June16,1998 

Board of Governors 

Federal Reserve System 

201h and C Streets NW 

Washington, D.C. 20551 

Dear Boardmembers: 

On behalf of the 9 counties and 97 cities that are members of the Association of 

Bay Area Governments, I am writing to submit our comments on the proposed merger of 

BankAmerica and NationsBank. 

. 

Our Association recently convened a regional hearing on the impact of the merger; 

many of those testifying you are hearin g from on a separate basis, but we have enclosed 

for your review any written testimony submitted to us. Our own concerns can be 

summarized as follows: 

l Job Losses We are concerned about the large number of jobs being eliminated, and 

particularly concerned about the number that Lvill be eliminated, not just in San 

Francisco but throughout the Bay Area. We ask that employees receive reasonable 

notice of any layofis, and that the new bank make a commitment to job training and 

placement. 

l Community Development - We are concerned about the recent community 

development “commitment” that fails to provide specifics about distribution throughout 

various states, regions and communities. In addition, reference to “small business” fails 

to provide specific commitments to minorities and low income populations. We are 

concerned about the preservation oi BoirZ’s community development bank, and 

demand that the new bank not compete rvith non-profit housing developers in the Bay 

Area. 

- Consumer Protection -We are concerned about branch closures, iee increases, ATM 

availability and ATM fees, and honoring commttments to current customers. If the new 

bank plans to save over a billion dollars by 1999, we can only suspect that it is the 

consumers who will feel the impact. The merger announcement boasted that the new 

bank will have $570 biiiion in asse[s; horn tvili this giant maintain its connection to the 

/rometown customers? 
Federal Reserve 

June 16, 1998 

Page Two 

l Fairness to Minority and Low Income Populations _ It has been stated that 

NationsBank has a reputation for “generic lending”- and California is a a generic 

state. (Our Association has forecast significant changes in regional demographics: the 

.Asian population will grow from 16% of the population in 1990 to 20% in 2020; the 

Hispanic population will grow from 14% to 24%; by 2020, the Caucasian population 

will no longer be a majority, at 47%.) We are concerned that NationsBank is not 

prepared to deal with the diversity in Caliiornia and especially the Bay Area. We are 

concerned with reports that NationsBank has a very poor record of lending to 

minorities and low income populations, lending only 6.3% to low income households, 

and even lower percentages to minorities. The new bank must nof be dragged down 

by the poor standards ejtablished by NationsBank- similar performance with minority 

.and low income lending will not pas5 muster in the 6ay Area. 

We are concerned about the closure oi 6oiA’s San Francisco headquarters and the 

transfer of decisionmaking to Charlotte. North Carolina is a long way from California- in 

miles- and light years away, we believe, in attitude. 

Our concerns are not relieved by word that global operations wll be based in San 

Francisco; such operations will be lookins west to the Paciiic Rim and will not be 

concerned about jobs and customer relations in the rest oi the Bay Area. 

IMore generally, we are concerned about the reduction oi competition in this merger, 

as well as other proposed mergers in banking. Vv’irh fewer banks, who &vi// be compelled 

to offer free checking, free ATILl:, and true customer service? 

Before any decisions are made, we ask that the Federal Reserve convene regional 

hearings, including one in the Bay Area. We ask that Mr. McCoII and Mr. Coulter 

personally attend the hearings, and personally respond to questions. We ask that the 

public comment period be extended until every relevant analysis has been made public 

and given time for thorough reviebx,. We also ask that current discrimination cases against 

NationsBank be released ior public reviebv. 

Mergers don’t tend to iavor consumers, and don’t tend to favor small businesses. BofA 

customers are our constituents. and we \,oice our concerns on their behali. 

Sincerely, 

ABAC President and 

Alameda County Supervisor