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 
Conrad W. Hewitt 

279 Kaanapali Drive 

Napa, California 94558 

(707) 259-1079 

Testimony on July 9, 1998 before the Federal Reserve Board, San Francisco, California 

Concerning the proposal by the National Bank Corporation, Charlotte, North 

Carolina, to merge with Bank America Corporation, San Francisco, California 

My name is Conrad W. Hewitt. For over the past three years, I served as the 

State Superintendent of Bar&sand the Commissioner ofFinancial Institutions for the 

State of California. My term ended this past June 3Oth, 1998. Prior to my position with 

the State of California, I was a Managing Partner in the firm of Ernst & Young. For over 

33 years, I specialized in financial institutions Consequently, I have been involved in 

many mergers and acquisitions of financial institutions~ 

During the past three years, in my capacity as State Superintendent of 

Banks and as Commissioner, I have approved a number of bank mergers and acquisitions. 

The largest acquisition was Wells Fargo acquiring First Interstate Bank The California 

State laws concerning the sale, merger and conversion of depository corporations are very 

similar to the federal agency’s laws, such as the Federal Reserve. 
As a regulator, I had several standards to consider under California banking law, 

before 1 could approve or deny such a transaction. Some of the elements of the law 

included: 

1. the transaction till not result in a monopoly 

2. Competition will not be lessened or be anti-competitive 

3. The convenience and needs of the community will be served 

4. The shareholder’s equity will be adequate and the financial condition 

of the combined banks will be satisfactory 

5. Directors and executive officers will be satisfactory 

6. The surviving entity will afford reasonable promise of successful 

operation and will be operated in a safe and sound manner 

In my opinion, this proposed merger meets all of the standard to be considered 

under the Bank Holding Company Act. 

I note that the proposed transaction does not result in the largest hank in the 

United States. Also, this merger will operate in only 25 of the 50 states. I publicly stated 

over three years ago, that there would be consolidation in the banking industry I had 

many reasons for this statement and I believe that this trend will continue. There is too 

much capacity in the banking industry, too many banks and too much competition from 

outside the banking industty Thus the need to consolidate. Even the largest US banks 
face tremendous competition from companies such as: Merrill Lynch, GE Capital, General 

Motors Acceptance Corporations, all mutual funds, such as Fidelity, T. Rowe Price, 

Household Finance and now the intemet Many of these companies are not subject to 

state and federal regulatory law, as the banks presently are. 

Other reasons for this merger are: 

1. The high cost of investment in technology helps drive the mergers and 

consolidations. The non-bank competitors have invested heavily in technology and banks 

must invest j&as much, ifnot more, in order to compete and survive. This investment 

requires a larger capital base, and one way to create this base is through consolidation. 

2. Our largest U.S. banks are still small compared tot the other banks in the world, 

which are comprised of the Japanese, German and French banks The U.S. is rapidly 

becoming a global player and world trader. Our banks must be large enough to provide 

the financing and capital necessary for our businesses to compete world-wide. 

3. Because there is very little overlap in this merger concerning the consumer, the 

consumer need and convenience should be satisfied. Branch banking has changed 

dramatically in the past five years because of ATM usage, banking by phone, computer 

banking and banking by mail. The consumer has dictated this shift in the delivery system 

of banks, The consumer has a wide choice and availability of financial institutions from 

which to chose. As I said earlier, the competition is fierce. This transaction should 
enhance the service and products available to the customers of the new bank. This is truly 

an interstate bank merger as contemplated by the federal Riegle-Neal Interstate Banking 

and Branching and Efficiency Act of 1994, which Congress passed, with the law 

becoming effective September 29,1994. As a result, the consumer will be the benefactor 

of one of the few, real interstate banks in our country 

Considering the other aspects of this proposed acquisition, both companies are 

financially strong, as indicated by their financial statements, capital and operating ratios 

and market capitalizations 

If this transaction is approved by the Federal Reserve Board and, in my opinion it 

should be, then a nationwide I?anchise will be created which has the potential to deliver 

financial service to millions upon millions of families and businesses, 

Thank you for allowing me to testify and I will be pleased to answer any questions 
, 

TESTIMONY OF 

CRAIG COLLETTE 

AT THE HEARING OF THE FEDERAL RESERVE BANK OF 

SAN FRANCISCO ON 

PLANNED MERGER OF NATIONSBANK AND BANK OF AMERICA 

JULY IO,1998 

SAN FRANCISCO 

CRAIG COLLETTE 

PRESIDENT, 

MARATHON NATIONAL BANK, LOS ANGELES 

AND MEMBER, CALIFORNIA INDEPENDENT BANKERS 

BOARD OF DIRECTORS 
, 

Thank you for the opportunity of addressing this very important topic before the Federal Reserve Bank of 

San Francisco. My name is Craig Collette, and I a member of the Board of Directors of the California 

Independent Bankers and am President of Marathon National Bank, a $75 million asset bank located on the 

West side of Los Angeles. As an independent banker with 33 years of experience, I would like to give you my 

views on the impact of this gigantic merger of Nationsbank and Bank of America. 

I am speaking this morning on behalf of the California Independent Bankers which represents some 200 

banks throughout the state. 

Let me first address you as a concerned citizen of our state. When legislation was debated in 

Sacramento three years ago which enabled this kind of merger, the California Independent Bankers raised an 

important issue. What will the tax impact be of permitting out of state institutions to own large CA banks and 

shift their headquarlers out of state? Little attention was given this critical question. As a concerned taxpayer in 

this state, I would like to raise the issue again and I would like to see some estimates or projections of what this 

merger will mean to CA taxpayers when the headquarters of the combined institutions shifts to Charlotte, NC. 

All of CA’s three largest financial institutions are now owned by out of state entities. 

As a community bank president I have additional views. 

The US, with the passage of the Riegle-Neal bill, is moving from a diversified financial system to one 

characterized by a lopsided barbell with just a few very large banks at one end and a large number of 

independent banks at the other. To quote Hugh McCall, chief executive of Nationsbank, US banking will be “...a 

barbell-shaped industry with a dozen or half-dozen very large players on one end and four or five thousands 

boutiques on the other.” On this issue we agree. But, what are the implications of such a structure? 

Nationsbank and Bank of America’s merger at $60 billion is the largest between two American banks. The bank 

created by this merger will have 8.2% of the nations deposits--dangerously close to the 10% limit set by the 

Riegle-Neal bill. In a country of our size this is an enormous concentration of economic, financial and political 

power. An Ironically this very merger will weaken California’s voice in the US Congress. The interest of Hugh 

McCall will not parallel the interest of California. 

Unfortunately, this trend toward mega mergers will probably continue given the overvalued asset base 

our own stock market has created. The trend toward mega mergers, and this includes this merger, is not 

healthy for Main Street where I come from, it is very risky for Wail Street, and it is bad for the Federal Reserve 

and other regulators who will have to bail out these mega giants when they are mismanaged, over speculate or 

reach too far in risk taking. These banks are the new super sized “too big to fail” varieties. 

The evidence shows that increased concentration in the banking industry has not benefitted bank 

customers. The economies of scale that supposedly justify large bank mergers either do not materialize or are 

not passed on to customers. In addition, large interbank mergers reduce competition in ATM network markets 

as well as in credit card markets. Consider the following: 

A. Larger banks charge higher fees, According to Bank Rate Monitor, none of the top 50 banks in the 

U.S. offer the least expensive checking accounts. In fact, those offering the mast expensiu&~accQmts 

are banks involved in the latest mega mergers: Citibank and Nationsbank. The best deals are offered by 

smaller regional and community banks. And a 1997 study found a widening gap between large and small bank 

fees. 

0. A Federal Reserve study found the average fees charged by multi state banks are significantly higher 

than those charged by single-state banks, even accounting for location and other factors that might explain the 

differences. 

1 
C. Bank mergers have an adverse effect on consumer deposit pricing. A Boston Federal Reserve 

Bank study of 499 bank mergers found the combined banks lowered interest rates paid on deposits regardless 

of the amount of competition in the market. 

D. Economies of scale? The evidence suggests that the optimal size for a bank in terms of economies of 

scale, profitability and efficiency is between $100 million and $1 billion, quite a bit smaller than the $300 to $600 

billion behemoths that will be created from the latest mergers. And a Harvard study showed that instances of 

improved operating results after a merger weredueptimarily M-ricing, not economies of scale, 

suggesting the use of increased market power to raise prices. Given sufficient market power, large banks could 

price smaller competitors out of the market with below market rate loans or above market rate deposits. 

E. Small business lending receives short shrift in a world of ever-larger banks. Generally, the 

percentage of small business lending is inversely proportional to bank size. And mergers involving small banks 

tend to increase small business lending while mergers of large banks tend to reduce it. 

F. Large interbank mergers will also have negative effects on competition in ATM network markets. 

ATM network mergers typically follow big bank mergers. And the current merger mania is paving the way for an 

oligopolistic ATM network market owned by a handful of the nation’s largest banks. Essentially, these banks 

control the pricing, policies and functionality of the nation’s ATM networks. Given this control, large banks could 

limit access for community banks and their customers by imposing anti-competitive and discriminatory pricing, 

membership requirements, operating rules or technological barriers. Access at a fair price to ATM and other 

electronic financial services networks is critical for community banks to insure their customers also have fairly 

and competitively priced access to these networks to transact their banking business. 

G. Large bank mergers are creating an oligopoly of credit card issuers led by Citicorp, Bane One and 

Nationsbank. Today, under the Visa or MasterCard joint venture umbrella, thousands of community banks are 

issuers of credit and debit cards, set their own pricing and terms, and have the national and worldwide 

acceptance essential for their card viability. Unfortunately, we believe that increasingly the large banks will 

promote their own brands to the detriment of the Visa or MasterCard brand. And as the Visa and Mastercard 

brand names are undermined or destroyed, this would be to the detriment of competition and to thousands of 

community financial institutions and their customers. We will be back in a tightly controlled card environment 

detrimental to both consumers and small merchants. 

In conclusion, as an independent bank president, I am fully aware that in the beginning, community 

banks will prosper from the fallout of customers from big bank mergers. After these giants consolidate however, 

there will no longer be a fair and equitable competitive environment for independent banks in the areas I have 

pointed out in my testimony. Bank customers and small business will suffer as a result. 

2 
,._ 1 

Expanded remarks of Craig Collette’s testimony before the Federal Reserve Bank of San 

Francisco on planned merger of NationsBank and Bank of America, July IO, 1998. 

Increased Financial Concentration Means Less Competition 

Effect on Prices, Small Business Lending and Economies of Scale 

We should examine empirically the economic impacts of recently-consummated 

interbank mergers. What have been their real effects, on access to banking services by 

consumers, and on convenience? What have been their observable effects on the level of fees 

and charges, and related phenomena such as minimum balance requirements? Have fees 

gone down and services expanded, as the proponents of these mergers would have us 

believe? Or, have fees to consumers gone up as large banks have become increasingly 

bureaucratized and oblivious to the needs of their customers? 

A. Laraer Banks Charae Hiaher Fees: 

In fact, the body of evidence shows that increased concentration has not benefitted bank 

customers, who correctly perceive an across-the-board increase in fees and charges. 

According to a March 1998 Checking Account Pricing Study of 350 banks nationwide conducted 

by Bank Rate Monitor, none of the top 50 banks in the U.S. offer the least expensive checking 

account. The best deals are offered by smaller regional and community banks. Ironically, the 

banks offering the most expensive checking accounts turned out to be none other than the 

1 
banks involved in the latest round of proposed megamergers: Citibank, San Francisco; Barnett 

Bank, Tampa (merging into NationsBank); NationsBank, Tampa; and NationsBank, Orlando. 

The Federal Reserve Board’s Annual Report to the Congress on Retail Fees and 

Services of Depository Institutions (June 1997) found that the average fees charged by 

multistate banks are significantly higher than those charged by single-state banks, even 

accounting for the role of locational and other factors that might explain differences in the level 

of fees charged. And a 1997 study by the US. Public Interest Research Group, Big Banks, 

Bigger Fees, found a widening fee gap between large and small banks as fees climbed at big 

banks, while dropping at small ones. In the previous two years, fees at large banks had risen 3 

percent, but fell 2 percent at small banks. 

C. Bank Meraers have an Adverse Effect on Consumer DeDosit Pricina: 

A recent paper by two economists (Simons and Stavins) at the Federal Reserve Bank of 

Boston questions whether antitrust enforcement has been sufficiently vigorous since mergers 

have an adverse effect on consumer deposit pricing. Their study of 499 bank mergers found 

the combined banks lowered interest rates paid on deposits regardless of the amount of 

competition in the market. In short, there is reason to believe that the vaunted “efficiencies” to 

be realized by interbank mergers are not in fact being passed along to the consumers. If not to 

consumers, then to whom? 

2 
D. Economies of Scale? 

Equally important, we question whether interbank mergers really present the 

opportunities of increased efficiency that their proponents claim. One recent study indicates 

that, except below a relatively low threshold in terms of combined assets, bank mergers do not 

in fact result in the realization of increased efficiency through economies of scale-a common 

economic rationale for horizontal mergers in any industry. Several other studies (including 

those conducted by the Harvard Business School and the Federal Reserve Bank of Atlanta) 

found no significant cost savings or profit improvement (measured as return on assets or gross 

operating income) as a result of mergers. Ironically, in the Harvard Business School study of 

New England bank mergers, instances of improved operating results (such as improvement in 

net interest margin) was due primarily to higher repricing rather than economies of scale, which 

strongly suggests the use of market power to raise prices, and again raises antitrust concerns. 

Given sufficient market power, large banks could price smaller competitors out of the market 

with below market rate loans or above market rate deposits. 

We suspect that economies of scale may actually become negative once a merged 

banking entity exceeds some critical mass, because the increased costs of management and 

bureaucratization will at some point overwhelm any theoretical economies of scale. The 

evidence suggests that the optimal size for a bank in terms of economies of scale, profitability 

and efficiency is between $100 million and $1 billion. An analysis of the largest 100 banks in 

the May 1998 issue of USBanker shows that as a general rule the largest banks have poorer 

asset quality, lower profitability, less efficiency and weaker capitalization than the smaller banks 

on the list. 
E. Small Business Lendina Receives a Short Shrift in a World of Ever Laraer Banks 

The effect of interbank mergers on small business lending is also of concern, as small 

business lending receives short shrift in a banking world of ever larger entities. Generally, the 

percentage of small business lending is inversely proportional to bank size. According to 

another Federal Reserve Bank of Boston analysis (Peek and Rosengren), banks under $100 

million involved in bank mergers on average had 16 to 19 percent of their loan portfolios in 

small business loans, while banks over 51 billion involved in bank mergers had on average 6 

percent of their loan portfolios in small business loans. And interestingly, small bank acquirers 

tend to increase small business lending while large acquirers tend to reduce it. Peek and 

Rosengren note that several recent studies have found small business lending is also growing 

faster at small banks than large, and that large acquirers are less likely to expand in this sector. 

They found that banks with less than 5100 million or more than $3 billion of assets each had 

asset growth of about 24 percent from June 1993 to June 1996, yet growth in small business 

lending (loans under 51 million) was 42 percent at the small banks but only 3 percent at the 

large banks. 

In sum, the recent trends favoring consolidation in the banking industry are coupled with 

widely-held suspicions that (I) realized efficiencies are overstated or non-existent, and/or (ii) the 

benefits of such efficiencies as may be realized are not being shared with bank customers, and 

(iii) increased market power is used to raise prices. 

4 
Effect on ATM Network and Credit Card Markets 

F. ATM Network Markets: 

A key concern in large interbank mergers, and one that does not get the attention it 

warrants, is the effect on ATM networks. Market concentrations resulting from bank mergers 

and acquisitions have potential anti-competitive implications for ATM network markets 

(specifically control of ATM switches). 

ATM networks are joint ventures between competing banks. ATM networks are selfregulated, private sector entities, owned and controlled in the majority of cases by large banks, 

that set their own pricing and related operating rules subject only to the constraints imposed by 

the antitrust laws. Given the structure of ATM networks, certain anti-competitive aspects are 

inherent. For community banks, these anti-competitive aspects are more pronounced as they 

generally have little influence over network fees, bylaws or operating rules. Access at a fair 

price to ATM and other electronic financial services networks is critical for community banks to 

insure their customers also have fairly and competitively priced access to these networks to 

transact their banking business. 

Big bank mergers affect ATM networks in two ways. First, ATM network mergers 

typically follow. For example, NationsBank and First Union acquisitions in the South prompted 

the merger of the Honor and Most ATM networks (NationsBank owns 30 percent, the largest 

single share, of the Honor network). NationsBank’s purchase of Boatmen’s Bancshares of 

Missouri prompted Honor’s acquisition of the BankMate network in St. Louis formerly owned by 

5 
Mastercard and three smaller networks. Currently, First Chicago owns 30 percent of the Cash 

Station network and 25 percent of Magic Line. Bane One owns 20 percent of Electronic 

Payment Systems, Inc. which operates the MAC network. The pending Bane One/First 

Chicago merger could result in mergers of all of these networks. (Interestingly, EPSlMAC 

entered into a consent decree with the Department of Justice in 1994 agreeing to cease certain 

anti-competitive practices that caused over 1,000 banks, particularly small banks, thrifts and 

credit unions, to pay higher, noncompetitive prices for ATM transaction processing.) 

In the short term, the industry’s merger mania is rapidly paving the way for an 

oligopolistic ATM network market owned by a handful of the nation’s largest banks. Essentially, 

these banks control the pricing, policies and functionality of the nation’s ATM networks. Given 

this control, large banks could limit access for community banks and their customers by 

imposing anti-competitive and discriminatory pricing, membership requirements, operating rules 

or technological barriers. Since network policies directly affect the ability of community banks 

and other small financial institutions to offer competitive ATM services for their customers, they 

must be allowed to participate fairly in the governance of ATM networks in order to protect 

these interests. 

We note that under current law, the Federal Reserve has the authority to approve or veto 

ATM network mergers or mergers of other payments processing entities owned by banks. In 

the past, the IBAA has urged the Federal Reserve to consider the electronic banking markets 

when determining whether a proposed bank merger/acquisition passes antitrust tests. We have 

urged the Federal Reserve to ensure that its competitive impact analysis evaluates: 1) the 

market power of a network brand, 2) fees, 3) routing rules, 4) third-party processing 

requirements, and 5) other factors that could be used to disadvantage community banks. 

6 
The second way big bank mergers can effect ATM networks is that, over the long term, 

large banks could transfer their transaction processing from regional ATM networks to their inhouse operations. BankAmerica Corp. is currently the largest ATM owner, and its merger 

partner NationsBank is second. Together they control more than 15,000 machines--a number 

that is comparable to multibank shared networks such as Pulse or NYCE. The Bane One/First 

Chicago merger will result in the nation’s second largest ATM owner with almost 10,000 

machines. (By contrast, all community banks combined own fewer ATMs than 

NationsBanWBank of America.) Excess capacity could be created in existing regional electronic 

networks as large banks pull transactions out of the network as a consequence of mergers. If 

this excess capacity is not shifted to smaller financial institutions, the consumer of electronic 

payment services will have less and less choice. And the customers of community banks, 

savings and loan associations and credit unions could be forced out of electronic commerce by 

pricing and other decisions of the fewer and fewer network owners. 

G. Credit Card Markets: 

We have a major anti-competitive concern in the credit card area. Large bank mergers 

could create an oligopoly of credit card issuers led by Citicorp, Bane One and NationsBank. 

Citibank is currently the largest issuer of credit cards with 65 million cards outstanding. Bane 

One/First Chicago combined will hold the number two spot with 53 million cards. 

NationsBankIBank of America combined will have 24 million cards outstanding. Once the 

pending mergers are consummated, the top ten credit card issuers will control 72 oercent of the 

credit card market. according to Robert McKinley of RAM Research in Frederick, Md. 
Under today’s rules of the game, by using the Visa or Mastercard umbrella, thousands of 

community banks are issuers of credit and debit cards and set their own pricing and terms. 

Thousands of community banks and their credit and debit card customers can tie into the Visa 

and Mastercard brands, which confers on the cards the national and worldwide acceptance 

essential for the cards’ viability. Like ATM Networks, the two card associations, Visa and 

Mastercard are joint ventures and all competing member banks enjoy the strength of two 

brands that are recognized and accepted around the world. 

We have already heard the ad “Don’t think Visa, think Citibank Visa” (i.e., its not just a 

Visa Card, it’s a Citibank Visa Card). It is our concern that down the road the ad you hear from 

Citibank or Bane One will jettison the Visa or Mastercard brand name in favor of a credit card or 

debit product that they exclusively own and control. And with the destruction of the Visa or 

Mastercard brand names, combined with large banks’ long-term goal to destroy the FDIC 

symbol now on every bank door, enormous financial concentration to their benefit and to the 

detriment of thousands of community financial institutions and their customers will have been 

achieved. And then the consumer will suffer because we will be back in the brave new world 

where every credit card issuer charges a $35 annual fee and a 19.6 percent interest rate 

regardless of market interest rate fluctuations. And the taxpayer will suffer when the inevitable 

occurs, and a large financial conglomerate Titanic goes down. 

At best, the card brands will be systematically weakened to the detriment of smaller 

issuers forcing them out of the business because they will not have the marketing budgets to 

compensate. Historically, Visa and Mastercard have offered baseline marketing and 

enhancement packages that virtually any size member bank could take advantage of. 

Increasingly the large issuers will not be willing to support such product parity preferring instead 

8 
. 

to use their considerable influence to assure their own cards stand out. This in turn, will hinder 

cooperative brand advertising serving to obscure the message to consumers that other Visa 

and Mastercard offers are available, not just a “Citibank Visa.” 

Consumers will not only be disadvantaged by choice limits and higher pricing, some will 

find themselves “de-marketed” from the card product entirely. With increased consolidation and 

less competition, large issuers will begin to look for other ways to improve profits. For example, 

some issuers are already “de-marketing” by eliminating value-added enhancements, changing 

terms, assessing inactive fees and using other disincentives to discourage transactors, those 

consumers who pay off their balance each month to avoid finance charges. In addition to 

simply not offering the card product or raising annual fees, the grace period will be reduced or 

eliminated as the large card issuers focus on the more profitable revolvers, i.e. those who 

maintain a balance from month to month and pay finance charges, in a sort of reverse 

discrimination. In Canada today, where only a few large banks exist, most cards carry a high 

annual fee, $25 to $39, and reduced grace periods, from no grace period to just over 17 to 21 

days (Office of Consumer Affairs of Industry Canada, Feb. 1998). Revolvers on the other hand 

will be held captive with higher annual percentage rates (APRs) applied using the highest 

possible compounded calculation methods and no grace periods along with higher late fees, 

over-limit fees and risk-based pricing. 

Small merchants will also be affected. Already, the core interchange rates that form the 

basis for merchant pricing favor large merchants which are generally contracted with large 

banks. Just a few years ago, most of the large banks had bailed out of the merchant business 

leaving it fragmented and primarily in the hands of non-banks and small community banks. 

Now the big banks are back with a vengeance and have the clout to win market share. In 

9 
today’s electronic world and with linkages to other commercial services, it will become 

increasingly difficult for smaller players to compete. With large card bases, the mega banks can 

also offer special, targeted promotions that will further tie merchants and consumers forcing out 

the smaller players, primarily community banks. Once the competition is eliminated, merchants, 

especially small businesses, will have little choice but to pay whatever rates are charged. 

The California Independent Bankers (CIB) represents some 200 independent financial 

institutions throughout California and is politically active on behalf of its members in Sacramento 

and Washington DC. It is the California Affiliate of the Independent Bankers Association of 

America which has over 5,500 independent bank members nationwide. 

### 

10 
Inner City Press 

Community on the Move 

& 

Inner City Public Interest Law Center 

July 10, 1998 

MS. Polc,re5 S. Smith 

Presidir.y IOfficer 

Federal Reserve Bank of San Francisco 

101 Market Street 

San Francisco, CA 94105 

ICE: ICP'a Attached Testimony To Be Presented by the 

California Reinvestment Committee 

Dear Presiding Officers Smith, members of the Fan-1~: 

This letrrcr confirms that the California Reinvestment 

CommiLtee jis authorized and invited to present the attached 

testimony ;~t the Public Meeting on July 10, 199'6. For your 

information, our organizaLion presented CRC's testimony at 

the Pubiic Meeting on the Travelers-Citicorp proposal, held 

at the Federal Reserve sank of New York on June 25, 1998. 

We thank C%.C for returning the favor, and note t!ult we will 

be submiLLing further written comments on or beh;llf July 16, 

1998. IF you have any questions, please telephone me at 

(718) '71;<-:1540. 

Executive? director 
Inner City Press 

Community on the Move 

& 

Inner City Public Interest Law Center 

TESTIMONY OF MATTHEW LEE, INNER CI’fY PRESS/COMMUNITY 

ON THE MOVE (AND ALSO ON BEHALF OF THE NEW MEXICO 

ALI.IANCE AND BLACK CITIZENS FOR JUSTICE:, LAW AND 

ORDER), fN OPPOSITION TO THE APPLICATIONS OF 

NATLONS’BANK TO ACQULRE BANKAMERLCA & ITS SU13SIDIARlES 

FEDERAL RESERVE BANK OF SAN FRANCISCO 

JULY lo> 1998 

Good morning. Ms. Smith and other members of the panel. This is the 

testimony of Matthew Lee, Executive Director of Inner City 

PressiComrnu~mu~,~, the Move and of the Inner City Public Interest Law 

Center (together,“ICP’), which the California Reinvestment Committee has 

been kind enough to present. TCP on May 6 filed a %-page protest to this 

application, along with Black Citizen for Justice, Law and Order of Dallas, 

Texas, and the New Mexico Alliance, two of whose members, Gilbert 

Sanchez and Robert Wells, you heard from yesterday. We are opposed to 

this proposed merger, primarily due to NationsBank’s continued predatory 

and discriminatory practices through its finance companies NationsCredit and 

EquiCredit. and due to the anticompetitive and branch closing effects the 

proposed merger would have in New Mexico and in Dallas, Texas. 

NationsHank’s ill-defmcd Community Reinvestment pledge does nothing to 

address these issues -- in fact, as explained in a moment, NationsBank’s 
~~1-08-98 13:06 

failure to live up to its commitment with regard to NationsCredit calkinto 

question whether the Board could rely on NationsBank’s press release 

pledge. 

In 1996, when NationsSank announced its proposal to acquire 

Boatmens Bancshares. including its subsidiary Sunwest, the largest bank in 

New Mexico, ICP and the New Mexico Alliance filed comments with the 

Federal Reserve Board. We critiqued the lending of NationsBank and its 

higher than normal interest rate finance company, Nat:t;Cz$i and 

documented that NationsBank was referring applicantshdispr&ortionately 

African Americans and Hispanics) from its banks to NationsCredit, which 

ofl‘ers higher than normal interest rate credit, but that NationsCrcdit had no 

policy or program to refer “up” to NationsBank applicants who were entitled 

to normal interest rate credit. We showed that NationsBank has been closing 

branches in low income communities of color, and has been opening 

NationsCredit offices in these communities. The Board refused to conduct 

an examination of NationsCredit, but did ask NationsBank how many 

lawsuits were pending against NationsCredit. NationsBank submitted a 

skeletal list of IlY lawsuits then pending against NationsCredit, We showed 

that the list was incomplete -- but even if it were not, it would seem that that 

volume of litigation would trigger some examination by the Federal Reserve. 

During that protest, NationsBank’s CRA Officer was quoted in U.S. News & 

World Report to the effect that NationsCredit would institute a practice of 

referring applicants who were entitled to normal interest rate loans up to 

NationsHank’s. banks, from NationsCredit, and that this would be done by 

February 1!)97. 

2 
.Jul-08-98 13:06 

NationsBank refused thereafter to provide information about 

NationsCredil: or this promised change. In January of this year, we were 

informed by the Office of the Comptroller of the Currency that NationsCredit 

has still not instituted any “referral up” program. NationsBank has since 

confirmed this, proffering as its excuse that there has been “a lot of turn over” 

at NationsCredit. Most recently, the Federal Reserve itself asked 

NationsBank to described all current and planned referral programs between 

its banks, mortgage company and finance companies. NationsBank’s 

response hai been that everything is in flux. 

Simply put, NationsBank’s $350 billion Community Reinvestment 

commitment is not credible, since NationsBank has not lived up to its 

previous commitments. 11 is also important to note that NationsRank has 

refused to make any more specific geographic commitments, at even the state, 

much less cotmty, level. Rut the key point, to us, is that NationsRank’s 

promises of future improvements -- do not in fact take place. 

After NationsBank bought Boatmen’s and Sunwest, NationsBank 

quickly closed eight branches in New Mexico, even though there was not 

overlap between NationsBank and Sunwest: The Federal Reserve has said, in 

its NationsBank-Boatmens conditional approval order, that it would 

“monitor” NationsBank’s branch closings, but this has had little to no effect. 

More recently. after gaining approval to acquire Bamett Banks of Florida, 

NationsRartk has moved to close over 200 branches in Florida. 

In thus proposal, NationsBank and Bank of America overlap in New 

Mexico and Dallas. NationsBank has again refused to disclose how many or 

7 
.JU,-OS-96 13:06 

1 

P.07 

which branches it would close; it has also put forth a laughably low 

divestiture proposal, that would allow it to dominate and raise prices in Dallas 

and a number of New Mexico markets. NationsRank has apparently paid 

numerous groups to come and testify in its support at this public meeting, but 

the fact, as they say, are the facts: 

--NationsBank said it would institute a referral up program From 

NationsCredit to its banks by February 1997, and NationsBank DIII NOT 

DO SO. 

--This proposed merger would be anticompetitive in Dallas and numerous 

New Mexico markets, and NationsBank’s divestiture proposal is sorely 

insufficient. 

--NationsHank has refused to disclose what the actual effects of the merger 

would be, including in branch closings. 

There are other adverse issues, including the foreseeable loss of 

various Bank of America programs, ably raised by the California 

Reinvestment Committee and others. For all the reasons stated, this proposed 

merger should be denied. Thank you for your attention; we will be submitting 

further written comments by July 16, 1998. Thank you. 
,. 

.wi-08-98 13:07 p.oa 

Inner City Press 

Community on the Move 

& 

Inner City Public Interest Law Center 

ADDEh’D IJM TO 

TESTIMONY OF MATTHEW LEE, NNER CITY PRESS/COMMUNITY 

ON ‘IlIE hfOVE (AND ALSO ON BEHALF OF THE NEW MEXICO 

ALLIANCE AND BLACK CITIZENS FOR JUSTICE, LAW AND 

ORDER), IN OPPOSITION TO T-HE APPLTCATlONS OF 

NATIONSBANK TO ACQUIRE BANKAMERICA & ITS SUBSIDlARlES 

FEDERAL RESERVE BANK OF SAN FRANCISCO 

JULY 10. 1998 

On klehalf of Inner City Press/Community on ti.e Move, 

the New Nexico Alliance ("WA"), and Black Citizen:; for 

Justice, I,a~d and Order ("BCJLO") (collectively hereinbelow, 

"ICP"), this addendum analyzes the 1996 l.ending of 

NationsRank Corp.'s banks, NationsBanc Mortgage Co. i"NK") 

and EquiCr-wi,t, a higher~ than normal interest rate ler,der 

owned by NationsBank. A; demons:rated below, Na:.innsBank's 

normal irte.cest rate lenders disproportionately deny and 

exclude P.fr.ican Americans and Hispanics (protected classes 

under [he Flair 13ousing Act and the Equal Credit Opportunity 

Act), while EquiCredit targets people of color for !iiyher 

than normal interest rate credit. This makes OUL a prima 

facie case :>f pricing discrimination within NationsHank 

Corp., 2nd rlilitates for an on-site examination of 
Jul-OS-98 13:07 P-09 

EquiCredi,t and NationsCredit, and for the denial of 

NationsBank Corp.‘s acquisition applications. 

First, examples of NationsBank’s banks, jn 1996 (the 

most reccznt year for which HMDA data is publicly available): 

NationsBank of Texas, N.A., in 1996 denied 47% of mcrtgage 

loan applications from African Americans, and on?) %O> of 

applications from whites, for a denial rate dispariLy of 

2.35-n- I~, significantly higher than that of the industry as 

a wholo. AS demonstrated beloci, NationsBank’s higher than 

indust.ry average denial rate di~spari.ties for mi.nori.tiCS 

cannot b$? explained or justified by greater than average 

outreach tc minority communities. 

NationsBank of Kentucky, N.A., in 1996 denied 4:!!. of 

applications from African Americans, and only 16:; of 

applications from whites, a denial rate disparity of 2.63- 

to-l, rwch higher than other banks. 

111 ::ht Memphis MSA in 1996, NationsBank of Tennessee, 

N.A., denied 497, of applications from African Americans, 

versus o~l?y 19% of appli.cations from whites, for a de:llial 

rate dijspari~ty of 2.58-to-l, hiyher t.han the industry 

averaqf .i!: this MSA. Meanwhil.e, Nat ionsBank of Te;inessee 

had a h&her market share of loans to whites t.har. to African 

Americans ln this MSA, rebutting any claim that 

Natior::;&lnk’s bank’s denial rate disparities are excused by 

greater Than average outreach to mi,norities. NationsBirnc 

Mortgage Corp. in this MSA is no better: while also having a 

higher market share of loans to whjtes than tc African 

Ameriran:s, it has a denial rate disparity between African 

American:, and whites of 2.25-to-l. 

Nat I orwide, NationsBanc Mortgage Corp. (“NBC;” by far 

the largc?sl: of NationsBank Corp.‘:; HMDA-reporting mori.gage 

lenders; in 1996 had a higher than 2-to-1 denial rate 

disparit:! bet.ween African Americans and whites. A:; 

demonstrated below [in connecti.on / comparison’s to 

NationsRank’s EquiCredit’s 1996 lending in the same MSAs), 

NMC’s record in particular markets is much worse. For 

example, in the Dallas, Texas MSA lheadquart.ers cf 

protesLant Black Citizens for Justice, Law and Order) In 

199G, NationsBanc Mortgage denied 36% of applications from 

African Americans, and only 10% of appl.ications from whites, 

a denial rat~e disparity of 3.6to-l, much higher than the 

industry’s average in this MSA oft 1.89-to-l. Meeriwhile in 

this MSA. NaLionsBanc Mortgage had a higher mark?1 share of 

loans to whites than to African Americans - NNC’s outrageous 

6 
.l”l-o8-9El 13:07 P-10 

denial rate disparity is NOT explained by greater Lhan 

averaTe (or even average) outreach to African Anerjcans. 

In the San Antonio, TX MSA in 1996, NationsDanc 

Mortgage denied 50% of applications from African Americans 

and only 9i: of applications Prom whites, for a denial rate 

disparity of 5.56-to-l, much hj.gher than the industry 

average in this MSA of 1.57-to-l. Meanwhile in this MSA, 

NMC had a 3.5 times higher market share of loans :o whites 

than to Afr.ican Americans. In this MSA in 1996, NMC denied 

Hispanics 2. 11 times more frequently t.han whites (compared 

to an industry average i.n this MSA of 1.70-to-l), while 

having a 1.5 times higher market share of loans to whites 

than to Hispanics. Again, NMC's outrageous denial rate 

disparity is NOT explained by greater than average (or even 

average) outreach to African Americans. 

In the Austj~n, TX MSA in 1996, NMC denied 21:~ of 

applicatiol:s from Hispanics, versus only 85 of applications 

from white:, for a denial rate disparity of 2.61-:0-l, while 

making 3!>& loans to whites and only 35 to Hispxics (and 

only 20 3 African Americans), entirel,y inconsisrent with 

the demo.grdpt1ic.s of (and other lenders' lending ir!) t.his 

MSA. 

In the E: Paso-Dona Ana County (TX-NM) MSA in i996, 

NationsH,3!lc Mortgage denied 24.i of applications from 

Hispanic::;, while denying only lo? of applicatio:s from 

white:;, For a denial rate disparity of 2.4, higher than the 

industry average in this MSA (less than Z-to-l). These 

disparil..ie:; are not explained by greater than average 

outreilch tact minorities: in this MSA, hwT?c had a hiyher market 

share of loarls to whites than to Hispanics, as did 

Natiorl:;IJank of Texas, N.A.. 

111 t:t,e Washington, D.C. MSA in 1996, NationsRank, N.A. 

denied 4:!.? of applications from African Americans, and only 

19'( of applications from whites, for % denial rate di~sparity 

of 2.21, hj.gher than the industry average in this MSA (less 

than ."-tL)-1). NationsBanc Mortgage was even worse in this 

MSA: it dc?rlied African Americclns 4.2 tines more frequently 

than whil,~es, while having a 3.2 5j. market share of loans to 

whites, and only a 1.665 market share of loans Ilr~ African 

American:;. The denial rate disparities are not cxslained by 

any greater tharl average (or even average) outreach to 

people of' color. 

t * * * * 

Natlor.sCredit, despite heioq a rr.ajor mortgage and home 

equity lender, refuses to report H+lDA data. While in some 

7 
J",-oI3-98 13:07 

1 

P. 11 

markets 1CP and its affiliates are reviewing Ndtii,nsCredit's 

lendinq by recorded mortgages, and while some leqal 

newspapers report lis pendens (see, e.g., New York Law 

Journal of May 28, 1397, reporting NYC lis pcndens o? / for 

NationsCredit Home Equity Services Corp.), it is diIficult 

withwt HM3A data to conduct the type of analysis set forth 

infra as to EquiCredit. ICF maintains that NationsCredit is 

violating HMDA. Most recently, ICP has been infor~med, by a 

HUD representative, that the FRB is responsible for the 

KMDA-re;orcing (and KMDA compliance) all of BHC 

subsidiaries, and has been directed to FRB HMDA conpliance 

staff. More forthcoming (on NationsCredit/fair lending)- but 

consider the following comparison of NationsBanc Mortgage 

Corp./s normal interest rate lending versus NationsBank's 

EquiCredit's high interest rate lending, in the same MSAz 

and etates, making out a prima facie case (or raising a red 

flag) of pricing discrimination and disparate treatment 

within the current NationsBank Corporation: 

In the Albuquerque, NM in 1996, NationsBanc Morl.gaqe denied 

42i of morr:cgage applications from Hispanics, and only 14?' of 

applicatiori:; from uhites (a denial rste disparity of 3-to1). NMC originated 24 loans to whites, and only I to 

HispanIcs This comment will call loans to the protected 

class (Xispanics or African Americans] divided by ioans to 

whites the "Index."' NMC's Index in this MSA in 1'296 was 

0.292. Meanwhile in this MSA, the higher interesi rate 

EquiCrcdit originated 43 1oap.s to Hispanics, and 59 loans to 

whites -~- Index of 0.860, 2.95 times higher than NXC's. NMC 

disproportionately denies people of color; NationsEank's 

EquiCrw~~r disproportionately targets people of color for 

higher Interest rate credit. 

In the Atlanta GA ISA in 1996, NationsBanc Mortqige denied 

17% oi nwrtqage applications from African Americans, and 

only ?i. of applications from whites (a denial rate disparity 

of 2.431. NMC originated 2,211 loans to whites, ;~nd 54; to 

Africa:: Americans. NMC's Index (see supral in tt.is MSA in 

1996 was 0,245. Meanwhile in this MSA, the higher interest 

rate F:qu:.Credit originated 80 ioans to African Americans, 

and 71 loanz to whites -- Index of 1.127, 4.6 times higher 

than NK c 

In tile Augusta GA MSA in 1996, NatlonsBanc Mortgdqe detr.ied 

If):, of wrtgage applications from African Americans, and 

' The rati<> between NMC's Index and NationsBank's 

QuiCredit'3 Index, calculated for each market analyzed 

ahove, csn be viewed as / called the "Disparity :or 

Targeting~) Index". 

8 
only Ei, of applications from whites (a der.ial rate di.sparity 

of 2.36). NW originated 333 loans to whites, and only 78 to 

Africarl Americans. NMC's Index in this MSA in 1996 was 

0.234. Meanwhile in this MSA, the higher interest rate 

EquiCredit originated 19 loans to African Americans, and 14 

loans to w!lites -- Index of 1.357, 5.8 times higher than 

NMC'S. 

In the Bakersfield CA MSA in 1996, (obviously relevant to 

this proposed merger), NationsBanc Mortgage made :I0 loans to 

whites, and only one to a Hispanic, Index of O.lOOJ. 

Meanwhile, EquiCredit made four loans to Hispanics and eight 

to whites, Index of 0.500, five times higher than NMC's. 

In the Baltimore, MO MSA (in NationsBank's CR4 assessment 

area) in 1996, NationsRanc Mortgage denied 17% of mortgage 

applicati,ons from African Americans, and 1l:j of applications 

from whites (a denial rate disparity of 1.55 -- !iee infra). 

NMC originated 695 loans to whites, and only 112 to African 

Americans. NMC's Index in this MSA in 1996 was 0.161. 

Mear,whiLe in this MSA, the hiqhcr interest rate EquiCredit 

originated 174 loans to African Americans, and 171 ioans to 

whites -- Lndex oft l.Olf?, 6.3 times higher than WiC's. 

EquiCrcd~it reported the same 11%) denial rate for African 

Ameri.:an,; and whites, contrary to NMC's denial rate 

disparity r,f 1.55-to-l. 

In tht Buffalo NY Msn in 1996, NatjonsBanc originated 61 

loans to whites, and only one loan to an African American. 

NMC'S Index in this MSA in 1996 was 0.013. Meanwhile in 

this MSA, Lhe higher interest rate EquiCredit originated 52 

loans to Afri~can Americans, and 62 loans to whites -- Index 

of O.rc36 I 66.3 times higher than NMC's. 

In the Charleston SC MSA (in NationsBank's CKA assessment 

area] in 1996, NationsBanc Mortgage denied 338 of mortgage 

applications from African Americans, and only 7: of 

applicilL.ons from whites la denial rate disparity uf 3.71). 

NMC oriqinated 915 loans Lo whites, and only 63 to African 

American:;. NMC's Index in this MSA in 1996 was 0.063. 

Meanwhjic! in this MSA, the hiqher interest rate Eq::itredit 

originated 10 loan? to Africaa Americans, and 15 loans to 

whites --- Index of 0.667, 9.67 times higher than WC's, 

In the Charlotte NC MSA (in NationsBank's CR.8 assessment 

area - NatIonsBank's headquarters MSA) in 1996, NaKionsRanc 

Mortgage denied 16% of mortgage applications from Afrj.can 

Americaris, and only '7; of applications from white:; (a denial 

rate disparity of 2.29). NMc originated 2,207 loans Lo 

whites, tind nnl~y 290 to African Americans, NMC's Index in 

this MSA in 1996 was 0.135. Meanwhile in this MSk, the 

higher interest rate EquiCredit originated 53 loans to 

Y 
Jul-08-98 13:oa 

! 

P.13 

African Americans, and 83 loans to whites -- Index uf 0.639, 

4.73 times higher than NMC's. 

In the Charlottesville VA MSA (in NationsBank's Crux 

assessment area) in 1996, NationsBanc Mortgage denied 22% of 

mortgaqe applications from African Americans, and only 9% of 

applicaLions from whites (a denial rate disparity of 2.44). 

NMC originated 234 loans to whites, and only 27 'ca Airican 

Americans. hiC's Index in this MSA in 1996 was P.115. 

Meanwhile in this MSA, the higher interest rate EquiCredit 

originated 4 loarks to African Americans, and 8 loan:; to 

whites -- Index of 0.500, 4.35 times higher than NK's. 

In the Chicauo IL MSA in 1996, NationsBanc Isortgage denied 

258 of mortgage applications from Hispanics, and 1Y:' of 

applicatioxs from African Americans, and only 8* cf 

applications from whites. NMC's denial rate disparity for 

HispJnics was 3.13; for African Americans i.t was 2.35. NMC 

oriqinated 1,080 loans to whites, and only 37 to Hispanics 

and only 33 to African Americans. In this MSA in 1996, 

NMC's Index for Hispanics wax 0.034, for African Americans 

it was 0.0'31.. Meanwhile in this MSA, the higher ir:I.erest 

rate Eq:liCr,edit originated 345 loans to African Americans, 

32 to H,ixpanics, and 164 to whites -- ~Indcx for African 

Americail!i cf 2.104, 67.9 times higher than NMC's.: Inciex for 

Hispanic!; of 0.195, 5.7 times higher than NMC's. 

In the Cincinnati OH in 1996, NationsBanc Mortgage 

origii1arod i69 loans to whites, and only THREE to African 

ivneriun::; . NW's Index in this MSA in 1996 was C.0~18. 

Meanwhile in this MSA, the higher interest rate EqJiCredit 

originattxi 8 loans to African Americans, and 54 loans to 

whites --- Index of 0.148, 8.22 times higher than NMC's. 

In the Cleveland OH MSA in lYY6, NationsBanc Mortgage denied 

20% Of mortgage JppliCJtiOns from African AmeriCans, and 

only 7': of appli~cations from whites la denial rate dl,sparity 

of 2.P6). NMC originated 251 loans to whites, and only 12 to 

African Americans. NMC's Index in Lhis MSA in 1996 was 

0.048. Meanwhile in this MSA, the higher interest rate 

EquiCreciit originated 191 loans to African Americans, and 

154 loarlz to whites -- Index of 1.240, 25.8 times higher 

than NMc's. 

In the Dallas TX MSA (in NationsRank's CRA assessment Jrea) 

In 1996, as partially analyzed supra, NationsRanc Mortgage 

denied ?f..!. of mortgage appiications from Africa!1 Americans, 

and only I@:, of applications from whites (a denial rate 

disparity of 3.60). NMC originated 91'7 loans to whij.tes, and 

only 7'1 to African Americans. NMC's Index in this XSA in 

1996 was O.rlH4. Meanwhile in this MSA, the higher interesl 
rate EquiCredit originated 7 loans to African Americans, and 

13 loans Lo whites -- Index of 0.538, 6.40 times higher than 

NMC'S. 

In the Danville VA MSA (in NationsBank's CRA assessmL'1It 

area) in 1996, NationsBanc Mortgaqe denied 11% of mortgage 

applicatioils from African Americans, and only 5';, of 

applications from whites (a denial rate disparity of 2.20). 

NMC originated 50 loans to whites, and only 8 to African 

Americans. NMC's: Index in this MSA in 1996 was 0.160. 

Meanwhile in this MSA, the higher interest rate EquiCredit 

originated G loans to African Americans, and 5 loans to 

whites -- Index of 1.200, 7.5 times higher than NMC's. 

In the Dayton OH in 1996, NationsBanc Mortgage originated 

111 loans to whites, and only THREE to African Americans. 

NMC's Index in this MSA in 1996 was 0.027. Meanwhile in 

this &A, l.he higher interest rate EquiCredit originated 82 

loans to African Americans, and 151 loans to whites -- Index 

of 0.543, 20.11 times higher than NMC's. 

In the Detroit, MI MSA in 1996, NationsBanc Mortgage denied 

32% of mortgage applications from African Americans, and 

only 51 a f applications from whites (a denial rate disparity 

of 4-to-?) NMC originated 350 loans to whites, and only 12 

to African Americans. WC's Index in this MSA in 1996 was 

0.034. Meanwhile in this MSA, the higher interest rate 

EquiCredit originated 156 loans to African Americans, and 

29G lc,;a:is Lowhites -- Index @f 0.521, 15.5 times higher 

than NMC's. 

In the 

area) i 

whites, 

Fort worth TX MSA (in NationsBank's CRA assessment 

.II 1996, NationsBanc Mortgage originated 423 ioans to 

and only 17 to African Americans. NMC's Index in 

this MSI\ in 1996 was 0.040. Meanwhile in this MSA, the 

higher~ unterest rate EquiCredit originated 4 loans to 

African Americans, and 4 loaris to whites -- Index of 1.000, 

25 times higher than NMC's. 

In the Greensboro NC MSA (in NationsBank's CRA assessment 

area) jr, 1996, NationsBanc Mortgage denied 21Y, of mortgage 

applications from African Americans, and only 75; of 

applications from whites (a denial rate disparity of 3-to1). NW c>riginated 703 loans to whites, and only 122 to 

African Americans. NMC's Index j.n this MSA in 1996 was 

0.174. Meanwhile in this MSA, the higher interest rate 

EquiCredit oriqinnted 105 loans to African Americans, and 

191 loars Lo whites -- Index of 0.550, 3.16 times higher 

than NK'S. 

In the Greenville SC MSA (in NationsBank's CRA assessKent 

area) in 1996, NationsBanc Mortgage denied 27% of mortgage 

II 
appliczations from African Americans, and only 7% cf 

applications from whites (a denial rate disparity of 3.86). 

NMC originated 936 loans to whites, and only 67 to African 

Americans. NMC's Index in this MSA in 1996 Was 0.0X'. 

Meanwhile in this MSA, the higher interest rate EquiCredit 

originated 33 loans to African Americans, and 104 loans t0 

whites -- Index of 0.317, 4.4 times higher than NMC's. 

In the Hartford CT in 1996, NationsBanc Mortgaye originated 

eight l,>ans to whites, and none to African Americans. 

Meanwhile in this MS.\, the higher interest rate Equicredit 

originated 41 loans to African Americans, and 44 loans to 

white:;. 

In the Houston 'IX MSA in 1996, NationsBanc Mortgaqe denied 

179 of mortqage applications from African Americans, and 

only al :ef applications from whites. NMC's denial rate 

dispariLy' lor African Americans was 2.13. NMC originated 

603 loans to whites, and only 96 to African Americans. In 

this M:;.A in 1996, NMC'S Index was 0.160. Meanwhile in this 

MSA, th:? hiqher interest rate EquiCredit originated 9 loans 

to Afri.can Americans, and 15 to whites -- Index for African 

Ameri<:an:? of 0. 600, 3.15 times higher than NMC's. 

In the Jackson MS in 1996, NntionsBanc Mortgaqe originated 

39 loan; t.ti whites, and none to African Americans. 

Meanwhile in this MSA, the higher interest rate EyuiCcedit 

originated 52 loans to African Americans, anti 34 loans to 

whites. 

1n the Jacksonville FL MSA (in NationsBank's CRA assessment 

area.) iri 1996, NationsBhnc Mortgage denied 36?, olc mortgaqe 

applicatio!~s from African Americans, and only Y‘i of 

applications from whites (a denial rate dispari.ty of 4-toIl. NMC originated 208 loans to whites, and only five to 

African Americans. NMC's Index in this MSA in 1996 was 

0.024. Meanwhile in this MSA, the higher interest rate 

EquiCredit originated 16 loans to African Americans, and 29 

loans to whites -- Index of 0.552, 23.0 times higher than 

NMC’E. 

In the Kansas City MO MSA (in NationsBank's CRA assessment 

area) in 1996, Nationsaanc Mortgage denied 20% of mortgage 

applicd:ions from African Americans, and only 6? 3f 

appli(:;il:ions from whites la denial rate disparity of 3.33- 

to-l). NMC originated 388 loans to whites, and only four to 

African Awricans. NMC's Index in this MSA in 1996 was 

0.010. Meanwhi~le in this MSA, the higher i~nteres: rate 

EquiCredit vriqinated 25 loans to African Americans, and 60 

loans t.c whites -- Index of 0.417, 41.7 times higher than 

NMC'S. 

I2 
.3”1-08-98 13:09 

In the Los Angeles CA MSA in 1996, NationsBanc Fortqage 

originated 1,251 loans to whites, and only 126 to Hjspanics 

and only 24 to African Americans. In this MSA in 1996, 

N?K's Index for Hispanics was 0.101, for African Americans 

it was 0.019. Meanwhile in this MSA, the higher interest 

rate EquiCredit originated 26 loans to African Americans, 39 

to Hisp3:lic:s, and 24 to whites -- Index for African 

Amer~icilns Iof 1.083, 57.0 times higher than NMc's; Index for 

Hispanizzs of 1.625, 16.1 times higher than NMC's. 

In the Memphis TN MSA (in NationsBank's CRT+ Jsscssment area) 

in 1996, NationsBanc Mortgage denied 18% of mortqage 

applicaciocs from African Americans, and only 8$ of 

applications from whites (a denial rate disparity of 2.25- 

to-l). NMC originated 176 loans to whites, and only 65 to 

African Americans. NMC's Index i.n this MSA in 1996 was 

0.369. Meanwhile in this MSA, the higher inter~est rate 

EquiCredit originated 248 loans to African Americans, and 52 

loans to whites -- Index of 4.769, 12.9 times higher than 

NMC'S. 

In the Nashville TN MSA (in NationsBank's CRA assessment 

area) it> 1996, NationsBarK Mortgage derlied 20% oft mortqaye 

Jpplical:ior!s from African Americans, and only 6% of 

applications from whites (a denial rate disparity of 3.33- 

to-l). NMMC originated 1,525 loans to whites, and o:lly 712 to 

ATrlcJn mcricans. NMC's Index in this MSA in 1996 was 

0.047. Meanwhile in this MS?,, the higher interest rate 

F.quiCrrdit originated 101 loans to African IL%ericans, and 

102 loan:; to whites -- Index of 0.555, 11.9 times higher 

than NMC's. 

in the New York NY MSA in 1996, NationsBanc Mortqage 

originated 31 loans to whites, and only two to Hispanics and 

only 7 1.0 African Americans. In this MSA in 1996, NMC's 

Index for Hispanics was 0.065, for African Americans it was 

0.226. Meanwhile in this MSA, the higher interest rale 

EquiCr'cdit originated 10 loarls to African Americar:!;, 3 to 

Hispanics, and 8 to whites -- Index for African Arrericans of 

1.250, 5.5 times higher than NMC's; Index for Hisp';lnics of 

0.315, 5.8 %imes higher than NMC's. 

In the Norfolk VA MSA (in NationsBank's CP.A assessnent area) 

in 1496, NationsBanc Mortgage denied 202 of mortgaye 

applications from African Americans, and only 7!. '3 

applications from whites (a denial rate disparity of 2.86- 

to-l). WC originated 988 loans to whites, and only 100 to 

African Americans. NMC's Index in this MSA in 1996 was 

O.lCJl. Meanwhile in this MSA, the higher interest rate 

EquiCr,edit originat~ed 4: loans to African Americans, and 21 

13 
loans IXJ whites -- Index of 2.000, 19.8 times higher than 

NMC'S. 

In the Oakland cA MSA in 1996, NationsBanc Mortgage denied 

33% ot mortgage applications from African Americans, and 

only 15?: of applications from whites (a denial rate 

disparity fif 2.2-to-11. N?iC originated 923 loans to whites, 

and only 3i3 to African Americans. NMC's Index in this MSA 

in 1996 was 0.033. Meanwhile in this MSA, the higher 

interest rate EquiCredit originated 27 loans to African 

Americans, and 23 loans to whites -- Index of O.YG4, '29.2 

times higher than NMC's. 

In the Philadelphia PA MSA in 1996, NationsBanc Mortgage 

oriqinated 209 loans to whites, and only seven to African 

AmeGicans. In this MSA in 1996, NMC's index was C.C33. 

Meanwhile,in this MSA, the higher interest rate EquiCredit 

originated 218 loans to African Americans, and 51 to whites 

-- Index for African Americans of 1.083, 129.5 times higher 

than NMC'S. 

In the Phoenix AZ MSA in 1996, NationsSanc Mortgage 

originated 446 loans to whites, and only nine to Hispanics 

and only two to African Americar.s. In this MSA ir: 1996, 

NMC's Index for Hispanics was 0.020, for African Americans 

it was '1.004. Meanwhile in this MSA, the higher inrerest 

rate Eql:i.Credit: originated 14 loans to African Americans, 41 

to Ilizp,3nics, and 198 to whites -- Index for African 

Americar1.s cf 0.070, 1'1.5 r:imes higher than NW's; Index for 

Hispanics cf 0.207, 10.3 times higher than NMC's. 

In the Raleigh-Durham NC MSA (in NationsBank's CRT\ 

assessment area) in 1996, NationsBanc Mottqaqe denled 203 of 

mortgayf? applications from African Americans, and only 5% of 

applicaticns from whites (a denial rate disparity of 4-k1). NMC originated 944 loans to whites, and only 171 110 

African Arrericann. NMC's Index in this MSA in 1996 was 

0.139. Meanwhile in this MSA, the higher interest rate 

EquiCredit origiE.ated 28 loans to African Americar.5, and 21 

loans 1.o whites -- Index of 1.333, 7.2 times higher than 

NMC'S. 

In the Richmond VA MSA (in NationsBank's CKA asses!;ment 

<area) in 1996, NationsBanc Mortgage denied 23% of mortgage 

applications from African Americans, and only 71 of 

applications from brhites (a denial rate disparity of 3.29- 

to-l). hMC originated 1,010 1oar.s to whites, and only 198 to 

African Americans. NMC’s Index in this MSA in 1996 was 

0.196. Meanwhile in this MSA, the higher intesesL rate 

EquiCredit originated 31 loans to African Americans, and 46 

14 
loans Lrl whites -- Index of 1.978, 10.1 times higher than 

NMC's. 

In the Riverside CA MSA in 1996, NationsBanc Mortgage 

originated 113 loans to whites, and only 11 to Hispanics and 

only seven to African Americans. In this MSA in 1936, NMC's 

Index for Irispanics was 0.143, for African Americans it was 

0.059. Meanwhile in this MSA, the higher interest rate 

EquiCredit originated 14 loans to African Americans, 19 to 

Hispanics, and 44 to whites -- Index for African Americans 

of OJ18, 5.4 Limes hiyhcr Ghan NXC's; Index for Hispanics 

Oft 0.432, 3.0 times higher than NMC's.. 

In the Roanoke VA MSA (in NationsBank's CRA assessment area) 

in 1996, NationsBanc Mortgage denied 12% of mortgage 

applications from African Americans, and only S'i, or 

app.,lii:aitiulss fromwhites (a denial rate disparity of 2.4-to1). NMC originated 275 loans to whites, and only 13 to 

African Americans. NMC's Index in this MSA in 1936 Was 

0.047. Meanwhile in this MSA, the higher interest rate 

EquiCreciit origir\ated 3 loans to African American!:. and 9 

1oar.s 1.1, whites -- Index of 0.333, 7.1 times higher than 

NMC'S. 

In the Sacramento CA MSA in 1996, NationsBanc Mortgage 

original_rd 634 loans to whites, and only 24 to Hispanics and 

only pi? tc African Americans. In this MSA in 1996, NMC's 

Index for llispanics was 0.037, for African Americans it was 

0.013. Meanwhile in this MSA, the higher interest rate 

EquiCredit oriyinated 3 loans to African American:;, 4 to 

Hispanics, and 31 to whites -- Tndex for African Ame.ricans 

of 0.09', 5.1 times higher than NMC's; Index for Xispanics 

of 0.3?1, 3.5 times hiqher than PiiC's. 

In the St. Louis MO MSA (in NationsBank's CRA assessment 

area) iri 1996, NationsBanc Mortgage originated 363 loans to 

whites, and only eiyht to African Americans. NMC's Index in 

this MSA in 1996 was 0.022. Meanwhile in this M!;A, the 

higher- interest rate EquiCredit originated 191 loa:ls to 

African Americans, and 288 loans to whiles -- Index of 

0.663, SO.1 times higher than NMC's. 

In the San Diego CA MSA in 1996, NationsBanc Mortqage 

origLnatcd 522 loans to whites, and only 12 to Hispanics and 

only six tn,African Americans. In this MSA in 1936, h?K's 

Index cc.r Hispanics was 0.023, for African Americans it was 

0.011. Meanwhile in this MSA, the higher interest rate 

EquiCredit originated three loans to African Americans, 

seven tc Hispanics, and 14 to whites -- Index for African 

Americans of 0.214, 90.9 times higher than NMC's; Index for 

Hispar.ic‘s of 0.500, 22.7 times higher than NMC's. 

IS 
. 

.Ju,-08-98 13-11 

In the Santa Fe NM in 1996, NatiorlsBanc Mortgage originated 

:l6 loans t.3 whites, and only one to a Hispanic household. 

NMC's index in this MSA in 1996 was 0.063. Meallwhile in 

this MSA, the higher interest rate Equicredit originated 5 

loans to Hispanics, and 5 loans Vo whites -- Index of 1.000, 

15.9 times higher than NMc's. 

Tn the Tucson AZ MS4 in 1996, NationsBanc Mortgacje 

originated 75 loans to whites, and only two to Hispar.ics and 

only one to an African American. In this MSA in 1991,, NMC's 

Index for Hispanics was 0.027, for African Americans it was 

0.013. Meanwhile in this MSA, the higher interest. l-ate 

EquiCredit originated six loans to African Americans, 20 co 

HIspanics, and 32 to whites -- Index for African Americans 

of 0.188, 14.5 times higher than NMC'S: Index for Hispanics 

of 0.625, 23.1 times higher than NMC's. 

In the T&a OK MSA (in NationsBank's CRA assessmenl. area) 

in 1996, NztionsBanc Mortgage @riginated 124 loans to 

whites, and only one to an African American. NW's Index in 

this MSA in 1996 was 0.008. Meanwhile in this WA, the 

higher interest rate EquiCredit originated 21 1oa:ls tc 

African Americans, and 44 loaris to whites -- Index of 0.477, 

59.6 times tligher Lhan h%C's. 

In the Washinqton DC HSA (in RationsBank's CRA assessment 

area1 in 1996, partially analyzed above, NationsBanc 

Mortgag,? derlied 21" of mortgage applications froir. African 

?,meri canii, and only 5" of applications from whites (a denial 

rate di:<par1ty of 4.2-to-l). NMC originated 2,851 ln;lns to 

white:;, and only 442 to African Americans. NPlC's Index in 

this MSA in 1996 was 0.155. Meanwhile in this MSA, the 

higher interest rate EquiCrediL originated 100 loans to 

African Americans, and 48 loans to whites -- Index of 2.083, 

13.4 timas higher than NMC's. 

In the Wilmington DE MSA in 1996, NationsBanc Mortqilge 

originated 36 loans to whites, and only two to African 

Americans. NMC's Index in this MSA in 1990; was 3.056. 

Meanwhilf: in this XSA, the higher interest rate EquiCredit 

origiriatrd 54 loans to hfricar. Americans, and 77 loans to 

whites -.- Index of 0.701, 12.5 times higher than h?K':r. 

In the Wilminqton NC MSA (in NationsRank's CRA assessment 

area) ir, 1996, NationsBanG Mortgaqe oriqinated 202 loans to 

whites;, and only nine to African Americans. NMC'S Icdex 

l;;z ;(,;~~a) in thi., - MSA in 1996 was 0.045. Meanwhii~e in 

S , the h~igher interest rate EquiCredit orlqinated 4 

loans kc African Americans, and 15 loans to whites --. Tndex 

of 0.267, S.Cj times higher than NMC's. 
The above analysis makes out a prima facie case (and/or 

red flag) that NationsBank Corp., through its normal 

interest. rate lenders including NationsBanc Mortgage and 

through its higher interest rate lenders, including 

EquiCrcdit [and Nationscredit) are engaged in lending 

discrimination, including pricing discrimination. On this 

record, the FBB must conduct on-site fair lending 

examinations of EquiCredit, NationsCredit and NMC. On the 

current record, this meqa-merger proposal, which wonld 

expand NatlonsBank Corp.'5 practices, must be denied. 

ICP can be reached at (718) 716-3540. 

17 
July 10, 1998 

My name is Regina Blosser. I am board secretary for the Oceanview Merced 

Heights - Neighbors in Action. We are a public safety and neighborhood improvement 

organization in the Oceanview area of San Francisco. 

The Federal Reserve sent me a copy of the "Bank of America closure policy 

adopted by the Social Policy Corronittee of Bof A on September 14, 1993. 

I wish to read it to you, item by item, and then tell you how we perceive 

that, BofA does not follow its own closure policy. 

1. BankAmerica is obviously not corranitted to serving our community because it closed 

our only bank in the Ocean View district in March of 1997. 

2.BofA d~iLd not strive to do anything to minimize the negative impact in our community 

In fact, phone calls we make to the Comunity Development Department have not 

been returned most of the time. 

3. If there was a review and concurrence of the Corporate Community Development 

department, we were never shown any documentation of this review. We want to 

see this review. 

4 Again, we wish to see the review of the closure recorrmendations. We would like 

to see if this review includes the prediction of the negative impacts our merchants 

have experienced,such as loss of deposit and change making services and the time that 

neighbors must use in their day to go to a bank now. 

5. If there was an action plan to mitigate the adverse impacts on our community, 

we have not seen any representative or action from &&America since our branch 

closure in March of 1997. 

6. BankAmerica chose the Geneva-??ission branch to be the receiving branch. This 

branch is more than a mile away from our closed branch. Anyone dependent on public 

transportation must transfer to another bus to get there. A large freeway creates 

a barrier to access to this branch from our neighborhood. 

7. Our conrmunity, the Oceanview district of San Francisco has a racially diverse 

and working class population. In the 1950's it became majority African American. 

Income levels on average are low by San Francisco standards because we have many 

retired and affordable housing residents. 

8. We have no other banks in the Ocean View district. The BankAmerica Corporate 

Community Development department could and can easily see that. 

9. We tried to help the branch stay open. We promised the district manager that 

we would find 900 new customers for the branch if it would only stay to give Us 

a chance. We stated in many'letters from our churches and organizations thaTthe 

branch was important to us and our merchants. We gathered petitions and protested 

publicly. Again, BankAmerica's evaluation was already made and the bank ev?,luatior. 

was not going to be changed by our efforts. 

10. The only level of service offered to us was to direct us to a branch a mile 

away. 
11. We suggested security service at the ATM's and we requested a shuttle for 

disabled and seniors to the receiving branch. These ideas were disregarded by 

bank executives. 

I am submitting a map with my testimony that shows all branches located in San 

Francisco. The green circles indicate a 5 mile distance from all branches. 

Blank areas are usually industrial, park land or residential with&o cmercial 

zone. You can see that many BankAmerica branches in our neighborhood commercial 

districts are less than one mile from each other. The red area is our neighborhood. 

The yellow lines show where tanks are so numerous that the street has 3 or more 

banks per block. Neighbors by the yellow lines complain that they would like 

to have something besides banks on their cormnercial strips. You will be able 

to see that our neighborhood, when compared to other parts of the city has less 

banking service than the rest of San Francisco. 

Numerous nonprofits have come to you to state their satisfaction with these banks' 

financing of their,programs. This is fine but the only thing our neighbors and 

merchants want is a bank! We feel no desire for charitable giving. 

Supervisor Jose Medina passed a resolution unanimously at our Board of Supervisors 

that urged the Bank of America to stay or find another bank for our neighborhood. 

The BankAmerica did not comply with his resolution because we have no bank. When 

the Mayor's Office of Economic Development suggested that Sterling Bank could 

move into the vacated BankAmerica branch building, Bof A refused to remove its 

ATM's so Sterling would not move in to the building. We have tried to find a 

credit union would serve our neighbors but the American Bankers Association 

lawsuit against credit unions won at the Supreme Court level has presently 

stopped our efforts to use a credit union. 

We want to take care of ourselves. We are trying to stop the decline of our 

neighborhood commercial district. We have asked our neighbors to make contacts 

with banks to invite them to open a branch on Ocean Avenue. So far no luck. 

Perhaps if BankAmerica had followed its own c:'losure policy, our neighborhood 

would be much better off today. 
Ji~-?2-?998 15: 31 FROM BFN( rJ= MZRICR a3246 TO 76-1 P.e2 

Bank of Anterka Branch Uosuti Policy 

September 1993 

~6) Bank of America is wmmltted t&providing aax& to bankin 

8 

nicas to all members of its 

community through both physical branches and tQkS0M’d urthermore, the Bank tin 

reasonably &ive to minimize any negative impact on the community. 

c3 

Review and ooncurrenca by Corporate Community Development must be an integral part of 

Caliiomiti Retail Banking’s branch dosure decision process. . 

fP 

nce a branch has been idefied for potential ctosure, a repfZSentatiVe imm Corpo& 

Community De)!elopment will review c&we recommendations to ensure that any potM% 

negative impacts on the co unities in Its serving area am identified and indud@ ins 

subsequent consideratio & action plan to mitigate any adverse impads on the 

community or its residents must be developed and integt-zzted into the closure plan prior to 

the final dosure decision being made, and approval given by Corporate Community 

Development’s senior officer. 

0 6 Community factors to be considered when a 

@? 

posed branch closure is being evaluated 

must include; distance to the receiving branc he economic and ethnic characteristics of the 

impacted oommuntie@he presence (or lack there of) of other financial service wmpan?es in 

the closing branch’s ~serving area, pending economic developrnefl activities, the effect on 

service levels pmvided the entire community, partiatlariy low- d moderateincome 

segments of the comtiunity, and other relevant consideration % ecause each branch is 

unique, each proposed closure is evaluated on the basis of its indiidual drcumstanms and 

performance. 

/;)- /O, PflOr to closing offices, Bank of America assesses the potential im 

- p”bn, 

on its ability to 

continue offering appropriate levels of service to the local community. ‘s assessment 

inctudes taldng into consideration information and ideas obtained from members of the 

community to minimize the impact of an off& closing. 

__ 

Adopted September 14.1993 by Sodal Policy Committee 

cratirdospl 

. 

SAN FRANCISCO 

CHAMBER OF COMMERCE 

Federal Reserve Hearing 

Testimony Regarding 

BankAmericalNationsBank 

Presented by 

G. Rhea Serpan, President & CEO 

San Francisco Chamber of Commerce 

Friday, July 10, 1998 

My name is Rhea Serpan and I am the President & CEO of the San Francisco Chamber 

of Commerce. I appreciate this opportunity to speak on behalf of the Chamber in 

regards to the proposed merger of BankAmerica with NationsBank. 

Since its founding in the city in 1904, BankAmerica has been integral to the 

development of San Francisco’s business community. The bank has been a longstanding member of the Chamber of Commerce. Mr. A. P. Giannini served on our 

board of directors, and that representation continues today. BankAmerica has 

generously supported the Chamber’s many activities, including providing resources to 

business development programs and contributing both expertise and funding 

l SF Works: BankAmerica has contributed $250,000 over three years to SF 

Works, the welfare-to-work initiative created by the Chamber, Committee on 

Jobs and United Way 

l San Francisco Partnership: BankAmerica has been generous in 

contributing to economic development projects, including a multi-year 

investment in the San Francisco Partnership, a public-private partnership 
2 

launched by the Chamber to attract and retain business and jobs in San 

Francisco. 

. BASHOF, Business Arts Council and LSF: Bar&America has been a 

strong supporter and contributor to the BASHOF Youth Fund, Business Arts 

Council, Business Volunteers for the Arts and Leadership San Francisco. 

Throughout its history BankAmerica has been an involved and responsible 

corporate participant in the San Francisco community. 

l Small Business Investment: BankAmerica recognizes that small 

businesses are the job-creation engine of our economy, and has made a 

substantial investment in San Francisco-area firms. Currently, BankAmerica 

has small business loan commitments in the Bay Area that total $708 million. 

(Counties include Alameda, Contra Costa, Marin, San Francisco, San Mateo 

and Santa Clara.) 

. Affordable Housing: Since 1990, the bank has loaned $235.5 million to 

support construction of 4,500 affordable housing units in the region. 

. Charitable Giving: BankAmerica has contributed $14 million in the past 

three years to the arts, education and health and human services, including 

$5 million in support of the United Way of the Bay Area. 

The Chamber fully expects BankAmerica to continue to play an important 

leadership role in our community. We believe that as their business grows, and it will, 

their corporate involvement will expand. 

Bar&America’s merger with NationsBank, along with the announced merger of 

Wells Fargo Bank with Northwest Bank, will reaffirm San Francisco as a national and 

global banking center. BankAmerica is expected to fully participate in our region’s 

growth and to benefit from the strategic advantages of doing business in San Francisco. 
-. 

San Francisco is the center of a strong and growing Bay Area economy. It is the 

gateway to the Asian marketplace and the place where Silicon Valley does its banking. 

While there will undoubtedly be some job dislocation, new job opportunities will 

be created as a result of this merger. It is, of course, too early to estimate with any 

accuracy what the net effect might be on jobs, but the combined strengths of the two 

banks creates the potential for job growth that may not have been otherwise possible. It 

is significant that the combined bank’s corporate and investment banking headquarters 

will be in San Francisco. 

The Chamber is proud of the strengths of our community and confident in the 

continued growth of our economy. We strongly believe BankAmerica will continue to be 

a major contributor to both. 

# # # 
July 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Att”: Joy Hoffman” Molloy, Community Affairs Oft&r 

Ladies and Gentleme& The Arizona Hispanic Chamber of Commerce is pleased to have the opportunity to testify on behalfof the 

proposed Bank of AnxricaINationsBank merger. In a” em of decreasing public assistance to individuals of low and moderate income 

and small, women or minority owned businesses, banks. with the encouragement of the Community Reinvestment Act and the 

conscience of its board members, are a major source of hope to those who dream of home or small business owwship. Institutions 

such as Bank of America have been a source, both directly and indirectly, of credit and capital to those who lack access to 

conventional financial services through innovative products and community partnerships. The current industry trend of bank 

consolidation poses serious questions for those of us who work with financial institutions in a” effort to encourage investment, 

leveraging financing and creation or preservation of jobs in less affluent communities. However, OUT experience with Bank of 

Anwica has led us to conclude that the proposed merger will result in a contimution and/or expansion of the bank’s commitment to 

sewing poor and diverse communities. 

Bank of America has been a” active member and strong corporate partner of the Arizona Hispanic Chanlber of Commerce since 1980. 

In addition, it was a founding member of the Los Amigos de AHCC, a corporate advisory group that provides both financial and 

business value to the AHCC and its small business members. Bank of Plmerica’s recognition, understanding and commitment to the 

growing Hispanic market is borne out in two key areas for AHCC: I) DATOS, Focus on Arizona’s Hispanic Market, a” annual 

publication and presentation of AHCC, with the Ba”k as prwnier sponsor; and 2) Minority Business Development, the Bank has 

committed both financial and technical assistance to the mission of our Greater Phoenix Minority Business Development Center. 

Also, a member of the bank staff serves on our Board of Directors a”d its bank officers and statT regularly participate in AHCC 

business seminars, host networking mixers to highlight procurement opporhmities and scwz as speakers in OUT business education 

series: NxLevel and Su Plan de Negocio. 

Bank of America has also demonstrated a comtitment to diversity in the boardroom, at all levels of management and in a unique 

bilingual customer service, CuentaTel. Through partnerships with organizations like others and ours, it supports training to 

consumers, business owners and others who play a promising and important role in developing the social and economic fabric of 

America. Most in~ponantly to AHCC, the merger presents new oppommities for the local business community A nationwide network 

that has greater access to global financial markets is consistent with the growing presence of mutual customers seeking to retain and 

expand their business success. It also presents greater east of service for individual consumers whose mobility is a vltal patt of a” 

expanding economy. 

AHCC expects the activities previously mentioned to continue after the merger of the hvo i”stih3ions. I want to reiterate that based 

on experience. we feel confident that the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively serve the needs of a diverse customer base, both large and small. 

Personally, my husband and I have been Bank of America custonlers since it assumed responsibility for the former Western Savings & 

Loan Association/Security Pacific institutions. That transition convinced nle that it is possible to sun-ive and thrive from change at 

Bank of Anwica while maintaining a high level of customer service. 

l-hank you. 

2400 North Central Avenue, Suite 303 s Phoenix, Arizona 85004 l (602) 252-l 101 l Fax (6021 252-6110 
I 

ARIZONA 

HISPANIC 

CHAXfHER OF COMWKCE 

July 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Attn: Joy Hoffmann Molloy, Community Affairs Ofticer 

Ladies and Gentlemen The Arizona Hispanic Chamtxr of Commerce is pleased to have the opportunity to testify on behalfof the 

proposed Bank of Ama-ica!NationsBank merger. In an em of decreasing public assistance to individuals of low and moderate income 

and small, women or minority owned businesses, banks, with the encouragement of the Community Reinvestment Act and the 

conscience of its board members, are a major source of hope to those who dream of home or small business ownership. Institutions 

such as Bank of America have been a source, both directly and indirectly, of credit and capital to those who lack access to 

conventional financial services through innovative products and community partnerships. The current industry trend of bank 

consolidation poses serious questions for those of us who work witi financial institutions in an effort to encourage investment, 

leveraging financing and creation or preservation ofjobs in less affluent communities. However, our experience with Bank of 

America has led us to conclude that the proposed merger will result in a contiouation and/or expansion of the bank’s commitment to 

serving poor and diverse communities. 

Bank of America has been an active member and strong corporate partner of the Ariiona Hispanic Chamber of Commerce since 1980, 

In addition, it was a founding member of the LosAmigos de AHCC, a corporate advisory group that provides both financial and 

business value lo the AHCC and its small business members. Bank of America’s recognition, understanding and commitment lo the 

growing Hispanic market is borne out in two key areas for AHCC: 1) DATOS, Focus on Arizona’s Hispanic Market, an annual 

publication and presentation of AHCC, with the Bank as premier sponsor: and 2) Minority Business Development, the Bank has 

committed both financial and technical assistance 10 the mission of our Greater Phoenix Minority Business Development Center. 

Also, a member of the bank staff serves on OUT Board of Directors and its bank officers and staff regularly panicipate in AHCC 

business seminars, host networking mixers to highlight procurement opportunities and serve as speakers in OUT business education 

series: NxLevel and Su Plan de Negocio. 

Bank of America has also demonstrated a commitment to diversity in the boardroom, at all levels of management and in a unique 

bilingual customer service, CuentaTel. Through partnerships with organizations like others and ours, it supports training to 

consumers. business owners and others who play a promising and important role in developing the social and economic fabric of 

America. Most importantly to AHCC, the merger presents new opportunities for the local business community. A nationwide network 

that has greater access lo global financial markets is consistent with the growing presence of mutual customers seeking to retain and 

expand their business success. It also presents greater ease of service for individual consumers whose mobility is a vital part of an 

expanding economy. 

AHCC expects the activities previously mentioned to continue after the merger of the two institutions. I want to reiterate that based 

on experience. we feel confident that the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively serve the needs of a diverse customer base. both large and small 

Personally, my husband and I have been Bank of America customers since it assumed responsibility for the former Western Savings & 

Loan AssociationiSecmity Pacific institutions. That transition convinced me that it is possible to survive and thrive from change ac 

Bank of America while maintaining a high level of customer service. 

Thank you 

2400 North Central Avenue. Suite 303 l Phoenix. Arizona 85004 l (602) 252-1101 . FAX (602) 252~b:l’J 


AKIZONA 

HISPANIC 

July 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Attn: Joy Hoffmann Molloy, Community Affairs Offker 

Ladies and Gentleme& The Arizona Hispanic Chamber of Commerce is pleased to have the opportunity to testify on behalf of the 

proposed Bank of America/NationsBank merger. In an era of decreasing public assistance to individuals of low and moderate income 

and small, women or minority owned businesses, banks, with the encouragement of the Community Reinvestment Act and the 

conscience of its board members, are a major source of hope to those who dream of home or small business ownership. Institutions 

such as Bank of America have been a source, both directly and indirectly, of credit and capital to those who lack access to 

conventional financial services through innovative products and community partnerships The current industry trend of bank 

consolidation poses serious questions for those of us who work with financial institutions in an effort to encourage investment, 

leveraging, financing and creation or preservation of jobs in less aflluent communities. However, our experience with Bank of 

America has led us to conclude that the proposed merger will result in a continuation and/or expansion of the bank’s commitment to 

senmg poor and diverse communities. 

Bank of America has been an active member and strong corporate partner of the Ariiona Hispanic Chamber of Commerce since 1980 

In addition, it was a founding member of the Los Amigos de AHCC, a corporate advisory group that provides both financial and 

business value to the AHCC and its small business members. Bank of America’s recognition, understanding and commitment to the 

growing Hispanic market is borne out in two key areas for AHCC: 1) DATOS, Focus on Arizona’s Hispanic Market, an annual 

publication and presentation of AHCC, with the Bank as premier sponsor; and 2) Minority Business Development. the Bank has 

committed both financial and technical assistance to the mission of ou Greater Phoenix Minority Business Development Center. 

Also. a member of the bank stafT serves on our Board of Directors and its bank ofticers and staE regularly participate in AHCC 

business seminars. host nehvorking mixers to highlight procurement opportunities and serve as speakers in OUT business education 

series: N.xLevel and Su Plan de Negocio. 

Bank of America has also demonstrated a commihnent to diversity in the boardroom, at all levels of management and in a unique 

bilingual customer service, CuentaTel. Through pirtnerships with organizations like others and ours, it supports training to 

consumers. business owners and others who play a promising and important role in developing the social and economic fabric of 

America. Most importantly to AHCC, the merger presents new opportunities for the local business community. A nationwide nehvork 

that has mater access to global financial markets is consistent with the growing presence of mutual customers seeking to retain and 

expand their business success. It also presents greater ease of service for individual consumers whose mobility is a vital pal of an 

expanding economy. 

AHCC expects the activities previously mentioned to continue after the merger of the two institutions. I want to reiterate that based 

on experience, we feel confident that the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively save the needs of a diverse customer base, both large and small. 

Personally. my husband and I have been Bank of America customers since it assumed responsibility for the former Western Savings & 

Loan Association/Security Pacific institutions. That transition convinced me that it is possible to survive and thrive from change at 

Bank of America while maintaining a high level of customer service. 

Thank you 

2400 North Central Avenue. Suite 303 l Phoenix, Arizona 85004 l (602) 252-1101 . FAX (602) 252~6.1 10 
,’ 

ARIZONA 

HISPANIC 

CHA\IREK OF COUMERCE 

July 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Att”: Joy Hoffman” Molloy, Community Affairs Off&r 

Ladies and Gentlemen, The Arizona Hispanic Chamber of Commerce is pleased to have the opportunity to testify on behalf of the 

proposed Bank of AmericaMationsBank merger. In an era of decreasing public assistance to individuals of low and moderate income 

and small, women or minority owned businesses, banks, with the encouragement of the Community Reinvestment Act and the 

conscience of its board members, are a major source of hope to those who dream of home or small business ownership. Institutions 

such as Bank of America have been a source, both directly and indirectly, of credit and capital to those who lack access to 

conventional financial services through innovative products and community partnerships. The cUrrent indusm trend of bank 

consolidation poses serious questions for those of us who work with financial institutions in a” effort to encourage investment, 

leveraging financing and creation or preservation ofjobs in less afiluent conmmnities. However, OUT experience with Bank of 

America has led us to conclude that the proposed merger will result in a continuation and/or expansion of the bank’s commitment to 

sening poor and diverse communities. 

Bank of Anlerica has ken an active member and strong corporate partner of the Arizona Hispanic Chamber of Commerce since 1980. 

I” addition it was a founding member of the LosAnri~os de AHCC, a corporate a&isor) group that provides both financial and 

business value to the AHCC and its small business members. Bank of America’s recognition, understanding and commitment to the 

growing Hispanic market is borne cmt in two key areas for AHCC: 1) DATOS, Focus on Arizona’s Hispanic Market, a” annual 

publication and presentation of AHCC, with the Bank as prenGer sponsor; and 2) Minority Business Development. the Bank has 

committed both financial and technical assistance to the mission of our Greater Phoenix Minor& Business Development Center. 

Also. a member of the bank staff serves on our Board of Directors and its bank officers and statT regularly participate in AHCC 

business seminars, host networking tiers to highlight procurement opportunities and serve as speakers in OUT business education 

series: NxLevel and Su Plan de Negocio. 

Bank of America has also demonstrated a commitment to diversity in the boardroom, at all levels of management and in a unique 

bilingual customer service, CuentaTel. Through partnerships with organizations like others and ours, it supports training to 

consumers, business owners and others who play a promising and important role in developing the social and economic fabric of 

Anwica. Most importantly to AHCC, the merger presents new opportunities for the local business community A nationwide nehvork 

that has greater access to global financial markets is consistent with the growing presence of mutual customers seeking to retain and 

expand their business success. It also presents greater ease of service for individual consumers whose mobility is a vital part of an 

expanding economy. 

AHCC expects the activities previously mentioned to continue after the merger of the two institutions. I want to reiterate that based 

on experience, we feel confident that the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively serve the needs of a diverse customer base, both large and small 

Personally, my husband and I have been Bank of America customers since it assumed responsibility for the former Western Savings & 

Loan Association/Security Pacific institutions. That transition convinced me that it is possible to survive and thrive from change at 

Bank of America while maintaining a high level of customer service. 

Thank you. 

1400 North Central Avenue. Suite 303 . Phoenix. Arizona 85004 l (602) 252-1101 . FAX (602) 252-01~13 
AKIZONA 

HISPANIC 

July 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Att”: Joy Hoffman” Molloy, Community Affairs Officer 

Ladies and Gentlemen, The Arizona Hispanic Chamber of Commerce is pleased to have the opportunity to test@ on behalf of the 

proposed Bank of AmericaMationsBank merger. In a” era of decreasing public assistance to individuals of low and moderate income 

and small, women or minority owned businesses, banks, with the encouragement of the Community Reinvestment Act and the 

conscience of its board members, are a major source of hope to those who dream of home or small business ownership. Institutions 

such as Bank of America have been a source, both directly and indirectly, of credit and capital to those who lack access to 

conventional financial services through innovative products and community partnerships. The current industry trend of bank 

consolidation poses serious questions for those of us who work with financial institutions in a” effort to encourage investment, 

leveraging financing and creation or preservation of jobs in less afIl”ent communities. However, OUT experience with Bank of 

America has led us to conclude that the proposed merger w+ll result in a continuation and/or elrpansion of the bank’s commitment to 

sening poor and diverse communities. 

Bank of America has been an active member and strong corporate partner of the Arizona Hispanic Chanlber of Commerce since 1980 

In addition, it was a founding member of the LosAm@x de AHCC, a corporate advisory group that provides both financial and 

business value to the AHCC and its small business members. Bank of America’s recognition. understanding and commitment to the 

growing Hispanic market is borne out in two key areas for AHCC: 1) DATOS, Focus on Arizona’s Hispanic Market, a” annual 

publication and presentation of AHCC, with the Bank as prenlier sponsor; and 2) Minority Business Development, the Bank has 

comtitted both financial and technical assistance to the mission of our Greater Phoenix Minority Business Development Center. 

Also. a member of the bank staff serves on our Board of Directors and its bank officers and staff regularly participate in AHCC 

business seminars, host networking misers to highlight procurement opportunities and serve as speakers in OUT business education 

series: NsLevel and Su Plan de Negocio. 

Bank of America has also demonstrated a conunitment to diversity in the boardroom, at all levzls of management and in a unique 

bilingual customer service, CuentaTel. Through partnerships with organizations like others and ours, it supports training to 

consumers, business owners and others who play a promising and important role in developing the social and economic fabric of 

America. Most importantly to AHCC, the merger presents new opportunities for the local business commonit)-. A nationwide network 

that has greater access to global financial nwrkets is consistent with the growing presence of mutual customers seeking to retain and 

expand their business success. It also presents greater ease of service for individual consumers whose mobility is a vital part of an 

expanding economy. 

AHCC expects the activities previously mentioned to continue after the merger of the hvo institutions. I want to reiterate that based 

on experience, we feel confident that the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively serve the needs of a diverse custonw base, both large and small. 

Personally, my husband and I have been Bank of America customers since it assumed responsibility for the former Western Savings & 

Loan Association/Security Pacific institutions. That transition convinced me that it is possible to survive and thrive from change at 

Bank of America while maintaining a high level of customer service. 

Thank you 

2400 North Central Avenue. Suite 303 l Phoenix, Arizona 85004 l (602) 252-1101 . FAX (602) 252.Cll’, 
ARIZONA 

HISPANIC 

Joly 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Attn: Joy Hoffman Molloy, Community Affairs Offker 

Ladies and Gentleme& The Arizona Hispanic Chamber of Commerce is pleased lo have the opportunity to testify on behalf of the 

proposed Bank of America/Natio”sBank merger. I” a” era of decreasing public assistance to individuals of IOU and moderate income 

and small, women or minority owned businesses, banks, with the encouragement of the Community Reinvestment Act and the 

conscience of its board members, are a major source of hope to those who dream of home or small business owership. Instihltions 

such as Bank of America have been a scwce, both directly and indirectly, of credit and capital to those who lack access to 

conventional facial services through innovative products and community partnerships. The current indusw trend of bank 

consolidation poses serious questions for those of us who work with financial institutions in a” effort to encourage investment, 

leveraging financing and creation or preservation of jobs in less affluent communities. However, our experience with Bank of 

America has led us to conclude that the proposed merger will result in a continuation and/or expamion of the bank’s commitment to 

sewing poor and diverse communities. 

Ba~lk of Anlerica has bee” an active melnber and strong corporate partner of the Arizona Hispanic Chamber of Comnierce since 1980 

In addition it was a founding member of the Los Amigos de AIKT. a corporate advisor group that provides both financial and 

business value to the AHCC and its small business members. Bank of Anlerica’s recognition, understanding and commitment to the 

growing Hispanic “wkct is bomc out in two key areas for AHCC: 1) DATOS. Focus on Arizona’s Hispanic Market, a” annual 

publication and preset~tation of AHCC, with the Bank as premier sponsor; and 2) Minority Business Development, the Bank has 

committed both financial and tecllnical assistance to the mission of our Greater Phoenix Minorit) Business Development Center. 

Also, a member of the bank staff serves on our Board of Directors and its bank officers and staff regularly participate in AHCC 

business seminars, host networking mixers to highlight procurement opportunities and serve as speakers in our business education 

series: N.&eve1 and Su PIan de Negocio. 

Bank of America has also demonstrated a comnGtme”t to di\-ersity in the boardroom, at all levels of management and in a unique 

bilingual customer sen-ice. CuentaTel. Through partnerships nith organizations like others and ours, it suppons h-aining to 

consumers, business owners and others who play a promising and important role in developing the social and economic fabric of 

America. Most tiponantly to AHCC, the merger presents new opportunities for the local business conummit\-. A nationwide network 

that has greater access to global financial markets is consistent with the growing presence of mutual customers seeking to retain and 

expand their business swcess. It also presents greater ease of service for individual consumers whose mobilit) is a vital part of a” 

e\panding economy. 

AHCC expects the activities previously mentioned to continue after the merger of the two institutions. I want to reiterate that based 

on experience, we feel confident that the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively sense the needs of a diverse customer base. both large and small 

Personally, my husband and I have been Bank of America customers since it assumed responsibility for the fomvx Western Savings & 

Loan Association/Security Pacitic institutions. That transition convinced me that it is possible to survive and thrive from change at 

Bank of America while “wintai”i”g a high level of customer service. 

Thank you 

2600 North Central Avenue. Suite 303 l Phoenix. A:izono 85004 . (602) 252-l 101 . FAX (602) 252-61 :C 
, . 

AKIZONA 

HISPANIC 

CH,L\~KEK Or COMMERCE 

JuIy 10, 1998 

TESTIMONY OF SANDRA L. FERNIZA, PRESIDENT & CEO, ARIZONA HISPANIC CHAMBER OF COMMERCE 

To: Federal Reserve Bank of San Francisco 

Attn: Joy Hoffmann Molloy, Community Affairs Ofiicer 

Ladies and Gentleme& The Arizona Hispanic Chamber of Commerce is pleased to have the oppxhmity to testify on behalf of the 

proposed Bank of America/NationsBank merger. In an era of decreasing public assistance to individuals of low and moderate income 

and small, women or minority owned businesses, banks, with the encouragement of the Community Reinvestment Act and the 

conscience of its board members are a major source of hope to those who &earn of home or small business ownership. Instihltions 

such as Bank of America have been a source, both directly and indirectly, of credit and capital to those who lack access to 

conventional financial services thmygh innovative products and community partnerships. The current indush). trend of bank 

consolidation poses serious questions for those of us who work with fmncial institutions in an effort to encourage investment, 

leveraging ftnancing and creation or preservation of jobs in less afnuent communities. However, our experience with Bank of 

America has led us to conclude that the proposed merger will result in a continuation andor expansion of the bank’s commitment to 

serving poor and diverse communities. 

Bank of America has been an active member and strong corporate partner of the Arizona Hispanic Chamber of Commerce since 1980 

In addition, it was a founding member of the LosAnrigos de AHCC, a corporate advisory group that provides both financial and 

business value to the AHCC and its small business members. Bank of America’s recognition, understanding and commitment to the 

growing Hispanic market is borne out in two key areas for AHCC: 1) DATOS, Focus on Arizona’s Hispanic Market, an annual 

publication and presentation of AHCC, with the Bank as premier sponsor; and 2) Minority Business Development, the Bank has 

committed both financial and technical assistance to the mission of our Greater Phoenix Minority Business Development Center. 

Also. a member of the bank staff serves on our Board of Directors and its bank officers and staff regularly pariicipate in AHCC 

business seminars, host networking mivers to highlight procurement oppommities and serve as speakers in our business education 

series: NxLevel and Su Plan de Negoc;o. 

Bank of America has also demonstrated a commitment to diversit\; in the boardroom, at alI levels of management and in a unique 

bilingual customer service, CuentaTel. Through parmerships nith organizations like others and ours, it supports training to 

consumers, business owners and others who play a promising and important role in developing the social and economic fabric of 

America Most importantly to AHCC, the merger presents new opportunities for the local business community A nationwide nehvork 

that has greater access to global fwncial markets is consistent with the growing presence of mutual customers seeking to retain and 

eqxmd their business success. It also presents greater ease of senice for individual consumers whose mobility is a vital part of an 

txpandmg economy. 

AHCC expects the activities previously mentioned to continue after the merger of the two instimtions. I want to reiterate that based 

on exzrience, we feel confident tti the bank will not only continue its outstanding community service but also seek new ways to 

efficiently and effectively serve the needs of a diverse customer base, both large and smaII 

Personally, my husband and I have been Bank of America customers since it assumed responsibility for the former Western Savings & 

Loan Association/Security Pacific institutions. That transition convinced me that it is possible to survive and thrive from change at 

Bank of America while maintaining a high level of customer senice. 

Thank you 

2600 North Central Avenue. Suite 303 . Phoenix, Ar;zona 85004 l (602) 252-1101 . FAX (602) 252-6110 
Testimony present 

J--3 

7/10/9x 

Dolores Smith, Presiding-&cer 

Bank of America-Nations Bank Merger Public Hearing 

Federal Reserve Bank of San Francisco 

IO1 Market Street 

San Francisco, California 

Presiding Officer Smith, 

Thank you for the opportunity to provide testimony at this hearing. I have asked for 

this time to describe my \.cry positive experiences working with the Bank of America 

Federal Savings Bank staff in Portland, Oregon. I am the Deputy Director in charge 

of community development for Community Action Team, a communitybased 

nonprofit, antipoverty agency sewing three rural counties in Northwest Oregon. Like 

many Community Action Agencies around the country, we provide a number of 

coordinated antipoverty programs such as Head Start, child and family development 

programs, J-ow Income Energy Assistance and homeless assistance. In the area of 

community development, we assist our communities with the development and 

rehabilitation of affordable housing. affordable home ownership, single family 

rehabilitation, and community facihties development. 

My understanding of the Community Reinvestment Act requirements is that a lender 

is expected to actively seek ways to meet the credit needs of its community. As a 

community organizer working in a rur.d area, I find that communities define 

themselves, usually at populations no larger than 10,000 persons. In our three county 

service area, two communities are xmed by n single bank based in the three counq 

arca. All other commercial banking is done with banks which serve nearly the entire 

state or, in most casts. many states. Given the re.&ties of the commercial banking 

industry in the 1990’s each ofour communities must look outside the community for 

some, or all, of its banking needs. 

While working in our communities. I have been approached by local bankers 

representing several banks. With one exception, these bank officials have understood 

very little about community development. Rather &an the offering a useful 

parmership, they have sought information and offered referral services. Bank of 

America has been different. In our community development work, no bank, IocJl or 

otherwise, has supported our commun~y development ef&wu like Bank of America 

Federal Savings Bank. 

In the last eight years, I have arranged three loans with the help of the Bank of 

America staff I have also arranged one with statewide nonprofit bank consortium and ~:z~-!il.:t:~~:i 

one with a government agency. The difference in support and service is marked. For s,:. ! !&;$. c:: <:7-: 

me, the irony of these experiences is simply brcnthcaking. I felt that I had to fight 

tooth and nail with the nonprofit and the govemment agency, to simply get good ‘x’“‘~‘~‘~ 

~z.;~J??Q3^-2 !T_; 
loans underwritten. In the case of the nonprofit and the state. I felt that my lending 

partner was seeking to underwriting the transaction in ways that reduced my agency’s 

development and operating cushions so low that it would deny us sufficient capacity 

to contiiue to our work. 

Working with the Portland Bank of America staff is an entirely different experience. 

They appear to be actively planning for out future. The Bank’s staff have encouraged 

us to take on new roles, increasing our efficiency and effectiveness. During campaigns 

to organize and develop the cap+ of other nonprofits working in my three-county 

service area, I have received the Bank’s support in the form of time, expertise and 

money. ‘IThe Bank’s staff has taken a personal interest in developing the capacity of 

my agency and me personally. This has taken the form of scholarships, supportive 

information and advice. 

I cannot speak about any of Bank of America’s CFU work except that which goes on 

in Portland. Nor do I have any experience with Nations Bank. However, I can say 

that Bank of An+a and its Portland staff have made a huge difference in our ability 

to do out work. 

James C. Tierney 

Deputy Director 
Federal Reserve Bank of San Francisco 

Bank AmericaRJationsBank Merger Hearing 

July 10, 1998 

Joann Hauger 

Community Housing Resources of Arizona 

500 East Thomas Road, Suite 300 

Phoenix, Arizona 85012 

I am executive director of Community Housing Resources of Arizona (CHRA) a Hudapproved housing counseling agency which was established in 1987 to promote fair 

housing and equal’housing opportunity for residents of Phoenix. In 1990, we expanded 

our services to include prepurchase counseling and affordable homeownership programs. 

In the 8 years since then, over 2,100 low and moderate income families have completed 

our counseling program and become homeowners and over 600 low-income and minority 

household have received downpayment assistant grants. On average, our agency puts 27 

families per month into their own home. 

In order to make the dream of homeownership a reality for lower income and minority 

households, Community Housing Resources relies heavily on the support of financial 

institutions. Over the last 6 years, Bank of America Arizona has been instrumental in our 

success by providing significant funding and management support. We sincerely hope our 

mutually beneficial relationship with the bank will continue after the merger is completed. 

Bank of America has recognized the value of prepurchase counseling in preparing lower 

income households for homeownership by contracting with CHRA to provide prepurchase 

counseling for low-income, first-time homebuyers. B of A has provided first mortgages for 

our clients and has given us generous grants to support our counseling program. These 

grants have not only provided operating funds, but have also provided the matching funds 

needed to secure government funding for downpayment assistance grants and 

homeownership counseling. 

In addition to the financial contributions, Bank of America Arizona employees, James 

Raybum, Juan Salgado and Darryl Tenenbaum have unselfishly helped and guided the 

agency by providing hundreds of hours of management service. They have all served on 

the CHRA board of directors and have provided technical assistance which ensured that 

the agency’s goals and mission have been achieved. 
Joann Hauger Testimony Page 2 

As a director since 1990, Jim Raybum has saved our organization thousands of dollars by 

providing countless hours of pro bono legal advice. 

Community Housing Resources strives to provide homeownership opportunities for 

under-served populations including persons with disabilities and ethnic minority 

households, Over 60% of our clients are Hispanic and more than one-third of ah 

counseling sessions are conducted in Spanish. Our main concern with the proposed 

merger is that our low income and minority clients will be under served by the creation of 

a much larger bank. We are, however, encouraged by recent articles describing 

NationsBank’s increased efforts to serve the growing Hispanic community, and we trust 

that those efforts will extend to all traditionally under-served communities in Arizona. 

We support the merger with the expectation that the current level of support for our 

organization, including employee involvement, will continue and that the new bank will 

provide increased homeownership opportunities for the low income and minority 

communities we serve. 
UIN CDC 

UNITED INDIAN NATIONS COMMUNITY DEVELOPMENT CORPORATION 

Federal Reserve Bank of San Francisco 

101 Market Street 

San Francisco, California 94105 

RE: Nations/Bank of America Public Meetina Testimony 

The United Indian Nations Community Development Corporation (UINCDC) was incorporated in July 

1997 as a California nonprofit, Section 501(c)(3) tax exempt corporation (ElN94-3255859). The aim of 

the UINCDC is to develop housing and employment opportunities that are true lo Native Amertcan cutture 

and values to promote the economic and social well being for Native Americans in the San Francisco Bay 

Area. UINCDC has created an urban Indian initiative to acquire and develop property on closing 

military bases and other surplus federal lands that directly connect low-income communities to 

housing, employment, and revenue generating opportunities. This initiative is a model development 

mechanism that can be replicated by urban and rural Native American organizations to mitigate negative 

impacts on our community from historical federal policies. 

The Bureau of Indian Affairs’ Relocation Programs, initiated in the early 1995s and continued until the 

early 1970s created dramatic changes in the number and charader of American Indian population in 

urban centers. As a dired result of these federal programs, more than 85,000 American Indians moved 

from reservations to urban areas and many other followed to join their extended families or find better 

employment or educational opportunities. According to the 1990 US Census, which undercounts Indian 

people overall, more than 65 percent of American Indians now live in urban areas. In addition, urban 

Indian populations have historically been excluded from federal, state and foundation funding targeted for 

Native American projects located on, or linked through the provision of a service or product to a 

reservation, rural community, or tribal government. 

The San Francisco Bay Area Native American community is one of the largest and fasted growing Indian 

populations in the country. The 1990 US Census reported more than 40,000 Indians in the Bay Area. 

Although it is one of the smallest ethnic minority groups in the area, it is the third largest concentration of 

urban Indians in the United States. The demographic and socio economic stress of the Bay Area Indian 

community reflects the history that brought Indians to this area. These conditions exasperate the 

following socioeconomic and psychological problems which face the community: 

Fastest growing urban Indian population in the country The population has increased more than 

600 percent since 1960. Following from this the Bay Area has a disproportionately large and growing 

population of young people -- approximately 40 percent under the age of 25 according to the 1990 US 

Census. Considering, suicide is the second leading cause of death for Indian adolescents, the need 

to meaningfully engage this growing population in moving towards family self-sufficiency is our highest 

priority. In order to engage these individuals we have to raise educational levels. 

Bay Area Indians have considerably lower educational attainment levels than the general population. 

In 1990, nearly one in four American Indians had not earned a high school diploma or passed the 

1320 WEBSTER STREET l OAKLAND, CALIFORNIA 

94612-3204 

510/763-3410 * FAX 510/763-3646 
- - -. 

equivalency test and only 15.2 percent completed college, half the proportion of the general population 

(30 percent). With recent changes in affirmative action policies regulation California’s public universities it 

is likely that this number will decline. Following from this, we have to be prepared for unemployment rates 

to rise and poverty to persist. 

Unemployment rates for American Indians are higher than those for other Bay Area residents. In 

1990. nine percent of the community was unemployment, as opposed to 5 percent for the general 

population, Employed Bay Area American Indians. about 20,000 in 1990, tend to occupy blue-collar 

positions, very few are managers Overall, the Bay Area American Indian population has a dramatically 

low average income. In 1990, their per capita income was $14,034 compared with $19.629 for the area 

as a whole. The proportion of American Indian families living in poverty (11 present) was nearly twice as 

high as for all Bay Area families (6percent). Additionally, more than a third of Indian households headed 

by women were living in poverty (36 percent), compared to less than 20 percent for the total population. 

A low proportion of Bay Area American Indians own property and denial rates for American Indian 

mortgage lending has risen steadily. Only about 40 percent of American Indian households owned 

homes in 1990, compared to 57 percent of all Bay Area households. Denial rates for American Indian 

mortgage lending increased from 27.0 percent in 1993 to 50.2 percent in 1996. Furthermore. many 

American Indians spend, more than 35 percent of their income on housing costs. 

Considering these statistics, it is not surprising that a three-year Indian Health Service report to Congress 

completed in 1991 found that the health status of California American Indians was far below that of 

the rest of the population. High mortally rates, substance abuse, and health risks for infants and 

children combined with a lack of health insurance to create a health care crisis. 

UINCDC has acquired and is developing three significant projects in the East Bay: 

Unity Village: a transitional housing and supportive service project at the Alameda Naval 

Air Station 

American Indian Museum and Cultural Center: a regional educational museum at the 

Oak Knoll Naval Hospital 

United Oakland ECO Park: a community driven redevelopment project for a 220.acre 

eco-industrail park with an employment and training campus at the Oakland Army Base. 

In order for UINCDC to continue to revitalize our community and our neighbors in the East Bay, we need 

to have continued access to Bank of Americas levels and range of contributions for nonprofit 

infrastructure and continued support for projects that target very low-income urban communities. The 

Bank of American has been a positive CRA force in California, institutionalizing community reinvestment 

as a business through the Community Development Bank. Considerable expertise about community 

reinvestment as a business and about the needs of California communities has come to be housed at the 

Community Development Bank. Bank of America’s Rural Initiative 2000 has targeted funding to 

reservations and rural American Indian projects bringing significant new benefits to those undeserved 

communities. A merger with Nations Bank should augment the current benefits to low-income 

communities in California and bring additional funding and range of services for urban Indian initiatives 

without reducing the current grassroots services provided by Bank of America. Thank you. 

Sincerely, 

Sally Gallegos 

Executive Director 
. 

NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE 

P.O. Box 907 l Stockton, California 95201-0907 _ 

Telephone: (209) 646-1669 

Fax: (209) 476-0725 

TESTIMONY OF 

ROBERT “ BOBBY “ BIVENS 

PRESIDENT NAACP STOCKTON BRANCH 

AND NATIONAL BOARD MEMBER 

PRESENTED BEFORE THE 

FEDERAL RESERVE BANK BOARD 

NATIONS / BANK AMERICA PUBLIC HEARING 

SAN FRANCISCO, CALIFORNIA 

JULY 9,199s 
Presiding Offtcer, Members of the Panel, my name is BobbyBivens and I am a member of the National Board of Director’s and 

President of the Stockton California Branch of the National 

Association for the Advancement of Colored People, generally 

known as the NAACP. I appreciate the opportunity to come 

before this body today to give testimony expressing concern and 

opposition for the public record regarding the proposed acquisition 

of Bank America Corporation by Nations Bank Corporation and 

to quote our Chairman of the Board of Directors the Honorable 

Julian Bond “ bank mergers need to be opposed when the banks 

do not address the specific needs of minorities and the poor”. 

The NAACP was founded in 1909 and we are the oldest civil 

rights organization in America with over 200 units in California 

and over 1700 units across this nation and in several countries 

abroad. The NAACP has a long history of fighting for civil 

rights, economic and community development and self 

sufftciency for A&an Americans, other ethnic minority groups 
and all disenfranchised people in America. While we remain 

focused on our founding principles we have in recent years taken a 

more aggressive and proactive approach to achieving economic 

and community empowerment. 

Some of our concerns are: 

l The $350 billion announcement, while an impressive sum, 

nonetheless lacks the specificity and targeted lending, service and 

investment components needed in a full community reinvestment 

commitment. More specifically, it does not address the critical 

needs of California communities. 

l The Banks have refused to make a specific and meaningful 

written commitment to California. They have verbally told me as 

a National Board Member representing the NAACP for the State 

of California and the Stockton CA. Branch and members of the 

CRC in meetings that they are allocating approximately $70 

billion to California - the same $70 billion already allocated to this 

state under 1997’s Bank of America $140 billion lending goal. In 

order words, the Banks have not committed one additional penny 

to California, the state that will be the most impacted by this 

merger, that will lose the headquarters of its largest bank and that 

will see that Bank’s successful community reinvestment program 

dismantled. 

l No written commitment to provide specific products and 

services targeted at the unique needs and priorities of California’s 

diverse regions and people. 
l There is no written commitment to establish a “floor” goal, or 

targeting, for lending in this area the Central Valley of California 

for small businesses, nor any commitment to target loans or lines 

of credit of $50,000. or less to small minority owned businesses. 

l There is no written commitment to prioritize nonprofit housing 

developers, who will keep housing developments at the greatest 

level of affordability for the longest period of time. 

l Nations Bank has a CDC which develops its own housing 

developments. The California Branches of the NAACP is 

concerned that, were it to tinction in a similar manner here in 

California, it would conflict directly with the state’s thriving 

infrastructure of non-profit housing developers. In negotiating 

meetings with the Banks, the California State Conference of the 

NAACP with CRC members have requested of the Nations Bank 

that they only do investment and lending, but no development, in 

California. Nations Bank has categorically refused to make such a 

commitment. Although the NAACP has a ongoing relationship 

with Nations Bank with our Community Development Resource 

Centers (CDRC’s) in other regions of the country, that does not 

have any impact on us in California, nor has Bar&America been 

agreeable to the establishment of a similar program in California. 

l There is no written commitment to continue Bank of America’s 

program of appointing a liaison to the community on Fair Housing 

issues. 

l There is no written commitment to establish a secondary review 

process for declined consumer loan applications from minority and 

low income census tracts. 
l There is no written commitment to develop program to provide 

venture capital to Minority Owned Businesses, especially those 

located in distressed and Rural areas. 

l There is no evidence to adopt or commit to any written goals for 

purchasing a certain percentage of the goods and services it 

consumes in California ii-om Minority Owned Vendors in 

California. 

l There is no written commitment to continue Bank of America’s 

existing agreement to 1) not close or consolidate any branch 

located in a low-income market as a result of the consolidation or 

closure of a Bank of America Branch. 

l There is no written commitment to ensure that Minority 

employees will not be disproportionately affected by consolidation 

and branch closures. 

l Bank of America’s reinvestment program known as the Bank 

America Foundation may be dismantled and may be integrated 

into the central corporate structure in Charlotte. 

l There is no written commitment to contribute a percentage of 

the Bank’s earnings, either specifically to California or even in the 

$350 billion announcement. This is out of step with every 

community reinvestment commitment has been negotiated and 

fought for by the NAACP. 

l Finally regarding the bank’s internal structure, the NAACP is 

extremly interested in the diversity goals regarding senior 

management and the governing board of directors. If the 

merger is approved and as the proposed new bank solidifies its 

diversity goals, objectives and policies, the NAACP will 
continue to be a resource and monitor the financial institutions 

internal structure envolvement. 

Regarding the proposed acquisition of Bar&America 

Corporation, the NAACP California State Conference of 

Branches, and Myself as a elected Member of the Board of 

Directors from California stand ready as resources to ensure that 

certian goals are met and matters are not overlooke, if a merger of 

the two institutions goes forward. We are extremly concerned 

about consumer protection, competition and economic expansion. 

Successful and effective mergers are to lower costs, improve 

product quality or enhance efftciences. The proposed new bank’s 

commitment to $350 billion in community development lending 

and investment over the next ten years is an indication of an 

expected enhanced delivery of services resulting from the merger. 

350 billion represents the largest community development 

commitment ever announced by a financial institution. This is an 

opportunity for organizations like the NAACP to challenge this 

bank and an opportunity for the new bank to live up to a bank’s 

chartered role as an economic leader in communities. 

Again thank you for the opportunity to appear before you today. 
National Associalion 01 Development Organizations 

444 North Capitol Street, NW, bile 630 n Washington, DC 20001 

202-624-7606 n FAX 202624-6613 

email nado@sso.org n home page www.nado.org 

TESTIMONY 

OF 

CHUCK PRINCE 

EXECUTIVE DIRECTOR 

OF THE 

SOUTHEAST IDAHO COUNCIL OF GOVERNMENTS 

POCATELLO, IDAHO 

ON BEHALF OF THE 

NATIONAL ASSOCIATION OF 

DEVELOPMENT ORGANIZATIONS (NADO) 

BEFORE THE 

FEDERAL RESERVE BANK OF SAN FRANCISCO 

ON THE PROPOSED MERGER OF 

NATIONSBANK CORPORATION AND 

BANKAMERICA CORPORATION 

JULY 9,1998 

SAN FRANCISCO, CA 
Thank you for the opportunity to testify today on the proposed merger of NationsBank 

Corporation and Bar&America Corporation. My name is Chuck Prince, and I am the, 

Executive Director of the Southeast Idaho Council of Governments and a member of 

the National Association of Development Organizations, or NADO. 

I am here today to express NADO’s conditional support for the proposed merger. 

NADO is a national association of regional development organizations serving rural and 

small metropolitan America. The association, a public interest group founded in 1967, 

provides its members with training, information, and representation, and has been a 

leader in promoting the interests of America’s frequently forgotten small towns and rural 

regions. 

Regional development organizations are multi-county planning and development 

districts that pool otherwise thin local resources across a region and are catalysts for 

cooperation between citizens and the public and private sectors. Most of America’s 

rural areas and small towns, which are home to some 77 million people, are served by 

regional development organizations. One of the most important functions of these 

organizations is managing revolving loan funds that serve the credit needs of small, 

high risk businesses that cannot obtain a loan on their own through a private 

commercial bank. Often these revolving loans funds are the only available noncommercial source of credit, so they play an important role in economic development. 

2 
‘. 

This brings me to the focus of our concerns and conditional support for the proposed 

merger. The most compelling reason we feel this merger should be approved is the 

$350 billion/ten year commitment to community development lending made by Nations 

Bank - Bank of America on May 20, 1998. Simply put, this commitment is extraordinary 

and will have a long reaching impact, both in communities served by Nations Bank - 

Bank of America and in establishing a benchmark for future bank mergers. 

However, even with the $350 billion commitment, we believe the merger should be 

approved with very specific conditions: 

1. First, that the Bank of America Community Development Bank be retained and 

expanded in both mission and function. The Community Development Bank is 

unique. Its vision statement, which reads in part: “to support community growth 

and prosperity by being the catalyst for or by forming public/private partnerships 

for funding,” has lead directly to a work program which loaned over $560 million 

for affordable housing in 1997. The Community Development Banks great 

success is partially attributable to its outreach to the non-profit housing 

development network as a pool of partners and borrowers And, recognizing that 

affordable housing lending requires specialized skills, many of the Community 

Development Banks’ 300 staff were recruited from this non-profit network. The 

NationsBank-BankAmerica Corporation $350 billion commitment includes $115 

billion for affordable housing. The only logical steward and conduit for these 

funds is the Bank of America Community Development Bank. 

3 
2. Second, using the Bank of America Community Development Banks affordable 

housing development activities as a template, the merged bank should create an 

entity dedicated solely to community economic development. Just as the 

Community Development bank has reached out to non-profit housing 

development corporations for affordable housing partnerships, this new entity 

should reach out to the community economic development network including 

regional development organizations, for business and job creation ventures. 

Only by making an organizational and structural commitment to community 

economic development will the merged banks’ actual lending and investments 

come close to matching the promises of its May 20, 1998 press release. 

3. Third, we commend the NationsBank-Bank of America $10 billion commitment to 

rural America. We ask that the purposes of this rural pool be sufficiently broad 

to include financing for community facility and infrastructure improvements. 

Many small cities, special districts and counties often find it difficult to finance 

city halls, jails, water and sewer systems, community centers and streets. 

Participation of the new Bar&America in meeting these credit needs would be a 

valued contribution in efforts to better rural America. 

4. Fourth, the merged bank has also pledged $180 billion for small business 

lending and $25 billion for economic development. To say that these are 

substantial amounts of needed capital is a gross understatement. However, we 

4 
are concerned that the lion’s share of these funds will be used for government 

insured loans. While these loans are an important tool in job creation efforts, 

they truly represent little risk to the bank and only serve a narrow spectrum of the 

needs of the small business credit continuum. In order for these funds to have 

the greatest impact we believe a portion of these funds should be targeted 

towards: 

1. 

2. 

3. 

4. 

5. 

Direct loans to higher risk borrowers including business start-ups; 

Investments in and grants to the revolving loan funds of regional 

development organizations; 

Creation of an accessible secondary market for loans made by regional 

development organizations through their revolving loans funds; 

Development of venture capital pools at regional development 

organizations and other regional and multi-state intermediaries; and 

Creation of a set-aside for small business lending and investment in rural 

and small metropolitan communities for ventures of any size. A recent 

NationsBank-Bank of America publication calls for only making loans to 

ventures creating more than 25 jobs in rural or lower and moderate 

income communities. This limitation is artificial and simply doesn’t reflect 

the reality of job creation in rural America where 3 and 4 employees 

ventures are the rule and 25 employee ventures, the major exception. 

5 
Only by adding these higher risk type activities in with the safety of government insured 

financing will the merged bank begin to approach meeting the credit needs of small 

business. 

In conclusion Mr. Chairman, NADO conditionally supports this merger. As stated at the 

outset, the $350 billion commitment to community development lending and investment 

is unprecedented. However, translating funding commitment to real impact requires a 

focused plan of action. The plan should contain: 

1. 

2. 

3. 

4. 

Retention of the Bank of America Community Development Bank; 

Creation of an equivalent to the Community Development Bank, focusing 

on community economic development; 

A vision of the community development needs of rural communities broad 

enough to include infrastructure finance; and 

An approach to small business and economic development lending that 

features a rural set-aside and a mix of both government insured and nontraditional higher risk loans and investments. 

Thank you for allowing me to speak to you today. I will be happy to answer any 

questions or provide additional information. 

6 
National Association of Development Organizations 

444 North Capitol Street, NW, Suite 630 n Washington, DC 20001 

202-624-7806 n FAX 202-624-6813 

email nado@sso.arg n home page www.nado.org 

1 i 

Training, in/ormation and representnrion /or regional deuelopmenl organizations serving small mefropolilan and rural Amrrica 
Statement of Committee on Jobs 

Federal Reserve Bank Hearing on Bank of AmericaINationsBank Merger 

July 10,199s 

Good morning, my name is Mark Mosher. I am Executive Director of the Committee on 

Jobs, a coalition of 33 of San Francisco’s largest private sector employers. 

Our organization focuses on public policy issues affecting the City’s economic vitality 

and quality-of-life. During its eight-year history, Jobs has organized corporate 

community involvement in a few key areas, including major youth hiring and welfare-towork initiatives. It is in this context that I would like to address the proposed merger and 

what we believe to be Bank of America’s post-merger commitment to San Francisco. 

In every initiative Committee on Jobs has undertaken, whether it was our effort to replace 

cuts in the federal Summer Youth Employment Training Program or the organization of 

hundreds of business volunteers through Christmas in April, Bank of America has taken a 

leadership role. The Bank has demonstrated to us that this leadership role will not 

decline in the wake of the merger. 

When the local business community came together to address the challenge of welfare 

reform, Bank of America led the way. Last year, the Bank contributed $250,000 to found 

San Francisco Works, an effort to help transition 2,000 public assistance recipients into 

self-sufficiency over the next three years. Bank of America’s involvement in this effort 

transcends checkbook philanthropy. Bank Chairman David Coulter has personally 

involved himself in the organization, participating in board meetings, loaning his staff to 

counsel San Francisco Works in current training methods and committing employment 

opportunities to program graduates. The Bank has communicated to us that its 

commitment in each of these areas will not decline after the merger. 

I value Bank of America’s role in San Francisco, and I was surprised and disappointed 

when I heard the headquarters would be moved to Charlotte. The move is definitely a 

blow to the City’s prestige. However, in practical terms, David Coulter and half of the 

merged Bank’s executive management team will remain in San Francisco, several key 

operations will remain headquartered in the City, and the deep spirit of community 

involvement fostered by the Bank’s current leadership will continue. 

We urge approval of the merger. Thank you 

ONE MARITIME PLAZA, SUITE 1201 *SAN KiANCISCO, CA 94111 telephone 4151956.9966 lax 4151956.9989 * 
United Heustntt 8 Educational Uevelettmant Ctwn 

161Y)NCkaclcRd 

T!Jcsm , AZ 85739 

July IO, 1998 

Federal Reserve Bank 

Good afternoon My name is Edward Esquibel . I Am The Executive director of Untied Housing & 

Educational Development Corporation. United housing is a non profit SOIC-3 organization Formed in 1990 in the 

state of Arizona that provides affordable housing in the Rural areas of Pima And Pinal Counties United housing is 

currently under contract with the United states Dept. ofagriculture, Rural Housing services, to operate and provide 

technical assistance under their 523 self help program This program targets families in need of safe , decent 

affordable homes Families’qualify for a housing loan from Rural Development.called the 502 direct loan program 

based on their income and need The families income cannot exceed SC% of the areas median income. Subsidy is 

awarded to families based on family size and income These families are considered low and very low based on the 

income standards 

United Housing and Educational Development Corporation (JJHEDC) is pleased to be a pannsr nith Bank of 

America’s Community Development Bank Bank of America has already established an effective partnership which 

has enabled local self-help housing organizations like ours to expand the opponunity for self-help families to achieve 

homeownership Bank of America in 1997 established It s Rural 20G0 Initiative which is addressing wral 

concerns of reaching out to markets that either no service is available or is unda served Bank of America’s rural 

2000 initiative will make available funds , to provide mortgage loens by partnering with department of agriculture, 

as well with Fannie Mae to start the 502 direct blended loan program which is being piloted through the rural 2000 

initiative The 502 direct loan program current Funding level is I billion dollars this fiscal year This Rural Initiative 

is assisting Non protit organizations with Lines ofCredit for construction loans and Infrastructure loans that will 

provide critical resources to facilitate the development ofbuilding sites for low-income families who, are willing to 

commit the time , and energy to build homes for themselves and their neighbors 

United Housing has demonstrated success in the development ofself-help housing. In Fact, since 1990, UHEDC 

has assisted I02 families in the successfUl construction oftheir homes through mutual self-help .The state of Arizona 

is currently Rank number two in the United States for providing selfhelp homeownership Under the department of 

agriculture National self help program United Housing was Natioinlly Recognized in 1996 by the Fannie Mae 

Foundation as the recipient of the Maxwell award of Excellence for the production of low income housing. At the 

same time , there are many families who are waiting for the opportunity to join with their neighbors to build better 

homes for themselves and their children One ofthe continuing obstacles we face is the difficulty of acquiring 

affordable building sites Bank of Ametica funds through the Community Development Bank has assisted UHEDC 

in the development of suitable building sites 

The opportunity of this merger can provide greater resorces to nonprofits like ourselves in partnering with the 

federal resource dollars that had been available in the past to operated programs such as the self help program The 

Bank of America / Nations bank , 350 billion dollars commitment to provide Funding resorces as I have discuss 

earlier will have a impact on rural areas markets that has been undeserved and misunderstood for years. 

Bank of America has a proven track record in effectively managing The Community Development Bank by providing 

fimds , which has created homeownership opportunities for hardworking, low-income families within OUT service 

area and throughout rural America 
< S’ 

. . . 

? : 

United housing supports the Merger between Bank of America and Nations Bank 

Thank you for the opportunity to speak on behalf ofthe fa@lies that we have sewed and United Housing 

Sincerely. 

Edward Esquibel 

Executive Director 
Good morning, 

d I am from Beaumont, Texas. I am a retired Captain for 

21 % years, I have served the citizens of Southeast Texas as 

their representative in the Texas House of Representatives. Today, I represent the Southeast 

Texas Community Development Corporation, Inc., which I serve as President. We are a 

. 01(c) (3) orgamzauon, founded in 1993. 

SETCDC currently serves the City of Beaumont, City of Port Arthur, City of Orange 

in addition to Jefferson and Hardin counties. 

SETCDC is certified as a CHDO by the Texas Department of Housing and 

Community -airs to serve rural Texas and certified as a CHDO by the Cities of 

Bbeaumont, Port Arthur, and Orange. 

In the past fide years SETCDC has completed new construction and rehab 

construction in excess of $2.2 million. SETCDC anticipates new construction of 250 new 

homes and 100 rehabs over the next three j&&s. We plan ro expand SETCDC in 

developing afFordable housing in rural Easr Texas. 

Some eight years ago, when we were reviewing the lending practices of banks in our 

community, I met Ms. Cathy Bessant of NationsBank. She came to Beaumont to work with 

us to achieve the aims of the Community Reinvestment Act. She was very cooperative and 

helpful and I am pleased to know that she will be involved in this great effort. 

Our organization has developed a business relationship with iY:ationsBank which 

includes the arrangement of permanent financing of loans for our homeowners and builders 

In this manner, we have been successful in addressing the housing and banking needs of a 

clientele that is traditionally below the regular commercial banking floor. Through our 

Homebuyer Education Program, we work with persons who are currently renters. We 

inform them, encourage them, cajole them--if necessary --spurring them to dare achieve the 

dream of homeownership. 

Virtually every one of our clients utters in disbelief at closing, “I never thought I’ll 

ever own my own home.” 

These are new homeowners. These are first- time homebuyers. These are new 

mortgages. This is new money bemg generated in our community This is private enterprise 

doing what it can do best and do much better than the government. This is removing 

people from the public dole. This is putting housing and economic development in the 
private sector-- without dependency on public funds. 

Upon learning of the proposal of NationsBank to make $350 billion available to 

address the needs of low-income and rural areas, I contacted NationsBank to discuss ways 

that we and they could partner with local officials and community leaders to plan and execute 

locally-conceived programs that will benefit the community as a whole, while concurrently 

achieving the goals of NationsBank and the Southeast Texas CDC. 

This $350 billion dollar infusion represents a pool of resources that will allow 

communities to do housing and economic development on a scale that will be both trendSetting and transforming--and if done correctly will allow a level of efficiency that can stretch 

these dollars farther. 

I have submitted a proposal to NationsBank to establish a pilot program in a small 

county in Southeast Texas. This proposal, which could be quickly implemented, calls for our 

convening the county commissioners plus the mayors and council members of each city (with 

a population of at less than lO,OOO), along with officials of HUD, the state of Texas, local 

non-profit groups and the private sector for the purpose of assisting local communities in the 

creation of a plan for housing and economic development. 

Such a procedure could be replicated anywhere and at >vill. Through SETCDC and 

other non-profits, NationsBank nil1 be able to extend its financial tentacles into hamlets 

which are presently inaccessible, thereby transforming whole communities. 

Homeownership is the cornerstone of safe, desirable neighborhoods, and therefore is 

essential to any plan to revitalize communities. People who own their own homes care about 

their streets, their properry values and their schools. They generate business, they pay taxes, 

and more often than not, they vote. By providing safe, sanitary, desirable homes to low-tomoderate income families, CHDOs work to fend off the “renter’s mentality”--with its 

emphasis on dependency, consumership and apathy-- and replace it with the “homeowner’s 

mentality” with its emphasis on independence, productivity, and involvement. 

Ladies and gentlemen, because I am so pleased to see this expression of corporate 

responsibility and goodwill and because I view this as a definitive measure to put affordable 

housing and community development firmly into the private sector-- and alvay from 

dependency on governmental handouts-- I am very pleased to support the proposal by 

NationsBanks Corporation, Charlotte, North Carolina, to acquire BankAmerica 

Corporation, San Francisco, California. 

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