© CREDIT UNIONS: Since so few credit unions charge maintenance fees on savings
accounts, comparisons are not meaningful.

e ATM-ONLY ACCOUNT FEES

Extra fees for teller visits

In their efforts to discourage branch use, more banks are offering accounts that require
use of ATM machines and charge a punitive fee for teller visits (although some allow 1-2
teller visits and provide more free telephone calls for these accounts). In 1997, PIRG
examined ATM-only accounts and obtained the following findings:

© In 1997, 12% of banks offered an ATM-only account. Monthly maintenance fees
averaged $2.98. Of these, 82% reported an additional $3.46 average fee for the first human
teller visit each month.*

e BOUNCING CHECKS

Writing Checks Against Insufficient Funds

© Average fees for bouncing a check at big banks rose 7% to $20.91 in 1997 from $19.48 in
1995. At small banks, bounced check fees rose 7% to $20.35 from $18.98.

@ DEPOSIT ITEM RETURNED (DIR)

Depositing Someone Else’s Bad Check

© The fee an innocent victim is charged for depositing in his or her account someone else’s
check that then bounces (a DIR or Deposit Item Returned fee) at big banks increased to

$4.87 from $4.19 in 1995. At small banks, the fee declined slightly, to $4.92 from $5.22 in
1995.

e ATM CARD FEES

© OFF-US ATM TRANSACTIONS: Fees charged to use regional networks (e.g., Most,
MAC) at big banks increased 10% at big banks, to $1.19 from $1.08 in 1995. At small
banks, off-us fees declined 5%, to $0.91 from $0.96 in 1995.

© ATM SURCHARGES: An increasing number of banks are imposing penalty double-
dipping surcharges on non-customers who use their ATMS. An April 1997 PIRG report
found that 45% of all ATMs charged a surcharge averaging $1.15 on non-customers using
their ATMS. This fee is in addition to the off-us fees above. This report, based on analysis
of fee brochures, does not update the April 1997 data, because no bank in the survey
explained its surcharging policy in its brochures.

PIRG’s 1997 Bank Fee Survey -- Page 5


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the bank have allowed such an employee to represent their institution. Why was he
assigned to this community, and not elsewhere (like in the non-minority sections of the
city). How was he trained, and who was supposed to oversee his activities. To my
knowledge, during my dealings with @MRMMEMMM—I here was never any follow through by
management to oversee his performance or the service being provided to me. How can a
bank operate like this? And, when the wrongdoings were uncovered I still was treated in a
roughshod manner by bank management.

As a long term resident of this community I believed that the opening of the Grove
Hall office signaled an economic commitment to address instances of unfair or illegal
lending activities charged against Fleet in Boston and in other areas of the country.
Instead, what the community got was a criminal bank representative who took advantage
of people whom had already been victims of some form of financial misconduct by banks
and loan sharks.

I find it to be unacceptable and unfair to have been subjected to fraudulent conduct
and in the process losing our home to foreclosure. I thought that the banking laws
protected consumers from these kinds of unfair dealings.

T have often asked what is Fleet's real intention. Was it to help the community or to
fleece it. I question Fleet's motives in hiring dishonest people, putting them in a position of
trust and power over customers, and then keeping them on the payroll. I know there are
several other families who were ripped of like 1 was by the bank. I was never contacted by
the bank concerning my application, and I am particularly disturbed that once management
knew what had happened their idea of correcting the situation was to coerce me into
signing a release rather than to ensure that we would not lose our home.

Iam very angry and offended for what I went through. In my opinion, Fleet has
not demonstrated its interest or ability to help me or this community. I am making this
statement in hope that others will not also become victimized by the bank's management
practices. Had it not been for the intervention of a concerned community organization I
am sure that 1 would have received no help from the bank.

I have not complained to any law enforcement agency out of fear that the bank will
But, I do not want anyone else to have

the experience that I had.

I do not feel that the bank has shown that it can serve this community in a fair
manner. I hope something positive will result from my speaking out.

July 12, 1995

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surveys, would be conducted by an independent agency or organization and made
available to consumers at every bank, on the internet, and through government agencies.

2. Establi inancial Con: iati

Massachusetts consumers today are facing a far different financial service
landscape than they were just five years ago. In 1995, BankBoston, Shawmut, Baybank
and Fleet were the state's 4 largest banks, holding more than half of the state's share of
commercial deposits. If the Fleet - Bank Boston merger is successful, we will have just
one mega bank in the region, where we had four just a short while ago. The recently
announced merger between Citizen's Bank and USTRUST further reduces the number of
banks in the region.

While the banks consolidate their power, consumers need to do the same. A
Financial Consumers’ Association (FCA) must be established. The FCA is a voluntarily
funded, independent, nonprofit, watchdog organization formed by individual customers
of financial institutions. The FCA would collect and disseminate information to
consumers about comparative costs and the availability and quality of financial services,
and would represent consumers interests in regulatory matters, the legislature and the
courts.

What makes the FCA most effective is how it is organized and funded. Financial
institutions would be required to place a neutrally worded announcement about the
formation and the existence of the FCA to be included as inserts in four regular mailings
a year from financial service providers to consumers. The FCA is modeled after similar
successful utility associations established in Oregon, New York, Wisconsin and Illinois.
A bill to establish a FCA (S. 114) was filed by Senator Steven Tolman and is pending in
the Massachusetts Legislature.

The FCA will help level the playing field between the consumer and the financial
services industry. The FCA will empower consumers, provide important advice, and save

consumers money.

In just this past year, the number of banks in Massachusetts imposing an ATM
Surcharge exploded by over 2,000%. The new ATM surcharge, the practice of banks
charging consumers twice for one ATM transaction, ought to be prohibited for three
reasons. First, ATM double fees are excessive and amount to price gouging (the Office of
Thrift Supervision has reported the average ATM cost to banks is .20-.50 cents wheras
many consumes are paying $.75 - $4. ). Second, the ATM surcharge is deceptive by
effectively double billing consumers, requiring the consumers’ bank and the consumer to
pay for the same transaction. Lastly, the surcharge is predatory; driving small bank
competitors out of business, allowing the big banks to charge even higher fees.


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restaurant account slip, then take all the money out of your account without your card, Plain
old ATM cards require a PIN, these do not. Unlike a credit card, where your liability is $50,
debit card liability can g0 as high as $500 or more. Worse, you’re not arguing about whether
you owe the money, you’re fighting with the bank to get your own money back. Meanwhile,
your other checks may be bouncing, subjecting you to bounced check fees and more. 22
Contact PIRG for a copy of our fact sheet: "If your ATM card is a debit card, watch out."

e CONCLUSION

In our view, the rise in fees and the increasing complexity of the fee system have created a
burdensome and consumer-unfriendly banking system that places huge costs on the middle
class and prices lower-income people out of the federally-insured banking market. For these
consumers, the only alternative may be even higher-priced check cashing stores. Profits from
rising bank fees accrue unfavorably to big banks, which fuels their anti-competitive growth.
Ultimately, all consumers face higher bank fees as the big, fee-gouging banks get bigger.

The future holds many concerns. The rapid rise in electronic banking -- computer home

banking, smart cards, and Internet commerce -- offers opportunities for banks to lower costs.
Will they pass those: savings on to consumers? Watch for future PIRG reports.

RECOMMENDATIONS FOR CONSUMERS

1) Bank at a credit union, ‘not at a bank, if you qualify. Else, look at smaller, community
banks.

2) Shop for financial services. This should be an ongoing process because banks are

constantly changing their fee structures. See.o our brochure -- "Consumers: Shop Around For
Banks." :

Compare the costs of your accounts to those of other banks in your area. Know what types
of transactions you regularly make and evaluate accounts with your needs as a yardstick. You
may find a better deal at a different bank.

-- If you can’t find "totally-free checking," look for banks that offer free or low cost
checking with a "linked" or "relationship" balance in another account, Linking accounts is a
cheaper way to avoid bounced check fees than paying a monthly fee for the various forms of
"bounced check protection" banks now offer.

-- Look for banks that offer free checking with direct deposit, if you qualify for it.
Other banks offer a discount of $1-3.

. _ -- Consider check safekeeping or check imaging. Banks are increasingly making check
"safekeeping," the default, and charging $1-4 extra to return cancelled checks. If you do
choose check safekeeping, be sure that the bank provides a certain number of free check

PIRG’s 1997 Bank Fee Survey -- Page 12

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I want to document the above assertion in three areas which I believe will
tend to prove Fleet’s disinterest in community development, its view that such
concems are merely a necessary and unwelcome cost of doing business, and that
its true concern is in doing whatever is necessary to attain its expansion goals.

1. Fleet was not forthcoming and complete concerning CHA’s role in
providing services on behalf of the bank in its response to inquiries
submitted to the Fed as part of the Fleet / Shawmut merger
application.

Ina letter dated September 25, 1995, sent to the Secretary of the
Board of Governors, Fleet stated that it “has been and continues to be
committed to responding affirmatively to the deposit and credit needs of
the communities it serves. ...Fleet undertakes its responsibilities to
community development and reinvestment with a serious, diligent attitude.
The commitment of Fleet’s senior management goes beyond mere
compliance with CRA. ...partnerships with Fleet’s communities and the
many voluntary and governmental organizations that sustain them is a key
aspect of its strength.”

To buttress its claims of affirmative response and of a ‘serious,
diligent attitude’, Fleet provides a listing of CRA driven affordable
mortgage programs in the northeastern United States. With respect to
Massachusetts the bank lists three programs it conducted between 1993 and
1995. The two which were in operation in 1993 (Mass. Housing
Partnership and Mass. Attorney General Program) accounted for
$13,184,000 in loan volume and 185 loans. Fleet’s pride in submitting this
data as evidence of its commitment and as proof of its “partnerships” and
credibility with “voluntary and government organizations” is undercut as
CHA’s name is surprisingly omitted from mention as the agency
conducting the “Mass. Attorney General Program.”

It seems remarkable that the agency responsible for 65% of all
of Fleet’s 1993 Massachusetts LMI product didn’t deserve a mention
or to be listed to document the provision of the claimed loan volume.
Certainly, Fleet and the Board of Governors relied most heavily upon
the bank’s 1993 community development lending as evidence of the
bank’s qualifications under CRA.

Further, according to the bank’s own report over the three year
period, CHA was responsible for 24% of all the bank’s LMI product in the
state. Why this level of performance did not earn distinction and
recognition in Fleet’s submission is not a mystery when measured against
CHA’s assertion that the bank was determined to renege on its commitment
to CHA and to the lower-income minority community it claimed to respect.


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BIG BANKS, BIGGER FEES:
The 1997 PIRG BANK FEE SURVEY

KEY TO CHARTS -- PAGE 2

® NO-FRILLS CHECKING: Generally imposes fee regardless of balance but restricts

number of checks severely, then fee per check. FEE ALWAYS: Y-Fee always. YN-means
no-frills is a NOW account. N-fee only imposed after check limit. FEE/CK: Same as Reg
and NOW.

@ ATM ONLY ACCOUNT: Monthly fee for an ATM only accouint, plus the fee for the
first (TELLR FEE) teller visit. a

© ATM CARDS: REPLACE: Lost card fee. ANNUAL: Fee for card. On-Us fee: Fee to
use banks’ own machines. #Free: Transactions free each month. Off-us fee: Fee to use local
network.ATM machines. NTL Off-us: Fee for Plus or Cirrus, if higher. DEBITCD: Annual

fee for branded "Visa" or "Mastercard" ATM Debit or Check card that can be used without
a PIN number. .

© BOUNCE CHECK: Write a check that bounces.
© DIR: Deposit Item Returned, deposit a check that bounces.
© STOP PAY: Stop Payment.
© TELEPHONE INQUIRIES: Fees to call to check balances and number of free
calls/month. Check lists, transfer, etc. will be extra. Bank may list separate fees for
automated (CALL COMPUTER) or non-automated (CALL OPERATOR).
© CLOSE ACCOUNT EARLY: FEE and number of MONTHS punitive Early Account
Closing Fee is charged.
®@ TOP 300: Rank, FDIC Top 300, by deposits, 31 December 1997.
© KEY: Describes most common additional features (good and bad) of accounts.
F: Some accounts include more free ATM transactions,
M: Meet minimum balance, get more free ATM transactions.
P: No-frills account has additional Punitive excess checks fee.
L: Some accounts, fewer free ATM transactions.
X: Alternate ATM pricing available, annual fee waives off-us fees.
T: Tiered balance requirement. Lower balance, higher monthly fee.
‘ B: On-us fee only at remote ATMs, not branches.


At no time was the CHA agreement conditioned on the approval of external
and irrelevant factors. Our previous Fleet sponsored program carried no such
demand. In fact, at that time bank officials urged that due to the nature of the
services offered, and because of our relationship with lenders under a mandated
remedial loan program [including a lottery system], issues of confidentiality and
impartiality be closely monitored and that CHA maintain an appropriate distance
from groups advocating for loans to specific individuals.

The effectiveness of Fleet's plan is evidenced by the fact that CHA was one
of the few organizations presenting reservations at the public meeting held by the
Fed on the Fleet / Shawmut merger application. And, CHA was the sole
organization from the Boston minority community voicing any opposition to the
merger. Predictably, the same groups who only weeks earlier at meetings with
Fleet and in the local press had called for denial of the application thereafter
criticized CHA for speaking in opposition. Reportedly, some received mortgage
loans from Fleet shortly after merger approval.

_ Fleet's efforts to undermine the agreement by the unilateral and selective
release of confidential information to the press and to certain individuals had its
intended effect. Suspicion and accusation arose among various groups and
individuals, some with sincere intentions and some who merely saw an opportunity
for personal benefit at the community's expense. If one places a gallon of water in
the midst of a crowd of thirsty people the result is predictable and obvious; the
crowd will devolve into clusters of contention and fisticuffs, and the water will be
spilled. In this case, while the contention among the groups has subsided, the
planned community benefits have been denied.

As a result of its refusal to release funds as agreed, CHA defaulted on it's
contract to purchase the property housing its offices (as provided for in the
agreement). The bank's breach was the proximate cause of the forfeiture of CHA's
deposit in excess of $5000.

Fleet's refusal to implement the program agreement reflects an arrogance
and disregard for the lower-income and minority consumers that the program was
designed to serve. In fact, the number of residential mortgage loans granted in
urban neighborhoods during each of the three years after the merger was lower
than prior to the merger.

With no basis for reneging on the agreement and no notification by the
bank of its intent to breach its commitment, such unfair and duplicitous practices
disqualify Fleet from receiving regulatory approval for the proposed merger. Just
as candor, honesty and character are seminal elements of sound banking practices,
fairness and integrity in implementing CRA programs is essential to ensure the
delivery of equal and open opportunity for every member of the bank's service area
to access financial products and services.


Exhibit C: | Fleet HMDA Graphs and Tables

1. Combined Fleet, Shawmut Single Family Mortgages to Minorities Differentiated by
MSA, 1994-1996

2. Fleet Bank LMI Denials and Approvals, 1996, African-American and White

3. Aggregated Home Mortgage Lending, Fleet & Shawmut, Hartford MSA, 1994-1996,
African-American, Latino and LMI Households

4. Fleet Mortgage Loans, CT, 1995-1997, African-American, Latino, LMI Households and
Census Tracts

5. Shawmut Mortgage Loans, CT, 1995-1997, African-American, Latino, LMI Households
and Census Tracts

6. Aggregate Mortgage Loans, CT, 1995-1997, African-American, Latino, LMI Households
and Census Tracts

7. Fleet/Shawmut Minority Lending, 1994-1998, MSA 1160, Asian, African-American,
Joint, Latino, Native and Other

8-15. Statewide and MSAs 1160, 1930, 3280, 5480, 5520, 8040, 8880, 1994-1998,
Originations by Income Level

Letter to Federal Reserve Board 7/7/99
Page 13 of 14


THE BOSTON SUNDAY GLOBE ¢ MAY 14, 1995

Program aimed at avoiding foreclosures tested

FORECLOSURE
Continued from Page Al

The FDIC, which began its program this month, has identi-
fied and offered help to 86 homeowners with delinquent loans,
said Gary Bowen, regional director at the FDIC.

Statewide, there were 8,099 foreclosures in 1994, a 17.4
percent decrease from the year before, according to Banker &
‘Tradesman, a real estate and banking journal. In the first quar-
ter of this year, foreclosures have been occurring at the same
rrate as last year - seven percent of all sales.

Freddie Mac and the FDIC, acknowledging that foreclosure
is an expensive process that destabilizes neighborhoods, real-
ized community groups could be a valuable link to homeowners,
said Gary Klein, staff attorney and project director of the Na-
tional Consumer Law Center.

__ “It took a lot of negotiating. We forged a common interest.
‘The lenders involved - Freddie Mac and the FDIC - recognized
that aggressive foreclosure wasn't always good business. These
programs reflect a change in attitude in the lending industry
generally,” said Klein. “Traditionally, they've looked at foreclo-
sure as the first option rather than the last option. And in this
program, that's reversed.”

Here's how the program works.

Homeowners whose mortgages are held by Freddie Mac,
one of the nation’s largest holders of mortgages, are eligible for
the Freddie Mae program. Families must be living in the house
they own and may not earn more than 116 percent of the medi-
an income. In Massachusetts, that amount for a one-person
household is $22,890; two-person, $51,918; three-person,
‘$64,589; four-person, $70,855.

Families whose mortgage payments are 90 days late and
who live in Greater Boston, Brockton, Lowell, Lawrence,
‘Worcester or Springfield will receive a letter, inviting them to
participate in the program.

‘The FDIC, which owns mortgages through its responsibility
for failed banks, has the same requirements - except ita
program extends statewide, eaid Chris Norris, project coordin-
ator at the Law Center.

After receiving a letter from the FDIC or Freddie Mac, bor-
rowers contact the Law Center, which screens borrowers and
refers them to a local nonprofit housing agency. The agency will
provide financial counseling and write 2 proposal on how bor-
rowers can restructure their loans in order to make timely pay-
ments. The counselor will also give any other financial advice
necessary.

Strategies to prevent foreclosures, which cost from $4,000 to,
$6,000 to initiate, include: lowering interest rates; allowing the
borrower to sell the house at a depreciated market value less
than the mortgage amount; creating payment plans that are 1.5
times the regular payment go the borrower can catch up on late
payments; and issuing a deed in lieu of foreclosure. In that sita-
ation, a borrower voluntarily eurrenders the deed, walks away
from the house and court proceedings are avoided.

For the Fiore family, the counseling session was a lifesaver.
“Kay Connors of the South Shore Housing Development. was
‘absolutely fantastic,” recalled Debbie Fiore. “She sits down,
{goes over the figures, ‘How did this happen? Where are you
‘new? What do you need?’ She was absolutely one of the best ad-

vocates, It was the first time we felt like we had someone listen-
ing to us.” 7

Convineing the lenders to talk with local community groups
vwas the idea of longtime housing activist Norma Mosely, direc-
tor of housing programs at the Ecumenical Social Action Com-
mittee, a private, nonprofit group which offers youth, education

Other nonprofit housing agencies working with this pilot

are: Community Homeowners Association of Dorches-

ter, Community Teamwork Ine. of Lowell; Ecumenical Social
‘Action of Jamaica Plain; Hampden Hampshire Housing Part-
nership of Springfield; Homeowner Options for Massachusetts
Elders of Boston; National Mortgage Counsel Center of Brigh-
ton; and Rural Housing Inc. of Winchendon.

housing,

absolutely impossible
folks (agencies such as FDIC and Freddie Mac which buy mort-
gages from lenders and hold them). They would just plow ahead
and foreclose, foreclose, foreclose,” said Mosely. “You would
have to go through humongous litigation. And months of impos-
se sonemaling . You never knew who you were aupposed to

to.

“It seemed to me, these were public agencies serving the
public, and they should be maintaining people in their homes in-
stead of foreclosing, and then using the homes as affordable
housing,” continued Mosely.

In March 1994, Mosely invited Kennedy to co-host a meet-
ing with community groups and Freddie Mac, the FDIC and
Federal National Mortgage Association (Fannie Mae). It would

take 11 more months to pegotiate a program. The hardest part,
was simply finding the right decision-makers to participate,
said Mosely.

“There was a lot of risk involved,” said Delgado of Freddie
Mac. “We did not want to be affiliated with a failure.”

‘The FDIC concedes the initial contacts were awkward. “The
first meeting we had got a little tense. Each side felt they were
being perceived unfairly and would not be cooperative,” ssid the
FDIC's Bowen. “Community groups felt we were unwilling to
be flexible. Then Congressman Kennedy came ... and added 8
good tone to it.”

Kennedy called the pilot program a win-win situation.
“When hard-working families fall on tough times, we all have an
interest in going the extra mile to allow them to keep their
properties atid maintain thetr stake in the community,” he said.
Fannie Mae aaid it helped draft the proposal but chose not to
participate because its own foreclosure prevention program was
working well. “We didn't think that Fannie Mae needed another
program, but we applaud any effort that anyone is doing to try
to keep people in their homes,” ssid Wayne Curtis, a vice presi-
dent in Fannie Mae's Northeast region.

‘Although Freddie Mac and the FDIC say they have always
tried to help homeowners keep their houses, community groups
call this pilot program a new, prosetive attempt to intervene,

“We fought successfully the mindset of many servicers and
fenders who believed that they should puniah a borrower be-
cause he can't pay,” said Dwight Miller, president of Communi-
ty Homeowners Ansociation.



e@ STATE-BY-STATE ANALYSIS

We ranked the states based on a combination of their rankings for the four PIRG Annual
Cost Indexes (Regular, NOW, No-Frills Checking and Savings Accounts), as well as
rankings for the availability of free checking and the balances needed to avoid fees on

checking and savings accounts. (ATM fees, bounced check fees and monthly maintenance
fees are included in the cost indexes.)

@ LOW COST STATES: Although consumers can find bargains in nearly every state, the
lowest cost states to bank in were led by Montana, followed by Iowa, New Mexico,
Vermont, Colorado, Washington State and Minnesota.

© HIGH COST STATES: The highest cost states were New Jersey, followed by Illinois,
Louisiana, Florida, North Carolina, and Washington, DC.

BANK FEE INCREASE STRATEGY

Throughout the 1990s, banks have generated ever-increasing profits, setting a new record
each of the last six years. In 1996, profits exceeded $50 billion for the first time. In the first
quarter of 1997, profits exceed $14 billion for the first time. Fee income represents a
growing proportion of non-interest-income, which, according to the FDIC, "provides a
growing proportion of net operating revenue to banks." In the first quarter 1997, "higher fee
income accounted for roughly half of the increase in noninterest income."’ Fee income
accrues disproportionately to big banks.

Banks’ fee-generating strategies include three attacks on consumers’ wallets:

e (1) Raise existing consumer account fees.

Reports by PIRG and other consumer groups document a pattern of fee increases exceeding
inflation. The Federal Reserve Board’s Annual Reports to Congress also show rising fees.*

e (2) Invent new fees.

From human teller fees to debit card transaction fees, banks are inventing new fees.? One
area of rapid fee growth is now fees associated with ATMS, including not only the
surcharge, but fees for obtaining ATM imini-statements. A second area is telephone balance
inquiries. Originally, banks claimed that computer call centers would save them money, and
urged consumers to call to check their balances. Now, banks such as Nationsbank, First
Union and others are charging consumers who call not only human tellers but also computer
call centers, fees ranging as high as $2. Nationsbank not only charges fees to call ‘the
computer, its software checks your PIN number, and queues your call to either the front or
rear of the line depending on its analysis of your profitability. "°

PIRG’s 1997 Bank Fee Survey -- Page 8


Sincerely,

Atle

Dwight K. Miller
President

DKM:ss
enc.

cc: Agnes Bundy, Fleet Financial Group

Hon. Joseph P. Kennedy, II, MC

Rev. Charles Stith, President, Organization for a New Equality
Walter Little, Grove Hall Board of Trade

Reginald Nunnally, Exec. Dir., NDCGH

Tom Callahan, Exec. Dir. MAHA


copies per year, in case of audits or disputes with creditors. Imaging, which provides a .
statement with photocopies of your checks, is an in-between cost alternative.

Despite all of our recommendations, big banks may still make sense for some
consumers because of their multi-state ATM networks. For now, most big banks generally

allow free ATM use across state lines, although that may be changing, as Banc One has
done.

3) Beware of NOW accounts. If you cannot maintain high minimum balances, stay away
from NOW accounts. The high fees on NOW accounts may cost you more than it’s worth to
earn the low interest on your balance.

4) Explore no-frills checking options. If you write few checks each month, look at no-frills

flat fee checking accounts. However, watch out for no-frills accounts with punitive over-the-
check-limit and bounced check fees for no-frills accounts.

RECOMMENDATIONS FOR CONGRESS

1) Enact Basic Lifeline Banking Laws.

All banks should be required by federal law to offer one low-cost account for consumers who
write few checks per month and to provide governmental check-cashing for non-
accountholders.

2) Create Financial Consumers Associations (FCA).

The largest consumer group in Illinois is its Citizen Utility Board, which fights utility rate
increases and practices. Illinois CUB is a privately funded non-profit group, but an
innovative state law allows it to insert its fundraising brochures directly into state motor
vehicle and income tax mailings to citizens. This piggybacking lowers fundraising costs and
-is @ legitimate role for government in addressing the failure of the marketplace to provide
competition and protect consumers.

Financial Consumers Associations (FCAs) would take the CUB model to the financial
services marketplace. Inserts in the account statements of federally insured financial
institutions would provide a similar funding mechanism. If FCAs could be established, they
could conduct many financial products surveys and put competitive pressure on banks and
other providers to do a better job. The Internet offers an outstanding opportunity for an FCA
to offet consumer shopping guides to financial services.

3) Impose account rate caps, improve disclosures and eliminate other fees.
In return for guaranteeing the safety of deposits and the liquidity of the financial system, the

federal government imposes modest public interest burdens on the banking industry. It’s time
to reform those laws, not roll them back.

PIRG’s 1997 Bank Fee Survey -- Page 13


Combined Fleet, Shawmut Slagle Family Mortgages:

Hartford MSA

|African American Households
Latino Households
LMI Households

Danbury MSA

African American Households
Latino Households
ILM! Households

INew Haven MSA

African American Households
Latino Households

LM Households

INew London MSA

African American Households
Latino Households

LMI Households

Waterbury MSA

African American Households
Latino Households

LMI Households

Stamford MSA

[African American Households
Latino Households

LMI Households

Bridgeport MSA

African American Households

Latino Households
LMI Households

differentiated by MSA

1994 1995 1996,

166 125 111
71 100 73
654-71 302)
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91. 58
22. 26
138 146
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2 4
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144 283
104 112
365.. 349

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I again urge your consideration and approval of the agreement in principle reached
by the bank and CHA. .

Sincerely,

Dwight K. Miller
President

DKM:km
enc.


MASSPIRG’S 1997 BANK:FEE RESULTS

MASSACHUSETTS AVERAGES

CLOSE ACCOUNT EARLY
BANKS FEE MONTHS _
BIG BANKS $20.00 Didn’t Disclose
q)
LITTLE BANKS $13.45 4.64
qi)
ALL BANKS $14.00 4.64
(12) _|

Total banks included in survey: 6 big banks, 37 little banks, 43 all banks, and 6 credit unions:

Number in parenthesis,(), represents the # of banks included in calculation.


BRIEF CHRONOLOGY OF ATM FEE LITIGATION ‘In COT?

1. September 14, 1995: Commissioner of Banking ii Issues an opinion stating that
Connecticut does not authoriae banks to charge an ATM fee directly on consumers,
nondepositors of banks which!own the ATM machine.

2. January, 1997: Fleet Bank filés lawsuit in federal court challenging this interpretation of
law and arguing that even if Cormecticut bans ATM fees that law is preempted by the
National Bank Act, Many procedural motions follow.

3. September, 1998: The federal: District Court holds that Connecticut law does not prohibit
ATM fees. Ow October, 12, 1998, State obtains stay of this decision pending appeal
hearing.

4. October 23, 1998: Second Circuit Court of Appeals hears argument but fails to extend
the stay on theidistrict court ruling.

5. October 24, 1998: Flect Bank First Union and BaukBoston begin charging a fee at their .
ATM's for nondepositors,

6. November 9, 1998: Second Circuit Court of Appeals rules that the district court sbould
uot have ruled on the interpretation of Connecticut law as that is best left to the state
court, Second Circuit vacates District Court's ruling on Connecticut ATM law. Fleet
Bank, First Union and BankBéston retrofit their ATM to stop charging a fee.

7. November 9, 1998: Fleet Bank and First Union file new sutt in federal District Court
secking to enjain Banking Commissioner from enforcing State ATM law. Judge
Chatigny denies from the bench First Union's request for temporary restraining order

against the Commissioner:

8. November 10, 1998: Bankin, Commissioner issues an administrative cease and desist
order against Fleet Bank, First!Union and BankBoston from charging an ATM fee on
nondepositors.”

9. November, 1998: First Union‘and Fleet Bank file application for temporary injunction
against Banking Commissioner in State Superior Court seeking to enjoin Commissioner's
proceeding to énforce the cease and desist order.

10. November 20, 1998: Superior; Court (Teller, J.) issues decision denying banks'
application for' Nemporary injuaction.

UL. December, 1998: Fleet Bank and First Union obtain assistance from the federal
Comptroller of the Currency who joins in their federal court case secking to enjoin the


ME MASSPIR

Massachusetts Public Interest Research Group
29 Temple Place, Boston, MA 02111-1350 (617) 292-4800

bitp:/ /www.pirg.org/masspirg

To: Committee on Banks and Banking

Fr: Deirdre Cummings, Consumer Program Director
Dt: April 27, 1999

Re: In Support of S.19, H. 2083, H. 1133, S.12

Testimony in favor of banning the ATM Surcharge

. Good afternoon. My name is Deirdre Cummings and I am the Consumer Program
Director for MASSPIRG. MASSPIRG is a nonprofit, nonpartisan consumér
organization with 50,000 citizen members across the state.

I am testifying today in support of $.19, H. 2083, H. 1133, and S. 12, bills to ban
the ATM double charge, also known as the surcharge. This new scheme by banks
should be prohibited for three reasons. First, ATM fees are excessive and amount to
price gouging. Second, the fee is deceptive by effectively double billing consumers,
requiring the consumers’ bank and the consumer. to pay for the same transaction.
Lastly, the surcharge is predatory; it's designed to drive small bank competitors out
of business and to allow the big banks to charge even higher, monopolistic banking
fees. This last issue is of particular concern today as we will once again see our
bank choices among the biggest banks’ cut in half, leaving the biggest bank in
Massachusetts, 'Fleet-Boston’, owning close to half of all the bank owned ATMs in

the state.

The banks' fee income strategy is simple: Raise fees, invent new fees, and get more
people to pay more fees. Since deregulation, banks have invented numerous new
fees. Some of the most outrageous fees include: Fees to close your accounts, fees
for calling your bank, fees for teller assisted transactions and fees for depositing a
check which bounces. Some estimate that well over 200 different bank fees now
exist.-This strategy has clearly worked for the banks' bottom line. Nationally,
commercial banks recorded their seventh straight year of record profits, earning ~
$61.9 billion in 1998, up 4.7% from 1997. However, fee income is growing more
rapidly. Non-interest income, including ATM fee income, rose to $19.4 billion, an

increase of 18.4%

On April 1, 1996, the two largest ATM networks, VISA's Plus and Mastercard’s
Cirrus, ended their prohibition against member banks surcharging non-
accountholders using their ATMs. This move allowed banks to charge consumers
twice to use the ATM only once. The surcharge is in addition to the "foreign" fee

1 printed on recycied paper


COMMUNITY HOMEOWNERS ASSOCIATION, INC.
630 Warren Street
Dorchester, MA 02121
617 445-4005

21 December 1994

Mr. John Marston
Fleet Bank

75 State St.
Boston, MA 02108

Dear John,

I know we haven't communicated lately. I wanted to update you as to CHA's
current activities, to inquire as to the current status of negotiations with the community
groups, and to inquire whether or not new discussions concerning CHA's services
proposal would be useful.

As you know, CHA is a signatory to the Freddie Mac agreement entered into last
week. I am particularly pleased that city officials and housing advocate groups convened
at CHA's new offices at Grove Hall to announce this important program. CHA, along with
other agencies , will provide foreclosure prevention services for mortgagors with Freddie-
owned mortgages, and will assist Freddie to market REO properties to local residents.

We anticipate that we will enter into a similar disposition agreement with FDIC
within the next two weeks; and, our lengthy negotiations with Fannie Mae should result in
a program to support our counselling services early in 1995.

As a result of these in-place and expected programs, CHA is increasing its service
capacity; and has broadened its base of community and organizational support.

I believe that our credentials as a recognized and effective community-based
agency have been enhanced by our activities begun last summer, and, although we were
disappointed that we could not conclude our agreement with Fleet at that time, in view of
changing circumstances, a reexamination of the potential for a successful program might
be of mutual benefit.

In light of our new activities and new location, we are planning a grand opening of
our office and programs in January, 1995. As a past financial supporter of CHA, I would
like to invite you, and other banks, to attend. And, inasmuch as Fleet may be a participant
in one or more of the programs offered by Freddie or Fannie, this may be an opportunity
to kick-off such new programs at a convenient community location.


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BE MASSPIRG

Massachusetts Public Interest Research Group
29 Temple Place, Boston, MA 02111-1350 (617) 292-4800

http://www. pirg.org/masspirg

To: Federal Reserve Board of Governors
Fr: Deirdre Cummings, Consumer Program Director
Re: Public Hearing on Proposed Fleet and BankBoston Merger
1/1199
Testimony in Favor of Three Consumer Initiatives

The Massachusetts Public Interest Research Group (MASSPIRG) is a non-profit, non-
partisan consumer organization with over 50,000 members across the state. MASSPIRG
has conducted numerous surveys and studies of rising bank fees and anti-consumer bank
practices, and advocated for bank reforms when necessary, including the passage of the
Check-Hold Law in Massachusetts and in Congress, the Truth In Savings Law and Truth
In Lending Law. MASSPIRG is currently campaigning to ban the ATM surcharge.

MASSPIRG urges you to require the new Fleet Boston to put in place specific programs
which would encourage competition among banks by empowering the consumer with
important meaningful information about bank fees, products, and services. Providing
consumers with access to useful, comparative information about bank fees, service, and
products is the most fundamental step in ensuring consumers will have any amount of
clout in the market place to keep fees low, service high, and a good variety of bank
products available. This, of course, will only be effective if the consumer has a real
"choice" in the market place by having real access to a significant number and types of
banks.

MASSPIRG proposes:

1. Release of Bank Fee Surveys

The number and amount of bank fees have exploded in the last few years, with the
largest banks charging higher fees and inventing some of the most egregious new bank
fees - including fees to speak to a human teller, fees to close your account and fees that
double charge consumers for using ATMs. In addition, banks have made it more difficult
for consumers to compare bank prices, services and products by: putting out slick
advertising campaigns which fail to disclose complete costs; failing to use uniform
language in describing their accounts and products; and even failing to make the
mandatory "Schedule of Fees" accessible and available to every bank customer before
they sign up for an account.

To provide for fair competition, Fleet Boston should be required to fund two
annual statewide consumer surveys comparing bank fees, products and services. The

printed on recycled paper


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How The ATM
Surcharge Works

Paying twice for a single transaction

1 Sandy, a customer of BANK A, uses an ATM

owned by BANK B to withdraw $20.

BANK A pays BANK B a 50 cent fee for
Sandy’s use of the ATM.

BANK A charges Sandy $1.50 for that same
transaction.

BANK B charges Sandy $1.00 for that same
transaction at the ATM.

Sandy pays twice, and BANK B is paid
twice, for the same transaction. And Sandy
pays $2.50 to take out $20.

© Public Interest GRFX/215-985-1113 MASSPIRG





COMMUNITY HOMEOWNERS ASSOCIATION, INC.
Dorcbeoen MA O2121
617 445-4005

Dwight K. Miller
President

10 June 1999

Mr. Richard Walker
Community Affairs Officer
Federal Reserve Bank of Boston
600 Atlantic Avenue

Boston, MA 02106

Re: Fleet / BankBoston Merger Application

Dear Sir:

I would like to register this organization's opposition to the above
referenced application and request a public meeting to allow for public
participation in the regulatory decision-making process.

CHA's objection is based upon Fleet's willful failure to implement an
agreement entered into by the bank and CHA in March 1994. Specifically, Fleet
agreed to support and fund a community empowerment program designed by CHA
which program was a result of the effectiveness of an earlier mortgage subsidy
project conducted by CHA under contract to Fleet. That program was initiated and
monitored by the office of the state attorney general and was supported by the
Massachusetts Bankers Association in response to the so-called "mortgage scam"
lending practices by some banks and unregulated lenders and contractors in the
wake of the real estate runup of the early 1990s.

Under contract to Fleet, Shawmut and USTrust, CHA implemented a loan
program that resulted in the prevention of foreclosure for scores of long-term
homeowners and in purchase opportunity for many otherwise unqualified
consumers to acquire a home.

As aresult of our successful efforts, and in response to Fleet's interest in
continuing CRA lending opportunities in lower-income and minority areas, CHA
was invited to develop a new program designed to meet the financial and
counseling needs of the lower-income and minority communities in Fleet's
Massachusetts service area.




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Utility CUBs have worked well in other states including, New York, Wisconsin, Illinois and
Oregon. They have saved utility ratepayers billions of dollars and enjoy widespread support. A
FCA could and should work here in Massachusetts.

We commend Senator Tolman for filing this important piece of legislation and hope this bill
receives a favorable report from the committee. Thanks, again, for the opportunity to present our
views today.

There is one technical amendment. Page 7, line 38 should read "section 7(d) of this chapter, not
70v)Gii).


BIGGER BANKS, BIGGER FEES:
The 1997 PIRG Bank Fee Survey

By Ed Mierzwinski, U.S. PIRG Consumer Program Director, Deirdre Cummings,
MASSPIRG Consumer Program Director, the PIRG Consumer Team and staff and
volunteers of the following state PIRGs and state and local consumer organizations
affiliated with the Consumer Federation of America.

Phyllis Rowe--Arizona Consumers Council; Pam Pressley, Jon Golinger--CALPIRG;
Pete Smith--Colorado PIRG; Laura Cordes--Connecticut PIRG; Monty Belote--
Florida Consumer Action Network; Scot Quaranda, Dan Jacobson, Mark Ferrulo--
Florida PIRG; Karen Berg--Indiana PIRG; Diane Brown--lllinois PIRG; Valerie
Ellis--Public Law Center Of Louisiana; Dan Pontious--MARYPIRG; Amy Michalek,
Michelle France--MASSPIRG; Chris Newbold, Hilary Doyscher--MONTPIRG; Jerry
Flanagan, NJPIRG Citizen Lobby; Jeanne Bassett-- NMPIRG; Denise Herkey,
Catherine Hayden, Christian Klassmer, Michael Goleblewski, Stephanie Powers,
Susan Craine, Russ Haven, Blair Horner--NYPIRG; Michael Rulinson--North
Carolina Consumers Council; Amy Simpson--Ohio PiRG; Laura Culberson--Oregon
State PIRG; George Atkinson, Lou Meyer , Harold Frantz, Ralph Coho Jr, Stewart
Lee--Pennsylvania Citizens Consumer Council; Judith Filler, Rosa Burgess, Val
Liveoak--Tx Alliance For Human Needs; Mark Sliter--Emergency Asst Of Tarrant
Cty (Tx); Dave Rapaport--Vermont PIRG; Jean Ann Fox--Virginia Citizens
Consumer Council; Jennifer Callahan, Jennifer Lindenauer, Rita Herkal--
WASHPIRG; Henry Clay White--Wisconsin Consumers League; Kerry Schumann--
WISPIRG; USPIRG Field Office Staff: Erin Madden--Az; Sheri Tarr--DC; Kimberly
Larson--DE; Robert Pregulman--GA; Danielle Lucas--IA; Robin Eiseman, ME; Wes
Jones--NC, Bob Greenberg--MN, Bethy Neiderman--TX

The MASSPIRG Education Fund is a statewide non-profit, non-partisan consumer
and environmental research and education group. MASSPIRG and the state PIRGs
appreciate the ongoing support of the Colston Warne Grants Program of
Consumers Union of the United States and of the Consumer Federation of America
(CFA) State and Local Grants Program.

FOR ADDITIONAL COPIES:

Mail a check to MASSPIRG Education Fund, 29 Temple Place, Boston, MA 02111.
Reports cost $20 for the public, $10 for individuals or non-profit organizations,
$7.50 for MASSPIRG members.

Lists of current publications are also available, free of charge, by writing to the
address above or calling (617) 292-4800.


nonprofit corporations seeking to have an impact on their communities. It is our understanding
that the CDC was understaffed for the first two years and we have not been able to confirm the
volume of loans made to any of the targeted communities’ small businesses. By segregating the
LMI and women- and minority-owned small business sector into a CDC, Fleet effectively
isolated and downgraded its overall approach to this vital credit and CRA area. In doing so,
Fleet has demonstrated that it has not been able or willing to commit the real resources of the full
financial institution to the small business lending that is so vital to Connecticut’s growth, both
urban and otherwise. At this point, we do not have access to the lending activity data for the
BankBoston CDC nor do we understand how the two CDCs (if they both survive, merge or both
disappear) would operate going forward. The reason for a CDC is to allow a financial institution
the opportunity to use creative underwriting, aggressive outreach and grant/loan combinations to
increase the impact in the community development arena. It does not protect the rest of the bank
from its fundamental CRA responsibilities.

If Fleet is allowed to explain away its history of performance with more commitments
that are not likely to be met over time, and it is not held toa standard that reflects the
substantially increased size and scale of the institution within the market it serves, then
Connecticut’s small businesses, especially in LMI communities and for those businesses owned
by women and minorities, will be even more starved for the credit and capital necessary to
survive and grow. The draft community development small business commitment that Fleet has
proposed will not begin to fill the need of the community. Community reinvestment demands
that the depository institution provide the funds, educational outreach, technical assistance,
creative underwriting and use of government guarantee programs to small businesses to increase
the amount of small business lending by the bank. Fleet’s historical performance, especially in
terms of its absolute number of small business loans, has been so problematic as to require denial
of this merger.

4, Services

A. Branches

The divestiture plan, critical to Fleet’s argument that the impact of the merger will not be
as anti-competitive as anticipated, has not been made public. The ability of Fleet and
BankBoston to sell enough of the branch offices to be divested (rather than close them), and the
identity of the buyer or buyers of these branches, are absolutely essential information to anyone
interested in determining accurately the impact of this merger and its anti-competitive aspect.
Historically, a merger’s “divestiture plan” has tended to be malleable, which may result in
further and disproportionate harm to the minority and LMI communities that will suffer most
from these “trades” or closures. This is true not only with respect to the sale (or potential closure)
of thirty-three (33) Connecticut branches in the original divestiture, but Fleet’s merger
application explicitly anticipates that subsequent Fleet branch closures will occur, dictated by
“business needs.” At least a third of the branches to be divested serve minority or LMI
communities now, both urban and rural. Without some condition that the “divested” branches
that are sold will remain open for a stated period, a large outside institution could come through,
bid and win the entire 292 branch divestiture package, and then close those it doesn’t expect to
be profitable. The branch divestiture will also have a tremendous impact on the employees of
these branches. While Fleet can blithely predict that when branches are sold, the acquiring banks

Letter to Federal Reserve Board 7/7/99
Page 7 of 14


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8a © SUPPLEMENT © Thursday, May 11, 1995 * BAY STATE BANNER

Groups join to stem
foreclosure danger

Yawu Miler

Housing activists and officials from
‘two federal agencies unveiled a new:
foreclosure prevention program on
April 27th, which they say will allow
homeowners who have faen behind
on ther mortgage payments to avoid
Josing their propertes.

ina press conference at the head
quarters of the National Consumer
Law Center in Boston, U.S. Rep.
Joseph P, Kennedy f announced that
‘the Federal Home Loan Mortgage As-
sociation (Freddie Mac) and the Fed-
eral Deposit Insurance Corporation

ing advocacy organizations on two pi
lot projects aimed at helping mort
gagees who are in danger of foreclo-
sue,

“Committed homeowners are an
asset no neighborhood can afford to
lose,” said Kennedy. “When hard-
‘working families fal on tough tes,
we all have an interest in going the ex-
tra mile to allow them to keep their
properties and maintain their stake in
the comeranity.”

Under the programs, mortgagees
who's loans are more than 90 days
‘overdue willbe referred to a counsel
ing agency that wil review the bor-
tower's Francia shuation and develop

Housing activists who have long
been pressuring Freddie Mac to
change its polices in the inner city
praised the new program. "t's the frst
time that Freddie Mac and the FDIC
have recognized the need to provide
alternatives to foreclosure and recog:
rize that there ought tobe alternatives
to foreclosure, displacement and loss
of homes,” said Dwight Miler, execu:
‘hve drector of the Community Home-
‘owners Association, one of the par-
ticipatng agencies.

‘Mer said the program is particu
larly effective in that it allows mort-
gagees the option of modifying their
loans. Under the program, mort-
gagees can restructure their loan re-
payment schedule and reduce their
payments by paying over a longer pe-
fod of time.

The program wil also hel people
who suffer rom what activists cal "un

U.S. Rep. Joseph P. Kennedy Njoins Dwight Miler ofthe Com- with the Federal Home Loan Mortgage Astociation and other
munity Homeowners Astoctation and Gary Klein of the National groups to create two plot projects that would sssist mortgagees,
Consumer Law Center ata press conference announcing plan who are in danger of foreclosing. Don West photo)

derwater mortgages”, according to
Miler. Mortgages who bought their
homes during the real estate boom
of the '80s can get their mortgages
refinanced to reflect the reduced
vale of their homes, Miler said. "We
can consider the fa market valve of
the home,” he commented.

Under the Freddie Mac program,
homeowners whose mortgages are
held by the agency wil be efigible for
the program f they are owneroccu-
‘pants in defautt on a proverty contain
ing four units oF less and if their in
‘comes are at or below 115 percent of
the median income.

The initiative was launched after
Kennedy and a group of community
activists held a series of meetings
with Freddie Mac and the FDIC. The
activists had formed a groups they
named the Coalition to Stop Freddie
Mac Attacks. The activists com
plained that Freddie Mac, which
‘owned what they estimated to be
about a third of the foreclosed prop-
erties in the inner city, was doing noth.

“Commitied home-
owners are an asset no
neighborhood can
afford to lose. When
hardworking families

‘fall on tough times, we

all have an interest in
going the extra mile to
allow them to keep
their properties and
maintain their stake in
the community.”

— Joseph P. Kennedy

ing to help their mortgagees avoid
foreclosure.

The high foreclosure rates in the
Roxbury and Dorchester area were
Contrbutng tothe destabiizaton of

by forcing owner-
cecsets at oes properies ac-
‘ists say.

The foreclosures aiso put a stan
on the mortgage holders, noled Gary
Bowen, the FDIC's regional director
“Foreclosures are not cheap,” he
said. "We spend nearly $4,000 to int
tiate a foreclosure, and that does not
take into account that i the property
value has dropped, itis thely to sell for
Jess than the amount currently owed.
This program may allow us to keep
people in their homes while at the
same time saving the FDIC a tremen-
<dous amount of money.”


John Brown
80 Ballou Ave.
Dorchester

ENWMA Luk,

Emma Carter
69 Thetford Ave.
Dorchester

fab ea

22 Fox Hill Rd.
Ashland

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lonna Cox.
30 Harold St.
Roxbury

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Maria DaRosa
54 Norton St.
Dorchester

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44 Woodhaven St.
Mattapan

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David Duren
377 Old Conn. Pth
Framingham

Janice Camillo
271 Eliot St.
Milton

Aalonde hu~
LaVonda Chin

6 Ruxton Rd.
Mattapan

Nancy Cdok
Rosewood St.
Mattapan

Allen Cam op

49 Woodbine St.
Roxbury

Doreen Dimisew
=3Hillside St.
Jamaica Plain

KE tewe tl Deharec
“Vakpe Did

Valerie Duhasey | J
Randolph

Francoise Etienne

145 W. Selden St.
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35 Blake St.
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579 Ware St.
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80 W. Selden St.
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Howland St.
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Muriel Waller
77 Jacob St.
Dorchester

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35 Eastman St.
Dorchester

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23 Jacob St.
Dorchester

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43 Hazelton St.
Mattapan

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10 Harlem St.
Dorchester

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Irma Vance
71 Goodale Rd.
Dorchester

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William Walker
17 Holiday St.
Dorchester

Daniel Ward
55 Weybosset St.
Dorchester

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Dorchester

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320 Washington St.
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15 Holmfield St. 104 West St.
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Mattapan Brockton

Sue Giovanella Nancy Golinveaux

51 John Alden Rd.

Plymouth Reading

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Walk Hill St. 31 Braddock Pk.

Mattapan South End

Curly Greene Charles Greenaway
Walnut Ave. 38 Evelyn St.

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29 Mt. Everett St.

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57 Milton Ave. 44 Wellington Hill St.
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10.

11.

12.
13.

14,

16,

17.

I’m Randall Parr. I live in Lowell, MA. I have a checking account at Fleet Bank and a car loan with Baybank,
which was bought by BankBoston. I grew up in Massachusetts. I am not a lawyer. .

When I was young, a bank robbery was when a person robbed a bank. Today the banks are robbing the people.
As a result of a decade of unrestrained mergers in Eastern Massachusetts, four retail banks have over 90 percent
of the market: Fleet, BankBoston, U. S. Trust, and Citizens Bank. Fleet and BankBoston are the 2 largest of
those 4.

Section 7 of the Clayton Act outlaws mergers where the effect “may be to substantially lessen competition or
tend to create a monopoly.” Since the proposed merger between the biggest and 2d biggest bank in this area
will tend to create a monopoly it is illegal. This merger will substantially lessen competition, which is also
illegal. It therefore meets both criteria of section 7 of the Clayton Act.

What is harmful about it? As a result of this merger thousands of workers will lose their jobs, and thousands
more who will be hired in the future if this merger does not happen, will never get those jobs. Many workers’
job skills are not transferable to nonbanking industries, requiring career changes, pay cuts, and retraining costs
to be sacrificed by sacked workers. They will have no choice. ~

Because wages fluctuate due to labor supply and demand, workers’ earnings will be reduced by this merger,
since the merger will shrink labor demand. Therefore workers will be robbed, even if they are not employed by
these banks. They will have no choice.

Customers can now go to Fleet or BankBoston and withdraw their money without charge, but if they go to
another ATM they must pay to withdraw money. After this and other mergers that will follow, ATM fees will
rise each time they withdraw money from their account. Check fees and loan interest rates and fees will increase
because there will be no competition. The megabank will have a monopoly. Customers will have no choice.
Mergers have a snowball effect. When one illegal merger is approved others are announced. No doubt it was
this Fleet/BankBoston merger, which let to the announcement by Citizens and U. S. Trust that they will merge.
No doubt, the Baybanks merger led to this Fleet/BankBoston merger. Perhaps the Shawmut acquisition led to
the Baybank merger. If the Fleet/BankBoston merger is not stopped the Fleet/BankBoston/U. S. Trust/
Citizens Bank merger will be next. This cycle creates monopoly.

Being able to borrow money is very difficult when there is no choice. Small businesses depend on banks loans
for their existence. The merger will reduce advertising demand, reduce start-up businesses, and harm many
other sectors. This merger will have a depressing economic impact like a tidal wave on eastern Massachusetts.
Recently the states filed suit against tobacco companies for smokers health services costs. People can choose
not to smoke, but not where to bank when there is a bank monopoly. Unlike smoking, losing jobs means
unemployment, food stamps, and welfare. This cost the state lots of money, and the people involved lots of
hardship. Unlike smoking, mergers are clearly illegal. The case against the Fleet/BankBoston merger is far
stronger than the case the states had against the tobacco companies.

I ask Fleet Bank and BankBoston to call off this illegal merger in the interests of customers, workers, and
society because it substantially reduces bank competition.

I ask the Federal Reserve Bank to deny this merger because it substantially reduces bank competition.

I ask the U. S. Attorney General to file suit to stop this merger under Section 7 of the Clayton Act. If not, I
request that she resign for failing to enforce the law.

Lask the Attorney General of Massachusetts to file suit to stop this merger under Section 7 of the Clayton Act.
Ifnot, I ask that he resign for failing to enforce the law.

. If all fail to do so, I ask fellow citizens to join me to file a class action suit to prevent this merger under Section

7 of the Clayton Act. I know we can win.

I ask both the U. S. and the Massachusetts Attorney General to reply within one week whether they plan to
challenge this illegal merger in court .

The Fleet/BankBoston merger is bank robbery. Support freedom of choice. Just say no! Ban the
Fleet/BankBoston merger.


Please advise me of your opinion regarding the potential value of reinitiating
discussions between the bank and CHA.

Have a pleasant holiday season.
Sincerely,
Dwight K. Miller
President

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Ownership of ATM networks should not be primarily held by large banks - again
perverting competition. For example, the NYCE network is owned primarily (95%) by
eight large banks. The remaining 5% is held by 150 smaller banks. Fleet and
BankBoston each currently own 12% of the NYCE network. Instead of dividing one of
the 12% shares amongst the large banks, they should go to the share owned by the 150
smaller banks.

If this merger between Fleet and Bank Boston is successful, consumers' power in the
market place will once again be reduced. This comes after a recent succession of mergers
and on the heels of the recently announced merger between Citizens and USTRUST.
There is no doubt banks will continue their strategy of eliminating competitors through
buyouts rather than compete with them through better service, and lower fees.

These three simple consumer initiatives will go a long way in preventing further erosion
of consumer clout and encourage more competition in the financial services market place.

Ihave enclosed additional information on the above initiatives.

Enclosures:

1. Report: Bigger Banks, Bigger Fees: The 1997 PIRG Bank Fee Survey

2. MASSPIRG testimony on the Act to Establish A Financial Consumers Association
S. 114, before the joint Committee on Commerce and Labor and a copy of the bill

3. MASSPIRG testimony on the ATM surcharge ban. bill S. 19, before the joint
Committee on Banks and banking

4. "How the ATM Surcharge Works"


Aggregated Home Mortgage Lending
Fleet Bank & Shawmut Bank

Hartford MSA (3280:00)
1994-1996

700 ~—-—— _ eee
600
500 —e—African American |
Households
400 ‘
ee —w— Latino Households
300 + |
ee gee : LMI Households
200 -
400 |—— ee >
0 ,

1994 1995 1996



the Currency (OCC), have condemned this reasonable proposal."

Actions by the OCC have hindered the ability of the states to regulate bank fees or enact
low-cost checking accounts. In 1992, the OCC preempted (held that national banks do not
need to comply with it) a New Jersey Lifeline Banking law, despite the absence of any
federal law explicitly requiring banks to provide lifeline banking accounts. Despite a
regulatory petition filed in 1995 to overturn that preemption, Comptroller Ludwig has taken
no action to do so.’ The existence of the preemption determination (OCC 92-572) has had
a chilling effect on state legislative attempts to enact further lifeline laws or ban ATM
surcharging.

The OCC’s recent preemptive history suggests that it would preempt any state law banning
ATM surcharging, despite the absence of any federal law regulating ATM fees.

e ATM SURCHARGING FUELS BIG BANK GROWTH

Banks argue that ATM surcharges are needed to cover the cost of remote ATMs. They claim
that ATM growth is being spurred by ATM surcharges. Hearings'® by Senator Al D’Amato
(R-NY), Chairman of the Senate Banking Committee, have in fact pointed out that ATM
surcharging is part of the big banks’ anti-competitive strategy to squeeze out smaller banks
and credit unions by encouraging their customers to switch their accounts to banks with
larger ATM networks.!’ When confronted with the argument that, in fact, banks are
surcharging at branches as well as in casinos and at ski areas, banks reply that, "consumers
should pay for convenience" and "consumers have a choice between ATMs that surcharge
and those that do not." :

The real question of choice in the marketplace is not between surcharge and no-surcharge
ATMs. It is between high-cost and low-cost banks and credit unions. If surcharging helps the
big banks get bigger, all consumers lose, since big banks have higher fees. When only big

banks are left, consumers will have no choice, except to pay higher fees, whether or not they
want the "convenience."

Already, one big bank, Banc One, has begun charging its own customers to use its own
ATMs.'® As the big banks use the surcharge to gain market share, expect others to follow.

Congress should immediately ban the anti-consumer, anti-competitive, pro-big bank, ATM
surcharge. Already, two states, Connecticut and Iowa, have done so by Banking
Commissioner regulation.

@ BANK FEES VERSUS COSTS

Past studies have found that bank fees exceed costs and that fees are being increased faster
than costs have risen. Fees for bounced checks are 7.5 times the banks’ administrative costs
and fraud losses.!? In some cases, banks have racheted up fees even when costs have
decreased.” ATMs save banks billions of dollars in teller and branch costs.?1_ However,

as the current study shows, banks continue to increase ATM fees.

PIRG’s 1997 Bank Fee Survey -- Page 10


bopurBle Oe

Augustin Ogiste
108 Bernard St.
Dorchester

William Pearson

Medford

GbE Rodgers 7 Joy Es

43 Bicknell St.
Dorchester

Clara Scott

Dorchester

Michael Pass
28 Sussex St.
Roxbury

“Tr
on espa
23 Eglestor St.

Dorchester

Hillie Sampson

10 Wellington Hill St.
Mattapan

Danlp-Leelf-

Davd Scott
SSC RandolphAt7e |
Milton, mA 2146

Bpuel beh John Sherrin

4 Arcadia St.
Dorchester

Lisa Simmons
Bloomfield St.
Dorchester

Barbara Said
Beet

46 Bradwood St.
Roslindale

Germaine Simon
47 Bicknell St.
Dorchester

Tua Smith
Westfield St.
Dorchester


High Noon

780 Windsor St. 2" £1
P.O. Bos 300
Hartford. C1 06106
Contact: Ron Dunson

Legal Assistance Resource Center
80 Jefferson St

Hartford. CT 00106

Contact: Jane McNichol

State Representative Evelyn Mantilla
36 Charter Oak Rd

Hartford. CT 06106

Contact: Fvelyn Mantilla

Vecinos Unidos

30 Arbor St
Hartford. C1 06106
Contact: Luz Santana

Letter to Peicrai Reserve Board 77-99
Page HA of it

Lead Safe House
117 Sigourney St
Hartford. CT 06106
Contact: Effie Barnes

NAACP

1585 Chapel St.

New Haven. CT 06511
Contact: Roger Vann

Urban League

1229 Albany Ave

Hartford. CT 06112

Contact: Beayanka Pinckney


ATidavit of are

We want to complain about the way we were victimized by Fleet Bank when we
tried to get a mortgage to refinance our home at © ai MA.

We were defrauded out of more than S§§MNEB because we trusted the bank and its
loan originator, i We met Gili at the Fleet Office in Roxbury and he
was assigned to our loan. We filled out all the documents and were told we had to pay
bank fees.

Although we gave our money, we never received the truth-in-lending disclosures
required by law, but we were told that the bank was slow and that our loan was approved.
We were desperate to obtain a loan and we relied upon as ° help us. We were
not familiar with Fleet's loan process and depended upon the bank to treat us fairly. We
hear that SNE has pleaded guilty to some crime. In our opinion, he is not the only
guilty party. Why didn't the bank oversee work and make sure the payments he
asked for were accounted for? Why were we not contacted by either the bank or the
District Attorney's Office? To this day we have not been informed of the status of our

loan, or that §iMMMgis no longer an employee.

We only found out about this recently. In fact SE talked to MBP last
week when told him that our money was safe and that the bank would return it at
any time. still insisted that he would get us a loan through Fleet Bank.

We want to know why the bank has not contacted us. We are facing foreclosure of
our property and we relied upon the bank to treat us fairly, not to rip us off. While an
employee of Fleet, <p tried to get us involved with an QE and a
who he said we had to pay to get our taxes done for the bank because the bank did not
accept the same tax return we send to the IRS.

There is something seriously wrong here. How many other have been treated as we
were? How was able to carry on this charade without help from others in the
bank. There must have been others who got paid off. And why didn't Fleet notify us that

bre longer worked for the bank. We have asked Community Homeowners to
help us. If they can't, we are going to complain to the attorney general and other agencies.

We feel that the bank is responsible for returning our money and for the conduct of
its employees. It is a real insult that the bank comes into this community claiming that it is
the best bank, then hires dishonest staff who do more harm than good. It is no wonder that
the minority community can never accomplish anything positive. The (EBB who
control the bank continue to make sure that we don't get a fair chance.

July 14, 1995


Community Homeowners Association, Inc.

Request: $175,000 per year as charitable contribution (501c3 pending) and ability to bill
clients on fee for service basis
Recommendation: $125,000 per annum! “fee for service must demonstrate benefit to community,
be modestly priced, and be a legal activity. Fleet would require a legal opinion
regarding issue of being a mortgage broker.

Request: $17.5 million in "INCITY" product

Recommendation: $12 million CHA/Fleet product and $5.5 million "set-aside" on Fleet CRA
Mortgage Product. CHA/Fleet product must contain competitive LTV,
purchase rehab, refinance, maximum income limits, debt/income ratios, no PMI,
and require CHA credit counseling to qualify

Request: $1 million revolving fund to acquire RTC, FDIC, etc. properties for the benefit
of homebuyers and for neighborhood stabilization

Recommendation: A $250,000 line of credit to CHA, where Fleet approves on a case by case
basis the acquisition of one or more 1-4 family structures, after analyzing the
purchase price, time and expense to rehab, marketability, and availability of
owner occupant buyer in the CHA network. Adequate appraised value and
modest rehab would be key factors. CHA must demonstrate the community
value of the acquisition (below market value to family acquiring building) for
request to qualify.

Request: Fleet "underwrite" the cost of acquisition, rehabilitation, and furnishing of new
offices at 630 Warren Street, Roxbury
Recommendation: If we have assurance that $125,000 is adequate before any disbursement, Fleet
would consider a $50,000 grant and a $75,000 construction/permanent loan
wd*sooo fanquin hartwan [5 oftwart puritan oud
ev avtebuity % trols dayvipreet from Ficet Bask to

LE ove fit ofRee rpace ot L320 Warren SH,
; Sve:
S SLE ‘2.9/5 anit .

Dwight Miller
Community Homeowners Association, Inc. Fleet Bank of Massachusetts

1. * For three years payable quarterly in advance Mach 24 ay
4

* Letter of agreement to follow expeditiously with acceptable
product guide.


1996 Fleet Bank LMI docisions-Biack z : |

ASA : Denied. Approved _ Ratio |
1160 BPT 25 67 «2.68,
1930 DBY 1 1 1.00
(3280 HFD 37 “39°. 1.05
5480 NH 11 17 1.55
15520 NL ee ee 1.00
8040 STM 8 26 «3.25
(8680 WTB 3 5 167
Total 86 1561.81
1996 Fleet Bank LMI decisions-White

MSA Denied Approved Ratio
1160 BPT 59 113 1.92)
1930 DBY 35 58 1.66
{3280 HFD 144 199° 1.38,
5480 NH 72 74 = = 1.03
5520 NL 42 At 0.98
‘8040 STM 82 137 1.67
8880 WTB 13 30 2.31)
Total 447 652 1.46
Black vs. White

Of LMI borrowers, blacks were approved at a rate of 1.8 for every 1
denial.



COMMUNITY HOMEOWNERS ASSOCIATION, INC.
630 Warren Street
P.O. Box 2
Dorchester, MA 02121
617 445-4005

15 May 1995

Mr. John E. Marston, SVP
Fleet Bank of Massachusetts
75 State St.

Boston, MA 02108

Dear John,

1am surprised to learn on last Friday that you apparently never received the
enclosed communication of December 21, 1994. I had hoped to receive a response months
ago. I would like to reiterate and update the information J provided at that time.

In addition to carrying out needed mortgage foreclosure prevention and
counselling services under contract to Freddie Mac, we are now also providing similar
services for the FDIC. Both agencies have recognized the continued and increased need
for neighborhood stabilization and home retention services, particularly in lower-income
and minority communities. The added value resulting from services provided by CHA and
other community-based agencies has resulted in more efficient processing and cost-savings
to Freddie Mac and FDIC, and has avoided many instances of foreclosure and financial
Joss to lenders and homeowners.

We have also enhanced our effectiveness by establishing working relationships
with other agencies involved with community empowerment and consumer education. I
enclose recent endorsements and news articles concerning our activities.

These activities, combined with our past effective administration of Fleet's
Consumer Mortgage Subsidy Program in 1993, has strengthened our capacity and
effectiveness in providing needed services. We have continued our commitment to assist
those in need despite a lack of adequate funding.

I ask the bank to reconsider our demonstrated capacity to deliver effective services
and our recognition as a primary source of relief for those at-risk of default, and for
those unserved by other Fleet initiatives.

I again request a review of the agreement we reached in 1994, and the underlying
assumptions. The bank's implementation of this program will further the mutual needs and
interests of Fleet Bank and our constituents.


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@ NO FRILLS CHECKING:

Fee Charged Regardless of Balance, Limited Checkwriting

© The average annual cost to consumers to maintain a no-frills account at big banks
rose 3% to $152.80 in 1997 from $148.33 in 1995. At small banks, the cost declined 4%, to
$134.43 in 1997 from $139.68 in 1995. The cost gap between big and small banks increased
112%, to $18.37 in 1997 from $8.65 in 1995.

In addition,

® Consumers at big banks paid $3.73 on average, for monthly no-frills account
maintenance fees in 1997, about the same, $3.71, as in 1995. At small banks, the monthly
fee decreased slightly to $3.49 in 1997 from $3.60 in 1997.

® At both big and small banks, the number of checks included in the monthly fee
decreased slightly, from 9.4 to 8.7 at big banks and 9.4 to 8.5 at small banks. Fees per
check over the limit increased slightly at big banks to 60 cents each from 58 cents and
decreased slightly at small banks to 46 cents from 55 cents.

© Further, particularly in New York, where the banks responded angrily to the 1994
enactment of mandatory low-cost lifeline banking legislation, some banks charge punitive
fees on consumers who go over the check limit. These data are not included in the above
averages, but it works like this:

Citibank, after 8 debits, and Chase and Bank of New York, after 10 debits, for
example, convert their no-frills accounts to regular checking accounts, increasing the monthly
fees from $4 or less to $9 or more. In addition, each bank charges 50 cents per check for all
additional debits. Further, since debits are calculated when received by the bank, not when
written by the consumer, a consumer must be very careful that checks clear within a
Statement period to avoid inadvertent penalties.

@ SAVINGS ACCOUNTS

Lowest Cost Statement Savings Account

© ANNUAL COST, EXCLUDING INTEREST: The average annual cost index of
maintaining a statement savings account with a $200 balance at big banks increased to $32.28

from $30.72 in 1995. At small banks, the cost decreased to $26.64 from $30.96. The gap
between small and big banks increased to $5.64 from (0.24)

@ MONTHLY MAINTENANCE FEE: Monthly maintenance fees for savings accounts at

big banks averaged $2.69, up from $2.56 in 1995. At small banks, fees declined to $2.22 in
1997 from $2.58 in 1995.

PIRG’s 1997 Bank Fee Survey -- Page 4




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Affidavit of Dwight K. Miller

lam making this statement on behalf of Community Homeowners Asso., Inc.
concerning certain activities of Fleet Bank mortgage personnel during the past 2 years.

The following assertions are made based on information and belief, and are also
the result of conversations with clients and members of this organization as well as with
employees of the bank.

There are several members who were allegedly defrauded by a certain mortgage
originator assigned to the Grove Hall Office. Some of these individuals received their
money back as a result of an investigation by the Fleet security department. Others
received only a portion of their money, and some were not notified that they may have
been defrauded by the bank through its employee. Some lost their homes as a result of
reliance upon the promises of the originator and upon reliance on the integrity,
professionalism and reputation of the bank.

As a result of intervention by CHA many of these borrowers were qualified and
granted loans through the attorney general program. In the course of processing these
cases it was determined that:

1. a certain employee of the bank was requiring unsophisticated borrowers to give
large sums of money directly to the originator

2. the power of the Fleet Bank affiliation gave the originator inordinate influence
and control over at-risk homeowners who were facing the uncertainty of imminent
foreclosure and family displacement

3. at least two employees were involved in these activities

4. these employees were observed, based on information and belief, frequenting a
‘crack house’ in the community.

5. questionable or fraudulent activities continued for more than a year

6. many potential borrowers/victims were never identified by the bank or notified
that they would be compensated for their loss.

7. the involvement of other individuals may indicate a more sinister purpose to
these activities

Asa result of receiving this information, and recognizing that CHA's mission and
integrity could be undermined should this information become public, I sought two
avenues of response:


In addition, the multi-family unit portion of the Fund was never realized. Fleet states that
the lack of establishment of the multi-family funding was due to “the excess supply of multi-
family housing that resulted from Connecticut’s economic recession.” There are a number of
organizations across Connecticut that have been working for years to establish a rational
financing source for multi-family projects, and they have not ever identified a reduction in their
need for financing — certainly not because of an excess supply.

The remaining committed funds were invested, ultimately, in CHFA bonds. Initially Fleet
bought $50 million in such bonds in 1997 and an additional $25 million was purchased in late
1998. Investment in CHFA bonds may support CHFA’s homebuyer mortgage loan program, but
it does very little (if anything) to address the multi-family housing development needs across the
state. Such investment protects Fleet from actually dealing directly with these low- to moderate-
income borrowers, or nonprofit developers involved in this field. With this history, it is difficult
to imagine that Fleet will change substantially to become a major participant in mortgage lending
for LMI multi-family projects.

First Community Bank at BankBoston has developed some creative products and services
that seek to underwrite multi-family projects. They have shown an unusual willingness to work
more closely with the developers and the neighborhoods in which they work. On the other hand,
Fleet’s record in this area is much less aggressive. If Fleet’s focus prevails after a merger and
Connecticut communities lose the opportunity to work with BankBoston on these projects, the
impact on the LMI community will be devastating.

Throughout urban Connecticut there are a number of urban-focused community loan
funds where banks in each urban area pool their resources, both capital and human, to support
the nonprofit development of multi-family projects. As bank mergers continue to occur, several
of these existing loan funds have had the number of their bank partners cut in half. As the
number of participants shrinks, in most cases the amount of committed capital also shrinks,
reducing the number of projects that can be accomplished. In addition, with fewer bank
participants the lending and program standards are then set by a smaller group of lenders. This
results in a lower likelihood that more creative CRA peer pressure can be applied to encourage
more aggressive lending. The problems with multi-family project underwriting raise complex
concerns that require significant commitment and willingness to undertake risk in teinvesting
into the communities. This merger will reduce the likelihood of these projects ever happening.

3. Lending to Minority- and Women-owned Small Businesses
and Businesses in LMI Areas

Small business lending through the First Community Bank at BankBoston Connecticut
has grown significantly over the past several years, including commercial mortgages, asset-based
lending, working capital and lines of credit. First Community Bank has taken full advantage of
numerous government guarantee programs, both state and federal, and has participated in the
development of specific programs with community-based organizations, including an aggressive
lending program at the South Hartford Initiative. While we have not been able to compile an
accurate list of loans made, or of comparisons between Fleet’s performance and that of
BankBoston in this arena, it has been demonstrated by those in the field that Fleet has a

Letter to Federal Reserve Board 7/7/99
Page 5 of 14


NYCEATM.XLS

Why the Sum Program Is Not a Solution to the ATM Surcharge

The SUM program is owned by the NYCE network. NYCE is primarily owned
by some of the region's largest, surcharging banks. If the program is successful,
the big bank owners can just cancel the program, just as they merge with their
|competitors as a way to eliminate competition.

Ownership: NYCE is primarily owned (95%) by 8 banks, all of whom surcharge
lexcept Peoples (CT), where Connecticut law prohibits surcharging.

The SUM program is NOT a “market solution;” rather, it is the result of an
investigation last year by the U.S. Department of Justice. If left up to the
market,” the big banks would have been successful in their attempt at blocking
ithe creation of selective surcharging programs.

NYCE Ownership

4%: other (approx 150

banks)
12%: Marine Midland

12%: Citibank
12%: Summit
12%: Chase
» 12%: Fleet

- 12%: BankBoston

12%: Bank of New York

12%: Peoples

Page 1


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MASSPIRG’S 1997 BANK FEE SURVEY RESULTS
MASSACHUSETTS AVERAGES

NOW INTEREST BEARING CHECKING ACCOUNTS

BANKS MIN OPEN | MINBAL | AVG BAL | MONTHLY | FEE PER
TO AVOID | FEE CHECK
FEE

BIG $335.00 $2125.00 $2500.00 $7.20 $0.38

BANKS (5) (4) (2) (5) (3)

LITTLE $141.58 $935.71 $1425.00 $5.92 - | $0.28

BANKS (26) (28) (10) (7) (23)

ALL $172.77 $1084.38 $1604.17 $6.07 $0.30

BANKS G1) G2) (12) (42) (26)

CREDIT $83.33 $316.67 $500.00 $5.25 $0.15 |

UNIONS (3) @) () (4) (2)

NO-FRILLS CHECKING
a

BANKS MIN OPEN MONTHLY # FREE FEE PER
FEE CHECKS CHECK

BIG BANKS $13.75 $2.83 $10.00 $0.82

(4) (6) (6) ©)

LITTLE $37.21 $3.71 $8.80 $0.53

BANKS (14) (21) (19) (18)

ALL BANKS _ | $32 $3.52 $9.10 $0.60

(18) (27) (25) (24)
CREDIT $25 $2.25 $6.00 $0.35
UNIONS (2) (4) (2) (2)

Total banks included in survey: 6 big banks, 37 little banks, 43 all banks, and 6 credit unions.

Number in parenthesis,(), represents the # of banks included in calculation.


not until the Department of Justice began an investigation into this anti-consumer
practice that the banks backed down and allowed for the formation of a selective
surcharge program. The SUM program allows for banks and credit unions to group
their machines together per se, and offer consumers a larger network of surcharge
free machines in an attempt to allow banks with smaller networks to compete with
the big banks. Unfortunately, the banking landscape is so consolidated that at its
very BEST, the SUM program will only represent less than one third of all bank
owned ATMs in Massachusetts, and that percentage will likely decline over time.

Further, it is important to point out here that the SUM Program is owned by
NYCE, which is owned primarily (95%) by 8 large banks, all of whom surcharge,
(except People's Bank in Connecticut where surcharges are prohibited.) Therefore, I
have little doubt that if the program was truly successful, the banks would eliminate
the program just as they eliminate their competitors through mergers and buyouts.

In the last few years we have seen a rash of mergers and consolidation in the
banking industry. What used to be the 4 biggest banks in Massachusetts will now
be just one. If the big banks are successful in using the surcharge strategy to lure
customers from smaller banks, every consumer will suffer as the huge mega banks
act as a monopoly, increasing both the number and the amount of fees faster and
higher than the already expensive banking system we have today.

In addition, for an industry that continues to argue choice throughout every debate,
they are certainly doing the best they can to eliminate consumer choices by

gobbling up their competitors.
Conclusion:

While in many circumstances true choice and a competitive market can weed out
truly anti-consumer practices, there are a number of examples where the market did
not work and government has had to intervene to protect consumers.

Two well known examples of legislative intervention include usury caps and the
check hold Jaw. A usury cap is a state imposed ceiling on the amount of interest
that banks and other creditors can charge consumers for a loan. A more recent
example is the check hold law which stopped the banking industry's anti-consumer
practice of earning billions of dollars in interest on cleared consumers' cheeks whilé'~
denying consumers access to their own money for as long as two weeks. I will add
that Massachusetts was the first state legislature to pass the check hold law in 1984,
followed by New York. It wasn't until the early 1990's that the law was passed by
Congress. A more recent example of government intervention is cited above when
last year the Department of Justice launched an investigation into the anti-
competitive network practices, which ultimately led to the establishment of

selective surcharge programs.




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Not only have there been declines in available credit to the LMI and women and minority
borrower markets, but Fleet has not expanded its market share to match its asset-based and
deposit-based market domination in any of these “CRA” areas.

2. Affordable Housing Lending

A. HMDA statistics

Fleet has recently had a problematic record in lending to underserved borrowers,
especially as shown in the data reported under the Home Mortgage Disclosure Act (HMDA).
We have only been able to access portions of the data, because 1998 is not yet fully available and
various researchers and reports include different sets of data for different purposes. We have
tried to extract data covering one-to-four family owner-occupied first mortgages, excluding
refinancings, home improvement loans and loans on investment properties. Studies have been
done by many, including Jim Campen, Associate Professor of Economics at the University of
Massachusetts at Boston, that show for Fleet a dramatic trend of DECREASING lending to
borrowers in low- and moderate-income (LMI) communities, and to borrowers of color. This is
especially alarming as it has occurred even after Fleet’s acquisition of Shawmut, essentially
reducing overall in the marketplace the availability of home mortgage credit to the underserved.

While the 1998 figures are only just released and not yet analyzed, the trends that appear
between 1994 and 1998 raise significant concerns. The ability to differentiate between mortgage
loans to minorities and mortgage loans to persons of low- or moderate-income in each MSA
becomes confusing, but even the overall data is startling. Statewide, including mortgage loans in
all income categories, the combined Fleet/Shawmut numbers plummeted from 6,653 in 1994 to
1,177 in 1997, with only a slight rise to 1,290 in 1998, which reflects only 20% of its 1994
lending volume. In the Hartford MSA, the total mortgage lending of both Fleet and Shawmut to
minority households in 1994 was 469 loans, while in 1997 it had plummeted to 102 and in 1998
it dropped further to 78, less than one fifth of the loans made by the two banks while they were
separate. Also in Hartford, combined Fleet/Shawmut mortgage lending to borrowers with
incomes up to $80,000 (low- and moderate-income) dropped in 1998 to 25% of the 1994 lending
volume, and even lending to those with incomes over $120,000 showed the following similar
precipitous decline:

Hartford, Connecticut MSA
Year -$51 51-80 Subtotal 81-95 96-120 120+ Total

1994 171 438 609 262 370 929 2170
1995 136 335 471 158 = 244 618 1491
1996 72 235 307 191 247 822 1567
1997 55 106 161 35 42 83321
1998 36) «6115151 36 67 103 357

In other Connecticut MSAs, the same comparisons exist. In New Haven, overall lending
to all races shrank from 478 in 1994 to 53 in 1997, increasing to 107 in 1998, still only 22% of
its 1994 lending volume. Of that volume, 49 mortgage loans were made to minorities in 1994
while only 9 loans were made to minorities in 1997 and 14 in 1998. Mortgage loans to
borrowers with incomes below $80,000 shrank from 113 in 1994 to a mere 25 in 1997: including

Letter to Federal Reserve Board 7/7/99
Page 3 of 14


@ OTHER MISCELLANEOUS FEES

This year, PIRG also looked at the incidence of two fast-growing fees.

© EARLY ACCOUNT CLOSING FEES: An increasing number of banks are charging
consumers a fee to close an account that has been open less than one year. Such fees
discriminate against college students and other transient persons. These fees are also designed
to discourage shopping for better deals.

-- 147 banks charged early account closing fees averaging $12.56. The average
number of months was 4.23. Of banks charging an early account closing fee, 2 banks
charged a $50 fee for accounts closed within six months. Most of the banks, 64,
charged a fee of $10 after either 3 or 6 months.

© TELEPHONE CALL CENTER FEES:-An increasing number of banks are charging
consumers who call to make balance inquiries. In addition, banks that had installed computer
call centers as a low-cost alternative to operator-assisted calls are now implementing fees to
call the computer, despite the cost savings. The fees listed below are for inquiries only. Full
check listings are generally extra, as are balance transfers.

-- 69 of 419 banks, or 16%, charged a fee to make a balance inquiry over the
telephone. In 1997, PIRG found the following different fee structures among those 69

banks:
| CALLS TO CALLING CENTERS
Fee Structure Cost to call | Avg # Cost to call jAvg #¥
Computer Free Operator Free

Calls/ Calls/
Month Month

One Fee (30 banks) $1.03 3.9

Free To Computer (14 Banks) $0.00 $1.20 2.9

Fee For Either (25 Banks) $0.56 5.9 $1.42 2.6

-- Six credit unions, or 16%, charged for computer calls. Four of the 6 charged an
average of $1.06 with 3.25 free calls per month. One allowed unlimited free
computer calls and charged $1 per operator inquiry. One charged $0.50 for each
computer call over 30 each month and charged $2 for each operator-assisted call.

@ MULTI-STATE BANKS CHARGE HIGHER FEES

One additional measure of the fee gap between large and small banks is to compare fees at
local institutions to fees at multi-state institutions, which are generally larger. Our data
correlate favorably with those in the Federal Reserve’s recent fee report to Congress, which

PIRG’s 1997 Bank Fee Survey -- Page 6



NATIONAL FINDINGS --
THE 1997 PIRG BANK FEE SURVEY

State PIRGs and CFA members surveyed 419 banks in 30 states in 1997 and compared the
results to PIRG’s 1995 survey of 271 banks in 26 states. In 1997, we also surveyed 36 credit
unions, as a comparison. The survey results are representative of the fees most consumers
would pay, since the sample includes 134 of the country’s 300 largest commercial and
savings banks. Those 134 banks hold 45% of the nation’s total deposits.?

e@ REGULAR CHECKING ACCOUNTS:

Meeting A Balance Requirement Avoids Fees

@ ANNUAL COST: Nationally, in 1997, consumers paid an average of 15% more, or
$27.95, to maintain a regular checking account at a big bank than at a small bank. The big
bank fee gap increased 57% from 1995, when consumers paid 9% more, or $17.76, to bank
at a big bank. In 1997, a big bank consumer paid $218.27 in annual account fees vs. small

bank fees of $190.33. In 1995, big bank customers paid $211.74 and small bank customers
paid $193.98.

@ BALANCE REQUIREMENTS: Most banks (60%) now require a minimum balance to
avoid paying fees. It is harder to meet a minimum than an average balance, used by only

15% of banks. The remaining 25% of banks allow consumers to meet either a minimum or
average balance.

@ MINIMUM BALANCE: The spread between big and small bank minimum
balance requirements increased from only $7 in 1995 to $150 in 1997. The minimum balance
required to avoid fees on regular checking accounts at big banks increased to an average of
$642 in 1997, up by 14% from 1995 ($561). At small banks, the minimum to avoid fees
declined by 11% from $554 to $492.

@ AVERAGE BALANCE: The average balance required to avoid fees at both big
and small banks declined very slightly from 1995 to 1997. At big banks, the balance declined
to $1321 from $1348. At small banks, the balance declined from $1115 to $1007.

© CREDIT UNIONS: By comparison, the survey found the average annual regular checking

account cost at credit unions to be only $108.65 in 1997, or less than 50% of the big bank
cost.

@ MONTHLY MAINTENANCE FEES: In 1997, the average monthly maintenance fee for

big bank consumers who fai! to meet a minimum balance is $7.65, up from $7.51 in 1995.
Small bank consumers paid $6.90 in 1997, up from $6.80 in 1995.

PIRG’s 1997 Bank Fee Survey -- Page 2

—


1. Institutional racism —the bank didn’t expect that CHA or any
minority-controlled organization would be qualified to conduct
a financial services program in a professional and efficient
manner. With little expectation, Fleet viewed the program [and
the community] as a throwaway, of little strategic benefit to the
bank.

2. Irrational fear of community-based organizations —Fleet
assumed the worst and took an adversarial relationship with
CHA and other organizations in the African-American
community despite a proven track record of cooperation and
effective advocacy.

Perhaps UNAC was successful despite its total lack of
qualification and the virtuol of its so-called director, because of
its aggressive and negative media campaign full of personal and
ad hominim attacks on Terry Murray.

By contrast, CHA’s thoughtful and reasoned approach to
conflict resolution apparently intimidated senior bank officials
so much so that the bank responded with the irrational NACA
loan program, one with such a high default rate that even the
bank refuses to disclose. Not surprisingly, CHA has saved the
homes of former NACA clients who were rejected as either “too
far gone to help” or because of the client’s failure to sufficiently
genuflect before NACA’s so-called director.

3. An arrogant belief that the bank is so big that it can intimidate
and eliminate any opposition or challenge. By selective
disclosure of the Fleet / CHA agreement the bank sought to
derail its commitment to the community and to blame such
failure upon “infighting among community groups.”

4. Fear among Fleet managers that their jobs were in jeopardy if
they didn’t deliver “the community groups” en masse in support
of the merger at the Fed public meeting. One local group listed
in the above referenced Fleet letter earlier issued a letter of
support for CHA. Shortly after the public meeting it considered
apologizing to the bank, fearful of reprisal.

While one can speculate on these matters, we likely will never
know the whole truth. It is unclear whether this information will defeat the
merger application. It is clear that Fleet’s management has been
dishonorable in its dealings with CHA and with other organizations.
Apparently, the bank empowers only those it believes it can control and
limit.




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15 Oldsfield Rd.
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35 Longfellow St.
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Testimony of Community Homeowners Association, Inc.
Dwight K. Miller, President

Federal Reserve Bank of Boston
Public Meeting on the Proposed merger among Fleet Financial Group, Inc. and BankBoston
July 7, 1999

My name is Dwight Miller and I appear to testify in opposition to the
proposed merger. My statement is in support and in furtherance of a statement that
was submitted to the Board on June 10. The basis for my objection is my concern
that the management of Fleet will continue its pattern of neglect and intimidation
with respect to the financial needs and interests of lower-income and minority
communities. And I fear that the proposed merger will tend to weaken the
community empowerment commitment that has been a hallmark of BankBoston’s
reputation and proven track record over many years.

I have serious doubt that the resulting entity will be one that is responsive
to the residential mortgage needs or one that is oriented toward the long term
housing financing desires of lower-income homeowners and would be purchasers.
With the recent increase in foreclosure activity resulting in part from increasing
property values but also fueled by gentrification and speculative investor interests
this concern is very real. Others here today will speak at length on the likely
negative impacts of the proposed merger on communities targeted by such
interests and the effects where a major lender, without the incentive created by
competition, ignores community needs and is focused primarily on higher income
residential borrowers and on commercial lending activities.

With the limited time allotted I would like to emphasize the weakness of
the Fleet commitment to CRA, its treatment of community organizations and the
conflicting signals it has sent over the past several years, since the Fleet / Shawmut
merger application.

I would like to inform the Board of the experience of my organization.
While Community Homeowners’ experience rightfully should be viewed through
the prism of Fleet’s overall performance with respect to CRA programs throughout
its market area, I am confident that ours is an experience which reflects a pattern of
arrogance and deceit, emanating from the highest levels of the bank, that this
Board cannot ignore or dismiss as an aberration or as simple, but regrettable
miscommunication among the parties.


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BIG BANKS, BIGGER FEES:
The 1997 PIRG Bank Fee Survey

SUMMARY

Over 12 million American families already can’t afford bank accounts. Other consumers are
paying too much, especially if they bank at big banks. Meanwhile, in 1996 banks recorded
over $50 billion in profits, yet another record. Growing fee income is an important part of
those increased profits.

This 1997 national survey, prepared by the state PIRGs with assistance from state and local
member groups of the Consumer Federation of America (CFA), updates our 1993.and 1995
national surveys.' The disturbing trend of more, and higher, fees is continuing. Data from
1997 are compared on a state by state basis and to'1995 national averages.”

Since bank deregulation began in the early 1980s, the PIRGs and other consumer groups
have conducted numerous studies documenting skyrocketing consumer banking fees. Our
studies have helped to focus national attention on the problem of skyrocketing bank fees.

Our findings show that the cost spread between big banks and small banks, and between
multi-state banks and locally-owned banks, is widening. The best deal, for consumers who
qualify for membership, is at member-owned credit unions. Others can find lower fees at
small, locally-owned community banks.

The survey results are profoundly disturbing. Bankers are punishing low- and middle-income
consumers with unjustifiable fee increases while bank profits soar to new records each year.

Meanwhile, a bank-friendly Congress continues a massive rollback of critical laws that
protect consumers, communities and taxpayers. 1994 legislation promoting interstate
branching has contributed to the merger frenzy that is leading to more higher-cost, multi-
state banks. In 1996, the Congress weakened the Truth in Savings Act and other consumer
laws, making it harder for consumers to compare fees. This year, the House Banking
Committee has already, narrowly, approved so-called Financial Modernization legislation that
expands bank powers to sell insurance and investment products, without concomitant
consumer safeguards. At the same time, the American Bankers Association has sent its
member banks marching into the courts and state legislatures, attacking low-cost credit
unions in the judicial and political arenas, since banks cannot win fairly in the marketplace.

PIRG’s 1997 Bank Fee Survey -- Page 1


which approximately 88% of banks in Massachusetts already charge their
accountholders when they use anothers ATM.

In just this past year, the number of ATMs imposing a surcharge exploded. From
April 1, 1998 to April 1, 1999 the number of bank owned surcharging ATMs went
from 3% to 71%, a 2,000% increase.

While many fees are too high, some are particularly egregious and should be
prohibited. The ATM surcharge is one of those fees.

A. Price Gouging

Our most recent study on bank surcharges, Always Taking Money, released in April
of this year, found that the percentage of banks nationwide surcharging non-
accountholders has increased dramatically. in the past year to 93% of all banks.
Compared to our 1998 report, overall surcharging by banks has increased 31%. The
average ATM surcharge was $1.37 up from $1.23 in 1998. An unprecedented 95%
of big banks now surcharge. Big banks, which have the vast majority of all ATMs,
impose higher surcharges, and surcharge at higher rates. The average ATM
surcharge at big banks was $1.42 and small banks was $1.30.

In Massachusetts, we are about a year behind the national trend in ATM fees. While
only 24% (56) of banks in Massachusetts surcharge, they represent over 71%
(2500) ATMs.

Today, 3 years after the removal of the surcharge ban by the networks, ATM
surcharges are most typically $1.50. However, surcharges of $2-$4 are on the rise.
Left unchecked, it is not hard to believe that surcharges will soon typically be $2-
$3, with the high fees being $3.50 to $5.

The surcharge, remember, is in ADDITION to the fee most of us already pay our
bank to use another's ATM. This fee, sometimes called the "foreign" fee, ranges
from .50 to $2 with only a handful of banks charging $0. In Massachusetts, the
average "foreign" fee was $1.05. Once again, the biggest banks charge the highest
“foreign" fee with the big banks averaging $1.58 and small banks averaging $1.

With the addition of the surcharge, a simple ATM transaction has in effect-doubled; ~
or even tripled the cost to the consumer. If surcharging is not prohibited in
Massachusetts, a typical banking customer who uses another bank's ATM will pay
$2-$3 to withdraw money from an ATM. In many cases a consumer pays $3-$4 if,
for example, they pay a $2 "foreign fee" (as is the case of Citizens Bank), and use
an ATM which charges $1.00 surcharge (BankBoston).

These fees are particularly outrageous compared to the actual cost to banks for an
ATM transaction. Various articles and studies, including an estimate by the Office _


14, See Memorandum of OCC Chief Counsel Julie Williams to OCC Comptroller Gene Ludwig of 24 June 1997,
discussing problems with the bill, now called the Financial Services Competition Act. The memo lists, under the
heading, "Banks and Bank Holding Companies Subject To New And Unequal Regulatory Burdens:” {that include
being] "required to provide ‘lifeline’ banking services.”

15. In response to the 1995 petition, the OCC did in 1996 meet the minimum requirements of the 1994 Riegle-Neal
Act by issuing a Federal Register Notice (Docket #96-01) to obtain comments on overturning the rule, but has done
nothing since, other than invite U.S. PIRG’s Ed Mierzwinski and other consumer and community leaders to a small
luncheon in April to discuss the plight of the nation’s 12 million unbanked families. :

No regulatory policy of either the OCC, the FDIC or the Federal Reserve Board or any other agency
explicitly requires financial institutions to provide any account or service in conflict with the New Jersey Checking
Account law. In the absence of conflicting federal law, it has long been the federal tradition of this country that the
states proceed to protect their consumers, as New Jersey has correctly done. Over 700,000 New Jersey consumers
have obtained New Jersey Checking Accounts.

Congress, in a strongly worded statement, has specifically condemned the OCC’s 1992 action as an
overzealous and “inappropriately aggressive" over-reach of regulatory authority. (Conference Report, Riegle-Neal
Interstate Banking Efficiency Act of 1994, H.R. 3841, Report # HR 103-651, 2 Aug 1994 at 53.)

16. See Sen. Hrg. 104-740, 12 July 1996 for opposition by small banks and credit unions to ATM surcharging. See
report of the U.S. General Accounting Office, "ATMS: Banks Report That Use of Surcharge Fees Has Increased,"
released at Senate Banking Hearing of 11 June 1997 for another report on ATM surcharging documenting the PIRG
findings of 1 April 97. Sen. D’ Amato has re-introduced legislation, S. 885, to ban the ATM surcharge. A similar
bill, H.R. 795 has been filed by Rep. Bernie Sanders (I-VT). "

- 17, See “ATM Surcharges: Panacea or Pandora’s Box," by David Balto, Page 169, The Review of Banking and
Financial Services, 9 October 1996, for a detailed discussion of surcharging issues. Balto suggests that banks that
dominate a market, such as in Minnesota, may already be using practices, such as refusing to link to the small

~ bank’s ATM network, that "make it increasingly difficult fof the small banks to offer adequate ATM access to their
depositors and effectively compete with large banks for retail deposits.” (at 174)

18. Banc One banks will charge $1.50 to non-customers and $1.00 to customers, who use new ATM machines at

non-bank locations. See "Cash Machine Use To Cost Banc One Customers,” Patricia Lamiell, Associated Press,
- 21 May 1997, Boulder Daily Camera and other papers nationally.

19. "Bounced Check Fees 7.5 Times Banks’ Costs," Center for Study of Responsive Law, December 1994

20. “Bank Cost Analysis,” Janice Shields, April 1993

21. "Banks Generate More than $2.1 Billion in Profits from ATM Transactions in 1994,” Center for Study of

Responsive Law, June 1995

22. See “Handy? Certainly, But Debit Cards Also Have Potential Risks," David Morrow, New York Times, Page
1, 13 July 1997.

23. Get it by e-mail -- Send mail to “watchdog@pirg.org" with the subject line “bank”
24. Consumers don’t have the information necessary to compare bank costs. That’s a marketplace failure. New York
State Governor George Pataki recently announced that the state would address this marketplace failure by posting

credit card, home equity and auto loan rates on the state’s web site. See “Banks Making Fortune From ATM
Surcharges,” by Robert Heady, Denver Post 6 April 1997. : .

PIRG’s 1997 Bank Fee Survey -- Page 16


Aidit ofA aaa

We are making this statement to inform the proper authorities concerning a loan
application we made to Fleet Bank in March, 1993. We paid the Fleet originator,
to process our application. We received nothing in return. We did not
even receive the all the disclosure documents required by law.

After a lengthy period, and repeated attempts to reach him, QR aid that
"things were looking pretty promising for us" and that we would hear from him soon with
a closing date. Apparently our loan application was never submitted to the bank since we
never heard again from him. Our house was never appraised and we don't know what
happened to our deposit money. .

We were about to be foreclosed upon and we sought other sources to secure a
loan. We contacted ay credit union. They were very helpful and concerned, unlike
the experience we had with Fleet. But, in the end they could not approve our loan
application because of our bad credit. But, the loan originator referred us to Community
Homeowners Association. There we met with Dwight Miller. He put us through his
program and we were granted a loan through Fleet, saving our home.

The difference in service was like night and day. While the Fleet employee was
unprofessional and lax, Community Homeowners was attentive to our concerns and was
very diligent to getting our loan because we were facing foreclosure in a matter of weeks.
We have seen many instances where this organization performed "miracles" for people
who had no way out of their situation. We are most thankful that this group was there for
us. Its a shame Fleet Bank reneged on its agreement to give CHA more money to help
homeowners in need of reliable financial help.

We are disappointed that the bank didn't supervise its employee the way it should.
If we had waited for ZEN o get back to us we would have lost our home. We
know now that just because Fleet is a big bank doesn't mean that it is a good bank.

From our experience, we don't think Fleet should be allowed to buy Shawmut
Bank. Fleet should get its own house in order first.

Since we received no real service from Fleet's employee, we would like to get our
money back. The time and hassle we went through with Fleet was a waste of time.

July 15, _


© Unjustified fees, such as the ATM surcharge, deposit-item-returned fees and human teller
fees, should be outlawed.

© Fee disclosures should be standardized. Just as the Fair Credit and Charge Card Act of
1988 requires all key credit card disclosures to be made in a standard easy-to-read box
format, banks should provide deposit account disclosures in the same way. Those brochures
should be easily available to prospective customers, not only accountholders.

(4) Oppose all attempts to roll back existing laws that protect consumers and taxpayers
and ensure that if modernization legislation is enacted, safeguards are imposed.

Banks have a sorry history of misleading consumers about whether or not non-deposit
investment products are insured by the FDIC (they are not). Banks have also grown fat
selling unnecessary over-priced credit life insurance to loan consumers. If bank powers are
broadened and walls between banking and commerce lowered, strong consumer, depositor
and taxpayer protections must be enacted. Current consumer laws must not be weakened.

e@ METHODOLOGY:

We obtained the data for the survey from the fee brochures of 419 banks from 30 states with
PIRG or CFA affiliates. We used data obtained from the FDIC’s web site (www. fdic. gov),
to calculate percentages of total deposits as of 30 December 1996. According to the FDIC
data, the nation’s 300 largest banks hold nearly two-thirds (65%) of total deposits of $3.7

trillion. The country’s remaining 11,543 banks hold the rest. We didn’t code the deposits of
the smaller banks in the sample.

LOWEST COST ACCOUNTS IN EACH CLASS AVAILABLE WITHOUT
RESTRICTION

Banks offer many more accounts than we surveyed. We sought to report on the lowest cost
accounts in each class (regular checking, NOW, no-frills checking and statement savings)
that were available to any customer, without income (means tests) or age restrictions. At
many banks, you may pay higher fees. This year, we also looked at ATM-only accounts,
offered by a growing number of banks.

CALCULATION OF ANNUAL ACCOUNT COSTS:

We determined the amount that an average consumer who fails to meet minimum balances
might pay in annual fees in the following way: Costs of regular, NOW and no-frills checking
accounts included monthly maintenance fees, per check fees for checks cashed above the
maximum number allowed free per month, 25 regional and 5 national network ATM
transactions, and one bounced check and one deposit item returned per year. The average
number of checks cashed and the average number of "off-us" ATM transactions per account
were obtained from published banking industry surveys. The cost of savings accounts
included only a monthly maintenance fee. This survey’s monthly maintenance fee calculations
assume that consumers checks are returned, even if an extra charge is assessed. Some banks
require safekeeping on some, or all, accounts.

PIRG’s 1997 Bank Fee Survey -- Page 14


e (3) Make more consumers pay more fees.

-- Raise minimum balances to avoid fees and more people are paying more, instantly.

-- Eliminate services that had been bundled, and charge more for them: charge
consumers to call you on the phone, charge consumers to receive their cancelled checks, '!
and charge consumers to use blank checking account deposit slips, or "counter items."
Although we did not track this fee in this year’s survey, we expect it to grow.

CHECK SAFEKEEPING: Of course, if you want your checks back, there is a
charge, ranging between $1-5 each month. A growing number of banks offer "check
imaging," or copies included with your statement, either at no cost or for a lower fee than
getting your checks returned. Most banks provide a few copies of checks annually for free to
those customers who have either elected or been given safekeeping. Some banks require
safekeeping on all accounts; most require it on no-frills and free accounts.

BANKS ATTACK LOW-COST CREDIT UNIONS _

As this survey shows, the best banking deal for consumers is not at the bank, it’s. at the
credit union. These member-owned non-profit alternatives to commercial banks consistently
beat the banks in the marketplace, as this survey shows. The banks have responded by
ratcheting up their public relations campaign against credit unions a notch, filing anti-credit
union bills in state legislatures, and winning a lower court lawsuit against the right of credit
unions to have broad "fields of membership" and attract members from related groups.

That case is now under Supreme Court review and U.S. PIRG and CFA have filed an amicus
brief in support of the credit unions. If the credit unions lose, not only do their member-,>
customers lose, but all consumers lose. Although credit unions hold less than 2% of all

deposits, they function as a competitive yardstick, holding rates charged by bigger banks
down. 2

BANKS AND OCC SEEK EXPANSION, OPPOSE
LIFELINE BANKING :

In the Congress, legislation that has already passed the House Banking Committee would
grant sweeping new powers to banks to sell and underwrite uninsured deposit products,
including insurance and investment products, without concomitant consumer protections. The
bill would. also expand bank holding company structures and allow mergers between banking
and commercial firms.'? Rep. Maxine Waters (D-CA), successfully authored an amendment
requiring banks that take advantage of the proposed new structure to offer lifeline bank
accounts. Both the ABA and the banks’ friendly regulator, the Office of the Comptroller of

PIRG’s 1997 Bank Fee Survey -- Page $


I hope my testimony has been helpful. With respect to those loan
applicants who were victimized by Fleet, I am prepared to share unredacted
information with the Board or other proper authorities.

Regardless of the outcome of this application I feel it is important
that the CHA experience with Fleet be part of the record of this application
process. I hope it may be instructive to others in the future.

Thank you for your attention.


THE BOSTON GLOBE © SATURDAY, MAY 13, 1996

(CLDBE PHOTO / STI ELEMENT

Participants (from left) Dwight Millet, Rep. Joseph P. Kennedy 2d, Angle Wilkerson, Deval Patrick and
Rev. Charles Stith leave a meeting yesterday on discrimination in homeowners’ insurance.

US to probe insurance bias claims
Justice Dept. seeks facts about firms’ practices in Boston .

By Stephen Kurkjian

GLOBE STAFF

‘The US Justice Department will
begin gathering evidence to deter-
mine if companies heve engaged in
discrimination by denying homeown-
ers insurance to residents of Bos-
ton’s poorer and predominantly mi-
nority neighborhoods.

‘After hearing complaints from
‘community and housing activists, US
‘Attorney Donald Stern and Assi
tant Attorney General Deval Patrick
said they would order federal inves-
tigators to interview homeowners in
Roxbury, Mattapan and Dorchester
about alleged practices of discrimi.
nation by insurance companies.

Neither Stern nor Patrick, who
heads the Justice Department's civil
rights division, would say whether
they were ordering 1 formal investi
gation into the possibility that insur-
ance companies had engaged in die-
criminatory practices.

“We will be looking hard at the
facts, and try to get facts that are as
specific as possible and try to make a
delermination if there is « violation
of any laws that are within the Civil

24, a Brighton Democrat who ar-
ranged the meeting, said a number
of community activists provided ac-
counts of homeowners being told by
insurance companies that they didn't
‘qualify for coverage.

“If the insurance industry hopes
to write policies in thi
cannot exclude whole
or individuals because on the color of
‘kin or their geography,” Kennedy
aid.

‘The insurance industry has de-
ried that it has engaged in practices
of discrimination in refuning to write

policies in poorer neighborhoods.
Instead, the industry states, its

decisions on where to write polices
are based strictly on economic
grounds - more claims for losses are
filed in poorer neighborhoods, which
‘eavee the companies to be far more
elective about which houses they
decide to insure.

‘The Globe has focused on the
problems that some homeowners in
Roxbury, Dorchester, Mattapan and
other poorer neighborhoods have
had in oblaining affordable ineur-
tance for their

"Among other things, the articles
revealed that three times as many
homeowners in Roxbury were in-
sured by the industry-subsidized,
high-risk insurance pool than owners
in predominantly white neighbor-
hoods; that many inrurance compan:
ton had reduced the number of

agents writing policies in Roxbury,
Matapan and Dorcherter, and that
homes in those neighborhoods tend-
ed to be significantly overinsured.

Fannie Mae head decries discrimination

‘By Matt Carroll
GLOBE STAFF

James J. Johnson, the chief ex-
‘ecutive officer of the nation’s largest
‘mortgage inetitution, yesterday said
the problem of mortgage discrimina-
tion against minorities was of “over-
whelming significance.”

“In the mortgage finance ryntem,
‘we have to face the fact that we have
1 significant. problem with diserimi-
ration,” said Johnson, of the Wash-
ington-bared Federal National
Mortgage Axeociation, also known an
Fannie Mae.

Johnson was in Boston yesterday
to receive the Corporate
‘Award from the Organization for a
New Fauality, « Boston-based non-
profit dedicated tn Aaghting for eco-
inemnic equality for mPturities, Fannie
Mae has prosided funding for ONF.

".

‘The sward was given at 2 $100-2-
plate fund-raiser at the Sheraton
Boston Hotel & Towers, which war
‘llended by about 450 people, se-
cording a ONE spokerwoman. ONE,
sthich in celebrating its 10th anniver-
sary, in run and was founded by Rev.
‘Charles R. Stith, the former pastor
‘of Union United Methodiat Church
{n the South Endl.

To battle discrimination, Johnson
said Fannie Mae wax working to
Provide martgages with lower down
payments, seen as a major barrier to
hhome purchases, and more flexible
credit requirements.

Also receiving an award was
Floicher H. Wiley, chairman of the
Greater Boston Chamba? of Com-
merce and x parter with (oldelein
& Manelio, He wae ghen the Civie

Leadership Award. The Black Minis-
terial Alliance wan given the Com-
munity Service Award.

Wiley, while accepting his sward,
said of Rev. Stith, whom he met
playing baskethall while both were
students et Harvard: “It's ironic 1
should be receiving this award from
you. You may not be as good a bas-
kketball player ax you once were, or
15 goor-looking ax you once were ..
« But when we want someone fight-
ing for economic justice, Charles
Stith fs the one I want out there,”
‘Wiley eaid.

Fannie Mae, which Johnson
heads, does not make mortgages di-
rectly, but purchases them from
lenders, and then reselin them to in-
vestors, much ax ineurance compan-
fen. Each ver it handlenmore mort
regoe than any ether institution in
the country



e FREE CHECKING

@ 64 banks (15%) of the 419 in the survey offer completely free checking accounts,
with no fees and no restrictions, other than mandatory check truncation (no return of
cancelled checks).*

© An additional 41 (10%) offer free checking with the regular direct deposit of a
payroll, pension or government check.

© CREDIT UNIONS: By comparison, 39% of credit unions offer free checking with
no restrictions and an additional 19% offer free checking with direct deposit.

e NOW ACCOUNTS:

Regular Checking Accounts That Earn Interest ©

Findings for NOW accounts were similar to checking accounts, although balances and fees
were higher.

@ ANNUAL COST: Nationally, in 1997, consumers paid an average of 14% more, or
$27.70, to maintain a NOW interest bearing checking account at a big bank than at a small
bank. The big bank fee gap increased 163% from 1995, when consumers paid 5% more, or
$10.52, to bank at a big bank. In 1997, a big bank consumer paid $230.87 in annual NOW
account fees vs. small bank fees of $203.17. In 1995, big bank customers paid $225.36 and
small bank customers paid $214.84.

© BALANCE REQUIRED TO AVOID FEES:

-- MINIMUM: Minimum daily balance requirements to avoid fees for NOW accounts
at big banks averaged $1252 in 1997, down slightly from $1281 in 1995. At small
banks, minimum balance requirements in 1997 also declined, to $949 in 1997 from
$1211 in 1995. The cost gap between big and small banks grew from $70 to $303.

-- AVERAGE: At banks using the average balance method, daily balance
requirements to avoid fees for NOW accounts at big banks averaged $2613 in 1997,
up slightly from $2598 in 1995. At small banks, average balance requirements in
1997 declined slightly, to $1741, from $1883 in 1997. The cost gap between big and
small banks grew 22%, from $715 to $872.

@ MONTHLY MAINTENANCE FEES: The average monthly NOW account maintenance
fee increased slightly at big banks, to $8.86 in 1997 from $8.81 in 1995. At small banks, the
fee decreased to $8.10 in 1997 from $8.53 in 1995.

@ CREDIT UNIONS: In 1997, the NOW checking average annual cost index at credit

unions was only $141.63, or only 63% of the cost at big banks. Minimum balance to avoid
averaged $394, average balance to avoid averaged $563. The monthly fee averaged $4.23.

PIRG’s 1997 Bank Fee Survey -- Page 3


D)

Fleet Bank

John E. Marston
Senior Vice President

June 30, 1994

Attorney Ira Nagel

85 Devonshire Street

Boston, Ma 02109

Re: 630 Warren Street, Roxbury, MA

Dear Sir,

This communication is to confirm that Fleet Bank is considering providing financing for
Dwight Miller for the acquisition of the above referenced property.

Assuming all lending conditions are met, I anticipate a favorable decision on this financing
request.

A final decision on a loan commitment should be made shortly.

incerely,

epfor Vice President

Fleet Bank of Massachusetts, N.A. 75 State Street, Boston, Massachusetts 02109 617-346-1801 / Fax 617-346-1805
‘A Member of Fleet Financial Group, Inc.


Connecticut Friends of Community Reinvestment
Clo CREN
32 Elm Street, Hartford, CT 06106

July 7, 1999

Richard C. Walker III

Vice President

Federal Reserve Bank of Boston
Community Affairs Office

600 Atlantic Avenue

Boston, MA 02106

Re: PROTEST TO FLEET/BANKBOSTON MERGER
Dear Mr. Walker:

This letter is an official protest to the proposed merger between Fleet Financial Group,
Inc. (“Fleet”) and BankBoston Corporation (“BankBoston”), the application for which was filed
with your offices during the week ending May 22, 1999. The Connecticut Friends of Community
Reinvestment (““CFCR”) is a state-wide coalition of numerous community-based organizations
and non-profit agencies in Connecticut committed to the spirit and practice of the Community
Reinvestment Act (“CRA”). The participants in CFCR are working collaboratively to ensure that
the financial services needs of Connecticut’s traditionally underserved communities are met.

This letter attempts to outline the major areas where trends in Fleet’s activities support
the position that the merger with BankBoston will so substantially inhibit competition as to
constitute a violation of the antitrust laws and of Section 3 of the Bank Holding Company Act,
12 US.C. Section 1842(c). This is especially critical in the area of CRA issues, where both the
specific CRA record for Fleet in Connecticut (which is only satisfactory) and the overall anti-
competitive aspects of this merger are likely to result in a dramatic reduction in services and
convenience for the needs of the communities that Fleet purports to serve. The Federal Reserve
Board, in reviewing this merger application, must consider both the impact of the proposed
acquisition on the competition in the marketplace and the history and impact of the CRA
performance of the institutions involved. In each area discussed below, the issues address both
the anti-competitive nature of the merger and the negative CRA impact, which are so closely
integrated and mutually supportive as to be almost impossible to separate.

1. Anti-Competitive Effect

Under 12 CFR Section 225.13, the Federal Reserve Board may not approve a merger
application if (1) the transaction results in a monopoly or (2) the effect of the transaction would
be to substantially lessen competition in any section of the country, unless the Board finds that
the anti-competitive effect is outweighed by meeting the convenience and needs of the
community. In addition, under Regulation BB, 12 CFR Section 228.29(a), the Federal Reserve
Board must take into account the CRA performance of each applicant bank in considering

Letter to Federal Reserve Board 7/7/99
Page | of 14


COMMUNITY HOMEOWNERS ASSOCIATION, INC.
29 Eldon Street
Dorchester, MA 02121
617 265-6050 / 436-6082

9 June 1994

Mr. John Hamill, President
Fleet Bank of Massachusetts
75 State Street

Boston, MA 02108

Dear Mr. Hamill,

I want to restate the urgency for closure of the agreement reached between the
bank and CHA. We are effectively unable to further assist more than two dozen clients
who are in immediate and desparate need of counselling and refinancing opportunities.
These clients, some of whom have been "in the pipeline" for more than 6 months, have
little other access to resources to help avoid foreclosure and loss of home.

Under the present circumstance, we can only attempt strategies designed to
forestall the inevitable. As was the case in the Attorney General Program, most of these
homeowners can be qualified to secure refinancing under traditional and untraditional
underwriting programs. Our success with that program underscores the need and the
effectiveness of community outreach and counselling activities, conducted by experienced
and qualified community-based organizations, to stem the continuing tide of default and
foreclosure, particularly in the minority and lower-income sections of Boston.

Mr. Hamill, as I stated to you in our recent conversation, we find ourselves in the
current state of negotiations due, in part, to factors beyond the control or infuence of
CHA. I can only advocate the primary mission and priorities of CHA, to reduce the
negative effects on family unity and family stability resulting from the high rates of default
and foreclosure experienced over the past several years, and to promote home retention
and foreclosure avoidance programs designed to ensure long-term homeownership
opportunity.

I further enclose a statement endorsed by a cross section of CHA's membership
anc s:ipporters. The subscribers, constituting approximately one-third of CHA members
and clients served during the past year, represent homeowners and renters who, but for the
independent outreach and effective counselling services offerred by CHA, would not have
had access to assistance. CHA fills a void and serves a real need. We, the lending
community and concerned community groups, cannot afford to allow this deserving need
to be stymied with so many families at risk.


MASSPIRG’S 1997 BANK FEE SURVEY RESULTS

MASSACHUSETTS AVERAGES

ATM FEES
BANKS REPLACE OFF-US/FOREIGN
W/D FEE
BIG BANKS $10.00 $1.25
q) ©
LITTLE BANKS $5.43 $0.86
(21) (33)
-ALL BANKS $5.64 $0.92
(22) @9)
CREDIT UNIONS $6.00 $0.95
@) 6)
PENALTY FEES
BANKS BOUNCE CHECK | RETURN (DIR) STOP PAYMENT |
BIG BANKS $22.00 $5.17 $18.33
© ) 3)
LITTLE BANKS $18.06 $6.11 $15.56
(34) (32) (33)
ALL BANKS $18.65 $5.96 $15.99
(40) (38) (39)
CREDIT UNIONS | $17.17 $7.40 $12.92
6) (5) 6)

Total banks included in survey: 6 big banks, 37 little banks, 43 all banks, and 6 credit unions.

Number in parenthesis,(), represents the # of

banks included in calculation.


@ OTHER MISCELLANEOUS FEES

This year, PIRG also looked at the incidence of two fast-growing fees.

© EARLY ACCOUNT CLOSING FEES: An increasing number of banks are charging
consumers a fee to close an account that has been open less than one year. Such fees
discriminate against college students and other transient persons. These fees are also designed
to discourage shopping for better deals.

-- 147 banks charged early account closing fees averaging $12.56. The average
number of months was 4.23. Of banks charging an early account closing fee, 2 banks
charged a $50 fee for accounts closed within six months. Most of the banks, 64,
charged a fee of $10 after either 3 or 6 months.

© TELEPHONE CALL CENTER FEES:.An increasing number of banks are charging
consumers who call to make balance inquiries. In addition, banks that had installed computer
call centers as a low-cost alternative to operator-assisted calls are now implementing fees to

call the computer, despite the cost savings. The fees listed below are for inquiries only. Full
check listings are generally extra, as are balance transfers.

-- 69 of 419 banks, or 16%, charged a fee to make a balance inquiry over the
telephone. In 1997, PIRG found the following different fee structures among those 69

banks:
| CALLS TO CALLING CENTERS
Fee Structure Cost to call | Avg # Cost to call JAvg #¥
Computer Free Operator Free

Calls/ Calls/
Month Month

One Fee (30 banks) $1.03 3.9

Free To Computer (14 Banks) $0.00 $1.20 2.9

Fee For Either (25 Banks) $0.56 5.9 $1.42 2.6

-- Six credit unions, or 16%, charged for computer calls. Four of the 6 charged an
average of $1.06 with 3.25 free calls per month. One allowed unlimited free
computer calls and charged $1 per operator inquiry. One charged $0.50 for each
computer call over 30 each month and charged $2 for each operator-assisted call.

@ MULTI-STATE BANKS CHARGE HIGHER FEES

One additional measure of the fee gap between large and small banks is to compare fees at
local institutions to fees at multi-state institutions, which are generally larger. Our data
correlate favorably with those in the Federal Reserve’s recent fee report to Congress, which

PIRG’s 1997 Bank Fee Survey -- Page 6



MASSPIRG’S 1997 BANK FEE SURVEY RESULTS
MASSACHUSETTS AVERAGES

SAVINGS ACCOUNTS

BANKS BALANCE TO AVOID MONTHLY FEE |
BIG BANKS $370.00 (5) $2.20 (5) |
LITTLE BANKS $260.00 (26) $1.54 (34)
ALL BANKS $277.74 (31) $1.62 (39)

| CREDIT UNIONS $100.00 (2) _| $0.40 (5)

REGULAR CHECKING

BANKS MIN OPEN | MIN BAL | AVG BAL | MONTHLY | FEE PER
TO AVOID | TO AVOD | FEE CHECK
FEE FEE

BIG $116.67 $750.00 $1250.00 $6.08

BANKS (6) (4) (2) (6)

LITTLE $80.13 $611.54 $714.29 $7.14

BANKS (15) (13) 7) (9)

ALL $90.57 $644.12 $833.33 $6.86

BANKS (21) (17) (9) (25)

CREDIT $500.00 $8.00

UNIONS (1) (1)

Total banks included in survey: 6 big banks, 37 little banks, 43 all banks, and 6 credit unions.

Number in parenthesis,(), represents the # of banks included in calculation.


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After a series of meetings with senior officials, including Chairman
Murray, CHA presented a proposal that was accepted and approved by the bank. A
subsequent memorandum agreement was executed by the bank and by CHA. That
agreement is incorporated herein by reference and is appended hereto.

That Fleet had no intention of honoring and implementing this agreement
and of its duplicity became evident by the occurrence of several events. Simply
put, the bank sought to ensure no opposition to its merger with Shawmut Bank by
undertaking a policy of containment and conflict by pitting local community
groups and individuals against one another, using vague promises of funding to
eliminate the likelihood of opposition.

The above assertion is borne out by the following sequence of events.
Within days of signing the agreement a senior official of the bank called,
ostensibly to "give you a head's up", informing me that he had "inadvertently" told
a Boston Globe reporter about the existence and the nature of the Fleet / CHA
agreement. The reporter called within hours insisting that I disclose the terms of
the agreement.

Normally, such an initiative program would be presented to the public in a
bilateral format with well planned publicity providing program information and
timed to ensure positive benefit, particularly since the Fleet / Shawmut merger was
in the approval process. The day the newspaper article was published, I received
calls from various, previously unheard from "community interests" seeking "a
piece of the action!" presumably in return for their unsolicited support or perhaps
as the price for withholding unwarranted and prior thereto nonexistent opposition.

Ultimately, after subsequent meetings with bank officials and various
community groups and politicians, and despite the signed agreement, CHA was
informed by Fleet that every group (presumably every and any group or individual
who had read the newspaper article and regardless of whether such group or
individual had a demonstrated interest or experience in delivering the services
proposed in the agreement) had to agree with the program.

A call to a senior official at the bank's Providence headquarters evoked the
curious rationale that a certain elected official, "...doesn't agree. You have to get
her to agree." Another bank official stated, "I could give $5000. to every minority
group in Boston and they would be glad to get it." This statement says volumes
about the bank's interest in comprehensive programming designed for long-term
and sustainable community empowerment. It is also curious that another
organization with whom Fleet was also negotiating a program not only was not
required to achieve community support, but in fact was vocally and publicly
opposed by many groups, including elected officeholders, particularly in the
minority communities of Boston.


RESULTS FROM CAMPUS SURVEY 1/99

30 campuses surveyed
19 only have BankBoston
2 only have Fleet
2 have BankBoston and Fleet
5 have credit unions or local banks
1 had a Citizens Bank ATM
1 college had "assorted banks"

DATA

SCHOOL BANK

Anna Maria College BankBoston
Bently College BankBoston
Berkshire Community College Berkshire Bank
Boston College BankBoston
Brandeis University Fleet and BankBoston
Bridgewater State College BankBoston
Bristol Community College Compas

Bunker Hill Community College Credit Union -
Clark University BankBoston
College of the Holy Cross Fleet and BankBoston
Emerson College BankBoston
Fitchburg State BankBoston
Framingham State BankBoston

Mass College of Art Citizens

Mass. Institute of Tech "Assorted Banks"
Mount Wachusett C.C. Mt. Watachusett Credit Union
Nichols College RIN Credit Union
North Adams State BankBoston
Salem State BankBoston
Simmons College BankBoston
Smith College BankBoston
Springfield Technical C.C. BankBoston
Springfield College BankBoston

U MASS Amherst BankBoston

U MASS Boston BankBoston

U MASS Dartmouth BankBoston
Wellesley College BankBoston
Wheaton College BankBoston
Worcester Polytechnic Inst. Fleet

Worcester State Fleet


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COMMUNITY HOMEOWNERS ASSOCIATION, INC.
42 Torrey St.
Dorchester, MA02124
617 265-6050 / 436-6082

28 May 1994

Mr. John Hamill

President

Fleet Bank of Massachusetts
75 State St.

Boston, MA 02108

Re: FLEET / COMMUNITY HOMEOWNERS PARTNERSHIP PROGRAM
Dear Sir:

We, the undersigned members and supporters of Community Homeowners Ass'n.,
Inc., request Fleet to promptly implement the agreement reached between the bank and
CHA. As a direct result of the work of CHA during the past year, many families have been
able to avoid foreclosure and loss of home.

We desire for other members of our community, many of whom are presently
facing the threat of foreclosure and financial ruin, be also afforded counselling and
mortgage refinancing opportunities. Through the cooperation between Fleet and CHA
many homeowners have been given a fresh start and a new beginning. The credibility and
demonstrated results obtained by this collaboration should continue to be strengthened
and built upon.

We urge the bank's continued support to empower CHA to fulfill its primary
mission, to address a critical community need by preserving the existing homeownership
base and by encouraging community stability and growth.

swe, CLC C a

THE MEMBERS AND FRIENDS OF CHA

Kenneth Alston fer,

9 Fayston St. 594 Harvard St.
Roxbury Mattapan, MA


I strongly believe that this is one of those circumstances where the legislature needs
to intervene. Currently, the ATM surcharge ban or moratorium legislation is being
considered in 26 states, Two states, Jowa and Connecticut, ban ATM surcharges
through their current banking regulations. In addition, large cities have started to
take action to ban surcharges. Most recently the cities of Berkeley, SanFrancisco,
and Philadelphia have taken up the issue of banning surcharges in their cities.

The ATM surcharge is excessive, deceptive and predatory and should be banned to
protect consumers and enhance choice. The bill has won the unanimous support of
the Senate for the last two years and enjoys support from a majority of members in
the House. I hope you will vote to ban the ATM surcharge and move the bill from
your committee quickly. .

NOTE:

I have heard today and repeatedly by the industry and others that the proposed ban
would be unfair since it would not apply to the federally chartered banks.
MASSPIRG agrees with many including the Attorney General of Connecticut, the
former Attorney General Harshbarger, and others that this argument is false for two
reasons:

First, under the Electronic Funds Transfer Act (EFTA), which governs ATM
transactions, states are clearly allowed to enact stronger laws unless inconsistent
with federal law. Since no contrary federal ATM pricing law applies, or, as the
argument is often made, since the federal government has not "taken the field," the

states are free to act.

Second, the most recent Congressional pronouncement on the authority of the
Office of the Comptroller of the Currency (OCC), which regulates national banks,
is the 1994 Interstate Branching Efficiency Act. This Act by Congress clearly
condemned the OCC's "inappropriately aggressive" preemption policies with regard
to consumer and community reinvestment laws. See Conference Report, 103-651.
Under the terms of a recent amendment to that law, enacted as H.R. 1306 this year,
Congress re-stated its strong opposition to the agency's abusive preemption policies
and is requiring an annual report to the Congress.

If the OCC were to preempt Massachusetts law, MASSPIRG would be ready to join
the state in a legal challenge, based on these clear Congressional findings. It is~
unfortunate that the banks lobby against worthwhile consumer laws in such a way,
because. it has a chilling effect on the rights of the states to protect their citizens

better.

Lastly, I have included the chronology of the ATM fee litigation in Connecticut
where the Attomey General feels confident they will ultimately defend their right to
protect consumers in their state by banning the ATM surcharge.


NEIGHBORHOOD DEVELOPMENT CORPORATION OF GROVE HALL

BOARD OF DIRECTORS

Virginia Morrison
President

George Guscott
Vice-President

Juanita Wade
Treasurer

Sadiki Kambon
Clerk-Secretary

BOARD MEMBERS
Desdimonia Alexander
Bertram Alleyne

Emest Branch
Murphy Gregory, Sr.
Eric Straughter

aa

485 Blue Hill Avenue * Suite 1, Dorchester, Mass. 02121 * (617) 445-2284


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The letter and the spirit of CRA do not support the tactics used by
Fleet to achieve its ends. I fail to understand how causing a supportive and
effective organization to lose its deposit money and credibility in the
community benefits the bank.

And, one is hard pressed to understand how a qualified
community-based organization can receive an oral commitment from
the chairman of the bank, a written and executed memorandum
agreement from a senior manager, have assisted for three years in the
processing of a large portion of the bank’s LMI product, and not merit
as much as a footnote in the bank’s merger submission to the Fed
reporting on its CRA lending.

As the number of megabanks increases, the pressure on community
interests, particularly for lower-income and minority neighborhoods; and as
the threat to aggressive CRA enforcement grows, every progressive
thinking consumer must become concerned. The concentration of banking
and financial services into a few behemoths will result in less services for
the poor and the dispossessed, and greater opportunity for the arrogance of
greed and power to trod upon community-based organizations and their
opportunities to provide protection from unscrupulous lending practices
and insensitive lenders who focus only upon the short term financial
bottom line.

Although my testimony may appear to merely vent one
organization’s frustration and dissatisfaction with the manner in which it
has been treated, I truly hope that the proposed new bank will view these
events as an opportunity to reflect upon its actions and attitude concerning
community participation in its CRA activities.

Many organizations throughout New England have sought to
participate, and some have done so successfully. Unfortunately, many
others have experienced reluctance, delay and sometimes hostile reactions
to well-planned community-based efforts designed to improve
neighborhoods while enhancing the bank’s presence and its bottom line.

Will the new bank bring a fresh vision of its relationships and
responsibilities? I certainly hope so. Opportunities for progressive and
mutually beneficial programs of empowerment and cooperation can occur
where there exists trust and fair dealing among all parties. I hope the new
bank will aspire to higher goals in ensuring services for all of its service
areas, including lower-income and minority communities.


Nor can our treatment by Fleet management be assigned to the expected
give and take or conflict among a community group and a bank where there is
historic precedent for the parties to initially stake out adversarial positions as part
of a virtual mating ritual to arrive at a settlement which allows the bank to achieve
its objective in exchange for a “donation” to the community group.

In our case, there was no adversarial relationship, or so CHA thought. Fleet
sought our assistance and we provided it. When the Fleet / Shawmut merger was
current I received calls from senior management of Fleet, including the chairman
of the bank, assuring me of the bank’s interest in continuing CRA-based
programming with CHA. Unfortunately, the bank was not candid in its true
intention.

During 1993 through early 1995, CHA was contracted by Fleet and other
banks to conduct a remedial and subsidized mortgage loan program in response to
the so-called “second-mortgage scam”. A high level of loan default and
foreclosures resulting from the real estate run-up of a decade ago and a pattern of
improper lending practices by regulated and unregulated lenders and home
improvement contractors prompted an industry response, in part to avoid
threatened consumer protection legislation. I need not recite the abuses as they
have been well documented in the Fed’s own investigation and reporting of the
period.

CHA conducted nearly all of Fleet’s affordable mortgage product under
this program, and received kudos for our efficiency and credibility. After the
conclusion of the formal program CHA continued, with the support and approval
of the bank, to provide Fleet mortgage financing for community residents.

At the bank’s invitation, CHA designed and submitted a proposal for
continued affordable mortgage products and related programs. The “Fleet /
Community Homeowners Partnership Program” was intended to expand upon the
earlier program and to include increased counseling and homeownership
opportunities. I enclose copies of letters to the bank evidencing our ongoing
communications efforts during the period prior to and after the merger.

Despite these efforts and the credibility CHA thought it had established,
once Fleet succeeded in its merger with Shawmut, CHA was virtually ignored.
Calls and letters to senior management were unanswered and CHA suffered
significant damage to its reputation and service capacity. It was like being in
Siberia, or in apartheid South Africa. Suddenly, CHA was “banned” and no longer
of interest to the bank.

In our written statement of June 10, CHA’s essential reason calling for the
denial of the application was Fleet’s actions in using CHA to “assure its successful
merger with Shawmut and thereafter reneging on its commitment to CHA.”

—


of Thrift Supervision, report that the average cost to a bank for an ATM transaction
. Fanges from $.20 to $.50. Simple math demonstrates that in many cases consumers
are paying 4-20 times the cost of a transaction. That is, pure and simple, price

gouging.

It is important to point out the uniqueness of the ATM surcharge and why it leads to
excessive pricing. Typically, in a competitive market, we would expect that price
would be pushed down to marginal cost. That is, with any product, if there is
sufficient consumer choice, consumers will seek out those competitors which offer
the best combination of price, service, and quality. For an undifferentiated product
like ATM access, one would expect that firms would compete aggressively on price
and prices would be driven down to marginal cost. Yet, as the evidence shows, the
average prices for surcharges has consistently increased over time. This problem is
aggravated by the dual pricing system wheré ATM owners are collecting both the
interchange fee and the surcharge. When two firms set a price they both try and
secure as high a margin as possible. This combined price will be higher than if only
one firm set the price. This problem is called "double marginalization" because two
firms try and secure the same margin.

Now, many of us are certainly willing and prepared to pay for the convenience of
ATMs but these kinds of fees are clearly excessive and should not be allowed.

B. Deceptive

Hitting the consumer up twice for one transaction is unfair and deceptive. In this
case, a consumer buys a product (a bank account) from his or her bank which
includes an ATM card and the ability to use it wherever the "network" carries the
banks' information. However, under the surcharge fee strategy, consumers would
then be required to pay again for that same service at the time of the transaction.
Charging the fee two different ways, two different times, is a deliberate
attempt to confuse the consumer and hide the true price tag to the consumer.

Here's how the ATM fee system worked before April 1, 1996. I-signed up for a

bank account at bank A. As a condition of my checking account Bank A charges me

. $1.50 to use another bank's ATM (bank B). Bank A pays bank B $.50 cents
(interchange fee) and the network $.25 (switch fee) every time I use Bank B's ATM.

This system allowed me to include the full cost of ATM transactions in my-decisiott

of where to bank.

Now when I use another bank's ATM, not only can I expect to pay my bank a fee,
and my bank will pay the other bank a fee, but the other bank will charge me again

for the one transaction!


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1995-1997
Source: FFIEC, HMDA data 1995, 1996, 1997

4600 y=
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FOOTNOTES

1. See Banks Think Fees, Not Free: The 1995 PIRG Bank Fee Survey of 271 Banks In 26 States, by U.S.
PIRG and Janice Shields, August 1995, and Crushing Consumers: The 1993 PIRG/CFA National Survey of 300
Banks In 23 States, jointly written by U.S. PIRG, the Consumer Federation of America and Janice Shields, Ph.D.

2. Our results are similar to data from numerous government, consultant and industry data on bank costs and fees
for consumer deposit accounts. See discussion below (Footnote 6) of Federal Reserve studies. The author talks on
a regular basis to investigative reporters who conduct their own local surveys, also confirming our results. For
recent comprehensive surveys, see "Mean Machines,” Akron Beacon Journal, 19 May 1997, by Maura McEnaney,
p. D1 and "Fatter Fees,” the’ Pittsburgh Post Gazette, 1 June 1997, by Patricia Sabatini, page C1.

3. See Methodology, below.

4. We included banks that offer free checking for at least one year on new accounts. We did not include banks that
charged extra for ATM cards or made ATM cards unavailable on free checking accounts.

5. Some banks charged a fee for each teller fee, others increased the monthly fee by a fixed amount for one or more
teller visits. We did not differentiate.

6. “Annual Report To The Congress on Retail Fees and Services of Depository Institutions," Federal Reserve Board
of Governors, June 1997, Submitted pursuant to Section 1002 of the 1991 Savings and Loan Bailout Act (FIRREA),
as amended. Reporters who receive numerous regular press releases from the Fed, as PIRG does, may ask the Fed
why no press release is issued pertaining to this report. These reports (1992-97) provide independent verification
of PIRG's findings that bank fees have been rising dramatically throughout the 1990s. These reports are purposely
designed to elucidate as little as possible and consist only of a sample, with no bank names or individual bank data
disclosed. In’ the early 1980s, the Congress required a one-time bank fee stidy that’ had the potential to help
consumers comparison shop for accounts. It would be useful, with all the data collected by the fed and other
agencies, to consider requiring a more detailed, shoppers guide to bank fees to be published.

7. "Commercial Bank Performance, First Quarter Report," Federal Deposit Insurance Corporation (FDIC), and
accompanying press release (PR-42-97), 17 June 1996. Data available at "www. fdic.gov”

8. See footnote 6 under “multi-state” banks above.

9. The industry trade paper Fee Income Report tracks bank fees and bank fee strategies. Its 1990 survey identified
96 different types of fees; in 1994, that total had increased to 250.

10. See “Bank will rank callers’ worth,”, by Bob Trigaux, Page 1, St. Petersburg Times, 25 April 1997.

11. A few states, such as Massachusetts, have not enacted industry supported changes to the Uniform, Commercial
Code that allow banks to "truncate" or “retain your cancelled checks for safekeeping at no charge to. you.”

12. National Credit Union Administration and Credit Union National Association vs. First National Bank and Trust
Company et al, Cases 96-843 and 96-847, October Term, 1996. See pgs. 12-15 of the Brief of Consumer Federation
of America and U.S. PIRG, May 1997, for a detailed discussion of the economic benefits of credit unions.

13. The bill would also overturn 1934 legislation separating banking and commercial firms. That provision has been
strongly opposed by both Ralph Nader and former Federal Reserve Board Chairman Paul Volcker because.allowing
industrial firms to own banks not only poses grave risks to the insurance safety net but could also lead to
misallocation of credit. Even current Fed Chairman Alan Greenspan contends the bill goes too far.

PIRG’s 1997 Bank Fee Survey -- Page 15


Affidavit of (aa?

In Wi of ‘WE | went to the Fleet Bank Loan Office in Grove Hall with the
intention of applying for a loan to refinance my parents’ home. ] was introduced toWy
mo said he was a mortgage originator for the bank.

I explained the financial problems that my family was facing due toy
Ge These expenses combined with high mortgage payments
created a hardship for my family and I was looking for help from Fleet. I had heard that
Fleet was doing business in the community and assumed that I could get help. I could not
have been more wrong or disappointed.

(QE had me complete a Fleet mortgage application and assured me that I
would have no problem in obtaining a mortgage through his bank. As time passed, and
with my repeated requests for information and status updates, (assured me that
everything was "moving along" and that moneys would be expected from me to pay as we
proceeded with the refinancing of the house.

As a result of being guided through the "refinancing process", I paid out a total of
1 By relying upon the bank to treat me and my parents fairly and in a businesslike
way, I was tricked into giving away virtualy all of my and my parents savings. I became
suspicious only after so much time passed with no loan commitment from the bank.

Only after obtaining counselling and help from a community organization did I
realize what had really happened. Fleet Bank never contacted me about this matter. I had
to contact the bank to find out what was going on. Although I was told that my payments
were required by the bank, I never received any notice or acknowledgment of my status.
While the bank has returned my money, the loon ae has not been closed,
and my parent's house was foreclosed upon.

Also, while the bank returned the money, I was not treated as I deserved. I was
repeatedly questioned and challenged at every turn. 1 am grateful that at least I got the
money. But, I felt pressured to accept what the bank felt it should "give". And, I had to
sign a release which I felt meant that I could not complain or take any action against the
bank, I felt powerless and that I had no choice. Either I had to agree with the bank or I
would not get my money or the loan. No one should have to go.through the extreme
stress and aggravation that was my experience with Fleet Bank [aR died during
this period, adding further stress and pain in the midst of all this insanity.

I am extremely disappointed that the management of Fleet Bank could have
allowed and condoned such unethical and unfair activities. As much as as
at fault, the bank is even more so. Where were the management controls to prevent my
being victimized like this. How could the largest bank in the city, claiming that it wanted
to help the black community, employ people who were out to rob customers? How could


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ME MASSPIRG

Massachusetts Public Interest Research Group
29 Temple Place, Boston, MA 02111-1350 (617) 292-4800
http://www.pirg.org/masspirg,

TESTIMONY IN SUPPORT OF S. 114
AN ACT TO. ESTABLISH THE FINANCIAL CONSUMERS' ASSOCIATION

SUBMITTED TO: Joint Committee on Commerce and Labor
SUBMITTED BY: Deirdre Cummings, Consumer Program Director, MASSPIRG
DATE: March 31, 1999 .

Good morning, Chairmen and members of the committee. My name is Deirdre Cummings and I
am the Consumer Program Director for the Massachusetts Public Interest Research Group
(MASSPIRG). MASSPIRG is a statewide citizen organization which advocates on a range of
consumer, environmental, energy and good government matters. We have over 55,000 members

across the Commonwealth.

Today, I am here to register our strong support for S. 114, "An Act to Establsih the Financial
Consumers’ Association" sponsored by Senator Stephen Tolman. The bill would establish a
Financial Consumers' Association (FCA) in Massachusetts to represent and advocate solely for
bank customers. The FCA is modeled after successful Citizen Utility Boards (CUB) established
in Wisconsin, Illinois, New York and Oregon who advocate on behalf of utility ratepayers.

Merger mania is the best way to describe what is happening in the banking and financial industry
over the last 5 years. Banks are frantically consolidating their power, gobbling up their
competitors, leaving consumers fewer and fewer banking choices. As banks and other financial
institutions get bigger AND face less competition, it is the consumer who loses by having to pay
higher fees and getting poorer services or products.

Massachusetts consumers today are facing a far different financial service landscape than they
were just five years ago. In 1995, Bank of Boston, Shawmut, Baybank and Fleet were the state's
4 largest banks, holding more than half of the states share of commercial bank deposits. If the
recently proposed merger between Bank Boston and Fleet is successful, as industry officials
claim it will be, we will have just one mega bank in the region where we had four just a short
while ago. In addition, banks have been given the green light to sell insurance and other
investment products.

While the banks consolidate their power, this bill will allow consumers to do the same. This bill
establishes a voluntarily-funded, independent organization called the Massachusetts Financial
Consumers’ Association (MFAC) controlled by financial service customers. The FCA would be a
state-chartered, nonprofit, watch-dog organization, formed by individual customers of financial

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A. CHA quickly and quietly processed each questionable situation where either of
the suspected employees were involved. We took special pains to discourage client
questions about the originator's appearance and demeanor. We aggressively pushed Fleet's
underwriting department to process and issue approvals quickly in anticipation that the
client would receive his loan and focus his attention on securing his refinancing, distracted
from any doubts concerning the bank's employee.

B. I also contacted a manager at the bank and notified him of my concern, and of
the potential liability for the bank and the community should matters continue as they
were. I specifically and adamantly warned the manager of the political problems that could
arise should it be perceived that the bank hired and assigned persons of questionable
qualifications or credibility to the Grove Hall Loan Office. I urged that reassignment be
considered and that internal management controls be reviewed and strengthened. That my
message was conveyed to senior levels was confirmed only recently.

Although one employee has been convicted for his activities, only a dozen or so
individuals/victims have been identified by the bank. I would recommend that the bank
should attempt to locate the remaining borrowers and resolve these matters. As of today,
these are open wounds which could have significant importance to federal regulators and
law enforcement agencies in view of the planned merger between the bank and Shawmut.

Dwight K. Miller
President

July 15,1995


Bank customers that the branches have developed. Given these concerns, along with expected
cost-cutting, loss of competition and past performance, we fear that the Fleet version of First
Community Bank will be only a shadow of the BankBoston operations.

Cc. ATMs and Fees

Fleet’s focus on litigating its right to assess double-dipping ATM fees shows its lack of
sensitivity in providing critical services to the community. Especially because Fleet will be
closing or selling branches, which will result in less access to service, customers will be forced to
use ATMs with excessive fees — an obviously anti-competitive result. As competition shrinks,
Fleet will be able to charge ever higher fees without fear of losing customers: they become
captive fee-generators, not customers.

This also raises significant concerns for those individuals who are now receiving
electronic benefit transfers (“EBT”) for TANF, general assistance, food stamp and other state
assistance. These EBTs are generally accomplished through ATMs and POS devices, and if fees
continue to rise in this area, the impact of increasing fees will be dramatically disproportionate in
its impact on the low income community. A $1.50 fee on every $20 withdrawal by an individual
on public assistance constitutes a 7.5% service charge, whereas the same $1.50 fee on a $100
withdrawal by a higher income customer is only a 1.5% service charge. EBT clients are limited
to four free transactions per month and then are charged $.85 per transaction. The potential for
coupling ATM fees with EBT fees, especially for those low income clients in both urban and
tural neighborhoods where access to branches or the “right” ATMs is limited, will eat away at
the very limited funds that these poor residents rely upon for basic necessities.

The change to the EBT system was mandatory for all Connecticut benefits recipients, but
EBT customers receive none of the same protections under Regulation E that ATM customers
are afforded. For example, EBT users do not receive monthly balance statements, so they cannot
ascertain whether any errors may have been made in their accounts, nor can they see the fee
structure and other information necessary for these low income consumers to understand their
financial situation. Increasing ATM and POS fees across the board would severely limit access
by many to the only source of services they may have left. Fleet’s domination of the Connecticut
market and its expressed interest in generating fees from all sources raises serious concerns in
the community serving these low income families.

5. Operations

A. Fleet’s history in hiring women and persons of color for positions in middle and
upper management has been disappointing. Of the top ten “resulting” officers named in the
newspaper after the Fleet BankBoston merger is accomplished, all were white males. This sort
of decision-making affects every aspect of the business and relationships with customers. For
example, many lending decisions are influenced by the relationship developed between the
lending officer and the customer — when these two individuals are from very different
backgrounds, the likelihood of a positive decision is inhibited by the relationship factor. The
Federal Reserve Bank of Boston did research in the early ‘90’s regarding the impact that having
white lending officers and black or Hispanic applicants had on the denial rates for home
mortgages, and found the impact to be substantial. This continues and affects all areas of service

Letter to Federal Reserve Board 7/7/99
Page 9 of 14

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whether to approve a merger. Specifically, under subsection (b), the Federal Reserve Board
must take into account in its deliberations any views expressed by interested parties in
accordance with the process established under the regulations. In furtherance of these reviews
and deliberations, the CFCR provides the following comments finding that the combination of
Fleet and BankBoston will substantially lessen competition and reduce the resulting capacity to
meet the convenience and needs of the community in Connecticut and therefore should not be
approved.

Both Fleet and BankBoston are among the largest players in the financial industry in
Connecticut, by deposit base, asset size and otherwise. Fleet’s acquisition of Shawmut four
years ago has resulted in significant concentration of deposits and services in one behemoth
institution, yet the increased size created the absolutely opposite effect desired by the Board -- it
decreased the availability of services to the Connecticut community. If the merger is
accomplished, Fleet Boston will have almost 50% of the market share for Hartford, and 30% of
the state’s deposits: the next closest competitor has only 11% of the deposits of Connecticut
customers. Not only will Fleet Boston build and control an exceedingly large portion of the
market, but the scale of the new merged institution will positively dwarf the remaining
independent banks in Connecticut. Sharing the market among institutions of such differences in
size rarely meets the definition of competition. With Fleet having already acquired its closest
competitor (Shawmut) and BankBoston recently acquiring its closest competitor (BayBanks), the
continuing concentration of the market (from four competing institutions to one mega-bank)
constitutes an alarming trend. These mergers may result in gains for the bank stockholders but
provide little or no benefit to the consumers who are to be protected by the Board.

The economies of scale touted in every merger have not produced savings for Fleet
customers or increased lending opportunities to match its growth in market share. Even with
specific lending commitments extracted from Fleet by the Connecticut Attorney General in
connection with the Shawmut acquisition, the service to the community has decreased in the
years since that merger. The potential loss of BankBoston as an independent financial and
depository institution, especially one that has been a strong competitor to Fleet in the
Connecticut marketplace and that has shown exceptional willingness to develop and implement
creative programs to serve the low and moderate income communities, raises serious concerns. It
appears that this merger will have such a disastrous effect on the competitive environment and
services to the traditionally underserved communities in Connecticut that the Federal Reserve
Board should not approve it.

The fact that the combined institution will create the eighth largest bank in the country
before divestiture, at $178 billion in assets, should elevate the standard to be applied in
reviewing and assessing the wisdom of this merger. Even with the proposed divestiture of $12.5
billion in deposits and $2.2 billion in commercial loans, the merged Fleet Boston would easily
overpower any local competitors, regardless of which institution acquires the divested branches
and assets. (Note: The lack of information on this subject makes this issue even more troubling to
the community seeking to understand the impact of the merger and divestiture.) The next largest
New England-based institution, Citizens Financial Group, is only $21 billion. Fleet’s current and
proposed dominant market share would demand that Fleet take an equally commanding lead in
all areas of community lending and CRA efforts. Our research has shown that not to be the case.

Letter to Federal Reserve Board 7/7/99
Page 2 of 14


institutions, that collects and disseminates information to consumers about comparative costs,
and the availability and quality of financial services. The FCA would also represent consumers
interests in regulatory matters, the legislature and the courts.

Why do we need an FCA? Banks have recorded their seventh straight year of record profits in
1998, totaling $61.9 billion. From 1991 to 1997 bank profits rose 230% while the Consumer
Price Index for that same period rose only 18%. Consumers are paying too much for banking
services, leaving as many as 12 million citizens nation wide"unbanked," they simply can not
afford a bank account. In addition to increasing costs to consumers, financial decisions are
becoming more complex as the traditional bank has become more of a financial supermarket.

In Washington, many financial service related consumer protections are being rolled back or
defeated before coming law. Here in the Statehouse, there are many banking and financial
services proposals that will all have an impact on the consumer. While the banks have well
financed legal and legislative departments, the consumer does not. The FCA would have the
resources to hire their own experts to analyze the proposals and look at how they may impact the
consumer. The consumers' experts could then be here before legislative and regulatory
committees, and even the courts, advocating in their behalf.

What makes the FCA most effective and probably the most controversial is how it is organized
and funded. The bill would require nuetrally worded announcements about the formation and
existence of the FCA to be included as inserts in four regular mailings a year to consumers from
financial service providers. The FCA would pay for this enclosure. "Piggy-backing" the bank's
mailing is a convenient and effective way to communicaté with bank customers.

NOTE: The utilities challenged this type of "piggy-backing" of CUB enclosures in their
envelopes in "Pacific Gas and Electric vs. Public Utilities Commission of California."
This case resulted in a Supreme Court decision in 1986 which ruled that the forced
enclosure of "content-based" messages violated the "negative free speech" rights of the
utility in that instances. However, the same ruling indicated that "content-neutral"
informational inserts would not violate utilities! first amendment rights. This bill would
require that the FCA inserts be content-neutral.

This system for funding the FCA provides a basis for economic self- sufficiency and

financial accountability. Any financial service consumer can join the FCA by contributing a
minimum amount each year. FCA members elect the Board of Directors who will govern the
organization, hire staff, and control the budget. The FCA is membership funded and receives no

tax dollars.

The FCA will help level the playing field between the consumer and the financial services
industry. The FCA will empower consumers, provide important financial advice and save
consumers money.

La


will hire the branch employees, there is no certainty in that and certainly we are not aware of any
commitment that such hiring be a condition of the divestiture plan.

Although divestiture may mollify the federal regulators regarding the market share and
competitive issues that this merger poses, it does little to protect the consumers left behind.
Divestiture does not insulate communities from decreased service. This is especially true in LMI
communities, both urban and rural, where efforts have been ongoing for years to prevent the
hemorrhaging of banking services and bricks and mortar from their neighborhoods as branches
close “through the normal course of business.” Branches close with some regularity. New
branches very rarely open in these communities (with the exception over the past several years of
First Community Bank branches targeted to urban LMI neighborhoods).

Divestiture also does nothing to address potential redlining issues or discriminatory
lending practices, as the community has no voice in working with the bank(s) acquiring the
divested branches. As in past Fleet mergers, the divestiture plan will likely result in further
branch closings in LMI communities. It is difficult to understand how Fleet can rely upon
divestiture in defense of the proposed merger when it will be relinquishing control of those
branches. Divestiture is a mechanism of business, not community reinvestment.

While the identity of the branches intended to be sold has been made public, the impact
on urban and rural LMI communities in particular cannot be assessed without an understanding
of the future operation of these branches. In an era of increased focus on online banking and
decreased focus on bricks and mortar, the impact of the divestiture of these branches on the low
and moderate income community will be even more substantial. This raises significant CRA
issues as the likely outcome will be fewer services to those customers in LMI communities who
have little or no access to computers. Rather than outreach and expansion of services, the
opposite will occur.

B. Products for LMI Communities

BankBoston has developed a uniquely creative program in First Community Bank that
has developed an entire line of products, services and delivery systems for LMI and minority
communities. First Community Bank has opened branches in neighborhoods formerly abandoned
by all other financial institutions (besides check cashers) and offered deposit and lending
products, as well as educational efforts, geared specifically to the underserved communities they
targeted. Fleet, on the other hand, has continued to reduce its market share in LMI communities
(see lending issues in previous sections of this letter). The new Fleet has projected income of $3
billion (see April 99 Real Estate Forum Magazine) based to a large degree on $600 million in
projected cost-cutting opportunities. This will most likely be achieved through both layoffs and
dropping lower-performing clients, the low- to moderate-income customers. Based on those
numbers and Fleet’s trends in behavior over the past several years, it appears that the increased
income projections will come primarily on the backs of the LMI customers. As the number of
available options for depository services shrinks, this impact is increasingly alarming. While
Fleet has stated publicly that it expects to continue the First Community Bank concept, no
commitment has been made to expand this effective bundle of products and services and their
delivery. In fact, if First Community Bank branches are among those being divested (as in the
Blue Hills neighborhood of Hartford), then Fleet should expect to lose the First Community

Letter to Federal Reserve Board 7/7/99
Page 8 of 14


1160
1930
3280
5480
5520
8040
8880

Exhibit B:

Bridgeport
Danbury
Hartford
New Haven
New London
Stamford
Waterbury

Letter to Federal Reserve Board 7/7/99

Page 12 of 14

MSA Names and Numbers


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e@ FEE DISCLOSURES ARE COMPLICATED AND CONFUSING

To conduct this survey, PIRG and CFA volunteers visited or called banks to ask for all the

brochures necessary to.cpen a bank account. Most banks sent at least one ‘brochure, but not
every brochure was helpful, clear or complete. :

The purpose of the 1991 Truth-in-Savings Act was to improve disclosures to consumers so
that they can better compare financial services at different banks. Truth-In-Savings also
explicitly prohibited certain onerous bank practices, such as the payment of interest on less
than a customer’s full balance and the use of the term "free" for checking and other accounts
that require minimum balances or other conditions to avoid fees.

However, our survey of bank fee brochures reveals that comparisons are still difficult and
additional remedial legislation may be necessary, despite the banks’ concerted attempt to
weaken Truth-In-Savings. Disclosure of terms of bank accounts differs dramatically. .Many
brochures appear designed to confuse, rather than assist, consumers. Some banks even place
some account terms in one brochure, and other key terms in another, or even a third.

Additionally, the language used in brochures to describe the same fee often varies from bank
to bank.

e ATM/DEBIT CARD FEES AND RISKS TO CONSUMERS

When banks introduced ATM cards in the 1970s, their marketing plans resembled those of
the nuclear power industry in the 1950s ("It'll be too cheap to meter."). Not surprisingly,
once banks got consumers hooked on ATMs, the fees started racheting up. In addition to the
fees tracked in this report, banks have developed various “mini-statement,” "balance
inquiry,” "annual," "replacement cari ," “electronic insufficient funds," and other ATM fees.

Consumets now face the same situation as banks replace "plain old ATM cards," with
enhanced debit cards that can be used either on-line (with a PIN) or off-line (with a
signature). Plain old ATM cards can be used at Point of Sale (POS) with a PIN, but the real
money is in off-line debit. Each month, banks ship more than a million new debit cards (they
prefer'the term "check" card) to consumers, branded:either Mastercard or Visa. Debit
systems, generally, offer tremendous benefits to both banks and merchants.

-- Banks avoid paper check transaction costs. ”
» <The risk of bounced checks is virtually eliminated (except in off-line systems).
---Metéhants gain rapid access to funds, as.check floats are eliminated.

But the real money is in merchant fees. PIN-based transactions pay the bank a flat "merchant
fee" of 6-12 cents. Off-line transactions pay up to 2% of the purchase, the same as credit
cards do. ©

e DEBIT CARDS: A CONSUMER NIGHTMARE

Debit or "Check" cards are seen by banks as the fee Holy Grail. For many consumers, they
are a nightmare..Banks don’t tell you that a thief can steal your account number from a

PIRG’s 1997 Bank Fee Survey -- Page 11


BIG BANKS, BIGGER FEES:
The 1997 PIRG BANK FEE SURVEY

KEY TO CHARTS

Big Banks/Small Banks (TOP 300 Rank): We downloaded from the Federal Deposit
Insurance Corporation (FDIC) the most recent available ranking (31 December 1996) of the
nation’s largest banks and thrifts by deposit size and coded survey banks by Top 300 by
deposits: ‘All other institutions surveyed were considered small banks. 36 member owned
non-profit credit unions (CU in Bankname) were also surveyed for comparison purposes.

CALCULATION OF PIRG ANNUAL COST INDEXES: We presume that all consumers
fail to meet minimum balances to avoid fees, make 25 off-us and 5 national ATM
withdrawals each year, bounce one check, and receive one deposit item returned. Based on
industry data, we presume that regular checking customers pay for 16.3, NOW. customers
15.8 and No-Frills customers 6.5, checks and other debits each month. Your costs may vary
and you could avoid fees by meeting minimum balances.

. ACCOUNTS: We selected the lowest cost account in each category available to any
consumer, regardless of age, income or other restriction. ‘

NATIONAL RANKINGS: ALL STATES: We ranked the states from best to worst for the
4 annual cost indexes, availability of free checking, and key balance requirements in the”
survey (ATM and penalty fees are included in the indexes). We then combined the rankings
to get an aggregate ranking, then ranked the states. A perfect ranking would be 12 (1 point *
12 categories). This comparison is a guide. Consumers can find bargains in nearly every
state.

Bank By Bank Pages: Page 1... . eee ete ee eee eee eee teen eens
© Savings Accounts: Average balance to avoid monthly fee (banks may charge additional
excess transaction fees).

@ FREE CHECKING (FR CK):
Y=Free checking, with no restrictions.
D=Free checking with direct deposit.
X=Free checking with no ATM card allowed.
Z=Free checking with extra ATM or other fees.

e@ REGULAR AND NOW CHECKING: MIN OR AVG: Some banks use a minimum (M)
balance method, others an average (A) balance method. Some allow either (E). Monthly fee
presumes no checks returned. FEE/CK is per debit charge after #FR CKS, if any,

exceeded. Debits generally include ATM withdrawals and checks.

-- over --


Further, by not listing CHA as a prinicpal participant in the bank’s
CRA programs, Fleet sought to limit and conceal CHA’s role in a cynical
attempt to diffuse CHA’s ability to effectively publicize the bank’s intent
to renege on its publicly stated commitment to the Fleet / CHA program.
As the Fleet letter was submitted several months after the public meeting
(where CHA reserved its support of the merger pending resolution of the
partnership agreement issue), apparently CHA’s name was excised by the
bank to avoid the possibility that CHA would use the data as evidence of its
effective performance and of the bank’s intent to renege on the agreement.

Paradoxically, Fleet empowered UNAC (NACA), a group with little
popular community support with a similar, but significantly different
program. The management of that organization only recently
acknowledged publicly that NACA was “not a CRA program.”

2. An employee of Fleet improperly solicited money from
unsuspecting homeowners with promises of loans and Fleet refuses
to reimburse the defrauded victims.

A Fleet employee improperly solicited and received thousands of
dollars from would-be mortgage applicants, stating the money was to be
paid to Fleet as part of the loan approval process. Apparently, the employee
converted the funds for his own use. When Fleet was informed of the
matter (see enclosed letters) the bank ignored the information. While one
victim was reimbursed, the others were not even contacted and eventually
lost their homes to foreclosure.

The names of the victims have been redacted because of fear of reprisal by
the bank.

3. Asa result of CHA’s reliance upon Fleet’s representations, it
forfeited over $5000. of its deposit on a real estate purchase.

Despite the bank’s assurance, and repeated pleas from CHA, Fleet
refused to honor its commitment to provide mortgage financing as part of
the underlying agreement. (See letter from Fleet to seller)

4. Fleet refused to implement and fund the partnership program that
it agreed to, causing homeowners to face unnecessary foreclosures and
impugning CHA’s credibility in the community.


of the institution. The fact that Fleet has not adequately addressed this issue raises serious
concerns throughout the organization.

B. While Fleet may have been involved in some efforts to increase the number of
local residents in their hiring programs, their commitment to training, both externally for new
hires and intemally for promotional hires, has not resulted in the kind of diversity in the
workforce that is critical to an institution of this size and impact in the Connecticut market. Fleet
has not been an active player in the training programs being developed around Connecticut to
help increase opportunities for LMI residents. Even where Fleet has hired individuals who have
completed welfare-to-work training, there has been some concer that these hires have stayed on
board at Fleet only for the required 61 days (in order for Fleet to get “credit” for their hire) and
subsequently been let go. If this proves to be true, it is even more problematic and negative than
simple inaction.

Fleet has never made the kind of leadership effort that BankBoston has made in, for
example, developing, implementing and building the First Community Bank. If Fleet is allowed
to acquire BankBoston and overshadow that kind of leadership, creativity, outreach to the LMI
and minority communities and overall responsiveness to CRA, then every community that Fleet
affects will be worse off after this merger. We request that you deny this merger because of its
substantial anti-competitive impact and because Fleet’s mediocre CRA and community lending
performance will have a devastating impact on the most vulnerable communities in Connecticut,
those communities which CRA and the regulators seek to protect in this era of big business.

PEYCCA

“Barbara S. McGrath, Chair
Connecticut Friends of Community Reinvestment

Attachments:
A. List of CFCR Participants (2 pages)
List of MSA # and Area Names

B.
Cc. Graphs showing HMDA data for Fleet (15 pages)
D. Graphs showing HMDA data for BankBoston (19 pages)

Letter to Federal Reserve Board 7/7/99
Page 10 of 14

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3. MASSACHUSETTS

A. MASSACHUSETTS HOUSING PARTNERSHIP SOFT SECOND PROGRAM This
» program provides two mortgages ~ a 75% first mortgage and a 20%

. deferred second mortgage to LMI residents of Massachusetts. For the
second mortgage, borrowers pay interest only for the first ten years
and qualified borrowers may have the interest subsidized by

Massachusetts Housing Partnership.

LOAN VOLUME
1993 1994 YTD 1995
P #loans S$Amount #Loans $Amount #Loans $Amount
96 $4,618,000 188 $8,216,000 40 $1,536,000

F B. UNION NEIGHBORHOOD ASSISTANCE CORPORATION (“UNAC”) - This is
»a partnership portfolio program with Union Neighborhood Assistance
Corporation, a non-profit agency that provides home buyer counseling
p to inner city residents of Boston. Fleet provides 100% financing
with no closing costs. The program started in 1994.

LOAN VOLUME
1993 1994 YTD 1995
$Amount #Loans SAmount #Loans S$Amount
N/A 98 $11,169,000 124 $13,675,000

MASSACHUSETTS ATTORNEY GENERAL PROGRAM - This was a Fleet

@ second mortgage loans. The program also provided loans for purchases
Ref homes within LMI and minority communities.

LOAN _ VOLUME

1993 1994 YTD_1995
$Amount #Loans $Amount #Loans $Amount

$8,566,000 30 $3,389,000 2 $199,000


Pale MPa — a foley —

Gaal thy, Mow hes Donna Holloway

4 Darlington St. 5 Whiting St.
Dorchester Loaf.
Ursula Humes ConragJatk

23 Duke St. c 523 Columbus Ave.
Mattapan South End

Janis sefferson Zones ft henen Leslie Jhurial

45 Stephen Drf 16 Leroy St.
Brockton Dorchester
Jackie Johnson Inez Jones
80 Milton Ave.
Mattpan Dorchester
Bettye King TM
65 Morton Village Dr. 50 Mora St.
Mattapan Dorchester
onaprak Hix Stanley Lewis
103 Walnut Ave. 47 Clancy Rd.
Dorchester Mattapan
Afi < Groere bond
T is - Ewana Lindo
5 Rosseter St. 10 Harlem St.

Dorchester Dorchester


uninspiring record of performance in small business lending to minority- and women-owned
businesses and to small businesses located in LMI communities. If trends from previous mergers
continue, it is highly likely that Fleet’s poor performance in small business lending to these
underserved communities will survive the merger, rather than BankBoston’s efforts.

In addition, in the Agreement between Fleet and the Connecticut Attorney General’s
office in connection with the Fleet/Shawmut merger, Fleet committed to close and disburse loans
to small and middle market companies through the Connecticut Works program totaling $20
million in the first year, $30 million in the second year and $40 million in the third year after
consummation of the merger. To the best of our knowledge, those commitments were barely
met, and Fleet has made almost no loans under this program after completing its minimal
commitment.

Fleet also committed under the Agreement to close and disburse $1 million in loans in
each year for three years under the Urbank program at the Connecticut Development Authority,
in excess of the average annual dollar amount of the combined amounts Fleet and Shawmut had
lent over the previous two years (which adjusted average annual dollar amount was $1.5
million). To the best of our knowledge, again those commitments were barely met. Fleet
subsequently made only $295,000 in Urbank loans in 1997 after completing this minimal
commitment. This pattern of lending to small businesses across the state, even where it is
intended to concentrate on “distressed urban areas” (under Connecticut Works) or designated
targeted investment communities (under Urbank), is painfully limited in its focus and
implementation. Fleet’s outreach to women- and minority-owned small businesses has not
resulted in significant loan volume, even through programs to which they have committed under
the Agreement. The fear of the community is that this focus will continue into the future, even
after Fleet has absorbed the community-sensitive BankBoston.

Fleet’s performance in SBA lending, even though it is a preferred lender for SBA and
should be a significant leader in this area, is also disappointing. In the first seven months of the
SBA’s 1998-1999 fiscal year, Fleet has made only 10 loans for a meager $728,950, ranking it
23" in total SBA lending. Meanwhile, Webster Bank, which is only one-fifth of Fleet’s size, has
made 8 loans for $1.36 million, ranking them 14". Last year, Fleet and Webster tied at
$7,496,000 of SBA loans, despite the tremendous gap between their sizes. Fleet’s volume of
SBA loans in 1996 and 1997, where it should have reflected a rise after acquiring Shawmut,
continued to drop as a percentage of the total number of SBA loans (1996: 102 loans at 11.7%;
1997: 73 loans at 9.1%; 1998: 39 loans at 5.2%). Another disturbing trend is that Fleet’s average
SBA loan size rose from $73,306 in 1996 to $110,901 in 1997 to $192,222 in 1998. This reflects
an increasing drying up of available credit to the small business person seeking those difficult
loans under $100,000. Given its stature as an SBA preferred lender and as the largest bank in
Connecticut by far, Fleet’s lending to small businesses under the SBA program should be
substantially more aggressive. Its declining participation raises significant fears in the
Connecticut small business community, especially among those businesses located in urban areas
and those owned by women, African Americans or Hispanics.

Fleet established a community development corporation (“CDC”) several years ago,
arguably in order to provide more flexible underwriting standards to small businesses and

Letter to Federal Reserve Board 7/7/99
Page 6 of 14


In this case, the bank took advantage of CHA's demonstrated results and
good will in order to assure regulatory approval of the 1994 merger application;
and reneged on its commitment thereafter. Such practices defy the purpose of
CRA, community banking goals and do violence to regulatory standards and
industry practices.

For the above reasons and other reasons, CHA opposes the application and
urges its denial. In the alternative, CHA requests that as a condition of the
regulatory approval process, the bank be required to compensate CHA and to
implement the agreement.

Sincerely,

Dwight K. Miller
DKM:ss /enc.

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Fleet’s actions to undermine the agreement and to cause conflict
among interested community groups is set forth in CHA’s June 10°
submission.

This information demonstrates a pattern of deception and abuse that
is inconsistent with the purpose of CRA. The Fed cannot build confidence
in the prospective resulting merged bank when Fleet has with deliberation
and arrogance refused to honor commitments its made to bona fide and
experienced organizations. CHA expended thousands in legal and other
expenses prepatory to and in reliance upon the bank’s stated commitment.
Scores of documentable meetings, telephone conversations and written
communications give further credence to CHA’s contention that Fleet
management agreed to the terms of the agreement only to renege for
reasons which were never communicated in writing or in public. Again, I
refer to CHA’s letter of June 10 for a more detailed recitation of the events
leading up to the bank’s refusal to honor the agreement.

Many will ask, “What happened?” If what CHA claims is really
true, why would Fleet’s management operate in such a manner. I have
asked myself that very question many times over the past several years. I
would like to ask Terry Murray that question. Community-based
organizations that successfully provide dedicated service, preventing
foreclosure for dozens of long term homeowners, many of them elderly and
pillars of stability in their communities, ought be applauded and not
castigated.

Recognizing the intense scrutiny from the bank as well as from the
community that had every right to know if we were providing real services
in an effective way, and understanding that scores of long-term
homeowners were at risk of foreclosure and loss of home and family
created great pressure upon CHA and other involved organizations to
negotiate loan workouts, short sales, loan closings and to provide pre-
closing and post-closing homeownership counseling in an effective and
timely manner.

Fleet’s refusal to honor it commitment certainly could not have
been the cost to the bank. CHA processed more than 13,000,000 in loans
with total financial support from Fleet of less than $30,000. This equates to
about .25pt. per loan, compared to Fleet’s payment of nearly 3 points per
loan to UNAC.

Why, then? In my opinion the convergence of a combination of
factors led to the manner in which CHA and other independent-oriented
community organizations throughout New England and New York have
been ill-served by the bank’s claim of community support:


found that fees are "significantly higher" at multi-state institutions.®

The following table compares single-state and multi-state costs and fees for 1997.

SINGLE

MULTI

$ HIGHER

% HIGHER

$ 188.33

$ 224.68

$ 36.35

COSTS TO CONSUMERS AT SINGLE AND MULTI-STATE BANKS--1997
REGULAR
CHECKING :
ANNUAL COST

19%

INDEX

NOW CHECKING $ 201.50 $ 236.91
ANNUAL COST

INDEX

NO FRILLS $ 133.45 $ 156.23
CHECKING

ANNUAL COST

INDEX

REG CHECK--MIN $ 527 $ 582
BALANCE AVOID

REG CK--AVG BAL $1003 $1344
TO AVOID

REG CK--MONTHLY |$ 6.82 $ 7.82
FEE

NOW CHECK--MIN $977 $1204
BALANCE AVOID

NOW CK--AVG BAL $1841 $2513
TO AVOID

NOW CK--MONTHLY | $ 7.89 $ 9.32
FEE

BOUNCED CHECK $ 19.80 $ 22.11
ATM--OFF-US FEE $ 0.89 $ 1.24
SAVINGS--MONTHLY | $ 2.11 $ 2.98

FEE

PIRG’s 1997 Bank Fee Survey ~- Page 7



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A more clear and less confusing pricing system is necessary to arm consumers with
the true and accurate price information they need to exercise their consumer
strength and take advantage of "the market".

What would we think of a cruise with an all inclusive price that also charges you
for the meal, or a phone company that charges you at the time of the call and then
again at the end of the month? We would say these practices are deceptive just as
the ATM surcharging practice is.

In Massachusetts today, even the surcharge free network of ATMs will offer little
choice to consumers in certain areas. Just comparing BankBoston's massive
network of nearly 1300 ATMs to the surcharge-free network, many consumers will
have no choice between a surcharging and non-surcharging machine. For example,
it was reported last year in a Boston Globe article that consumers in Boston and
Newton will have little "choice" because BankBoston's machines dominate the area.
In Boston, BankBoston owns 119 ATMs and the surcharge-free network has 43
machines. In Newton, BankBoston has 18 and the surcharge-free network has 5. In
addition, what consumer will be able to choose at the airport, where there is only
one ATM owned by BankBoston. How soon will it take for that surcharge to reach
$5? What about on college campuses? A quick poll of college campuses showed
that out of 30 college campuses, 70% (or 21 out of 30) of the machines on campus
are BankBoston or Fleet. Only three campuses had more than one ATM, two of
which were BankBoston and Fleet. While we commend BankBoston for
eliminating the surcharge on a handful of the campuses, we urge them to do it on all
campuses and other locations where their is no competing surcharge free machine.

Contrary to the industries' argument that the surcharge offers "choice", these
examples demonstrate that for many consumers their will be a clear lack of choice.

C. Predatory

Lastly, surcharges should be prohibited because they are predatory and solely
designed to draw customers from banks with smaller networks.

This is particularly threatening here in Massachusetts with just one bank, the new

Fleet-Boston, likely to own close to half of the ATMs. Surcharging by banks that

own most of the machines poses a serious competitive threat to smaller banks and”
credit unions. If enough small customers of smaller banks switch accounts to big

banks to avoid surcharges, then the big banks, facing less competition, will raise the

fees they charge their own customers even more.

The SUM Program, a selective surcharge program owned by NYCE, is not the "free
market solution" many bankers would lead you to believe. First, it is important to
point out that the big banks who own most of the networks prohibited selective
surcharging through anti-competitive clauses in their contract with banks. It was


borrowers with incomes up to $120,000, the drop was from 251 loans in 1994 to 39 in 1997.
Small increases in 1998 brought the total loans to borrowers with incomes under $120,000 to 83,
which is still barely one third of the 1994 loan volume of Fleet and Shawmut combined.

Exhibits B through D attached to this letter provide further breakdown information in graph form
for Fleet/Shawmut combined mortgage lending by LMI status and by minority borrowers in the
Bridgeport, Danbury, Hartford, New Haven, New London, Stamford and Waterbury MSAs.
Based on our research of the HMDA figures, overall in Connecticut the mortgage loans Fleet and
Shawmut made to LMI borrowers (incomes under $80,000) dropped from 1,828 loans in 1994 to
536 in 1997 and increasing only slightly to 556 in 1998, only 30% of their combined lending in
1994, This is a tremendously troubling trend.

The purpose of the Home Mortgage Disclosure Act (“HMDA”) is to allow the
community to review and analyze the critical facts of its local depository institutions’ lending
patterns, and specifically to work to eliminate discrimination in lending to traditionally
underserved communities (those viewed as “redlined” in the past). While many factors can
affect the reported statistics, the data in the case with Fleet are so compelling as to raise
fundamental questions about Fleet’s commitment to reinvesting in its communities. Fleet’s trend
of acquiring a customer-driven and community-sensitive institution (such as Shawmut) and
reducing substantially its positive impact on the communities it had served raises real concern
about the short and long term impact on LMI communities and communities of color in terms of
their access to the American dream. Home mortgages may be only one area of lending, but
mortgage lending arguably has the greatest impact on the growth of neighborhoods. It is also the
best barometer of the level of credit available overall in a community: the decline in available
mortgage credit in LMI and minority communities signals significant problems. Fleet cannot ask
for the opportunity to command an even larger share of the market through this proposed merger
and then continue to decrease its mortgage lending to LMI and minority households.

B. Multi-family projects

An issue of significant concern that affects multi-family housing projects (as well as
single family affordable housing) is the history of the Community Development and Preservation
Loan Fund (the “Fund”). This Fund was established at the Connecticut Housing Finance
Authority pursuant to an agreement of September, 1995, with the Attorney General’s Office in
connection with Fleet’s acquisition of Shawmut. Under this Agreement, Fleet committed to
“take a lead role in the establishment of” the Fund and make an initial capital investment of at
least $25 million to this loan pool.

In fact, it took until December of 1996 for Fleet to close on its $15 million lead
participation (the remaining $10 million of the commitment is not mentioned). Fleet assumed.
the “syndicating lead role” for a seven-bank consortium totaling $47 million. Despite the
substantial commitment, to date several years later only one single loan has been made under this
program in May 1999 for $75,000 -- a tiny fraction of the committed dollars. One other loan
was approved in September 1998 and has not yet closed. The reasons behind this lack of
implementation may be legion, but the fact remains that Fleet’s commitment here did not
accomplish anything for the community.

Letter to Federal Reserve Board 7/7/99
Page 4 of 14


REALESTATE =

THE BOSTON SUNDAY GLOBE e MAY 14, 1995

A Section

Home & Garden A8 *
New Hampshire A21 =
Cape Cod AZL
Apartments A25 .!
Market Basket A30__

By Mary Sit

GLOBE STAFF

1n 1988 when Debbie and
‘Tom Fiore purchased

= after his back injury,
his layoff, and both were
injured in # car accident - the Fiores
fell six months behind in their mort-
gage payments of $1,500 8 month.
__ Their mortgage company began

mortgage
10.76 percent to 6 percent. The new-
fy structured mortgage will adjust to
an B percent interest rate in four

yearn. .
‘The Fiores aft one of 10 families
faring forclonure who have been res-

(L08E STATE FOTO OAATHUN WES
Rahhie and Tom Flare wlth aon Jeff at thelr Brockton home. which was near foreclosure.

—Tnlieu of :

=|

Massachusetts is the testing

ground for a program to help
families keep their homes

cued by a recently launched pilot
program. Called the the Foreclosure
Prevention Project, joint effort
by Freddie Mac, the Federal Depos-
it Insurante Corp. (FDIC) and the
National Consumer Law Center in
Boston, a non-profit, private organi-
zation which offers legal services to
Jow-income people. -

‘The program, formally an-
nounced last month ata press con-
ference with community groupe and
US Rep. Joseph P, Kennedy 2d (D-
Mass), actually began operating qui-
etly last February with Freddie
Mac. So far, Freddie Mac has mailed
600 leters to families needing help,
fa reviewing 40 to 60 canes and has
halled 10 foreclosures, said Ed Del-
gado, manager of business oper-
ations at Freddie Mac.

FORECLOSURE, Page Ad
1


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Exhibit A: List of CFCR Participants

American Friends Si
Van Dyke Ave.
Harttord. CT 06106.
Contact: Bruce Martin

Capital Region Conference of Churches
30 Arbor St

Hartford. CT 06106

Contact: Roger Floyd

Citizens’ Research Education Network
32 Elm St
Hartford. CT 06106

Contact: Gree Vickers:

Corporation for Independent Living
30 Jordan Lane

Wethersfield. C1 06109

Contact: Nomathemba Shepard

Connecticut Housing Coa
30 Jordan Lane
Wethersfield. CT 06109
Contact: Jett Preiser

Connecticut Women's Education and Legal
Fund

135 Broad St

Hartford. Cl 06105

Contact: Anne Stanback

End Hunger Connecticut
300 Addison Rd
Windsor. (1 86095
Contact: Millie Arnold

Letter to Federal Reserve Board 7/799
1 Tiot it

Black American Marketplace
32 Elm St.

Hartford. CT 06106

Contact: Sam Saylor

Citizens for Economic Opportunity
ITT South St

Farmington, CT 06032

Contact: Phil Wheeler

Coalition to Strengthen Sheldon/Charter Oak
Neighborhood

32 Elm St

Hartford. CT 06106

Contact: Bernadine Silvers

Connecticut Consortium for Women and Their
Children With Behavioral Health Needs

205 Whitney Ave.

New Haven, CT 06511

Contact: Donna Campbell

Connecticut Urban Legal Institute
38 Elizabeth Rd.. Room K-202
Hartford. CT 06105

Contact: Barbara McGrath

Democracy Works

21 Oak St
Hartford. CT 06106
Contact: Carolyn Gabel

Fair Housing Center
221 Main St.

Hartford. CT 06106
Contact: Nancy Downit



P.O. Box 202 + Dorchester, MA 02121

Fleet Bank
Grove Hall Loan Center
Dorchester, MA. 02121

Att: Mr. Ronald E. Coard
Loan Manager

I am writing to you in support of the Community Home Owner Association, headed by Mr. Dwight Miller.

The Association has accomplished a great deal, but there is much more to be done to. To continue this effort
in our community, we need support from people who care about the quality of life in our Community and are
willing to support our struggle for Economy Development. The Community Home Owners Association has
the endorsement of the Grove Hall Board Of Trade.

This year's challenge that we face are substantially greater than those of the past. Mr. Dwight Miller Home
Owners Association has made such a difference and has influenced the course of human events displayed
within the community.

We urgently support the Community Home Owners Association, It is within the best interest of the Grove
Hall Board of Trade to see this program move forward.

I may be reached at (617) 427-4882, if there are any question's.

Sincerely, ) .
Y nae . ‘ f ma
: a Sof

. Leia, ely
Robert Hector

President, GHBT

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