Banks, Mergers, and the Affected Communities
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BANKS, MERGERS, AND THE AFFECTED COMMUNITIES FIELD HEARING BEFORE THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS SECOND SESSION DECEMBER 14, 2004 Printed for the use of the Committee on Financial Services Serial No. 108–117 ( U.S. GOVERNMENT PRINTING OFFICE 20–952 PDF WASHINGTON : 2004 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 0ct 09 2002 16:32 May 11, 2005 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 G:\DOCS\20952.TXT FIN1 PsN: MICAH HOUSE COMMITTEE ON FINANCIAL SERVICES MICHAEL G. OXLEY, Ohio, Chairman JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama MAXINE WATERS, California MICHAEL N. CASTLE, Delaware CAROLYN B. MALONEY, New York PETER T. KING, New York LUIS V. GUTIERREZ, Illinois EDWARD R. ROYCE, California NYDIA M. VELA´ ZQUEZ, New York FRANK D. LUCAS, Oklahoma MELVIN L. WATT, North Carolina ROBERT W. NEY, Ohio GARY L. ACKERMAN, New York SUE W. KELLY, New York, Vice Chair DARLENE HOOLEY, Oregon RON PAUL, Texas JULIA CARSON, Indiana PAUL E. GILLMOR, Ohio BRAD SHERMAN, California JIM RYUN, Kansas GREGORY W. MEEKS, New York STEVEN C. LATOURETTE, Ohio BARBARA LEE, California DONALD A. MANZULLO, Illinois JAY INSLEE, Washington WALTER B. JONES, JR., North Carolina DENNIS MOORE, Kansas DOUG OSE, California MICHAEL E. CAPUANO, Massachusetts JUDY BIGGERT, Illinois HAROLD E. FORD, JR., Tennessee MARK GREEN, Wisconsin RUBE´ N HINOJOSA, Texas PATRICK J. TOOMEY, Pennsylvania KEN LUCAS, Kentucky CHRISTOPHER SHAYS, Connecticut JOSEPH CROWLEY, New York JOHN B. SHADEGG, Arizona WM. LACY CLAY, Missouri VITO FOSSELLA, New York STEVE ISRAEL, New York GARY G. MILLER, California MIKE ROSS, Arkansas MELISSA A. HART, Pennsylvania CAROLYN MCCARTHY, New York SHELLEY MOORE CAPITO, West Virginia JOE BACA, California PATRICK J. TIBERI, Ohio JIM MATHESON, Utah MARK R. KENNEDY, Minnesota STEPHEN F. LYNCH, Massachusetts TOM FEENEY, Florida BRAD MILLER, North Carolina JEB HENSARLING, Texas RAHM EMANUEL, Illinois SCOTT GARRETT, New Jersey DAVID SCOTT, Georgia TIM MURPHY, Pennsylvania ARTUR DAVIS, Alabama GINNY BROWN-WAITE, Florida CHRIS BELL, Texas J. GRESHAM BARRETT, South Carolina KATHERINE HARRIS, Florida BERNARD SANDERS, Vermont RICK RENZI, Arizona JIM GERLACH, Pennsylvania ROBERT U. FOSTER, III, Staff Director (II) VerDate 0ct 09 2002 16:32 May 11, 2005 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 G:\DOCS\20952.TXT FIN1 PsN: MICAH C O N T E N T S Page Hearing held on: December 14, 2004 ........................................................................................... 1 Appendix: December 14, 2004 ........................................................................................... 75 WITNESSES TUESDAY, DECEMBER 14, 2004 Antonakes, Hon. Steven L., Commissioner of Banks, Commonwealth of Mas- sachusetts ............................................................................................................. 62 Baldwin, Irene, Executive Director, Association for Neighborhood and Hous- ing Development ................................................................................................... 11 Campanelli, Joseph P., President and Chief Operating Officer, Sovereign Bank New England Division and Vice Chairman of Sovereign Bankcorp, Inc. ......................................................................................................................... 37 Cofield, Juan, President, New England Area Conference of NAACP .................. 8 Finucane, Anne, President, Northeast Bank of America Corporation ................ 34 Flynn, Maureen, Deputy Director, Massachusetts Association of Community Development Corporations, Inc. .......................................................................... 4 Hagins, Florence, Assistant Director, Massachusetts Affordable Housing Alli- ance ....................................................................................................................... 6 Nuciforo, Hon. Andrea F. Jr., Senator, Massachusetts State House ................... 60 Quinn, Hon. John F., Representative, Massachusetts State House .................... 57 Thall, Mathew, Senior Program Director, Local Initiatives Support Corpora- tion ........................................................................................................................ 13 APPENDIX Prepared statements: Bachus, Hon. Spencer ...................................................................................... 76 Lynch, Hon. Stephen F. ................................................................................... 79 Murphy, Hon. Tim ............................................................................................ 81 Antonakes, Hon. Steven L. .............................................................................. 82 Baldwin, Irene .................................................................................................. 91 Campanelli, Joseph P. ...................................................................................... 110 Cofield, Juan ..................................................................................................... 270 Finucane, Anne ................................................................................................. 277 Flynn, Maureen ................................................................................................ 288 Hagins, Florence ............................................................................................... 307 Nuciforo, Hon. Andrea F. Jr. ........................................................................... 311 Quinn, Hon. John F. ......................................................................................... 321 Thall, Mathew ................................................................................................... 328 ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD Frank, Hon. Barney: Written questions submitted for December 14, 2004 Boston Field Hear- ing .................................................................................................................. 333 Responses to questions from Hon. Barney Frank .......................................... 335 Watt, Hon. Melvin L.: ‘‘Lending wisdom,’’ The Boston Globe, January 20, 2004 .............................. 339 ‘‘Bank of America to add 300 jobs,’’ The Boston Globe, December 11, 2004 ................................................................................................................ 340 (III) VerDate 0ct 09 2002 16:32 May 11, 2005 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 G:\DOCS\20952.TXT FIN1 PsN: MICAH IV Page Watt, Hon. Melvin L.—Continued ‘‘Bill Tightens Bank Merger Rules in State,’’ The Boston Globe, December 4, 2004 ............................................................................................................ 342 ‘‘Mergers Pinching Smaller Nonprofits,’’ The Boston Globe, November 21, 2004 ................................................................................................................ 344 ‘‘Bank of America to Cut More Jobs; Firm: Most Trims Will Come From Outside The State,’’ The Boston Globe, October 8, 2004 ............................ 347 ‘‘Hold Bank Accountable,’’ The Boston Globe, September 1, 2004 ................ 349 ‘‘Bye-Bye Big Bank, A Look At San Francisco Without Bank of America’s Headquarters Suggest Boston’s Future Without Fleetboston Isn’t Easy to Predict,’’ The Boston Globe, February 1, 2004 ....................................... 351 Nuciforo, Hon. Andrea F. Jr.: Southcoast Workforce Development Update, prepared statement ............... 354 Inner City Press/Community on the Move & Fair Finance Watch, prepared statement .............................................................................................................. 371 VerDate 0ct 09 2002 16:32 May 11, 2005 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 G:\DOCS\20952.TXT FIN1 PsN: MICAH BANKS, MERGERS, AND THE AFFECTED COMMUNITIES Tuesday, December 14, 2004 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON FINANCIAL SERVICES Washington, D.C. The committee met, pursuant to call, at 10:12 a.m., at the Fed- eral Reserve Bank of Boston, 600 Atlantic Avenue, Boston, Massa- chusetts, Hon. Spencer Bachus [presiding.] Present: Representatives Bachus, Murphy, Frank, Watt, Meeks, Lee, Capuano, Lynch. Also present was Representative Tierney. Chairman BACHUS. Good morning. The Committee on Financial Services will come to order. Today is a full Committee hearing requested by Mr. Barney Frank, Senior Ranking Member of the Committee, to examine the economic impact of large bank mergers, with particular focus on the two mergers we’ve had here in the Northeast. Gramm-Leach- Bliley have other factors contributed to me a large number of bank mergers we have seen recently. Since the mid-’40s, there’s been a decline of about 40 percent in the number of banking organizations; and the ten largest U.S. banking organizations, they’ve increased their deposit share or bank asset share from 20 percent to 46 percent by the end of last year. So there has been a tremendous consolidation in the industry. In fact, three of our banks, Bank of America, who will have a witness testify today, along with JPMorgan Chase and Citibank, are actually bumping up against the 10 percent deposit limit of Riegle-Neal.