of

Pome 23

Catholic Healthcare West 1700 Montgomery Street
TESTIMONY Suite 300

CHW San Francisco. CA 94111-1024
John R. Burgis (415) 438-5500 Telephone

(415) 438-5724 Facsimile

Catholic Healthcare West
RE: NATIONSBANK/BANKAMERICA MERGER

Federal Reserve Bank of San Francisco

(0 :
July $51998

My name is John Burgis and I serve as Senior Vice President Financial Services/Chief
Financial Officer for Catholic Healthcare West. Today I represent the concerns and hopes
of Catholic Healthcare West and a number of institutional investors including the General
Board of Pensions of the United Methodist Church, The Presbyterian Church USA,
Christian Brothers Investment Services, the Congregation of the Sisters of Charity of the
Incarnate Word and Sisters of Charity Health System. These institutions alone hold over
650,000 shares of NationsBank stock and over 400,000 shares of BankAmerica stock.
Catholic Healthcare West uses Bank of America for its cash transactions and credit
needs; both the Sisters of Charity and the Sisters of Charity Health Care System use
NationsBank for their cash transactions.

Let me begin with some background on Catholic Healthcare West's relationship with

BankAmerica. Catholic Healthcare West is a $3.5 billion health services delivery system

with facilities and affiliated physician groups in California, Arizona and Nevada. As a

religiously sponsored organization, CHW seeks business partners that demonstrate

corporate social responsibility. In 1991 CHW began a significant lending and depository

relationship with BankAmerica, due in large part to the bank's commitment to expanded

community reinvestment. During the ensuing years, we have noted and admired

BankAmerica's efforts to differentiate itself as a leader in corporate social responsibility.

Particular accomplishments include:

= Focused attention to developing, and promoting access to, affordable financial
services and products driven by a formal goal to achieve outstanding ratings in every
CRA examination

= Substantial financial commitment to BankAmerica Community Development Bank

"Dedicated and expert leadership devoted to community reinvestment and
development

= Inclusion of environmental and social considerations in criteria for lending to
developing economies

= Development of a strong environmental program including endorsement of the
CERES Principles for corporate environmental responsibility and accountability

= Sustained commitment to diversity in the workplace demonstrated by effective equal
employment opportunity and promotion programs, minority purchasing programs and
expanded family benefits programs

—


anh LZ
CANICCOR RESEARCH t 5

P.O. Box 426829, San Francisco, California 94142-6829 - (415) 885-5102 - FAX (415) 885-5103
Offices at 220 Golden Gate Avenue, 9th floor, San Francisco, CA 94102

TESTIMONY
of
John E. Lind, Executive Director, CANICCOR
before the
HEARING on the Acquisition of BANKAMERICA by NATIONSBANK
on 9 - 10 July 1998 at the

FEDERAL RESERVE BANK OF SAN FRANCISCO

1 am John Lind, Executive Director of CANICCOR, an agency of a non-profit corporation.
CANICCOR serves as a consultant to institutional investors on the social responsibility of
financial institutions. It provides services in two fashions.
1. CANICCOR provides information to funds which have social screens. These include
Kinder, Lynderberg & Domini Inc., Calvert, and U.S. Trust.
2. CANICCOR provides analysis for and coordination between institutional investors
which take an active shareholder role with the corporations in which they invest.

It is out of this second role, that | speak with you today.

As you have heard from Catholic Healthcare West, church related shareholders have sought
agreements with a number of major lenders to have goals of lending at or above the industry level
to each under-served group and area in which the corporation operates. The industry level is

defined as all reporters under the Home Mortgage Disclosure Act


PRESIDENT OF THE NORTHERN CALIFORNIA AFFILIATE OF THE
CONGRESS OF NATIONAL BLACK CHURCHES.

ADDRESS: 918 AVALON AVENUE, SAN FRANCISCO, CA. 94112

TEL: 1-415-334-0220

DR- BENJAMIN CRISWELL, 1058 CAPITOL AVENUE, SAN FRANCISCO,
CALIFORNIA TEL: 1-415-584-4710 HEALTH DIRECTOR OF THE
NORTHERN CALIFORNIA CONGRESS OF NATIONAL BLACK CHURCHES,
NORTHERN CALIFORNIA AFFILIATE. VICE PRESSIDENT OF THE SOUTH
BAY BRANCH OF THE NAACP.

3. CLARENCEE R. STERN CHAIRMAN OF THE FUNDRAISING COMMITTEE
SOUTH BAY BRANCH OF THE NAACP. SAME AS ABOVE.

4. REV. JESSE JAMES, MEMBER OF THE BAORD OF DIRECTORS OF
THE PASTORS AND MINISTERS CONFERENCE OF S.F. AND ADJACENT
CITIES, AND THE CONGRESS OF NATIONAL BLACK CHURCHES,
NORTEHR CALIFORNIA AFFILIATE.

2535 24TH STREET, SAN FRANCISCO, CALIFORNIA 94110 415-586—
7149.

JAMES WRIGHT, CHAIRMAN OF THE LABOR AND INDUSTRY COMMITTEE

SOUTH BAY BRANCH OF THE NAACP. 918 AVALON AVENUE,
SAN FRANCISCO,C ALIFORNIA 94112. 1-510-427-0516.

HUMBLY SUBMITTED:

c

-E.0.


o

Relative to the proposed merger of BankAmerica and NationsBank, we urge the new
corporation to embrace a comparable, if not enhanced, stance toward corporate social
responsibility. In our view the merger presents a singular opportunity to develop an
exemplary enterprise that succeeds in the marketplace by becoming the national leader in
meeting community needs.

In particular, we are concerned that the new corporation commit formally and publicly to
meeting the credit needs of every community where it does business with special
attention to low-moderate income clients and persons of color. To that end we have asked
Dr. Lind of CANICCOR to prepare reports assessing both NationsBank and
BankAmerica's performance in addressing the credit needs of these historically
underserved populations. Based on Dr. Lind's assessment, we ask the new corporation to
commit to both mortgage lending and small business goals.

In mortgage lending, especially on purchase mortgages and home improvement loans, we

ask that the new holding corporation seek to achieve:

1. Performance lévels above the industry level in the assessment areas of the banking
subsidiaries in lending to Black, Hispanic and low-income borrowers and in lending
in low-moderate income tracts and

2. Performance levels at parity with the industry in all other geographic areas in which
the mortgage lending subsidiaries operate in lending to Black and Hispanic borrowers

With regard to business lending, we request that the corporation achieve above the
industry levels in small business loans, especially:

1. Loans of $100,000 and under in low-moderate income tracts, and

2. Loans to small businesses in low-moderate income tracts

We believe that these goals would not impair the financial viability of the corporation,
but would increase the corporation's market. Such goals would provide a firm basis for
further development of these communities and help insure the corporation against
violations of the Equal Credit Opportunity Act.

In recent negotiations with a number of corporations, we have been gratified by their
readiness to adopt similar goals and are confident that the merged corporation will
demonstrate a comparable willingness to implement such goals.

We were pleased with the announcement of a Community Lending Commitment of $350
billion over the next 10 years for the merged corporation. It is indeed the largest
commitment announced in any merger so far. We welcome the new corporation's
willingness to detailed annual reporting of performance at national, regional and local
levels. We view such reporting as a means to maintain public accountability and as a
platform for dialogue.

However, we believe that the goals, which I outlined above, serve a different function
from these commitments. Commitments are what can be counted on, while goals detail
the benchmarks towards which the corporation aims. Thus goals are usually higher than


Let me give a few numbers to illustrate the problem.

¢ In 1996 NationsBank originated 1492 loans to Black borrowers (the most difficult to serve
group) in its home territory of North Carolina, South Carolina and Virginia, 657 below the
industry level of all HMDA reporters. If NationsBank were to have achieved industry parity,
lending to Black borrowers in these states would have increased 45%.

e In 1996 Bank of America issued 396 loans to Black borrowers in California, 186 loans below
the industry average. To have achieved industry parity its lending to this sector, lending to
Black borrowers should have increased by 47%.

© Overall, in 1996 the two corporations performed at 24 to 27% below the industry in lending
to Black borrowers, 12 to 15% below in lending to Hispanic borrowers, 14% below in lending
to low-moderate income borrowers and 7 to 22% below in lending in low-moderate tracts.
(When Boatmen’s and Barnett banks are added the overall performances improve slightly to -

19%, -14%, -11% and -10%, respectively.)
I refer you to my filing for details on home improvement lending and small business lending

Let me summarize by saying that we have had a recent phone conversation with NationsBank and
believe that the goals we propose are not foreign to the corporation. However, even if these
goals were adopted, the merged corporation faces considerable challenge in developing the
necessary structures to attain these goals in the near future:

1. NationsBank and BankAmerica have very different corporate cultures, which need to

cooperate and coordinate,


ton 23 -
po. 80x 12506. gan pmancisco . ca 24122: (415), 354-0200.

—

—

JULY 10, 1998

MR. WILLIAM W. WILES

SECRETARY OF THE BOARD

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
20TH STREET AND CONSTITUTION AVE, N.W.
WASHINGTON, D.C. 20551

FAX: 202-452-3819

RE: OBJECTION TO THE MERGER AND RESOLUTION TO THE PROPOSED
MERGER BY NATIONBANK CORPORATION, CHARLOTTE, NORTH,
CAROLINA, TO ACQUIRE BANK OF AMERICA CORPORATION OF
SAN FRANCISCO, CALIFORNIA, U.S.A.

RE: CONSIDERATION OF A PROPOSAL SUBMITTED BY THE PASTORS
AND MINISTERS CONFERENCE OF SAN FRANCISCO AND ADJACENT
CITIES, INC., UNDER THE FEDERAL COMMUNITY REINVESTMENT
ACT./HOW THE TWO BANKS CAN ASSIST IN COMMUNITY PROJECTS
BY DONATING $4,000,000 TO THE CONCERNED ORGANIZATIONS
FOR COMMUNITY SERVICES.

THE PASTORS AND MINISTERS CONFERENCE OF SAN OF SAN FRANCISCO
AND ADJACENT CITIES, INC.,/SOUTH BAY BRANCH OF THE NAACP/
NOE “HERN CALIFORNIA AFFILIATES OF THE CONGRESS OF NATIONAL
BLACK CHURCHES WHICH CONSIST OF MORE THAN 500 HUNDRED
CHURCHES AND ACTIVE COMMUNITY BASED ORGANIZATION WHICH HAVE
FORMED A COALITION AGAINST THE MERGER HEREBY FILES THEIR
CONCERNSES NEIGHBORHOODS, ABOUT THE MERGER'S IMPACT ON
BANKING SERVICES TO THE LOW-INCOME AND MINORITY NEIGHBOR-—
HOODS.

FEDERAL LAW-THE COMMUNITY REINVESTMENT ACT OF 1977 REQUIRES
BANKS TO MAKE LOANS IN ALL NEIGHBORHOODS IN WHICH THEY HAVE
BRANCHES AND WE ARE CONCERNED ABOUT HOW BANK OF AMERICA IS
CLOSING MOST OF THEIR BANK BRANCHES IN PREDOMINANT AFRICAN
AMERICANS NEIGHBORHOODS IN THE BAY AREA. WE ARE CONCERNED
ABOUT THE POOR COMMUNITY LENDING RECORD TO MINORITY
ESPECIALLY AFRICAN AMERICANS IN LOW-INCOME AREAS FEDERAL
REGULATORS SHOULD LOOK AT THEIR RECORD VERY CLOSELY.

WE FEEL THAT THESE GIANT INSTITUTIONS SHOULD EXPAND THEIR
LOANS COMMITMENTS NATIONWIDE IN COMMUNITY DEVELOPMENT LOANS
AND OTHER INVESTMENTS SUCH AS ASSISTING WORTHWHILE COMMUNITY


commitments and are more specific. We are particularly concerned that goals be
developed to apply to local markets and market sectors. As Dr. Lind points out in his
analysis of our desired goals and their comparison to the announced commitment:
"The need for separate goals for each racial/ethnic group is clearly shown by the
fact that the 10-year industry projection for white borrowers is nearly $50 billion
while that for Black borrowers is under $15 billion. Thus the aggregate
commitment for Blacks and Whites could be achieved through an excess of
lending to White borrowers of $5 billion (a 10% increase) and under-lending to
Black borrowers by $5 billion for a loss of over 33% to the Black community."
In closing, let me reiterate my advocacy that the new corporation embrace a vigorous
stance toward corporate social responsibility and seize the opportunity to develop an
exemplary enterprise that succeeds in the marketplace by becoming the national leader in
meeting community needs.


SERVICES PROJECTS.

WE FEEL THAT THE BANK SHOULD EXPAND THEIR SMALL BUSINESS
LOANS, AFFORDABLE HOUSING LOANS, LOANS TO MINORITIES
CONTRACTORS ESPECIALLY AFRICAN AMERICAN CONTRACTORS ECONONIC
DEVELOPMENT LOAN AND CONSUMERS LOANS.

IT IS OUR CONCERNS IF THESE TWO BANKING INSTUTIONS ARE
ALLOWED TO MERGE WITHOUT THESE DETAILED GUIDELINES IN

IN PLACE AS PART OF THIS MERGER IT IS OUR VIEW THAT THESE
INSTITUTION MAY NEGLECT OR ABANDON IT COMMUNITY INVESTMENTS
IN CALIFORNIA.

WE FEEL THAT INVESTMENTS WILL DIMINISH AS BANK OF AMERICA
LEAVES CALIFORNIA AND THE LOSERS WILL BE THE (LOW INCOME
AND MINORITY BANK CUSTOMERS.

MORE IMPORTANTLY WE A VERY CONCERNED ABOUT THESE TO
BANKING INSTITUTIONS LENDING POLICIES TO AFRICAN AMERICANS
HIRING POLICIES OF AFRICAN AMERICANS ESPECIALLY AFRICAN
AMERICAN MALES AND OTHER MINORITY.

THANK YOU VERY MUCH FOR ALLOWING US TO PRESENT OUR CONCERNS

AND VIEWS.
1

SINCERELY, _f-
_ =

CLARENCE R. STERN, ADMINISTRATIVE ASSISTANT

,

REV. JESSE JAMES, VICE PRESIDENT

—

- EDDIE C. WELBON, PRESIDENT

CC: CONGRESS OF NATIONAL BLACK CHURCHES, WASH, D.C.
NATIONAL OFFICE OF THE NAACP

THE CONGRESSIONAL BLACK CAUCAS, WASH, D.C.


©. BOX: 12506. gan eMaNcIBCO . ca 94112. (418) 334-0229

—

JUNE 27, 1998

JOY HOFFMAN-MOLLOY
COMMUNITY AFFAIRS OFFICER,
FEDERAL RESERVE BANK OF
SAN FRANCISCO, DIVISION

OF BANKING SUPERVISION AND
REGULATION, MAIL STOP 620
101 MARKET STREET

SAN FRANCISCO, CA. 94105

FAX: 415-393-1920)

RE: OBJECTION TO THE MERGER AND RESOLUTION TO THE
PROPOSAL BY NATIONBANK CORPORATION, CHARLOTTE,
NORTH CAROLINA, TO ACQUIRE BANK OF AMERICA
CORPORATION,S AN FRANCISCO, CALIFORNIA

RE: CONSIDERATION OF A PROPOSAL SUBMITTED BY THE
PASTORS AND MINISTERS CONFERENCE OF SAN FRANCISCO
AND ADJACENT CITIES, INC. UNDER THE COMMUNITY
REINVESTMENT ACT.

BRIEF STATEMENT

WE ARE CONCERNED IN BANK OF AMERICA’S LENDING POLICIES

TO AFRICAN AMERICANS AND OTHER MINORITIES GROUPS, PARTI-
CIPATING IN COMMUNITY OUT-REACH PROGRAM IN THE AFRICAN
AMERICANS COMMUNITIES AND SEE IF THESE BANKING INSTITUTIONS
WOULD BE SUPPORTED IN ASSISTING OUR NONPROFITS IN COMMUNITY
PROJECTS TO BENEFIT OUR INNER-CITIES YOUTHS.

ESTIMATED TIME TO SUBMIT OUR CONCERNS AND PROPOSAL SHALL
BE APPROXIMATELY THIRTY MINUTES (30) MINUTES.

WE ALSO HAVE A JOINT RELATIONSHIP WITH THE NORTHERN
CALIFORNIA BRANCHES OF THE NAACP AND THE NORTHERN CALIFORNIA
AFFILIATE OF THE CONGRESS OF NATIONAL BLACK CHURCHES.

AND MINISTERS AND PASTORS THROUGH OUT THE NORTHERN

CALIFORNIA
AREA.

1. DR. EDDIE C. WELBON, PRESIDENT OF THE SOUTH BAY BRANCH