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ICBA Concerned About Bank of America's Relocation of Banking Unit from Boston

ICBA Concerned About Bank of America's Relocation of Banking Unit from Boston

Washington, D.C. (Aug. 27, 2004) - The Independent Community Bankers of America (ICBA) expressed concerns today about the decision by Bank of America to move its small business banking unit from Boston to Charlotte and to lay off hundreds of branch employees who were former employees of Fleet Bank.

"When large banks merge, small businesses and consumers, as well as employees, are often adversely impacted," said Camden R. Fine, ICBA president and chief executive officer. "The resulting mega-bank never seems to have the same commitment to small businesses and consumers in the local community. We share the concerns of Governor Romney and the State Banking Commissioner about Bank of America's decision. We hope community banks in Massachusetts will mitigate any adverse impact the merger may have on small businesses and the community."

According to The Boston Globe, the announcement Tuesday by Bank of America that it was moving one of its key business units from Boston marked the second time since its merger with Fleet Financial Corporation that it has broken its pledge to headquarter divisions in Boston. The Boston Globe also reported that the bank laid off hundreds of branch employees last week, despite assurances from executives that "customer-facing" positions would be safe. State Treasurer Timothy P. Cahill has threatened to pull about $120 million of state business out of the bank and Governor Romney has demanded a public accounting of the bank's layoffs and its recent moves to relocate divisions.

In testimony before the Federal Reserve of Boston last January concerning this merger, ICBA expressed concerns about the continued concentration of banking assets in the United States and the impact this concentration has on consumers, small businesses and communities. ICBA regulatory counsel Chris Cole testified that large bank mergers often have an adverse impact on consumers and small businesses and that the new larger bank seldom has the same commitment to the local community as the acquired bank had.

ICBA stated that it would oppose any attempt by the large banks to increase the 10% national cap on deposits imposed by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.