 1999, they have 
         22   generated almost $1 billion in development loans, 
         23   over 11,000 loans tracked, geocoded to distressed 
         24   communities and low-income borrowers. 
. 0302
          1            Since I'm getting the signal to end, I 
          2   would like to say that the structure of this 
          3   financing allowed us to not only make these 
          4   investments, make them on terms that were of the 
          5   highest value to the institutions, namely tier one 
          6   capital and development banks in many cases, but 
          7   also supply working capital for us to provide 
          8   technical assistance to the management of these 
          9   organizations, so that they could raise capital from 
         10   other sources to enhance their development impact 
         11   through product development. 
         12            This was acknowledged or recognized by the 
         13   Honorable Donald E. Powell at the FDIC when he 
         14   created a partnership with us in 2003 to see how we 
         15   could leverage the workplace to get to low-income 
         16   workers and get them into the mainstream, and 
         17   finally to help the institutions become more 
         18   efficient. 
         19            With that I thank you very much, and I look 
         20   forward to the increase in impact that can be 
         21   achieved when you bring together the resources and 
         22   commitment of the institutions that we're talking 
         23   about today. 
         24            PRESIDING OFFICER SMITH:  Thank you very 
. 0303
          1   much. 
          2            Mr. Egan. 
          3            MR. EGAN:  Good afternoon, Madam Chairman.  
          4   I am Conrad Egan.  I'm the President and Chief 
          5   Executive Officer of the National Housing 
          6   Conference.  And since I have already submitted a 
          7   formal statement for the record, I would 
          8   respectfully request that that be placed in the 
          9   record and that I just deliver some briefer remarks 
         10   today. 
         11            First of all, let me describe the National 
         12   Housing Conference.  It is the nation's oldest and 
         13   most broad-based housing advocacy organization, 
         14   having been in this business, so to speak, for 70 
         15   years.  And I want to indicate very clearly up front 
         16   that we are fully in support of the application for 
         17   acquisition before you these days. 
         18            I also want to make it very clear, and I 
         19   support the comments by one of the earlier 
         20   presenters, Ms. Wilkerson, that sunshine is good.  
         21   Both Bank of America and Fleet are significant 
         22   contributors to the National Housing Conference.  We 
         23   are very proud of those contributions, and I assume 
         24   the institutions are proud to make them. 
. 0304
          1            With their assistance and the assistance of 
          2   many of our other members, significant members, 
          3   including some of whom have appeared before you 
          4   today, we have conducted some really groundbreaking 
          5   research, particularly about the challenges that 
          6   working families face in the area of housing 
          7   opportunities. 
          8            In fact, in one of our recent reports, 
          9   which just received extensive national publicity, we 
         10   point out that over the four-year period, just the 
         11   four-year period from 1997 to 2001, the number of 
         12   working families in this nation paying more than 
         13   half of their income for housing increased by 60 
         14   percent, just during that four-year period.  And my 
         15   assumption is -- that was between '97 and 2001.  My 
         16   assumption is that that has increased even more 
         17   significantly now. 
         18            Also, through support from Bank of America, 
         19   Fleet, and our other members, amongst our other 
         20   activities have been our regional senior executive 
         21   round tables which we have held in communities in 
         22   this region, such as Providence, Rhode Island; 
         23   Portland, Maine, just up the street; and also in 
         24   Charlotte, North Carolina. 
. 0305
          1            In fact, Mayor McCrory, who was in front of 
          2   you earlier today, was part of one of those round 
          3   tables where we bring together business leaders, 
          4   other private sector leaders, academic leaders, 
          5   public officials, and housing and community leaders, 
          6   to talk about strategies for better community 
          7   development and increasing housing affordability in 
          8   those areas. 
          9            I would like to bring two matters to your 
         10   attention which I think lend credence to the 
         11   approval of this application.  First of all, Bank of 
         12   America particularly has taken the lead on 
         13   supporting very creative financing. 
         14            Again, Mayor McCrory referred to this 
         15   earlier, but I don't think he was strong enough in 
         16   saying how much Bank of America has done on a 
         17   nationwide basis to support the revitalization and 
         18   the recapitalization of the public housing portfolio 
         19   across this nation.  In fact, I would like to say 
         20   that one of their senior officers participated along 
         21   with the other staff of the housing commission in 
         22   supporting that particular proposal. 
         23            Also, as Congressman Frank indicated 
         24   earlier today, the Bank of America has been very 
. 0306
          1   active in supporting and using the affordable 
          2   housing program of the Federal Home Loan Bank 
          3   system, so we are very pleased to see that the bank 
          4   has committed itself to keeping its charter in the 
          5   Northeast so that it can continue to participate in 
          6   that system. 
          7            Let me close by thanking you for being here 
          8   today.  I have been here all day, not just in 
          9   appearing before you and offering these humble 
         10   comments, but also being able to learn the kinds of 
         11   things I have learned today.  Let me assure you I 
         12   will go back to Washington with a greater resolve to 
         13   deal with many of the problems and challenges that 
         14   have been identified today. 
         15            Thank you.
         16            PRESIDING OFFICER SMITH:  Thank you very 
         17   much. 
         18            MR. FLORES:  Good afternoon, buenas tardes.  
         19   My name is Ramon Flores, and I along with my wife 
         20   own La Plaza Del Mercado, a supermarket located 
         21   inside a popular multistore building located in Park 
         22   Street, Hartford, Connecticut.  I am here today to 
         23   voice a favorable opinion on the merger of Fleet 
         24   Bank and Bank of America. 
. 0307
          1            I am testimony of the American dream, a 
          2   dream that started about ten years ago, in which I 
          3   wanted to establish my own business in Hartford, 
          4   Connecticut.  Today I am here to give a resounding 
          5   thank-you to Fleet for allowing me to live my dream.  
          6   It is with this affection that I have to stand up 
          7   and state publicly that if there were more banks 
          8   such as Fleet, many of our inner-city economic 
          9   problems could be resolved. 
         10            It was through one of Fleet's very 
         11   successful partnership community loan funds that I 
         12   was able to obtain my first loan to purchase 
         13   equipment and expand my business.  Without the 
         14   Fleet/HEDCO/SAMA Loan Fund, I would not be here. 
         15            This fund, which provides loans at very 
         16   favorable interest rates for businesses that 
         17   otherwise do not qualify for traditional bank 
         18   lending, provided me and my wife the capital to 
         19   continue to run my business during a period of time 
         20   when many businesses were failing.  The 
         21   Fleet/HEDCO/SAMA Loan Fund allowed me to establish 
         22   and improve my business so that six months ago I 
         23   applied to another loan, and I was approved by a 
         24   conventional line of credit from, guess, Fleet Bank. 
. 0308
          1            Speaking to my Hispanic business friends, 
          2   they all agree with me that it is Fleet that is 
          3   visible and active in the area of not only lending 
          4   money, but also educating them through a program 
          5   especially geared for the Hispanic business owner, a 
          6   program such as SAMA's Passaporte Community Training 
          7   Program, which my wife and I took two years ago, and 
          8   sponsored again by Fleet Bank. 
          9            I only expect better things to happen in my 
         10   street from the merger of Fleet Bank and Bank of 
         11   America.  Park Street needs more economic 
         12   development, and it will not likely come from 
         13   another area bank.  This merger could only advance 
         14   the plans we merchants have, envisioning a strong 
         15   and lasting Park Street, one in which the corner of 
         16   Park Street and Main Street will finally be 
         17   developed. 
         18            Fleet Bank's financial hand is over Park 
         19   Street not in the thousands of dollars, but in the 
         20   millions of dollars.  I encourage the people here 
         21   today who have to decide on the merger to make a 
         22   walk through Park Street, and you will see what I am 
         23   talking about.  Block upon block, Fleet Bank has 
         24   committed its financial resource. 
. 0309
          1            Fleet Bank sees the value and strength of 
          2   our Hispanic community.  Now they know that it makes 
          3   good business sense to lend in our community.  
          4   Therefore, I do not expect that commitment to 
          5   diminish with the merger, but to grow as strongly 
          6   with benefits to the Hispanic community, not just in 
          7   Hartford, but through all the cities that will be 
          8   served by the new bank. 
          9            Thank you very much. 
         10            PRESIDING OFFICER SMITH:  Thank you very 
         11   much for your comments. 
         12            MR. GAGLIARDI:  Good afternoon.  My name is 
         13   Peter Gagliardi, and I currently serve as the 
         14   Executive Director of HAP, Inc., a regional housing 
         15   partnership that serves the 43 cities and towns of 
         16   Hampden and Hampshire Counties in Massachusetts with 
         17   a wide variety of affordable housing programs. 
         18            I speak today in support of the proposed 
         19   merger, subject to a number of expectations that are 
         20   based upon a long and very fruitful relationship 
         21   with Fleet Bank. 
         22            Our relationship with Fleet spans virtually 
         23   the entire period since they entered the Western 
         24   Massachusetts market.  Fleet, for example, was 
. 0310
          1   instrumental in the creation of our first-time home 
          2   buyer program, through which over 3,000 people have 
          3   graduated and more than 1500 have been able to 
          4   purchase their first home. 
          5            Nearly 500 of HAP's first-time home buyers 
          6   have accessed the Soft Second Loan Program through 
          7   Fleet, and I was delighted today to hear that Bank 
          8   of America has committed to 3,000 soft second loans 
          9   over the next ten years. 
         10            There are many other relationship items 
         11   that I have cited in my written testimony, but in 
         12   the interests of time, I'll ask you to please look 
         13   at those, but move on. 
         14            Fleet's personal interest in the success 
         15   and growth of our business, our business as a 
         16   nonprofit affordable housing corporation, has been a 
         17   critical asset.  Fleet's Western Massachusetts staff 
         18   person in their community development area has been 
         19   a major part of that resource, helping us to grow by 
         20   establishing a strong banking relationship and by 
         21   providing guidance and support to us as an 
         22   organization. 
         23            The presence of an effective partner 
         24   knowledgeable in the area of community development 
. 0311
          1   has allowed the relationship to grow and our 
          2   business to flourish, to the benefit of low-and- 
          3   moderate-income people in our region. 
          4            Our expectation going forward is that Bank 
          5   of America will continue to provide the resources 
          6   and services that have been instrumental to our 
          7   efforts in Western Massachusetts. 
          8            That brings me to, I think, my most 
          9   important point.  As we like to point out to our 
         10   politicians here in Massachusetts, there is a 
         11   Massachusetts beyond Route 495.  There is another 
         12   Massachusetts that's not the same economy, the same 
         13   market as the one in this area where we're sitting 
         14   today. 
         15            It's a very separate and distinct market, 
         16   one that's not seeing the economic boom that the 
         17   eastern part of the state experienced in the 1990.  
         18   Our area is characterized by an economy that has 
         19   grown only slowly after a prolonged recession.  Our 
         20   urban areas continue to suffer the ravages of 
         21   abandoned housing, vacant lots, boarded-up buildings 
         22   and other conditions of urban blight. 
         23            In January 2000, we took a survey just of 
         24   the two principal cities, Springfield and Holyoke, 
. 0312
          1   and there were nearly 2,000 vacant and abandoned 
          2   dwelling units in those two cities alone in January 
          3   2000. 
          4            We have issues that remain, and I've given 
          5   you, for your benefit, some photographs with my 
          6   testimony of some of the neighborhoods, both in 2000 
          7   when we did the study and today, in one little 
          8   neighborhood of 5,000 people that has 130 vacant 
          9   abandoned parcels, some with houses still on them, 
         10   some not. 
         11            We need the new Bank of America's support 
         12   to continue the revitalization of neighborhoods like 
         13   this and to bring decent jobs, good-paying jobs, and 
         14   opportunities to the low-and-moderate-income people 
         15   of Western Massachusetts. 
         16            Thank you.
         17            PRESIDING OFFICER SMITH:  Thank you very 
         18   much.
         19            Mr. Sierra.
         20            MR. SIERRA:  Good afternoon.  My name is 
         21   Angel Sierra, and I am a business owner in Hartford, 
         22   Connecticut. 
         23            First I would like to thank the Federal 
         24   Reserve for allowing me the time to come before this 
. 0313
          1   body to speak about my support for the merger of 
          2   Fleet Bank and Bank of America. 
          3            I am the owner of Hispana Vision, a small 
          4   eye-care business located in the heart of Hartford's 
          5   Hispanic community, and also the president of the 
          6   Spanish-American Merchant Association, better known 
          7   as SAMA. 
          8            In 1993, I risked leaving the private 
          9   sector to establish my own business, Hispana Vision, 
         10   and it was during this period of time that I 
         11   understood what it really is to have the backing of 
         12   a Fleet Bank in the community.  Fleet Bank, since my 
         13   inception, has been there to support my growth.  
         14   They have been -- they have supported my business 
         15   with three loans, each allowing me to grow my 
         16   business. 
         17            One of these loans was for me to purchase a 
         18   vacant property in an area of Hartford that needed 
         19   development.  This loan, which was used to renovate, 
         20   build out and relocate my business, could not have 
         21   been possible without Fleet. 
         22            In addition, it was through another loan 
         23   fund sponsored by Fleet and managed by HEDCO and 
         24   SAMA, known as the Fleet/HEDCO/SAMA Loan Fund, that 
. 0314
          1   my building got completed.  This loan fund served as 
          2   a subordinated equity to allow the rest of the 
          3   lenders to finance this risky project. 
          4            Not only in this instance was Fleet there 
          5   for me, but only just last year I was given the 
          6   opportunity to purchase an adjoining empty lot in 
          7   the rear of my building.  And Fleet gave me not only 
          8   the money to purchase the lot, but also restructured 
          9   my loan to help me lower my monthly payments, very 
         10   important. 
         11            I am also a proud graduate of a computer 
         12   training program through SAMA geared to Hispanic 
         13   merchants that was funded by Fleet Bank, which 
         14   provided valuable training to merchants such as 
         15   myself who understood very little about computers 
         16   used in today's business.  Without the training, I 
         17   would not have been able to expand my business, 
         18   without understanding the technology available 
         19   today. 
         20            Today my new business employs seven people 
         21   and is associated with five optometrists and several 
         22   ophthalmologists.  Hispana Vision is the first 
         23   Hispanic-owned full-service optical business in the 
         24   Greater Hartford area. 
. 0315
          1            I plan in the near future to expand my 
          2   business into other towns, and I know that Fleet 
          3   Bank will be there to assist me.  I continue to look 
          4   forward for new challenges as my business grows and 
          5   believe that the merged banks will be there for the 
          6   growth. 
          7            Bank of America has a very strong 
          8   commitment to the Hispanic minority community.  
          9   There is still much to be done in our Hispanic 
         10   community, especially in the area of Park Street, 
         11   and we need strong institutions that have performed 
         12   well in the past and will be there for us in the 
         13   future. 
         14            Thank you. 
         15            PRESIDING OFFICER SMITH:  Thank you. 
         16            Mr. Rothman.
         17            MR. ROTHMAN:  Good afternoon.  I'm George 
         18   Rothman, President and CEO of MANNA.  We're a 
         19   21-year-old faith-based and community-based 
         20   nonprofit affordable housing developer and producer 
         21   in Washington, D.C. 
         22            I am not here because Bank of America 
         23   provides my organization with large grants, because 
         24   it doesn't.  We do get some small ones.  I'm here 
. 0316
          1   because I support this merger.  In my opinion, Bank 
          2   of America represents community lending and 
          3   participation at a very high level.  They are 
          4   certainly the best at it in D.C.  
          5            Not long ago I opposed a proposed merger 
          6   between a large North Carolina bank and a 
          7   mid-Atlantic one.  I did this because the acquiring 
          8   bank had a very lackluster record of community 
          9   lending; in the current slang, they talked the talk 
         10   but didn't walk the walk.  I opposed it even though 
         11   my organization regularly received grants and/or 
         12   sponsorships from the acquiring bank. 
         13            What I like and respect about Bank of 
         14   America is that community involvement and social 
         15   responsibility are not simply a means of meeting CRA 
         16   requirements, but are generally perceived as 
         17   admirable goals and good business. 
         18            Even though we are small by developer 
         19   standards, my organization is fortunate enough to 
         20   have established a strong track record in Washington 
         21   over the years, such that we're in a position that 
         22   we can select the banks with which we want to work.  
         23   Getting loans for our projects are the least of our 
         24   problems.  Many banks want our business. 
. 0317
          1            But we have chosen to work with only three 
          2   of them on a regular basis, and B of A is one of 
          3   them.  This is because of a multiplicity of factors, 
          4   which include a thorough understanding of our 
          5   business, flexibility in lending, and most of all a 
          6   caring and concern about our mission. 
          7            However, I do not for one minute think the 
          8   concern is philanthropic, nor does the bank act that 
          9   way.  What makes them so good?  In addition to the 
         10   aforementioned reasons, let me give a specific 
         11   example. 
         12            Not a lot of lenders really care about 
         13   getting community input and then respecting and 
         14   implementing it on projects in which they have huge 
         15   equity investments, which B of A has done in 
         16   Washington with residents of the Hillsdale 
         17   Neighborhood. 
         18            In one of those projects, B of A sought 
         19   community input through a charrette process, and 
         20   followed through on major recommendations made by 
         21   neighborhood residents, even though several of the 
         22   recommendations reduced the profit potential for the 
         23   project. 
         24            In that project we are a partner, and it's 
. 0318
          1   a project to develop and renovate a portion of an 
          2   old garden apartment complex into condominiums.  If 
          3   other banks were in a similar situation, they would 
          4   probably go out and hire a well-known architect and 
          5   general contractor to design and build the project. 
          6            Not Bank of America, and I'm talking about 
          7   a $12 million project.  They asked us to do the 
          8   architectural design and act as the construction 
          9   manager, general contractor, and real estate agent.  
         10   I don't know of any other bank which would do that, 
         11   because none has. 
         12            Recently we formed our own mortgage 
         13   company, the first and only nonprofit mortgage 
         14   company in D.C.  To serve a very-low-and-low-income 
         15   minority clientele better, we decided to establish 
         16   wholesale business relationship with three lenders.  
         17   We selected B of O as one of them because of the 
         18   variety of affordable mortgage products they 
         19   offered, their understanding of our needs, and their 
         20   willingness to work with us.  For them we were less 
         21   than a drop in the bucket. 
         22            To make this arrangement work 
         23   administratively, B of A had to jump through many 
         24   more hoops than MANNA did, and MANNA had no track 
. 0319
          1   record of mortgage lending.  Now, that's unusual. 
          2            In D.C., all of the former large hometown 
          3   banks, except one, have been purchased by out-of- 
          4   town banks.  The one exception is the one I'm least 
          5   likely to do business with. 
          6            Based on our long-time experience dealing 
          7   with Bank of America and its predecessor 
          8   NationsBank, and because of its outstanding 
          9   performance in doing business in underserved and 
         10   distressed communities in Washington, D.C., with my 
         11   organization and other nonprofits, I don't think 
         12   there is any better large bank for a community to 
         13   welcome than Bank of America. 
         14            Thank you.
         15            PRESIDING OFFICER SMITH: Thank you.
         16            MS. MICELI-VASQUEZ:  Thank you for the 
         17   honor to speak today in support of the Bank of 
         18   America/FleetBoston merger. 
         19            My name is Elaine Miceli-Vasquez from Fort 
         20   Lauderdale, Florida.  I co-own the pioneer Spanish 
         21   newspaper El Heraldo de Broward and a multicultural 
         22   firm called Latin Power, Incorporated.  And next 
         23   time I visit Boston, I promise to bring some Florida 
         24   sunshine. 
. 0320
          1            I am active on more than 15 nonprofit 
          2   boards in the community.  Presently I serve at the 
          3   Governor's pleasure on a post-secondary education 
          4   planning commission that among other duties creates 
          5   the master plan of education from K through 20 in 
          6   the State of Florida. 
          7            When I heard about this opportunity, I 
          8   simply had to speak openly and honestly about Bank 
          9   of America, as I feel I represent a good profile of 
         10   the Bank of America customer in Fort Lauderdale. 
         11            My sister recently retired from Fleet Bank 
         12   after a merger with Northeast Savings in Schenectady 
         13   and has moved down to Florida, and with her 401(k) 
         14   growing, she told me to say, "I have to come to 
         15   support this merger." 
         16            Ironically, my sister is now working at my 
         17   newspaper three days a week coordinating all of the 
         18   Bank of America sponsored events.  Talk about a 
         19   change there. 
         20            Selecting a bank is very personal.  It's 
         21   like going to a doctor.  You have to be honest, you 
         22   can't tell any lies, your history is on paper, and 
         23   you're always waiting for an answer that you hope is 
         24   good. 
. 0321
          1            Small business owners like me assume we 
          2   aren't important enough for a big bank.  But small 
          3   business is what makes Bank of America the bank it 
          4   is today in Fort Lauderdale.  
          5            In the early 1970s, as a single mother at 
          6   age 26, I had three daughters, ages four and twins 
          7   three months old, so you could count the numbers on 
          8   my age.  It was nearly impossible to find any bank 
          9   that would even talk to me as a single parent. 
         10            In 1989 I was offered the opportunity to 
         11   co-own a newspaper and took the leap, although I had 
         12   two teenagers in high school and one in college.  I 
         13   didn't know how I would begin selling advertising in 
         14   my free Spanish newspaper. 
         15            As the census had just come out in 1990, I 
         16   knew what was ahead of me with the Latin market, but 
         17   major companies wouldn't even talk to me.  It was 
         18   just not on their marketing radar screen, until I 
         19   met Linda Stepenovitch of Barnett Bank in 1991.  We 
         20   were at a luncheon, and both of us participated on a 
         21   newly formed CRA board in the county, and I was 
         22   hoping to encourage Barnett to join me in the 
         23   emerging market and collaborate with the culture. 
         24            That meeting began a journey of my banking 
. 0322
          1   experience and relationship with Barnett and through 
          2   the mergers with NationsBank and now Bank of 
          3   America.  What began as a mere $1,000 partnership of 
          4   advertising in 1991 has grown to more than a 
          5   $75,000-plus relationship with my newspaper for the 
          6   year 2004. 
          7            I am proud to say that Bank of America owns 
          8   the market share of the Hispanic consumer in Fort 
          9   Lauderdale because of their early vision and their 
         10   cultural competency. 
         11            I must admit when the mergers took place, 
         12   like the one being discussed today with Fleet Bank 
         13   Boston, I thought that my small-town banking 
         14   relationship would end.  I assumed that I would 
         15   become a number.  I was concerned that all the 
         16   banking staff that I was accustomed to working with 
         17   would be replaced by the new bank staff, I would 
         18   start over again and find another Linda 
         19   Stepenovitch.
         20            I was wrong.  Everyone is still there 
         21   working with us.  The market president, Jim Cassidy, 
         22   is a phone call away.  I even have his cell phone 
         23   number.  I can't tell you how many times the 
         24   president invited me to participate for input in the 
. 0323
          1   community. 
          2            What started as an early relationship of a 
          3   one-day event in 1989 called Viva Broward has now 
          4   turned into a month-long celebration of Hispanic 
          5   Heritage Month with 50 sponsors in 29 cities and on 
          6   a national level. 
          7            In closing, I would like to say that 
          8   customer service is the key to Bank of America's 
          9   success.  When you walk into a branch, you can 
         10   almost feel the security that the employees have.  
         11   The smiles are genuine, and if someone is happy at 
         12   their job, then it will be passed on to you. 
         13            I fully support the merger and hope that 
         14   your customers are as pleased as I have been with 
         15   Bank of America. 
         16            Thank you.
         17            PRESIDING OFFICER SMITH:   Thank you.
         18            DR. VASQUEZ:  My name is Erwin Vasquez.  I 
         19   am Elaine's husband.  I am a cardiologist in Fort 
         20   Lauderdale, and I am pleased to be here, 
         21   unfortunately with this cold reception that I have 
         22   received. 
         23            As a sole practitioner, I rely on the bank 
         24   to understand both my personal and business needs.  
. 0324
          1   I have taken the time from my practice to travel to 
          2   Boston today to give testimony and support the Bank 
          3   of America and FleetBoston merger. 
          4            Any immigrant comes to a new community with 
          5   language and cultural barriers that present 
          6   challenges to communicate.  These communication 
          7   challenges are increased when we confront them in 
          8   the financial world of banking.  Understanding of 
          9   language of loans, meeting IRS requirements and all 
         10   of the matters pertaining to setting up a business, 
         11   you can be overwhelmed by that proposition. 
         12            To many of us coming to the shores of 
         13   America, this is the first time we encounter such a 
         14   situation and find ourselves discussing our personal 
         15   financial matters with a total stranger.  It simply 
         16   doesn't occur in our culture. 
         17            When I selected a bank in the early 1980s, 
         18   I went to a local branch that was close to the 
         19   house.  I found Ana in Barnett Bank.  Ana speaks 
         20   Spanish.  However, if it came to speaking English 
         21   too, I tried to speak in English. 
         22            Today Ana is still my account 
         23   representative, through mergers with NationsBank and 
         24   more recently with Bank of America.  The continuity 
. 0325
          1   in the banking staff in a neighborhood branch a 
          2   block from my office has given me a sense of comfort 
          3   and convenience. 
          4            My opportunities became greater, obtaining 
          5   short-time loans for equipment, lines of credit and 
          6   investment opportunities. 
          7            My charitable work soon became an important 
          8   part of my personal growth.  I founded a free 
          9   healthcare clinic for the immigrant pool called The 
         10   Light of the World Clinic in 1989.  That relies on 
         11   volunteers, doctors, nurses and clerical workers.  
         12   Many of the patients are served for free and do not 
         13   speak English.  Most came from all over the world. 
         14            When NationsBank came, they offered me 
         15   furniture and all of the equipment.  Computers were 
         16   given to us.  So that facilitated us to have some 
         17   data that we could use later on in our granting 
         18   needs. 
         19            Then it became Bank of America, which is 
         20   more than an institution.  The bank has a social 
         21   conscience.  For example, a bank volunteer chaired 
         22   our annual gala, to get more funds for our clinic.  
         23   The Bank of America Diversity Team came one day with 
         24   Boy Scout Troops to paint the pediatric room.  Bank 
. 0326
          1   of America associates hosted a number of meetings to 
          2   learn more about the disparity of healthcare that is 
          3   very prevalent in this country, various children's 
          4   issues, mentoring programs, education access for 
          5   minorities. 
          6            I understand charity, and I advocate 
          7   volunteerism whenever it is possible.  They put 
          8   their money and support behind United Way, the arts 
          9   and education issues.  They touch the lives of many. 
         10            Recently I created the Vasquez Family 
         11   Public Fund, it's more than a million dollar fund, 
         12   and I asked Bank of America to help me out to put 
         13   that money in assets. 
         14            Relationships and loyalty are factors that 
         15   surrounded my culture.  Bank of America knows and 
         16   understands me and values my input and recognizes my 
         17   needs. 
         18            I fully support the merger of Bank of 
         19   America and Fleet Bank Boston. 
         20            Thank you, all of you, for the opportunity 
         21   to share my experience with you. 
         22            PRESIDING OFFICER SMITH:  Thank you.
         23            Lisa Alberghini.
         24            MS. ALBERGHINI:  Madam Chair, members of 
. 0327
          1   the Committee, thank you for the opportunity to 
          2   comment on this most important matter.  I am Lisa 
          3   Alberghini, Executive Director of the Planning 
          4   Office for Urban Affairs of the Archdiocese of 
          5   Boston, and I'm testifying today in support of the 
          6   FleetBoston/Bank of America merger. 
          7            The Planning Office's mission is to develop 
          8   affordable and mixed-income housing for low-and- 
          9   moderate-income people, and we began our work 35 
         10   years ago.  I urge you to support this merger 
         11   because of Fleet Bank's commitment to community that 
         12   they have displayed in working in partnership with 
         13   us, and also because of Bank of America's commitment 
         14   to invest $100 billion in New England. 
         15            In our experience, Fleet's leadership in 
         16   affordable housing development has taken two forms.  
         17   One is an unusual partnership, and the second is the 
         18   bank's lending and investment practices on specific 
         19   affordable housing development projects. 
         20            First, the partnership.  Fleet's leadership 
         21   and vision was responsible for initiating an unusual 
         22   partnership with the Planning Office of the 
         23   Archdiocese, which enabled us to dramatically 
         24   increase our housing production efforts by providing 
. 0328
          1   critical working capital to our office. 
          2            This is not a typical partnership, and it 
          3   represents a most important principle, that of 
          4   prominent business leaders not just talking about 
          5   what needs to be done to provide affordable homes, 
          6   but taking action to ensure those homes get built, 
          7   and there is a very big difference. 
          8            In April 2001, the Archdiocese joined 
          9   forces with the Greater Boston Chamber of Commerce 
         10   to learn about the obstacles to affordable housing 
         11   development.  That work was made possible by a 
         12   generous contribution of $50,000 from Fleet Bank, 
         13   and it resulted in the publication of an important 
         14   study. 
         15            That report called for the need to build 
         16   36,000 additional units of housing, including 15,000 
         17   affordable units.  A major theme of the study was 
         18   collective responsibility or the shared need for all 
         19   of those in a civil society to do their part in 
         20   responding to the housing crisis.  In our view, and 
         21   in our very real experience, Fleet Bank has done 
         22   just that. 
         23            For its part, the Archdiocese committed to 
         24   make available some of its underutilized property to 
. 0329
          1   develop more affordable housing, and the Planning 
          2   Office was faced with the tremendous opportunity to 
          3   dramatically increase our production efforts, but we 
          4   needed help.  We needed help to develop our capacity 
          5   and our working capital.  To that end and in direct 
          6   response to the Archdiocesan commitment, FleetBoston 
          7   Financial partnered with our office and came to the 
          8   call of collective responsibility. 
          9            With $2 million from Fleet Bank, the 
         10   partnership between Fleet and the Archdiocese firmly 
         11   positioned our office to initiate a five-year plan 
         12   to increase our production efforts and produce 2,000 
         13   additional units of affordable housing. 
         14            The result is six developments under way 
         15   today, totaling 654 units, and many more in the 
         16   planning stages, in Boston, Brighton, Hyde Park, 
         17   Lynn, Brookline, Lowell, and a number of other 
         18   communities. 
         19            Thus we have 654 units under way now, a 
         20   significant jump in our production, and we are well 
         21   on the way of meeting our 2,000-unit goal.  That is 
         22   an incredible concrete or bricks and mortar result, 
         23   and it is primarily because of Fleet's vision and 
         24   commitment. 
. 0330
          1            The lending practices of Fleet have also 
          2   been extraordinary.  They have provided us with a 
          3   $52 million construction loan on one development and 
          4   nearly $40 million of commitments on other 
          5   developments that we have under way. 
          6            We encourage this, encourage you to support 
          7   this.  I do not necessarily think that big is bad in 
          8   the banking world.  I think it is more and more 
          9   often a reality, and with it, though, can come 
         10   immense opportunity for investment and resources. 
         11            The key to seizing that opportunity is for 
         12   Bank of America to keep in place the community 
         13   relationships that Fleet has established, has well 
         14   established in this region. 
         15            I believe we should support the merger.  We 
         16   should applaud the $100 billion investment Bank of 
         17   America has promised.  And we should expect and 
         18   encourage a strong commitment to community to 
         19   continue under Bank of America, which most 
         20   importantly should be evidenced by remaining a fully 
         21   engaged partner directly involved in our work. 
         22            Thank you for the opportunity to give you 
         23   our point of view, and I wanted to let you know that 
         24   I left copies of my written testimony, which is a 
. 0331
          1   bit longer, out front.  And attached to it is a copy 
          2   of an article from this month's Affordable Housing 
          3   Finance magazine, which describes the partnership 
          4   between Fleet Bank and the Archdiocese.
          5            Thank you very much.
          6            PRESIDING OFFICER SMITH:  Thank you. 
          7            We are still in the three-minute time 
          8   frame, so if you could stick to it, we can start. 
          9            MR. GUNTER:  Thank you, Madam Chair, 
         10   members of the Committee, for this opportunity to 
         11   speak in favor of the merger. 
         12            My name is Bruce Gunter, and I am the 
         13   founder, President and CEO of Progressive 
         14   Redevelopment, Incorporated, PRI, a nonprofit 
         15   developer of affordable housing based in Atlanta, 
         16   Georgia. 
         17            Now 15 years old, PRI has developed a wide 
         18   range of housing for low-income families and 
         19   individuals, including transitional housing for the 
         20   homeless, first-time home buyer townhouses, low- 
         21   income housing tax credit apartments, and supportive 
         22   housing mid-rises.  We are the largest of our kind 
         23   in the state, with over 40 employees and almost 
         24   $120 million of developments. 
. 0332
          1            I began my career in finance working for a 
          2   major bank in Atlanta and then started and ran an 
          3   investment counseling firm and then a nonprofit 
          4   development company.  Beginning with volunteer work 
          5   with Habitat for Humanity in the early 1980's, I 
          6   have been involved in affordable housing and 
          7   community development activities for over 20 years. 
          8            Today I serve on various boards of 
          9   directors of housing development corporations, 
         10   homeless transitional housing services, Advisory 
         11   Board of the Federal Home Loan Bank, and recently 
         12   the Affordable Housing Advisory Council of Fannie 
         13   Mae.  For five years I was on the board of Habitat 
         14   for Humanity International, serving three of those 
         15   as treasurer. 
         16            So I must say I do find it quite odd to be 
         17   on this side of the table under such circumstances.  
         18   In fact, if these hearings produce more of a 
         19   commitment to affordable housing and community 
         20   development from Bank of America, then I would be 
         21   very pleased.  But times have changed, and in some 
         22   respects for the better, and Bank of America 
         23   epitomizes these changes, in my view. 
         24            Through CRA, the realization that decent 
. 0333
          1   enough loans could be made in lower-income 
          2   communities, the realization that healthy 
          3   communities are in all of our interests, and just 
          4   the plain old notion of what is right and needs 
          5   doing, in my view banks today are for more 
          6   responsive to the needs of poor communities than 
          7   they were 10 or 15 years ago. 
          8            However, while all of the above reasons are 
          9   valid, the most important ingredient in my view is 
         10   leadership.  Leadership sets the tone as to whether 
         11   the bank views their CRA requirement as simply one 
         12   more regulation to be fulfilled or as a duty of a 
         13   responsible corporate citizen at the fulcrum of 
         14   influence and wealth in our society. 
         15            Bank of America's leadership put their bank 
         16   out front on these issues, starting with Hugh 
         17   McColl, the former CEO.  In my work with Habitat for 
         18   Humanity, I witnessed Hugh McColl's personal 
         19   commitment to Habitat, not just dollars.  I saw him 
         20   at a building site, long after the cameras had gone.  
         21   I've seen him at small receptions for Habitat.  I 
         22   know the figures of support from Bank of America and 
         23   NationsBank and before that NCNB.  They are large; 
         24   they are larger, I believe, than any other bank in 
. 0334
          1   America. 
          2            Closer to home, I can safely stroll down 
          3   the street in my neighborhood in downtown Atlanta in 
          4   part because the then NationsBank became deeply 
          5   involved in bringing back the historic neighborhood 
          6   adjacent to the neighborhood where Dr. Martin Luther 
          7   King grew up.  They worked closely in partnership 
          8   with the local CDC there. 
          9            As for my own organization, B of A has 
         10   become a valuable business partner.  We enjoy a 
         11   small line of credit, a construction loan, small 
         12   grants from time to time, and members of their 
         13   senior management team have served on our Board of 
         14   Directors. 
         15            Therefore, I do testify on behalf of the 
         16   merger with Bank of America.  I'm not qualified in 
         17   the least to comment on the strategic ramifications 
         18   of this merger, nor do I know specifically what 
         19   bearing the merger will have on the lives of low- 
         20   income people.  But I do know what I have personally 
         21   witnessed by Bank of America in this arena for over 
         22   ten years, and it is this record that persuaded me 
         23   to come here today. 
         24            Thank you. 
. 0335
          1            PRESIDING OFFICER SMITH:  Thank you very 
          2   much.
          3            Mr. Arnett.
          4            MR. ARNETT:  Thank you.  My name is Stu 
          5   Arnett, and I am the Director of Economic 
          6   Development for the State of New Hampshire.   Also 
          7   my family is a client of Fleet.  We have three small 
          8   accounts, commercial or residential accounts, and I 
          9   can assure you they are very small.  I'm also 
         10   probably one of the few of your guests who have come 
         11   here today to get warmer. 
         12            The Economic Development Division of New 
         13   Hampshire basically supervises a number of program 
         14   areas, but just to give you some idea, a variety of 
         15   business services, including financing, 
         16   international trade, and small business counseling. 
         17            We also work indirectly on community 
         18   development and housing, affordable housing and 
         19   housing supply boards.  I am a term employee, 
         20   meaning I'm appointed by the governor and what is 
         21   called the Executive Council.  I was first appointed 
         22   and then reappointed by Governor Shaheen, and now 
         23   I'm happy to serve Governor Benson.
         24            PRESIDING OFFICER SMITH:  Excuse me.  Could 
. 0336
          1   we have quiet in the back of the room. 
          2            MR. ARNETT:  I mentioned I was appointed 
          3   and then reappointed by Governor Shaheen, and I am 
          4   happy to serve now with Governor Benson. 
          5            On December 19 I submitted to the Federal 
          6   Reserve a letter lending my support of the proposed 
          7   merger, basically because of the exemplary track 
          8   record that Fleet has with us in New Hampshire on 
          9   both community development and economic development 
         10   projects.  Although I will say again for the record, 
         11   though, that they have not invested anything 
         12   directly as far as money into our organization; it's 
         13   basically pledging their community assets and their 
         14   time. 
         15            My last comment will be to read a letter of 
         16   support from Governor Benson, dated the 13th, to the 
         17   Federal Reserve Bank.  "Dear Colleagues:  I would 
         18   like to take this opportunity to express my support 
         19   for the proposed merger of Fleet and Bank of 
         20   America. 
         21            "Through the years, Fleet has continued to 
         22   demonstrate leadership in promoting economic growth 
         23   and healthy community throughout New Hampshire.  
         24   Fleet's employees and corporate management in this 
. 0337
          1   state have been leaders in volunteerism and 
          2   philanthropy. 
          3            "Based on what we have learned about Bank 
          4   of America's record of participation in these key 
          5   areas in other regions of the country, we are 
          6   optimistic that this merger will result in this 
          7   outstanding record continuing. 
          8            "Sincerely, Greg R. Benson, Governor."
          9            Thank you.
         10            PRESIDING OFFICER SMITH:  Thank you very 
         11   much.
         12            Ms. Greene.
         13            MS. GREENE:  Good afternoon.  My name is 
         14   Jennie Greene.  I'm the Executive Director of the 
         15   Aquinnah Wampanoag Tribal Housing Authority for the 
         16   Wampanoag Tribe of Gay Head in Aquinnah, 
         17   Massachusetts.  I am speaking today as the board 
         18   representative of the National American Indian 
         19   Housing Council. 
         20            I speak on behalf of the housing interests 
         21   of 562 federally recognized tribes located on tribal 
         22   lands across this vast country, a population that's 
         23   been barely mentioned today. 
         24            I wants to thank you for the opportunity to 
. 0338
          1   speak, as Indian Country sorely needs banking 
          2   services.  This merger is of acute interest to the 
          3   housing industry, which relies on financial 
          4   institutions in order to provide housing for Native 
          5   Americans who live on reservations or in tribal 
          6   areas.  NAIHC would like to voice support for the 
          7   merger with the caveat that there be a binding 
          8   commitment established for the merged institution to 
          9   provide more loans and services in Indian Country. 
         10            It is our fear that because so few banks 
         11   serve the Indian reservations, as Indian 
         12   reservations are frequently located in rural and 
         13   remote areas, diminishing the number of separate 
         14   institutions will further hurt our chances of 
         15   getting these desperately needed services. 
         16            We recognize that housing loans are not the 
         17   only services that banks can provide to our native 
         18   people, because consumer economic development, 
         19   community and other loans are equally important to 
         20   tribes. 
         21            Both Fleet and Bank of America have a poor 
         22   history of providing banking products and services 
         23   to Indian Country.  This is deplorable when you 
         24   consider that in 1998 the Bank of America committed 
. 0339
          1   millions towards community development for tribes, 
          2   as part of the Bank of America Rural 2000 
          3   initiative.  However this commitment was never 
          4   fulfilled, and the native community never received 
          5   the millions in lending promised to assist them. 
          6            64 percent of the 2.5 million single-race 
          7   Native American population resides in the tribal 
          8   areas.  Of that number, 86.4 percent of the tribal 
          9   work force is employed, ready to open checking 
         10   accounts, make investments and borrow money for 
         11   homes and businesses.  Yet there are few, if any, 
         12   available in tribal areas.  In some cases, the 
         13   closest bank is 150 miles away, hardly a convenient 
         14   place for someone to hop in the car to transact 
         15   business. 
         16            The lack of access to financial 
         17   institutions makes it difficult to establish credit 
         18   history, start a business, obtain a credit card or 
         19   even cash a check.  It also prevents an honest, 
         20   hard-working person from getting a mortgage to buy a 
         21   home, when there is no bank to lend money and no way 
         22   to prove creditworthiness. 
         23            In an effort to create home ownership 
         24   opportunities for low-and-moderate-income Native 
. 0340
          1   Americans, the Department of HUD developed two 
          2   guaranteed loan programs, the Section 184 Guaranteed 
          3   Loan Program and the Title VI Guaranteed Loan under 
          4   the Native American Housing Assistance and 
          5   Self-Determination Act of 1996.  Unfortunately, 
          6   these programs have not experienced great success.  
          7   Yet the delinquency or the default rate for the HUD 
          8   Section 184 program is just over 1.1 percent, and 
          9   even lower for Veterans Affairs loans to Native 
         10   Americans, hardly high-risk lending. 
         11            While NAIHC supports the merger, we request 
         12   the bank to develop and implement a plan to develop 
         13   banking products and services to the tribes on their 
         14   reservations and in Indian areas.  Further, we ask 
         15   that the merger include language with a commitment 
         16   by Bank of America to take steps to protect Native 
         17   Americans from being victims of predatory lending, 
         18   something that is occurring more frequently to those 
         19   with the least exposure and experience with banks 
         20   and their products. 
         21            A study completed last summer found a 
         22   number of tribal members lost their homes to 
         23   predatory lending, particularly among the elders, 
         24   first-time home buyers, and purchasers of 
. 0341
          1   manufactured homes. 
          2            Bank of America must monitor the practices 
          3   of its sub-prime lending and work with native 
          4   nonprofits in developing financial literacy and 
          5   antipredatory lending initiatives.  Native Americans 
          6   must be provided the same considerations as other 
          7   races, to prevent discrimination in the provision of 
          8   services. 
          9            It is my belief that Bank of America can do 
         10   the right thing for native people by strongly 
         11   committing to these recommendations to better serve 
         12   the underbanked population in this nation.  We have 
         13   provided further testimony with statistics which 
         14   would help you in your consideration of this. 
         15            Thank you for your time, and should you 
         16   have any questions, I will be more than happy to 
         17   answer them.
         18            PRESIDING OFFICER SMITH:  Thank you very 
         19   much. 
         20            Mr Kreymeyer. 
         21            MR. KREYMEYER:  Good afternoon.  My name is 
         22   Chris Kreymeyer.  I'm the Executive Director of 
         23   Beyond Housing/NHS in St. Louis, Missouri, and I 
         24   applaud the bank and its staff for carrying out this 
. 0342
          1   very important but seemingly endless process here 
          2   today.  So in the ninth hour now of this, I will try 
          3   to be as brief and succinct as I can.
          4            For 25 years Beyond Housing/NHS has been 
          5   helping low-income families in communities in the 
          6   St. Louis region through a variety of mechanisms. 
          7   First, the construction and rehabilitation and then 
          8   renting of single-family homes to low-income 
          9   families, to single moms with kids, and offering 
         10   them a wide variety of support services. 
         11            Secondly, leading broad-based community 
         12   building work where we are working with several 
         13   communities and their leadership to build new homes, 
         14   to buy and rehab existing structures, to give out 
         15   grants to existing homeowners for code violations.  
         16   We run two family support centers.  We do a wide 
         17   variety of programming for the children and the 
         18   seniors in the community. 
         19            Lastly, we run a home ownership center  
         20   that's designated by our national partner, 
         21   Neighborhood Reinvestment Corporation.  We are one 
         22   of 200 or so affiliates across the country. 
         23            That kind of work and the reach that we're 
         24   able to have day in and day out is only possible 
. 0343
          1   when you have friends and partners like Bank of 
          2   America.  Our work with them has been long, and it 
          3   has been consistent over many years.  They offer us 
          4   competitive loans, countless charitable 
          5   contributions, provide us in-kind donations through 
          6   a wide variety of means. 
          7            Our work of helping those that we serve is 
          8   critical.  We can't do it without great friends like  
          9   Bank of America.  They are also flexible and 
         10   creative.  They have created a limited liability 
         11   corporation with our organization to work in a 
         12   targeted neighborhood in terms of housing 
         13   construction and housing development.  They've also 
         14   offered us one of their banking institutions to 
         15   provide some home ownership education curriculum to 
         16   a part of our community that is underserved relative 
         17   to that.
         18            I'm here today to say that Bank of America 
         19   is a great friend and great partner.  I don't 
         20   pretend to be smart enough to understand the size 
         21   and scope of this on a national level, but I want to 
         22   leave you with one last thought. 
         23            You have been bombarded with a variety of 
         24   statistics and numbers and dollars.  Behind all of 
. 0344
          1   that is a human face, and what we've seen and what 
          2   we know is, because of Bank of America, new homes 
          3   have been built where vacant land used to be. 
          4            What I do know is, where dilapidated 
          5   structures used to be, newly renovated homes now 
          6   exist and families have a place to call home.  What 
          7   I do know is, because of Bank of America's support, 
          8   children have after-school programs, have access to 
          9   summer camp.  What I do know, because of Bank of 
         10   America in the St. Louis region, a lot of folks are 
         11   better off. 
         12            And my belief is the leadership of the Bank 
         13   of America, their commitment to our work in St. 
         14   Louis, can cascade throughout this country if this 
         15   transaction is approved.
         16            Thanks very much,
         17            PRESIDING OFFICER SMITH:  Thank you very 
         18   much. 
         19            We're going to take a break.  We're going 
         20   to break just for ten minutes, given that we're 
         21   behind schedule.  So if you could gather yourselves 
         22   after that.
         23            (Recess)
. 0345
          1            PRESIDING OFFICER SMITH:  We're running 
          2   behind schedule somewhat, so we are holding to the 
          3   three-minute assigned time that you have been given.  
          4   Watch the timers, and do try to wind up quickly 
          5   after you're given the signal that your time has 
          6   expired. 
          7            So we'll start with Mr. Grogan, name and 
          8   affiliation to start with. 
          9            MR. GROGAN:  My name is Paul Grogan.  I'm 
         10   the president of The Boston Foundation, which is 
         11   Greater Boston's community foundation.  I'm glad to 
         12   be here today. 
         13            I'll be very brief, and I do want to note 
         14   that I am not here representing The Boston 
         15   Foundation, which takes no position on transactions 
         16   of this kind, but I'm here rather as a long-time 
         17   housing and community development official in 
         18   government and in the nonprofit sector that has had 
         19   extensive experience in working with the two banks 
         20   that are proposing to merge. 
         21            I think all of us Bostonians, of course, if 
         22   pressed, would be delighted if Boston were to be the 
         23   headquarters of this new combined bank, but the 
         24   economic realities being what they are, if our 
. 0346
          1   hometown bank is going to merge, it couldn't have a 
          2   better partner, in my experience, than the Bank of 
          3   America. 
          4            I was the president and CEO of the Local 
          5   Initiatives Support Corporation for 13 years in the 
          6   '80s and '90s.  I'm actually affiliated with a 
          7   number of organizations you're going to be hearing 
          8   from subsequently, but what many of these 
          9   organizations represent is really the cutting edge 
         10   of housing and community development. 
         11            Not only have Fleet and Bank of America, in 
         12   my experience, fulfilled their commitments, they 
         13   have put outstanding executives to work on issues 
         14   relating to urban development and housing and 
         15   community development.  They have made it central to 
         16   their institutions' missions.  They've gotten 
         17   results. 
         18            And they have been extremely receptive to 
         19   cutting-edge ideas and new products that have really 
         20   advanced the whole housing and community development 
         21   field and account for much of the stunning 
         22   neighborhood revitalization that we see in our own 
         23   City of Boston and many other cities around the 
         24   country. 
. 0347
          1            I think it's fair to say that on a national 
          2   level the Bank of America has really been one of the 
          3   principal architects, at least among major banks, in 
          4   terms of what I think of as the community 
          5   development banking revolution in the mainstream 
          6   banking sector, which is the lengthy process, but 
          7   it's well along now, of legitimating the flow of 
          8   market capital and bringing real emphasis and 
          9   standards to that market capital into distressed 
         10   neighborhoods and into areas where it once feared to 
         11   go. 
         12            So I think these are two superb 
         13   institutions that have fulfilled their obligations.   
         14   And in my long experience through many, many 
         15   different organizations, they've fulfilled their 
         16   commitments, they have been receptive to good ideas, 
         17   and they're going to fulfill the commitments that 
         18   they have already declared nationally and locally in 
         19   the context of this merger. 
         20            Thank you very much.
         21            PRESIDING OFFICER SMITH:  Thank you. 
         22            MS. HABIBY:  My name is Anne Habiby, and 
         23   I'm with a national nonprofit called the Initiative 
         24   for Competitive Inner City.  We are Boston based.  
. 0348
          1   Our mission is to make the business case for inner 
          2   cities and try to accelerate business investment and 
          3   business growth in inner cities. 
          4            Clearly a lot of the conversation today has 
          5   been about mortgage finance.  I wish to add a 
          6   different perspective, and that is around investment 
          7   in job and business growth, a very important 
          8   function that commercial banks play. 
          9            I also wish to unambiguously speak in favor 
         10   of the merger.  Merger is unavoidable, and we have 
         11   two of the best here at the table together.  I think 
         12   this is a dramatic opportunity. 
         13            I also wish to sort of tell by way of 
         14   anecdote the power of the leadership of these two 
         15   institutions and what we have to gain. 
         16            In 1997, NationsBank, of course now Bank of 
         17   America, pioneered a national effort to raise 
         18   awareness about the job and business potential of 
         19   inner cities, obviously areas that most had written 
         20   off.  They convened about 100 leaders for three days 
         21   to talk about change and what we were going to do to 
         22   move the needle in this country. 
         23            A group of about ten people worked all 
         24   night for two nights, and remarkably Cathy Bessant 
. 0349
          1   was one of them.  She not only hosted the meeting, 
          2   but she didn't sleep for three days.  Long after 
          3   everyone was sleeping, she was there, and she meant 
          4   business.
          5            The most important idea that came out of 
          6   this was in fact a mega-movement for inner cities.  
          7   We came up with this crazy idea that the president 
          8   of this country should advance a trade mission to 
          9   what, our own inner cities, instead of doing trade 
         10   missions overseas. 
         11            Cathy Bessant and Gail Snowden took up that 
         12   charge.  They went to their leaders and said, "We 
         13   must make this so."  And lo and behold, President 
         14   Clinton created something called the New Markets 
         15   Tour, and didn't stop there, subsequently created 
         16   something called the New Market Tax Credit.  This 
         17   was a milestone for inner cities.  People made a 
         18   difference, and these two leaders made it happen. 
         19            But that wasn't quite enough.  Three months 
         20   ago these same leaders, Bank of America, Fleet and 
         21   others, convened about 200 leaders to once again 
         22   think about what could be another step forward. 
         23            Again, people met all through the night to 
         24   work through these ideas, and to our amazement, 
. 0350
          1   Cathy Bessant showed up.  She had not been invited, 
          2   because she had risen well above the level of 
          3   executive worker bee.  Again she demonstrated her 
          4   depth of commitment, her sense of urgency for inner 
          5   cities. 
          6            One could tell exactly the same story of 
          7   Gail Snowden, but I don't need to do that, because 
          8   all of us in this room know her well and are 
          9   inspired by her work. 
         10            My point of support for the merger is 
         11   twofold.  It is indeed about people, which is what a 
         12   lot of people have said today.  We have two of the 
         13   best.  They collectively have pioneered what we have 
         14   come to understand is community banking in this 
         15   country.  Having them join forces is a step forward. 
         16            Second, much more needs to be done.  This 
         17   morning Massachusetts Senator Wilkerson referenced 
         18   comments by a very famous Wall Street analyst who  
         19   cast doubt on the merger.  The analyst had the 
         20   audacity to say, "I feel pretty certain that they're 
         21   not putting $750 billion into high-risk lending, 
         22   which is what minority lending tends to be." 
         23            We should support Bank of America in 
         24   affirming, with this commitment, the viability of 
. 0351
          1   inner-city markets, and we should stand behind them.  
          2   Merger is going to happen.  We have a tremendous 
          3   opportunity with these two banks and these two 
          4   leaders.  I submit that this merger is a significant 
          5   opportunity for the inner cities of the Northeast.
          6            PRESIDING OFFICER SMITH:  Thank you.
          7            Mr. O'Connor.
          8            MR. O'CONNOR:  Madam Chairman, thank you 
          9   very much.   My name is Stephen O'Connor, I'm with 
         10   the Community Development Trust, and as Mr. Grogan  
         11   said, I am one of the several progenies that have 
         12   come as a result of his leadership and initiative 
         13   and dedication. 
         14            Founded in 1999 by the Local Initiatives 
         15   Support Council when Mr. Grogan was there, the 
         16   Community Development Trust, or CDT for short, is 
         17   the nation's first and only real estate investment 
         18   trust dedicated to the preservation of affordable 
         19   housing.  We accomplish our mission through direct 
         20   equity investments in expiring use properties,   
         21   attempting to capture and preserve these vital but 
         22   diminishing national assets by preventing their 
         23   conversion into market-rate properties. 
         24            Unlike the 180 or so publicly traded REITs 
. 0352
          1   in the United States with access to broader capital 
          2   markets, CDT's unique mission is achieved through 
          3   the direct investment of socially minded and 
          4   dedicated community development institutions like 
          5   Fleet Bank. 
          6            Our mission was successfully launched 
          7   through the private placement of nearly $32 million 
          8   of equity capital.  Fleet Bank was not only one of 
          9   the first to pledge their support, but they were 
         10   also one of our largest initial investors, providing 
         11   $3 million toward our ambitious national goal of 
         12   affordable housing preservation. 
         13            Having now leveraged our initial capital 
         14   into nearly $200 million worth of affordable housing 
         15   assets, last year CDT set out to once again raise 
         16   additional capital.  And once again, based upon 
         17   performance and mission, Fleet Bank came through 
         18   with an additional $3 million investment. 
         19            While the financial support of Fleet Bank 
         20   has been instrumental to the success of CDT, we have 
         21   also benefited greatly from the corporate leadership 
         22   of their commitment.  Currently Mr. Phil Grossman is 
         23   a proactive and contributing member of CDT's Board 
         24   of Directors, and we view Fleet's overall 
. 0353
          1   participation in CDT as an integral factor in the 
          2   success of our mission. 
          3            In addition, CDT also serves as a pro bono 
          4   advisor to Habitat for Humanity.  Under the Habitat 
          5   program, simple and decent affordable housing is 
          6   sold at no profit to low-income families who are 
          7   otherwise not eligible for conventional financing. 
          8            While the average Habitat dwelling costs 
          9   roughly $48,000 to construct, the typical Habitat 
         10   family only earns between 25 and 50 percent of area 
         11   median income.  To help bridge the affordability 
         12   gap, each Habitat family is required to contribute 
         13   between 300 and 500 hours of sweat equity on the 
         14   construction of their own home, as well as working 
         15   on the homes of other Habitat families. 
         16            Currently, there are 1,650 local Habitat 
         17   affiliates that have collectively built, repaired or 
         18   renovated nearly 6,000 homes in 2003.  To finance 
         19   these home, the typical Habitat mortgage bears zero 
         20   percent interest for a term of 20 years.  And while 
         21   we have an effective secondary market in this 
         22   country for market-rate single-family mortgages, no 
         23   such vehicle exits for below-market-rate mortgages 
         24   made to low-income families. 
. 0354
          1            To help remedy this deficiency, as well as 
          2   to secure the future viability of this program, CDT 
          3   has helped to develop a securitization program for 
          4   Habitat mortgages.  With approximately 35,000 
          5   mortgages held in the United States, collectively 
          6   the Habitat affiliates now hold nearly $750 million 
          7   in illiquid zero percent mortgages. 
          8            Under this new program, Habitat issues 
          9   bonds that are securitized by the principal payments 
         10   on the zero interest mortgages held by affiliates.  
         11   In return, investors typically receive between 1 and 
         12   5 percent interest on these bonds.  To date, Habitat 
         13   has raised $45 million for affiliates through this 
         14   program. 
         15            Once again, Fleet Bank has been an early 
         16   and strong supporter of this program through direct 
         17   investments of $2 1/2 million in the Habitat 
         18   offerings. 
         19            My time is up, so in conclusion, we view 
         20   Fleet Bank as an active and responsible member of 
         21   the community development community, and we urge you 
         22   to support the proposed merger. 
         23            Thank you.
         24            PRESIDING OFFICER SMITH:  Thank you.
. 0355
          1            Mr. Thomas. 
          2            MR. THOMAS:  Good afternoon.  I am Henry 
          3   Thomas, President and CEO of Urban League of 
          4   Springfield, Massachusetts, the largest African- 
          5   American community-based organization in the western 
          6   part of the state. 
          7            I want to first thank you for an 
          8   opportunity to testify on behalf of the Urban League 
          9   of Springfield, and we are here to support the 
         10   merger between Bank of America and Fleet Bank.  We 
         11   think that it will yield some wonderful benefits to 
         12   the entire region. 
         13            The proposed merger for which we are here 
         14   commenting today represents a significant milestone 
         15   and opportunity for the citizens and businesses of 
         16   the community within the Commonwealth of 
         17   Massachusetts -- for communities within the 
         18   Commonwealth of Massachusetts. 
         19            In addition to uniting two of the nation's 
         20   finest and strongest banking institutions, this 
         21   merger will undoubtedly create a financial 
         22   infrastructure that will enhance our business and 
         23   retail climate. 
         24            While others are inclined to think that 
. 0356
          1   this merger will compromise banking service, 
          2   quality, jobs stability, et cetera, I believe on the 
          3   contrary that the result of this merger will bring 
          4   technological efficiencies and capacity that will 
          5   enhance employment opportunities, product 
          6   innovations, and financial sophistication.  
          7   Moreover, the financial strength of the combined 
          8   institutions will accrue to greater lending and 
          9   investment opportunities to grow local businesses. 
         10            During my tenure as President and CEO of 
         11   the Urban League of Springfield, I have come to know 
         12   the Fleet organization intimately and value their 
         13   commitment and involvement in our community.  Our 
         14   corporate banking relationship eclipses more than 
         15   three decades and has evolved into a genuine 
         16   partnership.  Without question, Fleet has been a 
         17   true partner and supporter with us in our efforts to 
         18   enhance the lives of our low-income community. 
         19            Our specific work involves advocating on 
         20   public policy issues affecting the dispossessed in 
         21   our community, promoting economic and financial 
         22   self-sufficiency, academic achievement, literacy and 
         23   proficiency among our city's youth, and developing 
         24   initiatives that enhance productive aging 
. 0357
          1   experiences for our senior citizens. 
          2            As our local Urban League affiliate is 
          3   stalwart in its efforts to positively influence and 
          4   revitalize the community, Fleet Bank has been a 
          5   consistent and essential link in the process. 
          6            Fleet's commitment has provided funding to 
          7   start and maintain programs, loan financing for 
          8   necessary capital improvements, lines of credit to 
          9   help with our funding inconsistencies, partnering 
         10   for financial literacy, education and home buyer 
         11   workshops and staff resources to help advance our 
         12   focused agenda to empower people for self- 
         13   sufficiency.  Whenever called upon, and to the 
         14   extent possible, Fleet has been a true leader with 
         15   regard to sharing their financial resources with the 
         16   community. 
         17            I hear the bell here, and I'll close in 
         18   making a final comment.  From our vantage point, 
         19   Bank of America -- the increase of resources by the 
         20   merger with Bank of America and Fleet Bank will 
         21   accrue locally and will not diminish the vital 
         22   corporate assistance that advances our human service 
         23   work.  It is reasonable to anticipate that, 
         24   following the merger, these two organizations will 
. 0358
          1   enjoy greater financial strength in the global 
          2   marketplace. 
          3            CRA is important to Western Massachusetts, 
          4   and I believe that the combined institutions will 
          5   demonstrate and fulfill their commitment and their 
          6   resolve. 
          7            Thank you for the opportunity. 
          8            PRESIDING OFFICER SMITH:  Mr. Brown.
          9            MR. BROWN:  Good afternoon.  My name is 
         10   Michael Brown, and I'm the President and Co-Founder 
         11   of City Year.  We are a national organization based 
         12   in Boston, committed to serving the community by 
         13   tapping the idealism of young adults for a year of 
         14   full-time community service. 
         15            I appreciate this opportunity to share City 
         16   Year's support for the proposed merger between Fleet 
         17   Bank and Bank of America.  We support this because 
         18   we trust the new entity will continue investing 
         19   significantly in our community. 
         20            That trust and confidence is based not on 
         21   words but on deeds.  It is rooted in the uniquely 
         22   supportive role, even the catalytic role that Fleet 
         23   Bank and its chairman and CEO Chad Gifford have 
         24   played in City Year's development and history over 
. 0359
          1   our 15-year partnership. 
          2            In 1988, Chad Gifford and the bank he led 
          3   took a risk on a new civic venture, becoming a 
          4   founding sponsor of City Year, and the first company 
          5   in the nation to sponsor a City Year team of diverse 
          6   young people in full-time service.  Today more than 
          7   350 companies have followed this act of leadership. 
          8            The bank then became the first company to 
          9   sponsor a community service team in more than one 
         10   our cities, and ultimately became a founding sponsor 
         11   of four City Year programs, in Boston, Philadelphia, 
         12   Rhode Island and New Hampshire. 
         13            In 1999, Fleet Bank became the first 
         14   company to endow a City Year team, and in doing so 
         15   created the first endowed community service 
         16   positions for young people in the country. 
         17            There are countless stories of what Fleet 
         18   has made possible at City Year.  Thousands of 
         19   children have been tutored and mentored, vacant lots 
         20   have been transformed into community gardens, scores 
         21   of community centers have been revitalized, and 
         22   thousands of citizens have been organized for 
         23   service through our annual serve-a-thon, all because 
         24   of Fleet support. 
. 0360
          1            All told, Fleet Bank has sponsored 350 
          2   full-time City Year corps members, who have 
          3   contributed more than 600,000 hours of full-time 
          4   service.  On the financial side, Fleet has provided 
          5   City Year with a line of credit, a critical service 
          6   to a nonprofit organization. 
          7            We are now celebrating our 15th anniversary 
          8   with Fleet.  What has maintained that partnership is 
          9   Fleet's strong commitment to community and its 
         10   culture of civic involvement and leadership. 
         11            It is greatly encouraging to know that Chad 
         12   Gifford will become Chairman of the Board of the new 
         13   entity of Bank of America and then become chairman 
         14   of the bank's charitable foundation in New England.  
         15   We know firsthand of his deep commitment to building 
         16   communities, to diversity, to social 
         17   entrepreneurship and especially to young people. 
         18            Bank of America also has a tremendous track 
         19   record of community investment.  We have every 
         20   confidence that the new company being formed will 
         21   maintain this commitment to, in Fleet's own words, 
         22   "working together to help the future of our 
         23   community outshine its proud history." 
         24            Thank you for providing me with this 
. 0361
          1   opportunity to speak today.
          2            PRESIDING OFFICER SMITH:  Thank you.
          3            MR. RUBINGER:  Good afternoon.  My name is 
          4   Michael Rubinger, and I am the President and Chief 
          5   Executive Officer of LISC, the Local Initiatives 
          6   Support Corporation.  And while we have a long and 
          7   very productive relationship with Fleet Bank, I'm 
          8   here this afternoon principally to focus on our 
          9   equally productive relationship with the Bank of 
         10   America in markets outside of New England. 
         11            LISC is one of the nation's largest 
         12   nonprofit community development support 
         13   organizations.  Since 1980, LISC has invested 
         14   $4 1/2 billion in low-income urban neighborhoods and 
         15   rural areas through local development corporations, 
         16   so-called CDCs. 
         17            This investment has led to the construction 
         18   or rehabilitation of over 130,000 affordable homes 
         19   and 20 million square feet of economic development 
         20   facilities, employing some 52,000 individuals.  We 
         21   have helped to finance day care centers, health 
         22   clinics, schools and community centers, all serving 
         23   lower-income, inner-city and rural residents. 
         24            LISC now provides about $600 million 
. 0362
          1   annually to CDCs in the form of grants, loans and 
          2   investments.  We have worked extensively in New 
          3   England, including Greater Boston, Rhode Island, 
          4   Connecticut and rural Maine, but much of LISC's 
          5   activity has been in markets that Bank of America 
          6   already serves. 
          7            For over 20 years our relationship with the 
          8   bank has been a close and mutually supportive one. 
          9   Bank of America has been one of our largest donors, 
         10   providing us with almost $11 million in grants, 
         11   $43.5 million in below market loans, and $480 
         12   million in equity investments.
         13            At a total of over half a billion dollars, 
         14   this is very substantial level of commitment to 
         15   LISC, but more important to the community 
         16   development activities in low-income communities. 
         17            But numbers alone do not tell the full 
         18   story of our relationship.  Bank of America has been 
         19   willing to invest its time and reputation as well as 
         20   its money in important and promising ideas. 
         21            In the early 1980s, for example, Bank of 
         22   America lent us $10 million, at that time by far our 
         23   largest bank loan, and an important statement of 
         24   confidence in us and the community groups we serve.  
. 0363
          1   That expression of confidence and support opened the 
          2   door to support from other financial institutions. 
          3            In virtually every innovative new program 
          4   we've launched, Bank of America has been at the 
          5   forefront, willing to take risks in the interests of 
          6   progress. 
          7            For example, Bank of America helped us 
          8   create and implement each of the following:  a 
          9   secondary market for community development loans; an 
         10   equity investment fund for major inner-city 
         11   supermarkets; the nation's first real estate 
         12   investment trust dedicated to community development; 
         13   expansion of our successful urban program into rural 
         14   America; training and technical assistance programs 
         15   to strengthen the organizational capacity of CDCs; 
         16   and a partnership to help public housing authorities 
         17   access private financing. 
         18            We have found Bank of America has stayed 
         19   the course through the tough times, as well as the 
         20   good, balancing its own interests with the broader 
         21   mission of building communities.  That has been very 
         22   important to us, to the CDCs we work with, and to 
         23   the community development field more generally. 
         24            The Bank of America has been a vital and 
. 0364
          1   productive partner for LISC in our community 
          2   revitalization efforts on behalf of lower-income 
          3   families and individuals nationwide. 
          4            If the merger before you is approved, which 
          5   we urge you to do, we have every reason to believe 
          6   that that partnership and those efforts will be 
          7   deepened and broadened, as the Bank of America 
          8   expands its community development activities and 
          9   commitment into the New England region. 
         10            Thank you very much. 
         11            PRESIDING OFFICER SMITH:  Thank you very 
         12   much for coming this afternoon. 
         13            We'll start with Mr. Nugent. 
         14            MR. NUGENT:  Good afternoon.
         15            PRESIDING OFFICER SMITH:  We're in the 
         16   three-minute frame. 
         17            MR. NUGENT:  My name is Jeff Nugent.  I'm 
         18   the Executive Vice-President of the Development 
         19   Training Institute, a 23-year-old national 
         20   organization devoted to supporting the leaders of 
         21   community organizations, government and the private 
         22   sector engaged in revitalizing blighted communities 
         23   throughout the nation. 
         24            Thousands of leaders of the most successful 
. 0365
          1   community-based development organizations -- and 
          2   actually a number of those testifying here today -- 
          3   in the country have graduated from our intensive 
          4   leadership programs, and over 12,000 bankers have 
          5   attended our programs on community development 
          6   lending.  I manage the national community 
          7   development lending school sponsored annually by the 
          8   Federal Reserve. 
          9            It's very fitting that I would follow Mike 
         10   Rubinger of LISC in this presentation.  The leaders 
         11   of many of the organizations that have accomplished 
         12   the kinds of things that Mike spoke of are graduates 
         13   of DTI's programs. 
         14            I'm here to testify strongly in support of 
         15   merger between Bank of America and FleetBoston.  The 
         16   Bank of America has led the banking industry in 
         17   supporting the kinds of leadership and management 
         18   development programs conducted for senior staff of 
         19   community-based housing and economic development 
         20   organizations by the Development Training Institute. 
         21            This investment by the Bank of America has 
         22   resulted in the development of tens of thousands of 
         23   affordable housing units and billions of dollars of 
         24   financing of housing and community economic 
. 0366
          1   development projects throughout Bank of America's 
          2   service areas.  It has also helped to create the 
          3   next generation of leaders who will continue to 
          4   articulate new visions and deliver substantial 
          5   results for their communities. 
          6            Specifically, these results include the 
          7   development of over $2 billion in affordable housing 
          8   and community economic development projects, with 
          9   over $1 billion of these costs privately financed 
         10   often by the Bank of America but by other banks as 
         11   well.  In this way the entire community reinvestment 
         12   industry has benefited from these investments made 
         13   by the bank in these leaders of community-based 
         14   organizations. 
         15            The merger between these two institutions 
         16   will result in increased innovation and further 
         17   commitments that will enhance the effectiveness of 
         18   community-based development organizations in 
         19   achieving their goals for years to come, and the 
         20   Development Training Institute is strongly in 
         21   support of this move. 
         22            PRESIDING OFFICER SMITH:  Thank you.
         23            We'll go to Mr. Banuelos.
         24            MR. BANUELOS:  Thank you.  My name is Fred 
. 0367
          1   Banuelos.  I'm the President and CEO of the Alliance 
          2   for Building Communities, a local nonprofit 
          3   affordable housing agency which spans five counties 
          4   in Northeastern Pennsylvania. 
          5            Headquartered in the Lehigh Valley, the 
          6   Alliance for Building Communities provides rentals 
          7   as well as first-time home buyer opportunities to 
          8   low-to-moderate-income families. We provide home 
          9   ownership counseling and owner-occupied 
         10   rehabilitation as well. 
         11            Since Fleet Bank's presence in the Lehigh 
         12   Valley two and a half years ago, the Alliance for 
         13   Building Communities has been able to build a strong  
         14   working relationship with Fleet Bank that has 
         15   enabled our affordable housing agency and low-income 
         16   families to participate in many funding products 
         17   that Fleet has to offer. 
         18            They have not only done a good job in 
         19   reporting on their reinvestment record in the 
         20   community, but they have worked tirelessly in making 
         21   sure that they are in touch with the community 
         22   banking needs. 
         23            I was pleased to learn that Bank of 
         24   America, with a strong banking reputation, and Fleet 
. 0368
          1   Bank will soon join forces to continue to work in 
          2   the community.  So here today, I urge this merger 
          3   and am in full support of it. 
          4            Thank you. 
          5            PRESIDING OFFICER SMITH:  Thank you very 
          6   much.
          7            Mr. Sibley.
          8            MR. SIBLEY:  Good evening.  My name is 
          9   Russell Sibley.  I'm Senior Vice-President of 
         10   Greater Miami Neighborhoods, so I bring greetings 
         11   from sunny Florida. 
         12            I want to talk to you today a little bit 
         13   about the positive experience we have had with Bank 
         14   of America and its predecessors NationsBank and 
         15   Barnett Bank in community development activities and 
         16   give you one example, and perhaps it will help 
         17   focus.  We are here, of course, in support of the 
         18   merger. 
         19            Our organization, Greater Miami 
         20   Neighborhoods, is a mission-driven nonprofit.  
         21   Although Miami is in the name, we're a statewide 
         22   organization working throughout Florida.  We work to 
         23   provide housing for low-and-very-low-income families 
         24   throughout Florida.  We have developed over 5,000 
. 0369
          1   homes and apartments valued at over $400 million in 
          2   the aggregate. 
          3            The Bank of America, through our 15-year 
          4   experience, and its predecessors, understand and 
          5   support the work that we have as a nonprofit 
          6   developer.  With us in the past, they have served 
          7   obviously as a lender, they are a tax credit 
          8   investor in some of our developments, and in one 
          9   instance they've actually been a development 
         10   partner, standing side by side, working with us as a 
         11   development partner. 
         12            I want to talk about one particular kind of 
         13   transaction, though, and that is the preservation of 
         14   existing affordable housing, as we have properties 
         15   such as Section A properties or others that have 
         16   been in existence for 20 or 30 years with for- 
         17   profits owners who are getting out of the business.  
         18   They need to -- most of them are typically selling 
         19   their properties. 
         20            As they do so, in order for us as a 
         21   mission-driven nonprofit to be competitive, we have 
         22   to be able to move as quickly as any other buyer. 
         23            Bank of America understands that, and 
         24   together we've developed an interim financing model 
. 0370
          1   that lets us acquire these properties quickly, and 
          2   then over a period of, say, one to two and sometimes 
          3   up to three years, bring the additional financing 
          4   that will let us complete the rehabilitation work on 
          5   these 20-to-30-year-old properties, and then bring 
          6   subsidized and below-market-rate local government 
          7   financing and state financing to these developments 
          8   to provide stability for the long term. 
          9            The Bank of America understands that and 
         10   has really worked with us to do that.  In the last 
         11   four years, using this particular model, we've 
         12   acquired five existing properties.  They contain 844 
         13   units.  Loans from the Bank of America have been in 
         14   the range from $2 1/2 million to almost $8 million, 
         15   and these loans aggregate $23 1/2 million. 
         16            These are significant commitments that 
         17   they've made.  We've borrowed the money; we've paid 
         18   it back according to terms.  We've executed on these 
         19   transactions the way we wanted to, which was to 
         20   bring in the bond financing, bring in the lower 
         21   interest rate, state and local subordinate debt.  
         22   And we have been able to complete the acquisition, 
         23   complete the rehab, and have these properties be 
         24   stabilized for the next 20 to 30 years. 
. 0371
          1            An important element of our success has 
          2   been our work with Bank of America.  We appreciate 
          3   their work, and we expect it to continue following 
          4   the merger with the Fleet Bank Boston, and we are in 
          5   support of it. 
          6            Thank you.
          7            PRESIDING OFFICER SMITH:  Mr. Pinsky.
          8            MR. PINSKY:  Thank you.  It's a pleasure to 
          9   be here.  I'm Mark Pinsky, President and CEO of 
         10   National Community Capital Association.  We are a 
         11   national network of community development financial 
         12   institutions. 
         13            The CDFI industry today comprises some 
         14   $10 billion in assets and have done upwards of 
         15   $12 billion of financing.  Both of the banks 
         16   involved in this transaction, Bank of America and 
         17   Fleet, have been significant players. 
         18            I want to make three points today, and I 
         19   will do it as briefly as I can.  The first is just 
         20   to say that National Community Capital is here to 
         21   speak in support of the merger of these two banks, 
         22   based on our experience in the CDFI industry.  And I 
         23   want to identify four things that both banks bring 
         24   to the table and have demonstrated repeatedly in 
. 0372
          1   their work in the industry. 
          2            The first is that both banks have embraced 
          3   community development finance as integral to their 
          4   core businesses and not treated it as something 
          5   outside of what their businesses were. 
          6            The second is they have invested heavily in 
          7   human capital, expertise, as well as financial 
          8   capital.  You have heard many examples today about 
          9   the ways that they brought innovation and ideas to 
         10   the table. 
         11            The third is they've consistently treated 
         12   CDFIs as customers and partners, and not, again, as 
         13   supplicants, if you will. 
         14            The fourth is that they have pioneered 
         15   products and services with CDFIs, as well as led 
         16   other banks into CDFI investments.  Again, you have 
         17   heard other examples of that today. 
         18            The second point I wanted to make, despite 
         19   the fact that I come at this from a CDFI 
         20   perspective, is that CDFIs are only a part, and we 
         21   hope a relatively small part, frankly, of community 
         22   development finance in this country and the 
         23   strategies of both of these banks. 
         24            And I trust that both banks as they look at 
. 0373
          1   this, and the Federal Reserve as they look at this, 
          2   will in fact take seriously and think seriously 
          3   about some of the other issues we've heard about 
          4   today, particularly as they relate to the 
          5   specificity of plans going forward. 
          6            I trust that Bank of America and Fleet, 
          7   because of the experience that we've had with them, 
          8   will respond to that.  I think that creates 
          9   transparency and credibility, and I think in fact 
         10   that this discussion today is an opportunity for the 
         11   banks to demonstrate that in fact they have done 
         12   that and that they're committed to doing that. 
         13            The third is really to recognize, picking 
         14   up on something that Paul Grogan said earlier, that 
         15   there has been a revolution in community development 
         16   finance and that in fact we're entering a new era, 
         17   and that in fact the way community development 
         18   finance gets done in the future is going to be 
         19   markedly different than the way it got done in the 
         20   past. 
         21            The creation with this merger of a national 
         22   bank creates all sorts of opportunities to create 
         23   systems that deliver capital, that bring people from 
         24   outside the economic mainstream into the economic 
. 0374
          1   mainstream and brings the economic mainstream into 
          2   the lives of those people in those communities in 
          3   the context of this merger, and again we urge to you 
          4   support it. 
          5            PRESIDING OFFICER SMITH:  Mr. Foss.
          6            MR. FOSS:  Thank you for this opportunity 
          7   today.  I'm the senior director for ACCION USA.  
          8   We're a private nonprofit organization that provides 
          9   credit and business training to micro-entrepreneurs, 
         10   low-and-moderate-income self-employed women and men. 
         11            ACCION is comprised of a micro-lending 
         12   network of five independent organizations serving 
         13   low-income communities in Greater Chicago, New 
         14   Mexico, San Diego, Texas and New York, along with 
         15   three direct lending offices in Atlanta, Southern 
         16   New England and Miami.  They are all directly 
         17   managed from our Boston headquarters here, although 
         18   we'd prefer probably to be in Miami at this point. 
         19            To date, ACCION has dispersed over 
         20   $83 million in micro-business loans to 16,800 home- 
         21   based and storefront business owners, helping them 
         22   to expand their businesses, increase their income 
         23   and improve their families' well-being, individuals 
         24   very much like Mr. Flores who spoke on Panel 12 a 
. 0375
          1   few minutes ago. 
          2            The purpose of my testimony today is to 
          3   describe the overall positive interaction and 
          4   relationship ACCION has had with both banks for over 
          5   a decade and to speak in support of the merger. 
          6            Every ACCION program is located in a city 
          7   or community where Fleet and/or Bank of America have 
          8   an active presence and therefore a responsibility. 
          9            Bank of America and Fleet have both 
         10   provided significant financial support to our 
         11   network for over a decade.  This includes ongoing 
         12   grants and support from Bank of America for ACCION 
         13   programs in Chicago, New Mexico, San Diego, Texas, 
         14   Miami and Atlanta.  It also includes current support 
         15   from Fleet Bank for our work in New York and 
         16   Southern New England. 
         17            In addition to grant support, Bank of 
         18   America has invested in our loan pools as well.  For 
         19   example, the bank made a $1.2 million loan to ACCION 
         20   Texas at a below-market rate.  This timely 
         21   investment by the bank enabled ACCION Texas to 
         22   leverage it and match it with the CDFI Fund. 
         23            As important as the financial support, both 
         24   banks have served generously on the boards of 
. 0376
          1   directors and advisory boards of a number of our 
          2   network programs.  We have two individuals, Gail 
          3   Snowden from Fleet and Mary Schultz Brown from Bank 
          4   of America, who serve on our national ACCION USA 
          5   Board of Directors. 
          6            Finally, we have worked closely with both 
          7   banks to establish joint customer referral programs.  
          8   When the banks aren't able to provide small business 
          9   loans to a potential customer, they will often refer 
         10   this lead to us.  It tends to be a big part of our 
         11   business overall.  Many of our current borrowers 
         12   came to us from bank referral programs. 
         13            Because of the support of Bank of America 
         14   and Fleet, ACCION has been able to help thousands of 
         15   hard-working micro-entrepreneurs with no other 
         16   access to loans.  These small business owners in 
         17   turn have helped not only themselves but their 
         18   families, their employees and their communities. 
         19            We at this point look forward to building 
         20   on the fruitful and long relationship that we've had 
         21   with both institutions. 
         22            Thank you very much. 
         23            PRESIDING OFFICER SMITH:   Thank you.
         24            MR. UMANSKY:  Good afternoon.  My name is 
. 0377
          1   David Umansky.  I'm the director of Civic Builders.  
          2   Thank you for the opportunity to speak out in 
          3   support of the merger. 
          4            Civic Builders is a not-for-profit real 
          5   estate developer of charter school facilities in New 
          6   York City.  Charter schools are a type of public 
          7   school which are given independence from boards of 
          8   education in exchange for strict performance 
          9   accountability standards.  They receive dollars from 
         10   the State and Federal Governments, and in New York 
         11   tend to serve economically disadvantaged 
         12   neighborhoods. 
         13            Charters do not receive a separate stream 
         14   of funding for facilities, and consequently the 
         15   funding of charters' facilities is difficult to 
         16   finance.  Civic Builders depends on lending partners 
         17   like Bank of America to do its deals. 
         18            This past October we closed on a 
         19   $4.7 million real estate deal which includes a 
         20   $3.3 million loan in senior debt from the Bank of 
         21   America.  The facility is in the Hunt's Point 
         22   section of the Bronx, which is the poorest district 
         23   in the country, according to the 1990 census. 
         24            With Bank of America's help, a blighted 
. 0378
          1   former salami factory is being turned into the Bronx 
          2   Charter School for the Arts, which will serve 280 
          3   neighborhood kids.  I believe that anybody who would 
          4   have joined me at the groundbreaking for the Bronx 
          5   Charter School for the Arts and seen the 280 smiling 
          6   faces would support this merger. 
          7            Thank you. 
          8            PRESIDING OFFICER SMITH:  Thank you.
          9            MS. MIRANDA:  Good afternoon.  My name is 
         10   Grace Miranda, and I'm the Housing Director for 
         11   Corporation to Develop Communities of Tampa, Inc., 
         12   located in Tampa, Florida. 
         13            The Corporation to Develop Communities of 
         14   Tampa, which I'll refer to as CDC of Tampa from now 
         15   on, is celebrating our 11th year of providing 
         16   services to low-and-moderate-income residents in the 
         17   East Tampa area, which is one our inner cities. 
         18            Our mission is to raise the economic, 
         19   educational and social levels of residents of 
         20   economically depressed areas of Hillsborough County, 
         21   and this is done through creating jobs, providing 
         22   job training, building community pride, promoting 
         23   entrepreneurship, revitalizing community areas, and 
         24   building affordable housing. 
. 0379
          1            Bank of America has supported the 
          2   revitalization efforts in partnership with our 
          3   organization for over four years now, and as 
          4   partners we share the belief that healthy 
          5   neighborhoods are built upon strong economic and 
          6   educational opportunities.  Bank of America has 
          7   committed to the development of affordable housing 
          8   and support services for residents of East Tampa. 
          9            An example of that would be we are a 
         10   partner in a Greater Miami neighborhood to build a 
         11   low-income rental property which has been referred 
         12   to as a rose in a desert, because it's a first, and 
         13   it's of high quality.  It's an apartment complex 
         14   that I would want to live in. 
         15            Bank of America also provides training and 
         16   technical assistance to our organization.  I 
         17   received my home buyer education and training 
         18   certification because they sponsored and they 
         19   continue to sponsor a lot of our luncheons.  
         20   Practically anything that we venture out to do, they 
         21   have been very supportive. 
         22            Bank of America has also been the corporate 
         23   leader in providing operating grants, donation of 
         24   furniture, and our corporate office was donated at 
. 0380
          1   that time by NationsBank. 
          2            The bank understands a key factor in 
          3   sustaining a productive community is the ability for 
          4   individuals to build and maintain access.  So with 
          5   this merger, we believe that it will continue to 
          6   allow Bank of America and Fleet to provide services 
          7   and funding that will enhance and strengthen the 
          8   inner city. 
          9            And in recognition of Bank of America's 
         10   excellent record of community involvement, ongoing 
         11   identification of regional needs, and innovative 
         12   service provisions that have fostered the continued 
         13   economic growth of both this region and its 
         14   citizens, the banks have our respect and support.
         15            Thank you.
         16            PRESIDING OFFICER SMITH:  Thank you very 
         17   much.
         18            We have three minutes for each of you, and 
         19   we will start with Mr. Bright. 
         20            MR. BRIGHT:  My name is Robert Bright.  I'm 
         21   the founder and President of Talson Solutions, and 
         22   we're located in Philadelphia, Pennsylvania.  Thank 
         23   you for this opportunity to express my support for 
         24   the merger and express my experience as a minority- 
. 0381
          1   owned small disadvantaged business owner. 
          2            Talson provides construction consulting 
          3   services to improve the financial control 
          4   surrounding large capital projects.  We perform 
          5   contract compliance reviews and risk assessments on 
          6   project management, design and construction 
          7   contracts. 
          8            I personally have over two decades of 
          9   engineering and financial consulting experience.  I 
         10   hold degrees from two of the top universities in 
         11   engineering and business schools.  I actually worked 
         12   for some of the most respected companies in the 
         13   United States, Exxon and PricewaterhouseCoopers. 
         14            I state the former in order to say that I 
         15   found BOA, Bank of America, to be very professional 
         16   and receptive of our firm's development.  This is 
         17   especially through their minority supplier 
         18   development program.  As a minority business owner, 
         19   I am pleased to find aggressive supplier 
         20   participation targets.  More importantly, I am 
         21   pleased to be in a position through Talson to verify 
         22   the enforcement mechanism that hits the bottom line 
         23   for many design firms and general contractors. 
         24            I found many majority general contractors 
. 0382
          1   were initially surprised by Bank of America's 
          2   commitment and compliance to supplier diversity.  
          3   But once again, they only recognize that their 
          4   commitment is the only way of doing business with 
          5   the Bank of America. 
          6            After working with Bank of America for the 
          7   past five months, the bank and I are now exploring 
          8   opportunities for long-term growth for Talson, and 
          9   because of my firm's success, since its inception in 
         10   2001, I have not had the need to consider a small 
         11   business loan.  However, I cannot ignore the bank's 
         12   commitment to small business should the need arise. 
         13            I wish to reiterate that I support the 
         14   merger and anticipate greater opportunities for 
         15   minority-owned businesses with the bank merger. 
         16            Thank you. 
         17            PRESIDING OFFICER SMITH:  Thank you.
         18            Mr. Torres.
         19            MR. TORRES:  My name is Felix Torres.  I'm 
         20   the Executive Director of Manchester Neighborhood 
         21   Housing Services in Manchester, New Hampshire.  
         22   We're the largest community development corporation 
         23   in the state.  We develop affordable housing for 
         24   sale or for rent.  We have an active home ownership 
. 0383
          1   program which includes counseling, it includes 
          2   lending, it includes the largest IDA program in the 
          3   state. 
          4            We've had a long and very productive 
          5   relationship with Fleet Bank.  They were intimately 
          6   involved in the founding of our organization over 
          7   ten years ago.  They provided capital to get us 
          8   started.  They provided charitable donations to get 
          9   us started.  They provided human capital in terms of 
         10   members of the board and volunteers. 
         11            That relationship has continued over the 
         12   ten years.  And every time there's been a merger -- 
         13   there's been at least one or two with Fleet -- that 
         14   commitment has not diminished, it has actually 
         15   grown. 
         16            One of the most important things they have 
         17   done for us is to be willing to take risks with us 
         18   in many of our deals and many of the things that 
         19   we're doing. 
         20            In particular, several years ago we had 68 
         21   units that were going on the market full of 
         22   low-income families in the toughest rental market in 
         23   decades in New Hampshire, and they came up to the 
         24   plate and gave us the acquisition loan to buy the 
. 0384
          1   properties, an acquisition loan which we 
          2   incidentally paid back ahead of schedule.  And 
          3   that's the kind of thing that Fleet has done for us. 
          4            Several years ago, again stepping up to the 
          5   plate, it was their charitable contributions that 
          6   enabled the State of New Hampshire to start a home 
          7   buying network statewide.  It was their support that 
          8   allowed us and other groups throughout the state to 
          9   provide home buyer counseling throughout the entire 
         10   state.  So time and time again, Fleet has been the 
         11   catalyst for a lot of the good things that happen in 
         12   our community. 
         13            Manchester is a small city, and New 
         14   Hampshire is a small state, and typically when these 
         15   mergers happen, people have concerns that the small 
         16   states will be ignored.  In our experience, we have 
         17   not been ignored by Fleet.  We strongly support the 
         18   merger, and we believe that this combination will 
         19   provide new resources, a more sophisticated array of 
         20   products to help the growing needs in our 
         21   communities. 
         22            Thank you. 
         23            PRESIDING OFFICER SMITH:  Thank you very 
         24   much.
. 0385
          1            Mr. Ansley.
          2            MR. ANSLEY:  I am Robert Ansley, President 
          3   of the Orlando Neighborhood Improvement Corporation, 
          4   in Orlando, Florida, where the temperature is about 
          5   75 degrees, but nevertheless I am pleased to be here 
          6   to speak in favor of our long-time partner, Bank of 
          7   America, in its merger with FleetBoston. 
          8            The ONIC, as we are called, is a nonprofit 
          9   developer of affordable housing in the Orlando 
         10   metropolitan area, and we were formed in 1985.  Bank 
         11   of America and its predecessors, NationsBank and 
         12   Barnett Bank, have been a partner with ONIC in three 
         13   ways. 
         14            Since our founding, Bank of America has 
         15   been represented on our Board of Directors 
         16   continuously.  Secondly, ONIC has received modest 
         17   grants for operating support from the Bank of 
         18   America Foundation over the last few years.  But 
         19   most important is the participation and the support 
         20   of Bank of America in our production of affordable 
         21   housing. 
         22            Since 1989 ONIC has developed or in some 
         23   cases co-developed 16 communities totaling over 
         24   2,000 units.  In ten of those, with over 1500 units, 
. 0386
          1   Bank of America has been a lender or investor.  The 
          2   most dramatic of these is City View at Hughes 
          3   Square. 
          4            In 1999 ONIC had an opportunity to control 
          5   four vacant acres in part of downtown Orlando where 
          6   the census tract data at this location listed the 
          7   median household income as 37 percent of the 
          8   area-wide median.  To accomplish our vision of a 
          9   significant mixed-income, mixed-use investment, we 
         10   needed a partner with horsepower and experience.  
         11   There was only one organization to call, and that 
         12   was Bank of America Community Development Banking. 
         13            We formed a 50-50 partnership, and as a 
         14   result, in this past November, 2003, the Hughes 
         15   Square Project opened, the $60 million Hughes Square 
         16   Project opened, with the following:  266-unit City 
         17   View Apartments, 107 of which are reserved for 
         18   households earning less than 60 percent of the area 
         19   median; 26,000 square feet of neighborhood-oriented 
         20   shopping; a 1,000-space parking garage; a Bank of 
         21   America branch; and finally, a 200,000-square-foot 
         22   national headquarters of Hughes Supply, 
         23   Incorporated, an Orlando-based company listed in the 
         24   Fortune 500. 
. 0387
          1            Bank of America invested $9 million of its 
          2   own money in tax credits and direct at-risk equity 
          3   at Hughes Square.  Needless to say, this development 
          4   has already become a significant catalyst for 
          5   revitalization in the downtown Orlando neighborhood.  
          6   We look forward to the next one. 
          7            Thank you again for the opportunity to 
          8   speak.
          9            PRESIDING OFFICER SMITH:  Thank you very 
         10   much. 
         11            Mr. Place.
         12            MR. PLACE:  Hello.  My name is Joe Place, 
         13   owner and president of CDS Air Freight.  We're 
         14   located at Washington Dulles International Airport, 
         15   and our business provides domestic transportation as 
         16   well as handling import and export shipments from 
         17   Washington Dulles. 
         18            Bank of America has had a positive impact 
         19   on the growth and success of my business, and 
         20   therefore I am here today in support of the merger.  
         21   My business relationship with Bank of America began 
         22   in 1996.  Bank of America was able to provide CDS, 
         23   when other institutions would not, a line of credit 
         24   that enabled us to manage our cash flow during our 
. 0388
          1   critical period of growth. 
          2            CDS has a fleet of trucks that was 
          3   originally financed with high-rate leasing 
          4   companies, high-interest-rate leasing companies, and 
          5   Bank of America was able to refinance at a lower 
          6   rate by actually half.  This better ensured our 
          7   existence and future growth. 
          8            With the help of Bank of America in 1999, I 
          9   created another company named Global Solutions 
         10   Associates.  We hire individuals who work as 
         11   government contractors.  We provide both services 
         12   and product to the government.  Bank of America 
         13   provided GSA, Global Solutions Associates, also a 
         14   line of credit.  That enabled us to manage our cash 
         15   flow and our growth, which was very critical for 
         16   being awarded government contracts.
         17            With the help of Bank of America in 2000, I 
         18   began another small company named JP Charters, 
         19   Incorporated.  Bank of America was able to offer the 
         20   most competitive rate and terms on the purchase of a 
         21   very large asset.  This asset is what generates the 
         22   revenue and hires the employees to operate and 
         23   maintain the company. 
         24            Most recently, in 2003, I purchased a 
. 0389
          1   commercial building.  The relationship between Bank 
          2   of America and the Small Business Administration 
          3   made this possible.  Bank of America was 
          4   instrumental in facilitating the paperwork needed to 
          5   close the deal with the Small Business 
          6   Administration.  Bank of America again was able to 
          7   offer the most competitive rate terms. This recent 
          8   acquisition will enable me to expand my business and 
          9   hire more employees. 
         10            Lastly, and most importantly, throughout my 
         11   business relationship with Bank of America, I have 
         12   worked with the same bank representative since 1996.  
         13   Bank of America has served me well as a small 
         14   business owner, and I thank you for listening and 
         15   considering my experience with Bank of America. 
         16            PRESIDING OFFICER SMITH:  Thank you.
         17            MR. WHELAN:  My name is Joe Whelan.  I'm 
         18   the Executive Director of St. Joseph's Carpenter 
         19   Society.  We are a 501(c)(3) neighborhood CDC 
         20   located in Camden, New Jersey.  Our focus is to 
         21   provide home ownership housing, thereby increasing 
         22   the wealth of people who are relatively poor, by 
         23   increasing real estate values through investment 
         24   over time. 
. 0390
          1            We do that through a three-pronged 
          2   approach.  That consists of education, quality 
          3   construction, and community organizing. 
          4            Camden, for those who don't know, is always 
          5   among the poorer cities of the country when those 
          6   cities are ranked.  We are directly across the 
          7   Delaware River from Philadelphia.  We're a city of 
          8   80,000, we have no middle-income neighborhoods, and 
          9   until recently we hadn't seen improvement in the 
         10   public high school dropout rate in years, and it 
         11   recently went below 50 percent for the first time in 
         12   quite some period. 
         13            Unemployment is usually three times the 
         14   national average, and infant mortality rates are 
         15   higher than many third-world countries.  So that 
         16   just paints a picture of a place where many see 
         17   reasons for disinvestment, but Fleet has not. 
         18            New Jersey is an interesting place.  It's 
         19   got about a quarter of the 25 wealthiest counties in 
         20   the country, while at the same time we have Newark 
         21   and Camden who are in great need of investment.  We 
         22   have dozens of other small cities that have been 
         23   disinvested for decades. 
         24            And now Fleet's role.  Fleet's role with 
. 0391
          1   the Carpenter Society has been the -- they have been 
          2   the only bank who in our 20-year history have 
          3   consistently been at our side to respond to our 
          4   call.  Other banks are in and out depending on what 
          5   their needs may be, but Fleet and its predecessors 
          6   have always been there for us.  They have made loans 
          7   and lines available to our organization.  They have 
          8   provided residential mortgages. 
          9            We are currently in the middle of a 
         10   520-unit project.  If I presented 100 homes that 
         11   were completed with home buyers, I'll tell you today 
         12   that Fleet will do at least half of the residential 
         13   mortgages.  Such is our relationship with them, in a 
         14   place that's as broken as Camden. 
         15            They do those residential mortgages with 
         16   discounted rates and with underwriting that truly 
         17   understands the marketplace.  They serve on our 
         18   Board of Trustees.  They have provided grants for 
         19   our educational programs and much more support in 
         20   in-kind contributions and donations of time. 
         21            When I look to the future now, upon this 
         22   merger announcement, I look at Bank of America as an 
         23   unknown.  I was enthused to hear some of the 
         24   testimony today.  I would encourage Bank of America 
. 0392
          1   to fulfill the Fleet agreement currently in place -- 
          2   I understand they will in New Jersey -- and then 
          3   renew it. 
          4            And I want to conclude by saying I 
          5   respectfully disagree with an earlier witness who 
          6   indicated bigger is not better.  Bigger can be 
          7   better if you understand your market needs and 
          8   respond to them appropriately, as Fleet has done.  I 
          9   believe Bank of America will do that, and I support 
         10   this merger application. 
         11            PRESIDING OFFICER SMITH:  Thank you.
         12            Mr. Owens.
         13            MR. OWENS:  Good evening.  My name is 
         14   Edward Owens.  I'm President and CEO of the Owens 
         15   Companies of Everett, Mass.  Owens Companies is 
         16   comprised of two companies, a management company 
         17   that controls about 200,000 square feet, but Owens 
         18   Companies was also founded by my dad in 1927, Owens 
         19   Movers. 
         20            We're the oldest minority firm in New 
         21   England.  We employ over 60 union movers in the 
         22   Boston area.  95 percent of our employees are 
         23   minorities.  We put about $2 million of payroll, 
         24   health and welfare into the Roxbury and Dorchester 
. 0393
          1   communities. 
          2            When I say "we," I mean Owens Movers and 
          3   FleetBoston partnering through their minority 
          4   supplier development program.  It really is.  It has 
          5   been this way for over -- the last time I was here, 
          6   I was at the Bank of Boston/Fleet merger, and I had 
          7   very much concern about that last merger. 
          8            But the thing that renewed my faith was 
          9   Bank of Boston, Chad Gifford, people like Chad, 
         10   people like Gail Snowden.  I've been with the bank.  
         11   I was one of the first minority vendors that Bank of 
         12   Boston had.  It was known as a Brahmin bank, the 
         13   First National Bank, and I've seen the changes. 
         14            Ira Stepanian was the CEO at that time, 
         15   with CRA.  And the bank had a culture, and that 
         16   culture was to be fair.  And when the merger came 
         17   for Fleet Bank, I was very much concerned, because 
         18   Fleet really didn't have that positive input in the 
         19   community at the time. 
         20            But over a period of time, I've learned 
         21   that Fleet Bank is a great bank.  It's been great to 
         22   over 60 families that work for me.  It's given us an 
         23   opportunity.  We were one of the first ones that got 
         24   a contract with them.  It has renewed my faith in 
. 0394
          1   what everything that Chad Gifford said, he did.  The 
          2   commitment that he made with Terry Murray, they did. 
          3            I'm here today to say that I believe, if 
          4   Chad Gifford says that this is good for the region, 
          5   for New England, it's good for me, it's good for 
          6   minority enterprise, because if there was a Hall of 
          7   Fame of CEOs, Chad would be number one.  He is the 
          8   guy. 
          9            I know it took a great deal of pain to 
         10   merge this with Bank of America, because of the 
         11   unknown, but I think that with the strength that 
         12   Bank of America can come with Fleet Bank and the 
         13   type of person that Ken Lewis is, I have great faith 
         14   in Bank of America. 
         15            That's what I'm here to say, as the oldest 
         16   minority business in New England, one of the first 
         17   companies to ever do business with a bank in this 
         18   city, and we presently are enjoying that business.  
         19   We've done warehousing and distribution for the bank 
         20   for a number of years, and it's given my company 
         21   great credibility as far as to do business with a 
         22   bank. 
         23            Willie Sutton says, "I rob banks because 
         24   that's where the money is."  For us, it was a 
. 0395
          1   position that we want to do business with banks 
          2   because that's where the credibility is.  For a 
          3   minority business, credibility is everything. 
          4            They gave us that opportunity.  We're still 
          5   enjoying that business with them now, and that's why 
          6   we are very happy to support this merger.  For all 
          7   of the families of Owens Movers, I want to thank you 
          8   very much, and I'm glad to be here today.
          9            PRESIDING OFFICER SMITH:  Thank you very 
         10   much, all of you, for being here this afternoon.
         11            Welcome to the last panel.  We're in the 
         12   three-minute time frame. 
         13            MS. CRUISE:  Good evening.  My name is 
         14   Armentha Cruise.  I am the President and CEO of The 
         15   Aspen Group.  Aspen is a full-service human 
         16   resources management and staffing company, 
         17   headquartered in Silver Springs, Maryland.  We are a 
         18   minority-woman-owned company, and we have been in 
         19   business for 15 years. 
         20            I am pleased to have the opportunity to 
         21   speak in support of the Bank of America and 
         22   FleetBoston merger.  As a long-term Bank of America 
         23   customer and a Bank of America contractor, I can 
         24   provide testimony based on -- I will provide 
. 0396
          1   testimony based on my own personal experience. 
          2            Bank of America has contributed to Aspen's 
          3   extraordinary growth by providing access to capital  
          4   with low interest rates and excellent terms and 
          5   conditions on our loans. 
          6            As our company has grown over the years, 
          7   Bank of America has supported and funded that growth 
          8   by increasing our lines of credit as needed.  The 
          9   relationship with Bank of America has been an 
         10   excellent one.  I have received outstanding support, 
         11   guidance and services. 
         12            Equally important, Bank of America has also 
         13   supported Aspen's growth over the last 12 years by 
         14   allowing us to serve as a contractor.  Now, when I 
         15   say "Bank of America," I'm also speaking of its 
         16   predecessors as well. 
         17            It is very difficult for a small minority- 
         18   woman-owned business to win major contracts, 
         19   especially the magnitude of Bank of America.  
         20   However, I'm pleased to say that our company, Aspen, 
         21   has provided staffing support to Bank of America and 
         22   its predecessors since 1992.  We started out by 
         23   providing these services locally in the Washington 
         24   metropolitan area, and today those services have 
. 0397
          1   expanded to a national managed services contract 
          2   award. 
          3            This is extremely significant and very 
          4   impactful for our company, because what it does, it 
          5   pretty much positions us -- it does position us for 
          6   future growth and viability in the marketplace, 
          7   because it's a very, very competitive market.  And 
          8   what this contract does, it certainly makes us a 
          9   major force in the marketplace.
         10            With this major contract award from Bank of 
         11   America, I know that they've demonstrated their 
         12   commitment to minority and women-owned businesses 
         13   and small businesses.  Because of Bank of America's 
         14   overall support for our company, Aspen, we are now a 
         15   national and international company. 
         16            It is my belief that this merger will be 
         17   very significant in allowing for further growth and 
         18   an expansion of opportunities in the marketplace for 
         19   women and minorities and small companies, as it has 
         20   done for Aspen.  Thank you very much.
         21            PRESIDING OFFICER SMITH:  Thank you.
         22            We'll go to Pastor Dewberry.
         23            PASTOR DEWBERRY:  Good evening.  My name is 
         24   Ronald B. Dewberry.  I'm the Senior Pastor and 
. 0398
          1   Founder of New Life Community Church in Syracuse, 
          2   New York.  I'm here this evening to express my 
          3   support, which I believe is the sentiments of many 
          4   of those who are familiar with the very fine work 
          5   that Fleet Bank has done in the Syracuse area. 
          6            Like many urban cities, Syracuse has 
          7   experienced its economic difficulties.  In the area 
          8   where I pastor on the South Side of Syracuse is an 
          9   area that is certainly most hard hit as far as 
         10   minority home ownership and things of that nature. 
         11            But I am proud to say that we have an 
         12   agency there by the name of United Neighborhoods, 
         13   Syracuse United Neighborhoods, which is involved 
         14   with monitoring lending institutions and their 
         15   practices as far as home mortgages.  And last year, 
         16   or should I say in 2002, the United Neighborhoods, 
         17   they had recognized Fleet Bank as being one of the 
         18   leading mortgage lenders in that ten-census-tract 
         19   area. 
         20            So out of all of the potential lenders that 
         21   might have made a significant impact, Fleet was one 
         22   of the leading representatives there to assist in 
         23   that area, giving a little better than a half 
         24   million dollars. 
. 0399
          1            So I'm here again to express my support for 
          2   the merger, and I hope that this Committee would 
          3   give it its strongest consideration. 
          4            Thank you. 
          5            PRESIDING OFFICER SMITH:  Thank you.
          6            MR. EMBAYE:  Good evening.  My name is 
          7   Belay Embaye.  And I am the Program Director of the 
          8   ECDC Enterprise Development Group.  I'm happy to be 
          9   here and support the merger of Bank of America with 
         10   FleetBoston. 
         11            We are a nonprofit organization, and we 
         12   serve minorities in the Washington, D.C., 
         13   metropolitan area, both as an intermediary of the 
         14   Small Business Administration, as well as member of 
         15   the CDFI.  Our relation with Bank of America has 
         16   been fruitful and goes back many years.  They 
         17   supported us in our programs as well as they have 
         18   given us support in development organization. 
         19            We have three major programs.  One is the 
         20   micro-enterprise development program.  Bank of 
         21   America gave us a low-interest, long-term loan with 
         22   $400,000, with which we are able to serve 32 people 
         23   to start their own business, ranging from $2,000 to 
         24   $35,000.  They also gave us $30,000 as an operating 
. 0400
          1   fund, and both with their loan fund as well as their 
          2   operating fund, we were able to leverage other 
          3   sources like from the CDFI. 
          4            Another program area that we have is car 
          5   financing.  And fortunately, Bank of America, as 
          6   sympathetic as it is to minorities like us, they 
          7   lent us $400,000, with which we were able also to 
          8   leverage another $500,000 from other sources. 
          9            And the third area where their help has 
         10   been useful to us is in the area of 
         11   micro-enterprise -- I mean, IDA program.  So far 
         12   they have serviced more than 400 clients in their 
         13   banks, waiving all the difficulties, but more 
         14   importantly, where they have been most useful to us 
         15   is in lending us $4.7 million to acquire our own 
         16   building, so that we can expand our services in many 
         17   areas. 
         18            Once again, we are very happy with the 
         19   services that are provided to us by Bank of America, 
         20   and without their help, I don't think we would have 
         21   achieved the achievements we have received.  So we 
         22   fully support the merger between Bank of America as 
         23   well as FleetBoston. 
         24            Thank you very much. 
. 0401
          1            PRESIDING OFFICER SMITH:  Thank you very 
          2   much.
          3            Ms. Davis.
          4            MS. DAVIS:  Good afternoon, and happy new 
          5   year to everybody.  My name is Diane Davis, and I'm 
          6   the Senior Vice-President of Operations for 
          7   Renaissance Design Build Group of Jacksonville.  We 
          8   are a minority-owned design build firm.  Currently 
          9   we work for a local nonprofit, Oakland Trace 
         10   Redevelopment Land Corporation. 
         11            Bank of America Community Development 
         12   Division has been the lender and partner in 
         13   rebuilding East Jacksonville with this nonprofit 
         14   located in the area that is near our newly 
         15   constructed ballpark and arena in Jacksonville, 
         16   Florida.  By the way, I'm not used to this cold 
         17   either. 
         18            Since these homes have been constructed, 
         19   the property values have appreciated from $72,000 to 
         20   $85,000, and in a blighted area that's substantial.  
         21   And this has taken place over a three-year period. 
         22            With the construction of these homes, we 
         23   have worked with the construction and permanent loan 
         24   product offered by Bank of America. 
. 0402
          1            We have found that, in a market where 
          2   things are generally expected to be difficult and 
          3   nonexistent, Bank of America has been responsive to 
          4   this underserved community, funding draws on time.  
          5   And if we had a process that slowed down at all, we 
          6   worked on that process together to improve it and/or 
          7   shorten the period between the next draw or closing 
          8   where it was required. 
          9            In addition, I have previously worked with 
         10   Bank of America and Nations and Barnett Bank.  I've 
         11   been in the building business since 1972. 
         12            We have utilized their construction loan 
         13   product, construction permanent loans, acquisition 
         14   and development loans, and have found the 
         15   administrative staff, along with the loan officers, 
         16   to be very knowledgeable, responsive, and helpful, 
         17   and listening when we needed to make sure that all 
         18   of our subcontractors were paid on time, closing 
         19   packages were delivered timely, our agents were 
         20   given the proper information, and all of it was 
         21   handled during a reasonable time period. 
         22            I want to say that I support the merger, 
         23   and I am sure, with the resources of both of these 
         24   entities, that they will continue to build 
. 0403
          1   partnerships and relationships with communities in 
          2   desirable as well as urban areas needing 
          3   revitalization. 
          4            I do thank you for allowing me to be here. 
          5            PRESIDING OFFICER SMITH:  Thank you very 
          6   much.
          7            Ms. Gulley.
          8            MS. GULLEY:  My name is Isay Gulley.  I'm 
          9   President and CEO of Clearwater Neighborhood Housing 
         10   Services in the shining city of Clearwater, Florida. 
         11            It seems like a punishment, when you want 
         12   to say so much and you have a few minutes to say it, 
         13   but I'm going to say what I have to say, in the 
         14   three minutes, and respect the timekeeper. 
         15            Clearwater Neighborhood Housing Services is 
         16   a private nonprofit, and it has been in existence 
         17   for 24 years.  I've had the pleasure of working with 
         18   the organization for 23 of those years.  And since 
         19   my term in office, I have seen many lending 
         20   institutions come and go, and not many have come and 
         21   gone and left an imprint in the sand as Bank of 
         22   America has. 
         23            Our Clearwater Neighborhood Housing 
         24   Services, as many of our organizations in our 
. 0404
          1   network, we're nationally chartered.  Neighborhood 
          2   Reinvestment Corporation out of Washington, D.C., is 
          3   our national partner, and today we have about 235 
          4   affiliate organizations that are out here in these 
          5   communities trying to respond to neighborhood 
          6   revitalization. 
          7            The organization started up years ago, in 
          8   the mid-'70s, because of urban renewal.  There were 
          9   so many lenders not loaning into the urban 
         10   communities, and we had a thing called redlining. 
         11            Today I'm very proud to say Bank of America 
         12   has not only talked the talk, they've walked the 
         13   walk, and Clearwater will never be the same, the 
         14   City of Clearwater, nor will the county, but 
         15   primarily our neighborhood in Clearwater known as 
         16   North Greenwood. 
         17            The most recent project that we've done 
         18   with Bank of America is a $14.6 million deal, and 
         19   it's known as the Greenwood Apartments Redevelopment 
         20   Project. 
         21            This project went on to win national 
         22   recognition from Fannie Mae last year, the Fannie 
         23   Mae Maxwell Award of Excellence.  We had 126 
         24   organizations nationwide apply for this award, and 
. 0405
          1   we came in first place.  That's all because of Bank 
          2   of America responding to an outcry from the 
          3   community. 
          4            This was 192 units of affordable housing, 
          5   where it was very deplorable.  You had people living 
          6   there with not adequate heating, you still had the 
          7   old fuel oil heat, you had outdoor clotheslines, you 
          8   had asbestos, you just had all kinds of conditions.  
          9   It was shameful that it was allowed to exist. 
         10            But thanks to Bank of America for 
         11   responding and partnering with our organization to 
         12   take the property out of the hands of a slumlord 
         13   that didn't care.  Not only did they partner with us 
         14   to do that, they are also partnering with affordable 
         15   housing to do in-fill housing, also purchasing of 
         16   existing houses, and they have a small business loan 
         17   program which we're partnering with them also. 
         18            I can't say enough in three minutes, but 
         19   all I can say, with this merger, I know Bank of 
         20   America is doing the right thing, and this will 
         21   allow it to do even more with the Fleet and Bank of 
         22   America merger.  I strongly support it. 
         23            PRESIDING OFFICER SMITH:  Thank you.
         24            Mr. Hamilton.
. 0406
          1            MR. HAMILTON:  Good evening.  My name is 
          2   Samuel C. Hamilton, and I am the Executive Director 
          3   and CEO of the Hartford Economic Development 
          4   Corporation and the Greater Hartford Business 
          5   Development Center located in Hartford, Connecticut.  
          6   I'm here to speak in favor of the merger of Bank of 
          7   America and FleetBoston. 
          8            We are a community development financial 
          9   institution serving Hartford and 62 of Connecticut's 
         10   169 towns since 1975.  In addition to providing 
         11   technical assistance and loan packaging for small 
         12   business start-ups and emerging businesses, we are 
         13   an alternate lender to small businesses who are 
         14   unable to qualify for loans through the traditional 
         15   lending community, either in part or in total. 
         16            Our firm has packaged more than $150 
         17   million in loans for micro-entrepreneurs and small 
         18   businesses since our inception, impacted in excess 
         19   of 5,000 jobs, assisted a significant number of 
         20   entrepreneurs and small businesses, averaging more 
         21   than 450 such contacts per year. 
         22            Our objective is to incubate the start-up 
         23   or emerging business to the extent that it can 
         24   qualify for traditional bank loan programs.  Thus we 
. 0407
          1   have a close relationship and a good understanding 
          2   of the commitment and involvement of traditional 
          3   lenders to serving this market, especially in the 
          4   urban center. 
          5            HEDCo/GHBDC has found FleetBoston to be an 
          6   extremely active institution in reaching out to 
          7   assure that access to capital, affordable housing 
          8   and wealth creation are possible for all, not just a 
          9   select few. 
         10            I am constantly amazed that, despite 
         11   FleetBoston's proactive position and active 
         12   involvement in their footprint to help make 
         13   communities more liveable for all, it does not 
         14   receive the recognition it deserves.  Perhaps this 
         15   is reflective that it's more of a concern to them to 
         16   do the job than the PR associated with it. 
         17            The recent Outstanding rating from CRA 
         18   offers some vindication.  FleetBoston is often first 
         19   to initiate programs to address a community need, 
         20   with others coming on board at a later time. 
         21            I find FleetBoston not only talks the talk, 
         22   but walks the walk, whether it is their 
         23   establishment of a revolving loan fund totaling 
         24   $6.2 million, leveraging another $4 million from the 
. 0408
          1   State of Connecticut to provide a revolving loan 
          2   fund to serve the underserved markets in Hartford, 
          3   New Britain, Meriden and New Haven, especially in 
          4   the Hispanic/Latino community, or the significant 
          5   participation in funding of IDA programs for small 
          6   business creation and individual wealth creation 
          7   strategies. 
          8            FleetBoston's commitment extends to 
          9   assisting in building capacity of small businesses 
         10   to manage their affairs, their financial affairs, by 
         11   funding computer labs, Quickbooks training, and 
         12   point-of-sale inventory systems. 
         13            As past chairman of the United Way of the 
         14   Capital Area, I have had personal experience with 
         15   FleetBoston's commitment to serve its role as an 
         16   outstanding corporate citizen.  It starts from the 
         17   top and spreads down throughout the organization. 
         18   Chandler Howard, Fleet Connecticut President, led a 
         19   successful campaign this year, despite a sluggish 
         20   economy.  It was his energy and FleetBoston's 
         21   support that made this happen. 
         22            As a Director of Neighborhood Support 
         23   Collaborative and the Local Initiatives Support 
         24   Corporation, I have personally experienced  
. 0409
          1   tremendous support both in financial and technical 
          2   assistance provided. 
          3            In summary, I summarize my remarks by 
          4   saying, in the case of the Bank of America/ 
          5   FleetBoston merger, more is better.  My firsthand 
          6   experience with FleetBoston, knowing how they value 
          7   community and keep their commitments, combined with 
          8   what I have garnered from my research on Bank of 
          9   America's track record, I believe the potential for 
         10   positive impact in the communities to be served by 
         11   the combined entities is enormous. 
         12            Thank you. 
         13            PRESIDING OFFICER SMITH:  Thank you very 
         14   much. 
         15            Ms. Kleiman.
         16            MS. KLEIMAN:  I know you all are just 
         17   saving the best for last. 
         18            Honorable Members of the Federal Reserve 
         19   Bank of Boston and Committee Members, thank you for 
         20   allowing me to speak this afternoon at this 
         21   important hearing or the proposed bank merger 
         22   between Bank of America and Fleet. 
         23            I am Cathy M. Kleiman, Executive Director 
         24   of Charleston Affordable Housing, a 501(c)(3) 
. 0410
          1   nonprofit development corporation based in 
          2   Charleston, South Carolina.  I am the founding 
          3   Executive Director, its first and only Executive 
          4   Director, and I'm appearing to provide our own 
          5   nonprofit's positive experience with Bank of 
          6   America, as well as its predecessor NationsBank, and 
          7   to give you the State of South Carolina's 
          8   perspective. 
          9            I have served on the South Carolina State 
         10   Fannie Mae Advisory Board and for six years on the 
         11   Advisory Council of the Federal Home Loan Bank of 
         12   Atlanta, as well as other regional and advisory 
         13   commissions.
         14            Since Charleston Affordable Housing's 
         15   inception 13 years ago, Bank of America has 
         16   supported our efforts to create and produce 
         17   affordable housing opportunities for low-and- 
         18   moderate-income families and to build nonprofit 
         19   capacity throughout the Carolinas.  It is only 
         20   because of their strong commitment to and 
         21   participation in community development and 
         22   affordable housing activities in our area that I am 
         23   appearing today and speaking in favor of the merger. 
         24            Unlike throughout much of the country, the 
. 0411
          1   development of nonprofit organizations and 
          2   corporations came slowly in the South.  We needed 
          3   help to develop those community development CDCs and 
          4   especially in South Carolina to build capacity. 
          5            Bank of America has worked with nonprofit 
          6   development organizations to bolster the efforts and 
          7   the productivity of these organizations.  They have 
          8   also invested in the projects and the programs of 
          9   those organizations.  BOA's support has clearly 
         10   helped build up the nonprofit affordable housing 
         11   industry and promoted the successful production and 
         12   completion of desperately needed housing resources 
         13   for low-and-moderate-income households.
         14            Tremendous resources, financial and human, 
         15   were needed a decade ago and are still essential 
         16   today to launch, coordinate and organize the 
         17   community-based organizations needed to 
         18   conceptualize, sponsor and develop affordable 
         19   housing developments and the related community 
         20   development activities.  Resources are also crucial 
         21   to expand the community and economic development 
         22   groups, to fund their organization's programs, as 
         23   well as to actually finance the work needed to 
         24   implement their activities and projects. 
. 0412
          1            Bank of America's personnel and financial 
          2   resources have been and still are available to 
          3   provide technical assistance to the organizations, 
          4   education to the communities and their residents, 
          5   execute planning and project sessions, and to 
          6   finance the greatly needed programs and housing 
          7   developments throughout the State of South Carolina 
          8   for low-and-moderate-income citizens, in our cities, 
          9   counties, and communities. 
         10            BOA representatives have been actively 
         11   involved in the creation and financing of affordable 
         12   housing for over a decade and have always been 
         13   available to attend any meetings with government 
         14   entities, boards, investors, neighborhood 
         15   associations or any local entities. 
         16            Representatives and employees of the bank 
         17   participate in all kinds of charitable 
         18   organizations, and they serve in roles from 
         19   volunteers to being on boards of directors.  They 
         20   assist us both in our housing development, economic 
         21   development, as well as all kinds of activities and 
         22   initiatives on statewide, countywide and local 
         23   levels. 
         24            I have submitted testimony to you which 
. 0413
          1   lists tremendous investments they've made throughout 
          2   the state in bonds and tax credit developments, and 
          3   I'll let you look at the statistics on your own. 
          4            Again, thank you, and we strongly support 
          5   the merger. 
          6            PRESIDING OFFICER SMITH:  Thank you very 
          7   much. 
          8            Now to our last speaker. 
          9            MR. OGUNDELE:  Good evening.  My name is 
         10   Jelili Ogundele from Harlem Park Revitalization 
         11   Corporation in Baltimore, Maryland.  I'm here 
         12   tonight to support the merger of Bank of America and 
         13   FleetBoston Bank. 
         14            Just like in Baltimore years ago we had 
         15   positive experience with NationsBank merging with 
         16   Bank of America, we believe this merger of Bank of 
         17   America and FleetBoston will benefit the state, the 
         18   communities, and all of the states that these two 
         19   banks are serving.  By combining the assets and the 
         20   commitment of these two banks, we believe the 
         21   underserved community will benefit greatly. 
         22            In Baltimore, as some you might know, Bank 
         23   of America, through its development banking and also 
         24   the CDC, have invested a lot of capital in several 
. 0414
          1   communities in Baltimore, especially in Harlem Park, 
          2   where we are one of lowest income communities of the 
          3   city, and most banks come and chicken out, they come 
          4   and go.  They make promises on paper; when it's time 
          5   to make the deal, they're gone, and you know that. 
          6            Bank of America through NationsBank came to 
          7   us since 1997, '98.  We were able to develop a 
          8   community improvement plan which is the first ever 
          9   in the city.  Our mayor has adopted this concept and 
         10   is encouraging all banks to go to some community and 
         11   partner with local citizen groups to create a vision 
         12   for the community. 
         13            This plan took 18 months.  As you know, 
         14   banks don't have the patience, but we were able to 
         15   convince them that a plan is bigger than a project.  
         16   Within a plan, you can have several projects that 
         17   you can implement. 
         18            This plan focuses on four areas of our 
         19   community, abandonment of vacant houses, new housing 
         20   development -- we are used to three-story row houses 
         21   in Baltimore.  Our community wants something new, 
         22   something like we see in the suburb, which is about 
         23   a mile from our community.  There is an issue of 
         24   public safety, sanitation and transportation.  There 
. 0415
          1   is an issue of new services. 
          2            This plan after 18 months becomes the 
          3   people's plan, and that's what we call it.  This 
          4   plan has also stimulated a city-wide planning 
          5   process for different communities to take action and 
          6   take responsible for their life. 
          7            Bank of America through its CDC also was 
          8   very instrumental in implementation strategy.  The 
          9   focus of the project in Harlem Park was the senior 
         10   citizen building for 94 units.  This is the first 
         11   new construction in 30 years in our community. 
         12            What is good about this project, it's got 
         13   pharmacy, the only pharmacy left in the 'hood.  
         14   Also, it's going to have a restaurant, the only 
         15   restaurant in the 'hood, serving five or six 
         16   communities.  Also it will have a doctor's office, 
         17   the only doctor's office, probably a general 
         18   practitioner, that will serve about five or six 
         19   communities.  This one project itself is stimulating 
         20   a lot of reinvestment in the community. 
         21            There will be a Phase II for this project.  
         22   The Phase II is the home ownership project for 160 
         23   units, which will be low-to-moderate-income 
         24   families, creating a mixed-income community in a 
. 0416
          1   community where no one had thought anything is 
          2   possible. 
          3            We're here tonight to support this merger.  
          4   We think it's good for our community, and we believe 
          5   the community of Bank of America will continue to 
          6   grow.  Thank you.
          7            PRESIDING OFFICER SMITH:  Thank you very 
          8   much.  I thank everyone who presented testimony at 
          9   this public meeting.  I thank you on behalf of the 
         10   panel here today and on behalf of the Federal 
         11   Reserve more generally. 
         12            It has taken a lot of patience on your 
         13   part, and on the part of panels already gone, to 
         14   abide by or try to abide by the time constraints 
         15   which we did find it necessary to impose.  But it's 
         16   been an important meeting to obtain views both for 
         17   and against the merger, and we, again, thank you. 
         18            I also take this opportunity to thank the 
         19   Federal Reserve Bank of Boston for hosting the 
         20   meeting, and for all of the effort that went into 
         21   making sure that everything is fine. 
         22            This is the end of the panels.  We had an 
         23   open mike.  We have two people signed up.  I have 
         24   Mr. James Carter and Archbishop Timothy Paul Bayman.  
. 0417
          1   Are you in the room?  (No response)  
          2            Do you think they might be waiting for 
          3   6:35?  Probably not.  Well, we'll be around here, so 
          4   if they do show up, we'll give them a private public 
          5   meeting. 
          6            So with that, we are adjourned, and thank 
          7   you all again very much.
          8                 (Whereupon the hearing was
          9                 adjourned at 6:15 p.m.)
. 0418
          1                         I N D E X
          2       SPEAKER:                                PAGE
          3       Charles Gifford                          6
          4       Kenneth D. Lewis                        15
          5       Barney Frank                            30
          6       Joseph Kriesberg                        40
          7       Gail Lattimore                          43
          8       Richard Thal                            46
          9       Jennifer Van Campen                     48
         10       Robert Van Meter                        50
         11       John Waite                              54
         12       Jeffrey Sanchez                         58
         13       Vincent Fort                            62
         14       Derrick Boazman                         65
         15       Dianne Wilkerson                        69
         16       Richard Blumenthal                      78
         17       John W. Fonfara                         83
         18       Patrick L. McCrory                      87
         19       Michael McMahon                         92
         20       William Wainwright                      95
         21       E.G. Ned Fowler                         99
         22       Richard Brown                          102
         23       Brenda J. Clement                      105
         24       Juan Cofield                           108
. 0419
          1                  I N D E X  (Continued)
          2       SPEAKER:                              PAGE
          3       Nadine Cohen                           112
          4       Hillary Pizer                          117
          5       Harmon Hamilton                        120
          6       Roberto Miranda                        122
          7       George Butts                           125
          8       Maude Hurd                             128
          9       James G. Hagan                         131
         10       Sarah Gerecke                          134
         11       Stephen Schley                         137
         12       Mike Servais                           139
         13       Sister Mary Bourdon                    142
         14       William Guenther                       144
         15       Bruce Marks                            148
         16       Steven Fishback                        153
         17       Kirsten Keefe                          156
         18       Louise McNeilly                        161
         19       Phyllis Salowe-Kaye                    166
         20       Tanya Wolfram                          170
         21       Lee Beaulac                            173
         22       Ruhi Maker                             178
         23       Meizhu Lui                             183
         24       Rev. Al Sampson                        186
. 0420
          1                  I N D E X  (Continued)
          2       SPEAKER:                              PAGE
          3       Richard E. Barber                      190
          4       Deadria C. Farmer-Paellmann            198
          5       Isidio Farash                          204
          6       Ramkrishna Tare                        207
          7       Bill Edwards                           212
          8       Daniel J. Forte                        218
          9       Joseph E. Washington                   223
         10       Lauren Compere                         227
         11       F. Barton Harvey, III                  231
         12       Charles Stith                          235
         13       Paul Guzzi                             237
         14       Dewitt Jones                           239
         15       Ronald L. Phillips                     244
         16       John Taylor                            250
         17       John Anderson                          259
         18       Andrea Psoras                          263
         19       Chris Cole                             270
         20       Richard Marsico                        273
                         for James T. Campen        
                  F. Patricia Callahan                   277
                  Al Ku'ahi Wong                         282
                  Joseph Coleman                         286
. 0421
          1                  I N D E X  (Continued)
          2       SPEAKER:                              PAGE
          3       Ruhi Maker                             290
          4       Richard Marsico                        294
          5       Lisa Richter                           298
          6       Conrad Egan                            303
          7       Ramon Flores                           306
          8       Peter A. Gagliardi                     309
          9       Angel Sierra                           312
         10       George K. Rothman                      315
         11       Elaine Miceli-Vasquez                  319
         12       Erwin Vasquez, M.D.                    323
         13       Lisa B. Alberghini                     326
         14       Bruce Gunter                           331
         15       Stuart T. Arnett                       335

         16       Jennie Greene                          337
         17       Chris Kreymeyer                        341
         18       Paul S. Grogan                         345
         19       Anne S. Habiby                         347
         20       Stephen H. O'Connor                    351
         21       Henry M. Thomas, III                   355
         22       Michael Brown                          358
         23       Michael Rubinger                       361
         24       Jeff Nugent                            364
. 0422
          1                  I N D E X  (Continued)
          2       SPEAKER:                              PAGE
          3       Fred Banuelos                          366
          4       Russell A. Sibley, Jr.                 368
          5       Mark Pinsky                            371
          6       Jeff Foss                              374
          7       David Umansky                          376
          8       Grace Miranda                          378
          9       Robert S. Bright                       380
         10       Felix M. Torres                        382
         11       Robert E. Ansley, Jr.                  385
         12       Joseph J. Place                        387
         13       William F. Whelan                      389
         14       Edward Owens                           392
         15       Armentha Cruise                        395
         16       Pastor Ronald B. Dewberry              397
         17       Belay Embaye                           399
         18       C. Diane Davis                         401
         19       Isay M. Gulley                         403
         20       Samuel C. Hamilton                     406
         21       Cathy M. Kleiman                       409
         22       Jelili Ogundele                         413
                                     * * * *
. 0423
          1                   C E R T I F I C A T E
                       We, Jane M. Williamson, Registered Merit 
          2   Reporter, and Carol H. Kusinitz, Registered 
              Professional Reporter, do hereby certify that the 
          3   foregoing transcript, Volume I, is a true and 
              accurate transcription of our stenographic notes 
          4   taken on Wednesday, January 14, 2004. 
          6                            ________________________
                                       Jane M. Williamson, RMR
         10                            Carol H. Kusinitz, RPR
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Last Update: March 15, 2017