Contact: Peter Skillern, CRA-NC, 919-667-4201
Tanya Aquino, SEIU, 321-960-3802

Bank of America Urged to Agree to Steps Before Fed Hearing on April 28, 2008

CHARLOTTE, NC—One day before the shareholders of America's biggest bank are set to meet, consumer advocacy organizations from North Carolina and around the country held a "Real Stakeholders' Meeting" to talk about nation's credit and foreclosure crisis and its affect on families.

CRA-NC, the California Reinvestment Coalition (CRC) and the Service Employees International Union (SEIU) released a report entitled, "Higher Standards? What America's biggest bank owes its customers and Countrywide borrowers," to delve into the potential effects of Bank of America's acquisition of Countrywide of various stakeholders such as communities, consumers, taxpayers, bank employees, and shareholders.

The report lists meaningful steps which Bank of America should take in order to accept the responsibility of its impact on their stakeholders and become a model financial institution. The groups called for the bank to make commitments to the steps before the Federal Reserve's public hearing on the Countrywide deal in Los Angeles on April 28-29, 2008.

According to the report, the commitments Bank of America should make are:

1. Pledge not to import Countrywide’s business model; present a detailed, transparent, and verifiable plan to reform Countrywide’s servicing platform; end abusive practices such as prepayment penalties, pay-option ARMs, and no-documentation or low-documentation loans; and work with an independent organization to evaluate the fairness and effectiveness of the servicing unit on a quarterly basis, and make the results of the quarterly evaluations publicly available.

2. Commit to modifying the terms of mortgage loans for borrowers in a manner that realistically accounts for their ability to repay the loans; to publicly reporting the results of its workout efforts on a quarterly basis; to refinancing all ARMs into long-term fixed rate loans, with the goal of keeping homeowners in their homes; and to providing $10 million to pay for housing counseling services for borrowers.

3. Ensure that critical Countrywide staff who can underwrite loan modifications and other support staff are kept intact in their current offices to deal with the servicing needs of delinquent borrowers; appropriately train staff to meet this challenge; and commit to having trained loan underwriters on staff.

4. Commit to changes in company policies that add much needed consumer protections in credit cards, retail banking, and mortgages; discontinue abusive practices such as risk-based repricing of credit cards, and "anytime for any reason" credit card interest rate hikes; pledge to use its market power to bring down consumer fees rather than driving them up; end aggressive opposition at the federal level to legislative and regulatory reforms of predatory consumer practices, including the basic consumer protections in the Credit Cardholders Bill of Rights, and meaningful foreclosure prevention measures.

5. Pledge to take significant measures to improve corporate governance policies and practices to adequately protect shareholder interests.

"Now is not the time to endanger the thousands of homeowners on the brink of foreclosure by handing over their mortgage to a bigger bank which has yet to promise to take responsibility for the damage already done by Countrywide," said Alan Fisher, Executive Director of the California Reinvestment Coalition, "The bank needs to have a specific plan now which protects consumers and prevent a costly taxpayer bailout."

"I would like to make very clear that my husband and I are working very diligently to secure the funds we need to save our home," said Vonda Hopkins, a resident of Greensboro, North Carolina, whose home is up for foreclosure sale next month. "Home ownership is the American dream.  This home was our dream when we made the purchase and we will not allow this situation to taint our dream and keep us from living out our dream in our home.  The bank can stop this from happening right now, with my family by making reforms today."

The stakeholders meeting is the latest in a series of events hosted by SEIU in partnership with consumer advocacy organizations around the country to call for better practices and consumer protections in the banking and credit card industries which run with too little regulation.

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CRA-NC is a nonprofit agency whose mission is to promote and protect community wealth.  The agency is responsible for over $40 billion in community lending commitments from financial institutions in North Carolina. CRA-NC has emerged as a national voice on the issue of predatory lending and the need for reforms in the subprime lending markets. For more information visit: http://www.cra-nc.org/index.htm

The California Reinvestment Coalition advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. CRC has a membership of more than 240 nonprofit organizations and public agencies across the State. For more information visit http://www.calreinvest.org/

With 1.9 million members, the Service Employees International Union (SEIU) is the fastest-growing labor union in North America. Together with consumer advocacy organizations and elected and community leaders around the country, SEIU is leading efforts to hold the nation's largest banks accountable to working families and our communities.

Contact: Lynda Tran, 202-907-1172
Tanya Aquino, 321-960-3802

As federal lawmakers debate legislation that would protect consumers from rising credit card interest rates, U.S. Representative Barney Frank and Massachusetts Attorney General Martha Coakley are taking part in a town hall meeting today to discuss the devastating impact of unfair banking and credit card practices on consumers and working families . Town hall participants will share stories about how they have been affected by banking issues ranging from rising ATM and overdraft fees on checking accounts to higher interest rates and unfair terms on credit cards. Others will be victims of the abusive subprime and predatory lending that is fueling Massachusetts’ fasting-growing foreclosure crisis.

“As I was going through my divorce, I needed food and clothes and school supplies and I began to rely on my credit cards to get those things for myself and my son ,” says Denise Perrault, a mother and a graduate student at the University of Massachusetts who filed for bankruptcy after the interest rate increased on her credit cards. “ At first I tried to work with the credit card companies on my payments but it got harder and harder to do. The average working person cannot possibly give the time and effort it takes to get a square deal from the credit card banks.”

The widespread use of policies including universal default and risk-based re-pricing, among other practices that can leave working people with unexpected hikes in fees and interest rates have come under increasing fire recently amid mounting concerns of a looming economic recession. The impact of credit card debt in particular has been increasingly compared to the subprime mortgage loan crisis, most recently in BusinessWeek and Fortune (“The Consumer Crunch,” Michael Mandel, BusinessWeek 11/26/2007; “The $915 Billion Bomb in Consumers’ Wallets,” Peter Gumbel, Fortune, 11/1/2007).

“I have always prided myself on paying my bills on time and handling my finances well—but in December of 2006, I received my first and only ‘late payment’ strike on my credit report from Bank of America,” says Eileen Curtis, a retired social worker from West Borough, Massachusetts and mother of two. “I accepted the fact that I missed a payment—that was my responsibility. However, I became frustrated with Bank of America’s never ending nickel-and-diming, and I have since closed all my accounts with them.”

Today’s gathering is jointly hosted by the Service Employees International Union (SEIU), the Massachusetts Public Interest Research Group (MassPIRG), and United for a Fair Economy and is the second in a series of town hall style discussions with lawmakers and consumer advocacy organizations planned nationwide to address banking issues.

In December, SEIU released a number of reform principles to hold the nation’s biggest banks accountable to working families, including:

• Basic standards for fees and interest rates on credit cards, bank accounts, and other bank products.
• Greater community reinvestment standards—including providing bank branches and fair loan products for low-income and communities of color.
• Stronger oversight of bank practices and better protections for consumers and working families at the national and state levels.
• Limits on how big the biggest banks—and the reach of their harmful policies—can grow.

“Ensuring that widely-available and competitively-priced comprehensive banking services are offered to all of America’s working families is a major responsibility of the Financial Services Committee,” said Congressman Frank, chairman of the U.S. House of Representatives Financial Services Committee. “SEIU’s statement of principles is a welcome reminder of the importance of that responsibility and underscores my belief that there remains work to be done.”

Contact: 
Lynda Tran, 202-907-1172

Statement by SEIU, Consumers Union, USPIRG, Consumer Federation of America, and Consumer Action on the Cancellation of Consumer Testimony at the House Financial Services Subcommittee on Financial Institutions and Consumer Credit Hearing

This morning's cancellation of the panel presenting consumer testimony to the House Financial Services Subcommittee on Financial Institutions and Consumer Credit is yet another example of the nation's biggest banks and credit card issuers refusing to recognize the real human impact of their harmful practices on consumers and working people around the country.

Working Americans should be able to tell their stories to Congress about the egregious abuses they have experienced without having to relinquish their basic privacy rights. Big banks may have succeeded today in gagging today's consumer witnesses but they will fail in squelching growing consumer outrage of millions of Americans who are sick and tired of the banks abuses. Today's occurrences only reinforce the huge power imbalance between banks and ordinary Americans.

The facts are undeniable-the industry's insistence on driving up credit card interest rates, hitting consumers with fee after fee, and other practices are pushing families to the brink of financial ruin and contributing to a national economic crisis.

It's not hard to understand how it might be uncomfortable to look working people in the eye when your business model is designed to make higher and higher profits at their expense. However the credit card industry and lawmakers plugging their ears to the hardships of American families suffering at hands of the nation's largest financial institutions isn't going to make it go away.

Contact: 
Elizabeth Brennan, 213-999-2164
Lynda Tran, 202-730-7349

***** MEDIA ADVISORY for Wednesday, February 20 *****

As concerns grow that credit card debt will lead to the 'next subprime crisis'…

Community hearing to discuss impact of runaway debt, unscrupulous practices by credit card companies

U.S. Rep. Joe Baca to hear testimony from consumers, community leaders in first in series of town-hall style hearings planned nationwide

Los Angeles -- With a growing number of lawmakers and industry analysts warning runaway credit card debt could be the "next subprime crisis" with similar catastrophic effect on the nation's economy, workers and community leaders throughout the Los Angeles area are hosting a community hearing to discuss the impact of credit debt and unfair banking and credit card practices on consumers and working families. Congressman Joe Baca (D-CA) is expected to join consumer advocacy organizations, faith, and labor leaders to call on elected representatives to ensure the nation's biggest banks-including the largest bank, Bank of America-follow meaningful bank reforms.

WHAT:  Town Hall meeting to discuss impact of credit card debt on working families

WHO:  U.S. Representative Joe Baca Victims of credit card and banking industry bad practices

WHEN:  6:30PM - 8:30PM Wednesday, February 20, 2008

WHERE:  West Covina Senior Center, 2501 East Cortez Street

The widespread use of policies including universal default and risk-based re-pricing, among other practices that can leave working people with unexpected hikes in fees and interest rates have come under increasing fire recently amid mounting concerns of a looming economic recession. The Los Angeles town-hall style hearing is the first in a series of community hearings with lawmakers and community advocacy organizations planned nationwide to discuss banking issues.

WASHINGTON, D.C.///February 6, 2008///It's spreading … one person can give it to another … even the nicest people have it and can't get rid of it … you can't tell if someone has it … it only takes one time to catch it.

The "it" featured in a video promoting a new contest for budding filmmakers is the growing problem of "Debt Disease" among young Americans. With the biggest banks in the United States-including the nation's largest bank by deposits, Bank of America-increasingly marketing credit cards to college students in particular, the Service Employees International Union (SEIU) and the League of Young Voters today unveiled "Keep It In Your Pants" (http://www.KeepItInYourPants.org), a video contest with a top prize of $5,000 for the best student-made public service announcement (PSA) running 30-60 seconds.

"Credit card debt can ruin your life, spreading and growing like a disease," said Stephen Lerner, SEIU Assistant to the President and Director of the Private Equity Project. "We're warning young people of the dangers of 'Debt Disease'-and urging them to protect themselves the same way they would against any other dangerous and contagious social epidemic."

The first-place winner of the "Keep It In Your Pants" contest-open to students 14 years of age and older enrolled in middle school, junior high, high school, college, or graduate school-will receive a $5,000 scholarship for school-related expenses.  Four runners-up will each win a $500 scholarship for school-related expenses. Submissions will be accepted at www.KeepItInYourPants.org until March 12, 2008. Semi-finalists will be announced on April 2, 2008 and the winner will be announced at a red-carpet event on April 23, 2008.  Complete rules are available at www.KeepItInYourPants.org/Rules.cfm .

With Americans holding nearly one trillion dollars in credit card debt nationally, "Debt Disease" is a growing issue among college-age individuals in particular.  Some of the biggest banks in the country employ troubling practices that contribute to Americans-including students-going deeper and deeper into debt. KeepItInYourPants.org explains what "Debt Disease" is, how it can be caught, and how to avoid it, providing statistics including:

• The average American carries as many as nine different credit cards.
• College students are one of the credit card industry's fastest-growing markets. It is estimated that 78% of college students have at least one credit card.
• The biggest banks already control the majority of the credit cards issued in the United States, and Bank of America controls 1 in 5 credit cards and 1/5 of the credit card debt in the country.
• 82% of Americans believe household debt is a serious problem and the general public is more concerned about falling into debt than about being the victim of a terrorist attack or a natural disaster.

To draw parallels between "Debt Disease" and other social epidemics, the website points would-be contributors to examples of current and past videos, including venereal disease-related educational films from the 1940s-1970s.

ABOUT SEIU

With 1.9 million members, the Service Employees International Union (SEIU) is the fastest-growing labor union in North America. Together with consumer advocacy organizations and elected and community leaders around the country, SEIU is leading efforts to hold the nation's largest banks accountable to working families and our communities.

CONTACT: Lynda Tran of SEIU at 202-907-1172 or Lynda.Tran@seiu.org.

Contact:
Lynda Tran, 202-907-1172

SEIU: BANK OF AMERICA SHOULD NOT BE ALLOWED TO ACQUIRE COUNTRYWIDE

Nation’s fastest-growing union calls combination of US’ largest mortgage lender with largest bank when both institutions are facing mounting losses and potentially destabilizing risks bad for consumers, bad for business, and bad for America

WASHINGTON, D.C.///January 11, 2008///The Service Employees International Union (SEIU)—the fastest-growing union in North America—today cautioned against uncritical and short-sighted support for Bank of America’s attempt to acquire troubled mortgage giant Countrywide Financial Corporation. In a statement issued today, SEIU said:

“With the deepening housing crisis and growing concerns about the unknown risks lurking on and off Bank of America’s balance sheet, we believe combining the largest bank with the largest mortgage lender will result in unnecessary and unacceptable long-term risk to the nation’s working families and consumers. Permitting such concentration of risk would be like putting a sick patient, Bank of America, together in the same room with a highly contagious and terminally-ill patient, Countrywide, and expecting both of them to get better.

“While investors and regulators are eager to see Countrywide avoid bankruptcy, it is more critical than ever that lawmakers take measures to curb the growth of the nation’s biggest banks. Huge banks and mortgage lenders have long leveraged their market dominance to rake in huge profits regardless of the risks to consumers and the economy and any bailout of Countrywide—the largest culprit in creating the subprime crisis—would be misguided.

“Rather than uncritically cheering Bank of America as a potential savior in the short-term, lawmakers and regulators must look to the potential long-term harm to working families and consumers and the risks to the economy of a Bank of America-Countrywide combination. In addition to being the largest bank in terms of branches and deposits, Bank of America already holds a dominant position in credit cards and other areas and has been growing its own mortgage lending business. Further consolidation of the nation’s banking industry would inevitably result in concentrated economic risks.

“We believe lawmakers must aggressively enforce the 10 percent cap on bank deposits and set standards for the independent and transparent calculation of bank deposits and compliance. Bank of America should not be permitted to use a ‘thrift institution’ loophole to sidestep the spirit—if not the letter—of the 10 percent cap.

“The trade-off for working families and consumers could not be clearer. While a Bank of America bailout of Countrywide could help some mortgage holders today, the long-run harm in terms of reduced competition, higher fees, and even more hidden influence in legislative and regulatory circles is just too high a price to pay for the nation’s working families.”

Contact: 
Lynda Tran 202-907-1172 cell

SEIU Unveils Reform Measures for Holding Nation's Biggest Banks Accountable to Consumers, Working Families

Exploitive practices by banking industry harming working families most, prompt fastest-growing labor union to call for new standards to protect consumers

Washington, D.C. - With lawmakers continuing the debate over subprime mortgage protections, the Service Employees International Union (SEIU) unveiled new reform measures today for some of the nation's largest and most powerful banks. The new standards called for by SEIU--the fastest growing labor union in North America--would protect low-income and minority families in particular from a range of exploitive practices currently used by the biggest banks in the country, including schemes to drive up ATM, overdraft, and other fees; excessively high interest rates on credit cards; and predatory and abusive lending practices such as deceptive credit card marketing and billing tactics as well as subprime and discriminatory lending.

"We've passed the point where an 'anything goes' motto can be tolerated for the biggest and richest banks in the country," said Andy Stern, SEIU International Executive President. "We're sending a message today on behalf of all working families: enough is enough."

Consolidation in the banking industry in the last decade has led to the top ten banks in the country controlling nearly half of all bank deposits in the country. Meanwhile, the biggest banks overall have cultivated a fee-driven profit model that disproportionately harms low-income and moderate-income families, most notably Bank of America (NYSE: BAC). Bank of America's total deposit service charges--income from fees the bank charges its customers for servicing their accounts--grew by 70 percent between 2002 and 2006 alone. In addition, Bank of America's move this summer to increase non-customer ATM fees by 50%--as high as $3 per transaction--has been criticized for prompting other leading banks to raise their ATM fees as well.

The reform measures released today--entitled "SEIU Principles for Holding America's Largest Banks Accountable to Consumers and Working Families" call for:

1. Basic standards for fees and interest rates on credit cards, bank accounts, and other bank products.
2. 'Super' Community Reinvestment Act requirements for the largest and most powerful banks.
3. Permit FTC scrutiny of bank practices and allow state attorneys general to enforce state and federal consumer protections.
4. Strict enforcement of the 10% cap on bank deposits set by the Federal Reserve.

"We already know what happens to consumers when the biggest banks are allowed to operate without real regulation," said Ed Mierzwinski, Consumer Program Director for US PIRG. "It's high time lawmakers put real limits on the power of big banks to wreak havoc on the financial futures of working people."

For more information visit www.bankofamericabadforamerica.org.

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Bank of America Bad for America is a project of the Service Employees International Union (SEIU), the fastest-growing labor union in North America with 1.9 million members. We're working to hold big banks accountable to working families and our communities.

Andy Stern, international executive president of the 1.9 million member Service Employees International Union (SEIU), the fastest-growing union in North America, will hold a phone-based national news conference at 2 p.m. ET on Thursday (December 6, 2007) to outline four principles to rein in America’s largest banks and the “increasingly harmful schemes” these financial institutions use to exploit U.S. consumers, particularly working families.

News event speakers will be: Andy Stern, international executive president, SEIU; and Ed Mierzwinski, consumer program director, US PIRG, the federation of state Public Interest Research Groups (PIRGs),

Stern will say that SEIU members and working families have been preyed on by big banks (such as Bank of America) for far too many years -- exploited by the banking industry’s profit-at-any-cost business model and bombarded with everything from excessively high ATM/overdraft/credit card fees and interest rates to predatory mortgage loans, to deceptive credit card marketing and billing tactics. According to Stern, the incredible growth and continuing concentration of power into the hands of a few giant banks is a threat to working families and consumers and to the health of the U.S. economy -- working families can’t wait any longer for lawmakers to step in and end the “culture of coziness” that exists between federal regulators and the biggest banks. 

TO PARTICIPATE:

You can join this live, phone-based news conference (with full, two-way Q&A) at 2 p.m. ET on December 6, 2007 by dialing 1 (800) 860-2442. Ask for the "SEIU bank reform principles” news event.

Contact: 
Lynda Tran 202-730-7349

Analysis of most-segregated cities reveals nation's biggest bank underserving communities of color, harming low-income families

Washington, D.C. -- As lawmakers ramp up scrutiny of the banking industry for predatory and abusive lending practices, a new report released today finds Bank of America (NYSE: BAC) is worst on locating bank branches in minority neighborhoods and lending more mortgages to whites than African Americans or Latinos. In four of six cities, Bank of America ranked last in locating bank branches in majority minority neighborhoods and was twice as likely to lend to white mortgage applicants than to African American mortgage applicants in Detroit and Chicago, the study shows.

"It's simply unacceptable that Bank of America--the biggest bank in the country--is failing to ensure access to banking services and fair mortgage loans for entire communities of color," said William McNary, Co-Director of Citizen Action Illinois. "If the bank with the most branches won't do the right thing for our neighborhoods, who will?"

The report, issued by the Service Employees International Union (SEIU), examined Bank of America's pattern of bank branches against its top two competitors in Buffalo, Chicago, Detroit, New York, Philadelphia, and St. Louis--cities ranked by the U.S. Census Bureau among the top-ten most-racially segregated in the country. Despite having more than double the number of bank branches of its nearest competitor nationally--with more than 5,700 bank branches, Bank of America has five times as many branches as Citibank and two times as many branches as JPMorgan Chase--Bank of America performed worst overall in locating branches in majority minority communities in the cities analyzed in the report.

Key findings of the study, entitled "Shut Out of The American Dream: How Bank of America is Systematically Underserving Communities of Color and Harming Low-Income Families with Questionable Practices," include:

• Bank of America is overall less likely to locate bank branches in majority minority communities than its top competitors in each market:
• Bank of America ranked last in locating bank branches in majority minority communities in 4 of the 6 cities analyzed.
• Bank of America ranked last in locating bank branches in African American communities in 4 of the 6 cities analyzed.
• Bank of America ranked last in locating bank branches in Latino communities in half the cities with Latino populations large enough to be analyzed.
• Bank of America fails to locate bank branches in majority minority neighborhoods regardless of the proportion of area residents who are minority:
• In Philadelphia--where nearly one-fifth of the area's residents live in majority minority communities--Bank of America has located only 5 percent of its bank branches in majority minority communities.
• In the African American communities that comprise 14 percent of Philadelphia's population, Bank of America has located only 3 percent of its bank branches
• In Chicago, Bank of America has 12 times more bank branches in neighborhoods with the fewest minority residents than in neighborhoods with the most minority residents.
• In Chicago neighborhoods with the highest number of white residents, the ratio of residents to bank branches is an average of only 11,204 residents per bank branch compared to 138,930 residents per branch in the neighborhoods with the highest percentage of African Americans.
• Bank of America lends more mortgages to whites than to African Americans and Latinos:
• Bank of America is more likely to be the mortgage lender for a white borrower than for an African American in all the cities examined.
• In Detroit and Chicago, Bank of America was more than twice as likely to be the mortgage lender for a white borrower as for an African American borrower. Bank of America was also more than twice as likely to be the mortgage lender for a white borrower as for a Latino borrower in Chicago.
• In New York, Bank of America was nearly one and a half times as likely to be the mortgage lender for a white borrower as for an African American borrower.

Bank of America is the largest bank in the United States, controlling one in five credit cards and ten percent of all bank deposits--the maximum amount permitted by the Federal Reserve. Nationally, Bank of America has recently come under fire for its record of charging consumers some of the highest fees and interest rates in the nation--the bank collected more than $22.4 billion from penalty and service fees in 2006 alone. In Chicago, Bank of America's acquisition in September of LaSalle Bank has raised concerns among community organizations and elected leaders at the local, state, and national levels, including a loss of 10,500 jobs and more than $780 million in tax and other revenue from the area projected by the Anderson Economic Group.

"The more we look at the practices of the biggest banks, the worse things we uncover," said Stephen Lerner, Assistant to the President, SEIU. "Here's a bank that is already using its size and market dominance to drive up fees and interest rates on working people--and now it's trying to grow even bigger. If a bank is going to be this big and this powerful it should have responsibilities to the communities in which it operates."

Contact:
Erica Hade, SEIU Local 1, 312-343-0322

Statement Regarding Federal Reserve Decision to Forgo Public Hearing and Unilaterally Approve Bank of America-LaSalle Merger in Chicago

The Save Chicago Jobs and Community Investment Coalition is extremely disappointed in the decision by the Federal Reserve to forgo a public hearing and approve the acquisition of LaSalle Bank by Bank of America today.

Public outcry and concern from Chicagoans ranging from Congressional representatives, to academics, to faith, and community leaders over the impact of this merger on our neighborhoods and working families has been substantial—and the request for a public forum to discuss the tremendous harm this merger could cause our community has been widespread. Given historical precedent and the fact that the Federal Reserve has held requested hearings on every merger of similar size since 1998, this incredible failure by federal regulators intended to be the stewards of consumers and the health of our economy relegates the great city of Chicago and its residents to the kind of secondary status that cannot and should not be tolerated.

We already know this merger could devastate Chicago—likely costing the area more than 10,500 jobs, draining more than three-quarters of a billion dollars from our economy, and ultimately raising banking costs for all of us. We are also fully aware that while the Federal Reserve may have given its approval, other federal agencies including the Office of the Comptroller of the Currency must still weigh in before the merger can be completed.

As a diverse coalition of faith leaders, community organizations and labor unions, we are committed to provide Chicago with the public forum the Federal Reserve has failed to offer so our neighbors and our families can explore the full impact of Bank of America’s take over of LaSalle.

We will to continue to fight to ensure the merger between Bank of America and LaSalle Bank is a good deal—for Chicago.

Signed,

The Save Chicago Jobs and Community Investment Coalition

For more information about the hearing 1PM CT Saturday, September 15, visit www.savelasallejobs.org.

Contact: 
Erica Hade, SEIU Local 1, 312-343-0322      
Tom Feltner, Woodstock Institute, 312-927-0391

Community Says: Federal Reserve Failing the Public By Failing to Hold Hearing on BofA and LaSalle Merger

Congressman Gutierrez and State Treasurer Giannoulias to Lead Community Hearing on Merger in Absence of Fed Hearing

CHICAGO -- Due to inaction by the Federal Reserve, Congressman Luis Gutierrez and State Treasurer Alexi Giannoulias will lead a community hearing Saturday to consider the full impact of the Bank of America acquisition of Chicago's LaSalle Bank.

Though a number of elected leaders and community organizations have requested a Federal Reserve public hearing - including Congressman Gutierrez, who is a member of the House Financial Services Committee; Cook County Clerk David Orr; and the Woodstock Institute - and though it is common practice that the Federal Reserve schedules hearings on significant bank mergers when there is substantial interest, the Fed has failed to schedule a public hearing.

"It is disturbing that the Federal Reserve Board has not yet committed to holding a similar hearing in this case, given that the combined entity of Bank of America and LaSalle Bank would represent the largest financial institution in the Chicago region," said a joint letter signed by 18 organizations and sent to Federal Reserve Chairman Ben Bernanke. The community coalition, Save Chicago Jobs and Community Investment, today delivered a copy of the letter to Charles Evans, the new president of the Federal Reserve Bank of Chicago.  

It is even more imperative that the Federal Reserve provide the public the opportunity for full input in this merger because Bank of America already controls almost 10% of national deposits, the maximum amount of national deposits a bank is allowed to control in a merger.  Bank of America's purchase of LaSalle Bank could push the bank's share of national deposits above that 10% cap on national deposits.

The public also needs input on other important issues related to the merger, including the impact of the merger on competition; the affect on cultural and charitable institutions; specific commitments under the Community Reinvestment Act; and the impact on serving the needs of our diverse communities.

"Bank mergers are about more than combining businesses, they are about the ability of families to get by -- to have a bank account they can afford, to have a credit card that doesn't trap them in debt, to have investments in the communities where they live," said Marilyn Pagán-Banks, President of the Metropolitan Alliance of Congregations.

The community hearing will be held: 
1 p.m., Saturday, September 15      
Chicago Temple, 77 W. Washington, Chicago

In the past, the Federal Reserve has held hearings on the mergers of JP Morgan Chase and Bank One, Bank of America and Fleet Boston, Fleet Financial and BankBoston, First Chicago and Banc One, and Bank of America and NationsBank. In every one of those mergers, the new combined entity represented the largest financial institution in at least one of the combined entity's local markets.  Bank of America already is the nation's largest bank, controlling 10 percent of all deposits in U.S. banks and 20 percent of all credit card business nationally.

Contact:
Lynda Tran, SEIU, 202-730-7349
Travis Plunkett, CFA, 202-387-6121

STATEMENT OF CONCERN ABOUT RISING ATM FEES

by Americans for Fairness in Lending, California Reinvestment Coalition, Consumer Federation of America, Consumers Union, Service Employees International Union, Woodstock Institute

We are deeply concerned by Bank of America's plan to raise fees for non-customers at many of its ATMs to $3 per transaction-the highest in the country.

In its emerging role as the largest banking institution in the United States, Bank of America's planned ATM fee hike from $2 to $3 has already been reported as an opportunity for other banks to drive their fees even higher ("Rising ATM fees on horizon," Charlotte Observer, September 2, 2007; "Higher Bank of America Fees To Raise Rivals' Costs," American Banker, August 3, 2007) and we fear the ultimate consequence would be an unconscionable squeeze on low- and middle-income bank consumers. These consumers-many of whom are unable to leave work to use lobby services during traditional "banking hours" and rely heavily on ATM transactions for small-dollar amounts-will bear a disproportionate financial burden in affording these increases.

Given the recent and disturbing trend toward fee-based profits that is making banking services more and more unaffordable for the Americans who need them most, we call on Bank of America and other financial institutions to proceed cautiously before placing even greater reliance on such practices.

No one disagrees that consumers can-and should-pay the fees that are necessary to provide them with vital financial services. However, we call on Bank of America and other banks to explain why-even as fees for nearly all other financial services decline over time as the scale of their use increases and related costs decline-ATM fees continue to "defy gravity" and are now poised to rise by another 50 percent.

We believe the temptation to squeeze out new profits by gouging consumers with unreasonable and unjustified fee hikes is one that should be resisted by our nation's financial institutions-and meet resistance from both consumers and Congress.

Signed,

Americans for Fairness in Lending (AFFIL)
California Reinvestment Coalition (CRC)
Consumer Federation of America (CFA)
Consumers Union (CU)
Service Employees International Union (SEIU)
Woodstock Institute

$780 Million Expected to Vanish from Area Economy, Neighborhoods

More than 10,500 Chicago jobs are expected to disappear in just two years if Bank of America follows through with promised cuts of 50% of LaSalle Bank’s costs, shows a new study released today conducted by Anderson Economic Group. The report, entitled “Economic and Fiscal Impact of LaSalle Bank Acquisition,” predicts job losses from an impending merger of locally-based LaSalle Bank with America’s largest bank would drain more than $780 million from Chicago’s economy during the same time period. More than 6,000 jobs alone will likely be lost from companies other than LaSalle due to a spillover effect to other area businesses resulting from the merger.

“Chicago’s economy will undeniably be hurt by the Bank of America purchase of LaSalle Bank,” said Tim Mahon, Principal at Anderson Economic Group. “As workers lose their jobs, it has a ripple effect throughout the local economy, causing more workers to lose jobs and removing nearly three-quarters of a billion dollars from the local economy over two years.”

“A Bank of America purchase of LaSalle Bank will cause irreparable harm to Chicago’s economy,” said Malcolm Bush, Executive Director of the Woodstock Institute, a community development research organization promoting access to capital in minority and low-income communities. “Not only will Chicago lose jobs, tax revenue and money flowing in our economy, but we expect Bank of America will drastically cut local community investment and philanthropy.”

The report, released by Save Chicago Jobs and Community Investment—a coalition of faith leaders, community organizations and labor unions who are calling on Bank of America to preserve area jobs and community investment—finds the massive job cuts could also significantly hurt public services. The study estimates local governments will lose more than $17 million in taxes paid by individuals while the state of Illinois will lose more than $32 million in similar taxes over two years as a direct result of the expected job cuts. In addition, although the report did not estimate the impact due to lost revenue from business taxes, further public revenue loss could be expected.

Citing a similar takeover in 2004 of Boston’s Fleet Bank when a community coalition successfully ensured Bank of America altered merger plans to preserve thousands of local jobs, area community leaders are calling on the nation’s largest bank to do the same for Chicago.

“If Bank of America plans to profit from Chicago, it has a responsibility to give back our community,” said Rev. Marilyn Pagán-Banks, President of the Metropolitan Alliance of Congregations. “Bank of America can’t just cut jobs and community investment and expect Chicago families to bank there, especially with their reputation for charging consumers exorbitant fees and interest rates.”

While LaSalle Bank was founded in Chicago in 1936 and has been actively involved in the local community, Bank of America has said it won’t need a Chicago headquarters. The bank is expected to cut virtually all Chicago jobs from LaSalle’s headquarters—overwhelmingly high wage jobs with an average annual salary of $91,000 a year—and the few jobs retained will likely be moved to Bank of America headquarters in Charlotte, North Carolina, according to the report. Meanwhile, the report shows the financial services industry is not adding many jobs, indicating Chicago will be unlikely to absorb such a large number of laid-off LaSalle employees.

Bank of America is the largest bank in the United States, controlling one in five credit cards and ten percent of all bank deposits—the maximum amount permitted by the Federal Reserve. Recently Bank of America has come under fire for its record of charging consumers some of the highest fees and interest rates in the nation. For more info, visit BankofAmericaBadforAmerica.org.

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About Anderson Economic Group

Anderson Economic Group LLC specializes in economics, public policy, financial valuation, market research and land use economics. AEG’s past clients include:

Governments, such as the states of Michigan, North Carolina and Wisconsin; the cities of Detroit, MI, Cincinnati, OH, Norfolk, VA, and Fort Wayne, IN; counties such as Oakland County, MI and Collier County, FL; and authorities such as the Detroit-Wayne County Port Authority;

Corporations, such as GM, Ford, Delphi, Honda, Metaldyne, Taubman Centers, The Detroit Lions, PG&E Generating, SBC, Gambrinus, Labatt USA, and InBev USA.

Nonprofit organizations, such as Michigan’s University Research Corridor, Michigan State University, Wayne State University, Van Andel Institute, the Michigan Manufacturers Association, Automation Alley and the Michigan Chamber of Commerce.

For additional information see AEG’s website: www.andersoneconomicgroup.com.

About Save Chicago Jobs and Community Investment

Save Chicago Jobs and Community Investment is a coalition of faith leaders, community organizations and labor unions concerned about the impact Bank of America will have on Chicago if it purchases LaSalle Bank. Members include: Action Now; Citizen Action Illinois; Chicago Coalition for the Homeless; Chicago Interfaith Committee for Worker Issues; Chicago Jobs with Justice; Community Reinvestment Organizing Project; Metropolitan Alliance of Congregations; Protestants for the Common Good; SEIU Local 1; and the Woodstock Institute.