Cityview: Eyewitness to a Merger

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It was like déjà vu. No sooner had I walked out of the auditorium when I was bombarded by people commenting on the testimony that I had just delivered to the Federal Reserve Board regarding the proposed Citicorp-Travelers merger.

Just three years earlier, as I was spirited out of the very same hearing room upon submitting my views on the proposed Chase-Chemical merger, I served as a lightning rod for the same assortment of press, bank officials, Federal Reserve staff and community activists. Now as then, I neither advocated for, nor argued against the proposed merger. Like then, I had tried to balance my appreciation for one of my organization’s most faithful and supportive bank partners with some very real concerns about financial service delivery to my community. And just like then, despite my attempt to walk a fine line with my conscience intact, I left the hearing room with a creepy, unsettling feeling in the pit of my gut that I had betrayed an ally–I just wasn’t sure which one.

There was one key difference: Three years ago, by refusing to summarily condemn both of the banks in question, I was accused, rather angrily, of being a “sell-out” by a Community Reinvestment Act (CRA) advocate, while the bankers in the house were waiting to carry me out on their shoulders.

This time an insurance company, Travelers, is one of the merger partners and the future of banking as we know it is at stake. All the pressure of complying with the CRA requirements is falling on Citicorp–and bank officials need a show of community support as never before.

This time, when I did not give my unqualified endorsement of the merger, the very same CRA advocate sang my praises. And some of the bankers, though polite and genuinely gracious, appeared wounded. Both times, as a result of a process that is designed to empower community-based organizations, I felt like I’d acted self-destructively, risking my organization’s financial stability and reputation.

Perhaps I’m overly sensitive. But when I gave my four-minute speech, I got the impression that I was submitting to a litmus test that measured only two things: my fidelity to the financial institution in question or my radical, bank-hating credentials.

CRA hearing participants tend to break into two camps: organizations that have received bank grants or loans, and advocacy groups who either don’t depend on bank support or are not accountable to any particular neighborhood.

I, on the other hand, represent a growing number of squeamish organizations who not only have close and mutually beneficial relationships with certain banks, but also have an obligation to protect the consumer interests of our communities.

In a perfect world, these wouldn’t be contradictory positions. But, as director of a small nonprofit, I find myself caught between responding to the quickening pace of my funders’ heartbeat–whether foundation or a bank–and the pulse of my community.

This is further complicated by the fact that many of the staff people I work with in bank community reinvestment departments are actually beautiful souls who are truly committed to community development, not to mention very good friends of mine who, if they could, would give me more support than is allowed by their bank. Most importantly, they happen to believe in my organization’s work and value our community development partnership.

Yet I belong to alliances and networks of advocacy and community organizing groups that represent the most consistent and effective agents of social change in the city.

Viewed broadly, bank mergers represent a trend toward the creation of a global financial industry that is increasingly impersonal and unresponsive to the needs of low-income people. Against this backdrop, any merger–regardless of the banks involved and their specific community reinvestment record–becomes suspect. Trying to make the separate points that a particular bank helps your community, but that its merger threatens your neighborhood, is tricky, but it has to be made.

The perils are obvious. Advocates, who by definition are trained to see the world as a fight between good and evil, may judge you harshly for not safeguarding CRA. Banks, as in any business relationship, may feel undermined by their community “partner” who has challenged their reinvestment efforts with statements placed on the public record. If this happens and the banks withdraw support, you may suddenly find it more difficult to meet payroll.

The next time a merger hearing rolls into town, it might be safer and arguably smarter to just stay home and out of the fray, like many of my colleagues do. There is absolutely no shame in survival. Like Bob Marley sang, “He who fights and runs away, lives to fight another day.”

But chances are you’ll see me there the next time, boldly, recklessly…straddling the fence. As long as low- and moderate-income neighborhoods of color remain dependent on these “community empowerment” investments, it may be the only truly independent position left to take.

Mark Winston Griffith is Executive Director of the Central Brooklyn Partnership and the co-founder of the Central Brooklyn Federal Credit Union.