BofA, NationsBank Execs Defend Merger to Fed Panel

The chiefs of NationsBank Corp. and BankAmerica Corp. defended their planned $60-billion merger at a Federal Reserve Board hearing on Thursday amid accusations that the deal would be bad news for minorities.

NationsBank Chief Executive Hugh McColl and BankAmerica CEO David Coulter outlined their goals for community investment, corporate philanthropy and diversity at the start of two days of public hearings at the Fed, which must sign off on the massive deal.

But critics of the planned merger, who unfurled banners reading “We want a better bank not a bigger bank” and “NationsBank go home,” attacked both banks’ track records on lending to minority homeowners and businesses and on hiring diverse staff.

Several speakers at the hearing--an undertaking viewed by some industry analysts as a mere formality--also criticized the new company’s proposed multibillion-dollar community reinvestment plan, saying it was hollow and short on specifics.

Others expressed concern that the first planned coast-to-coast U.S. bank would result in higher banking fees and job losses, particularly in California.

Speaking before a packed room inside the Federal Reserve Bank building in San Francisco, McColl touted the new bank’s philanthropic plans and said the new company’s board would be one of the most diverse in the country.

Seeking to deflect possible criticism, Charlotte, N.C.-based NationsBank and San Francisco-based BankAmerica in May unveiled a $350-billion, 10-year community lending program designed to comply with the Community Reinvestment Act.

But the banks declined to offer specifics on how the commitment would be distributed by geographic market or by product.

“[The opponents’] desire to receive the greatest financial support possible for their individual causes should not overshadow the fact that our pledge . . . is designed to benefit all our communities,” McColl said.

Although a few speakers, including Houston Mayor Lee Brown, told the panel they supported the deal, a majority questioned its merit and asked the Fed to deny the banks’ application to merge, or to approve it only under more stringent conditions.