ARCHIVES OF LEAD STORIES
January 22, 2004
Coalition pressures banks
on hiring
Jeremy Schwab
In the hectic days leading up to last week’s
Federal Reserve hearing on the Fleet/Bank of America merger, executives
at the Bank of America cut deals with key community investment
organizations to demonstrate that the bank is committed to issuing
loans in low-income neighborhoods.
Administrators at those community organizations testified favorably
about the proposed merger.
But a coalition of community groups including state Sen. Dianne
Wilkerson and the NAACP of New England are demanding that the
merger not go through until the Bank of America makes specific
commitments to hiring and contracting to people of color.
“The Bank of America did not create the disparity in our
country,” said NAACP New England President Juan Cofield.
“However, it must be part of the solution. We want its hiring
and procurement to reflect people of color in the general population
of Massachusetts.”
Fleet only issued three percent of its contracts for procuring
supplies in New England to minority-owned companies.
“Fleet’s record on procurement and diversity is quite
poor,” said Joseph Kriesberg, president of the Massachusetts
Association of Community Development Corporations. “Bank
of America’s is better on paper. That may be in part due
to the fact the bank has a strong presence in the South.”
In addition to commitments on minority hiring and procurement,
activists are demanding the bank come up with plans for small
business lending and investment in Massachusetts low-income communities.
Just days before the Federal Reserve hearing, Bank of America
officials announced a nationwide commitment to lower-income community
investing of $750 billion over the next 10 years.
But activists complain the bank rarely offers state-level plans
for investment.
“The state of North Carolina is asking for state-specific
plans to meet the ambitious but ambiguous $750 billion commitment,
which continues to be all smoke and mirrors,” said Richard
Brown of the North Carolina Fair Housing Center.
The Bank of America has promised a state-specific plan for Massachusetts,
something it has not done in most states in which it operates.
But the details of the Massachusetts plan have not been worked
out yet.
The testimony at the hearing, the first of two Federal Reserve
hearings on the merger and the only one to take place on the East
Coast, was by no means all negative.
Many who testified praised the bank for its previous investments
in programs ranging from education to neighborhood revitalization.
Even activists pressing for more Massachusetts-specific commitments
and affirmative action said there had been progress in their negotiations.
The bank has agreed to build upon Fleet’s investment in
the Soft Second Mortgage Program. It has agreed to maintain Fleet’s
membership in the Federal Home Loan Bank of Boston and keep Fleet’s
current level of investment in the Massachusetts Housing Investment
Corporation.
The bank is required to offer low-interest loan money to the MassHousing
Partnership, a semi-public entity, because it is taking over a
smaller bank operating in Massachusetts.
The amount of loans has been set at $504 million, according to
Hillary Pizer of the Massachusetts Affordable Housing Alliance.
According to Pizer, the Bank of America agreed last week to a
key demand of community investment activists — that it convert
some of the loan money into grants.
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