Fleet Bank Campaign
After over two years of intense research on predatory lending, NACA broke the story in April 1991 in the Boston Globe and on Channel 7 news. The focus in the press soon narrowed in on Fleet Bank, which had announced its intention to acquire the insolvent Bank of New England. Though many traditional banks were in financial trouble, Fleet had come through the 1980s in relatively good shape. Its involvement with predatory lenders provided the key. Fleet Finance, the subsidiary directly involved with predatory lending, provided 55% of the parent corporation’s profits.
Targeting Fleet - one of the largest
Fleet Finance’s success sent a clear message to other banks. Thus, UNAC believed that stopping Fleet would shift the tide against predatory lending even though other major institutions such as United Companies, Chrysler First, EquiCredit, Nations Credit and The Associates were also significant players. Fleet Finance was one of the biggest finance companies in the U.S. with over 130 offices in 26 states. UNAC would undertake a relentless campaign on a national scale, in the course of which UNAC would be recreated as NACA–the Neighborhood Assistance Corporation of America.
NACA expanded the campaign to Georgia, where Fleet Finance was based, and provided its research to the Attorneys General of Massachusetts and Georgia and to the Comptroller of the Currency. NACA enlisted the support of other community organizations and legal advocates, but the only one willing to take on the massive and corrupt finance industry was the Atlanta Legal Services Home Defense Program, directed by William Brennan. NACA also worked with aggressive and committed law firms to file suits against Fleet, including attorneys Roy Barnes (who became governor of Georgia), Jack Long and Howard Rothbloom.
In the streets and on the news
NACA created a whirlwind of public attention. It led demonstrations of hundreds of people against King and Spalding, the huge law firm representing Fleet, and filled the courtrooms and state hearings with Fleet victims. The national media caught on—over 350 articles were written concerning predatory lending and Fleet’s involvement. NACA worked with 60 Minutes as it unraveled the complicated financial schemes in a November 1992 exposé that targeted Fleet’s activities in Atlanta. Morley Safer described Fleet’s logo in this way: “These sails may be sails of hope for depositors, but in Georgia, where Fleet Finance is based, more than 20,000 borrowers think those sails look more like fins, the fins of loan sharks.”
Hundreds of victims attend the Senate Banking Committee hearings in D.C.
As the campaign spread to Michigan, North Carolina, Florida, New Jersey and other states where Fleet was active, the politicians in Washington D.C. finally took notice. NACA’s CEO, Bruce Marks, was asked to testify before the House and Senate Banking Committees. When the Senate Banking Committee held its hearings on February 17, 1993, NACA brought over 400 victims of Fleet bank. Busses from Georgia, Florida, North Carolina, Massachusetts and elsewhere pulled into Washington at 5:00 a.m. By 8:00 a.m. the hearing room was packed with victims singing gospel and protest songs and wearing yellow NACA t-shirts bearing the slogan “Stop Loan Sharks.”
With the hearing underway, one victim after another related the travails they had suffered at the hands of Fleet Bank. NACA’s CEO Bruce Marks and Massachusetts Attorney General Scott Harshbarger supported these testimonials with extensive research. As the evidence mounted, Fleet’s President John Hamill drew increasing fire from the Senators until only Senator John Kerry (D-Mass.) stood with Fleet.
On to the Federal Reserve
After the Senate hearing, seventy-five of NACA’s supporters proceeded to a meeting at the Federal Reserve. Low-income, minority and elderly victims of Fleet proudly marched into the boardroom and sat down at the Fed’s ornate conference table usually reserved for the captains of America’s economy. Federal Reserve Governor Susan Phillips and others listened as the victims spoke for an hour and a half about Fleet’s predatory lending practices.
At the conclusion of the testimony, NACA insisted that the Federal Reserve commit to a time frame for nationwide hearings on predatory lending. When the Governors would not agree to a timetable, the Fleet victims refused to leave the boardroom. Security was called, but the people would not be intimidated. President Clinton’s State of the Union address was only hours away, and the Fed realized they would have to arrest the participants to make them leave. Governor Phillips acceded to a second meeting.
NACA returned with many of the participants from the first meeting, but the Fed refused to meet. When the spurned victims blockaded the doors, preventing the entrance of the Italian Finance Minister and his bodyguards, the Fed acquiesced. Federal Reserve officials listened to the victims’ requests but ultimately refused to hold hearings.
To apply pressure on the Fed, NACA publicized Alan Greenspan’s direct number, flooding their switchboard with over 5,000 calls. While the Fed complained about these tactics to the Senate Banking Committee, NACA proceeded with the same fierce resolve on all fronts. When Fleet held its annual meeting at the Providence Biltmore Hotel on April 21, 1993, NACA rented rooms to get inside. Fearing NACA’s presence, Fleet called in State Police, Providence Police and extra security. They posted guards outside NACA’s room in an attempt to silence its protest, but the news media came to NACA. Fleet’s attempts to throw the reporters out, even roughing up a cameraman, failed—the story was all over the media the next day.
NACA defeats Fleet
Four ongoing lawsuits, the media focus and government scrutiny began to make other lenders wary of following Fleet’s path. NACA publicized Fleet’s top stockholders, and spurred First Union to divest most of the 374,136 Fleet shares that it controlled or held in trust–the only bank divesture ever to occur for abusive lending practices. When NACA learned that Fleet’s CEO Terrance Murray would be speaking to finance executives and alumni at an event sponsored by the Harvard Business School in November 1993, thirty five protestors went to infiltrate the meeting. Just as Murray began to speak at the Newton Marriott conference center, protestors jumped up and began demonstrating. Murray conceded to Boston’s business elite that NACA’s allegations about Fleet Finance were accurate and that he would meet Bruce Marks to resolve the issues.
Historic agreement provides $8.5 billion in lending and launches NACA’s mortgage program
After a number of face-to-face sessions during a two week period, Murray and Marks reached an agreement. Fleet would create the Fleet In City program, to provide $8.5 billion in lending to low- and moderate-income individuals and communities. They settled the pending private and public lawsuits with hundreds of millions of dollars of payments to their victims. Fleet also agreed to fund NACA’s mortgage product with $140 million in mortgages. This product featured no down payment, no closing costs, no fees and liberal underwriting criteria. This revolutionary mortgage product together with free comprehensive housing services and membership assistance for NACA homeowners, are the main components of NACA’s homeownership program for low and moderate income people and communities.
Using the Fleet mortgage agreement as a foundation, NACA launched a nationwide expansion of this homeownership community stabilization program. Despite Fleet’s prediction that such a product was bound to fail, tens of thousands of people have now purchased homes through NACA and own a piece of their neighborhoods. The NACA homeownership program has become the national standard for affordable mortgage lending. NACA now has over ten billion dollars available for its revolutionary mortgages across the country.
In addition, this long and hard-fought campaign had a national impact on predatory lending. NACA was instrumental in passing the Home Ownership and Equity Protection Act (HOEPA), the first Federal legislation to begin reigning in predatory lenders. Even more importantly, NACA provided the opportunity and the foundation for other organizations to investigate and combat predatory lending across the country.
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