Nevada activists square off over B of A merger

Two Las Vegans were among the approximately 300 people who had a message to take to the Federal Reserve about the proposed merger between BankAmerica Corp. and NationsBank Corp.

And while the two were on opposing sides in the debate, they both had the same message: Be sure that community investment and charitable interests' needs continue to be met if the two banking giants merge as planned.

Gail Burks, president and chief executive of the Nevada Fair Housing Center Inc. in Las Vegas, told Federal Reserve executives she is concerned about how the competitive environment in banking is going to be altered if the merger occurs.

Burks said in her testimony last week that she asked the Fed to refigure what the merged BofA's market share would be based on an index the industry uses to calculate competitive levels. Officials have estimated the post-merger market share of BofA to be 8.1 percent nationwide, slightly under the 10 percent regulators say should be the maximum.

Burks said she is concerned that a decrease in competition would result in an increase in interest rates and fees.

"The problem is that it takes away some choice," Burks said. "Interest rates on home mortgages, business loans and auto loans would be driven by the bank instead of by competitive forces."

Burks said she's also concerned that fees would rise on ATMs and charges for personal service from tellers also would increase.

Although Burks said she expects the merger to go through, she said she wanted the Fed to know there are concerns about Charlotte, N.C.-based NationsBank. As chairwoman of the Southern Nevada Reinvestment and Accountable Banking Committee, a consumer group, Burks was one of the most vocal critics of the BofA-NationsBank merger proposal when it was first announced.

Burks said after NationsBank's takeover of Boatmen's Bancshares, St. Louis, there were 119 lawsuits filed over fair lending and senior citizen complaints.

"We've had professional differences with Bank of America, but they don't engage in blatant practices to hurt the consumer," Burks said.

She also said she was concerned about NationsBank adding a new management level that would make decision-makers even further removed from the community. Although she is somewhat comforted that Nevada's top-level managers are staying in place within the merged companies, she said she has seen nothing in writing confirming the existing management team.

Another Las Vegan who was scheduled to testify before the Fed had his travel plans sidetracked late last week and will attempt to submit his testimony some other way.

Michael Husted, executive director of Catholic Charities of Southern Nevada, said he planned to speak in support of the merger, noting that he wanted to establish that the merged BofA would have the same priorities for community partnership projects.

"We've had some solid, positive relationships with Bank of America and we want to be sure these same policies continue on after the merger," Husted said.

He said BofA recently offered $10,000 in seed money for the predevelopment of a 40-unit senior citizen housing project on Martin Luther King Boulevard.

"One of the really tough things is getting funded when you don't have any of the preliminary work done," Husted said. He explained the bank committed funds to develop drawings, architectural work and cost estimates essential to a submission to the U.S. Department of Housing and Urban Development.

"BofA stepped forward with the predevelopment money, because they have a proven relationship with us," Husted said. "We want to be sure we preserve that kind of rapport."

Burks said once the BofA-NationsBank merger issues are resolved, she expects also to testify on the pending merger of Wells Fargo Bank and Norwest Bank.

Burks has been critical of that merger, which is substantially different for Nevada than the B of A-NationsBank transaction.

Since NationsBank has no retail banking operation in Nevada, no major changes are foreseen in BofA's Nevada branch network. But Wells Fargo and Norwest compete head-to-head in Nevada, meaning branches are likely to be closed where there are redundancies.

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