We talk now to Bruce Marks, CEO of the Neighborhood Assistance Corporation of America, a non-profit housing services organization based in Boston. Also with us is Washington, DC-based author and economist Julianne Malveaux.

Bruce, nice to have you on.

Mr. BRUCE MARKS (CEO, Neighborhood Assistance Corporation of America): It is good to be here, Tavis.

SMILEY: Julianne, nice to have you back.

Ms. JULIANNE MALVEAUX (Author and Economist): Always a pleasure, Tavis.

SMILEY: Bruce, let me start with you because you have a long history with FleetBoston specifically. You led demonstrations against the bank back in the '90s, accusing it of predatory lending practices and red lining. Talk to me briefly about what they were doing back in the '90s that got you on the picket line, so to speak.

Mr. MARKS: Well, you know, they've become the symbol for every predatory lending out there, Tavis. And what they did is that they would not lend in the minority community, so they cordoned off the community. But then they funded mortgage brokers and brokers out there that said, 'We will lend to you, but we will not lend to you at the conventional rates. We'll lend to you on the predatory terms, high interest rates, 20, 30 percent interest rates out there.' So in essence, they were creating a market, saying, 'We will not lend in this community,' but they had their surrogates going into the community saying, 'We will lend to you and Fleet will lend to you indirectly through these surrogates on predatory loan-sharking terms.' And they became known. So for four and a half years, it was a war against Fleet. And they have never been able to shed the image as the predatory lending bank, the loan shark bank.

SMILEY: It's one thing not to shed the image. I guess the question is, did they get better over time?

Mr. MARKS: Well, two and a half years ago, Terry Murray, their CEO, stood up at his annual meeting and he said, 'For 10 years, we've been in the merger and acquisition business and we have profited from that but we've done poorly by the consumer. The consumers don't like us. And we have to change that.' So they've put in place a program that they call customercentric. It was too little, too late. Because while they're the major institution throughout New England, the consumers despised the bank and would only do the minimal amount of banking they could with Fleet. So, in essence, they couldn't turn it around. They were known as the most anti-consumer bank in the country. So it was only a matter of time that they were going to be bought.

SMILEY: So, Julianne, what's the picture look like from your perspective? I guess the question is whether or not Bank of America's merger with FleetBoston will be good for folk of color.

Ms. MALVEAUX: Well, it's interesting the way that Bruce has presented the situation because it almost exactly reflects what happened in the market when the merger was announced. Bank of America stock went down, Fleet stock went up. Fleet is clearly enhanced by this merger because Bank of America has a different kind of reputation around consumers; not perfect. Certainly no bank is perfect. And the banking industry at this time, Tavis, quite frankly I think is consumer-unfriendly, although consumers have propped up the business in the wake of the stock market debacle of the early 21st century, because people have fled back to banks, leaving, you know, all these quasi-banking institutions. But in any case, the notion that B of A stock goes down and Fleet goes up suggests that Fleet is the greater winner in this.

What it means for consumers of color, in my opinion, is that there will be a need for increased vigilance. The larger the institution, the less competitive, oftentimes, they tend to be. Both companies have--this now will be the second largest banking institution in the nation with assets nearing a trillion dollars, $933 billion roughly. And they can go either way. We've seen it in the past and we've seen it on the West Coast with merger activity with Wells Fargo. We've seen it around the country. One of two things can happen. The size can essentially make access more difficult for people of color, who are already at the periphery of banking, or size can make people more sensitive and more competitive. And I think it remains to be seen. I think this is a clear case of the impetus for organizations like Bruce's. And I've read about your stuff, Bruce, and I want to give you kudos for it. But, you know, for organizations like his and others to continue to do the kind of monitoring work that they do to make sure that these institutions are responsive.

But let's be clear. I mean, these are institutions that are designed to extract a profit from consumers for their relationships. So it's not just about red lining and green lining. It's also about the terms and conditions of credit that's offered. It's also about the extent to which people are willing to engage in programs around financial literacy. There are a whole range of things that banks do. One of the things that's pending to me right now is this whole set of regulations around bankruptcy--the Bush administration had started, the Clinton administration refused to sign--that make it more difficult for working-class people to declare bankruptcy. Meanwhile, of course, you see, you know, Tyco and others not declaring bankruptcy but literally looting their corporate funds, which are public funds, for their own uses. So I think that, you know, there are a whole set of things we can look at with banking and this particular merger gives us the impetus to look at it more carefully.

SMILEY: Right. Bruce, let me ask you, are there then no cost benefits for consumers of color with this merger?

Mr. MARKS: Well, I think there are absolutely benefits. You know, what happened is that, you know, Fleet was not only known as a predatory lending. They were also known as Fee Bank, because when they took over Bank of Boston, their fees were so outrageous that as, you know, you were saying and Julianne was saying, that, you know, people fled the new Fleet to go to other institutions. I think Bank of America has a unique opportunity here. There is not one region in the country that's so dominated by one bank. I mean, here you've got Fleet. And the next size bank--they're four times, five times larger than the next largest bank. So certainly Bank of America can come on in here with, you know, low fees and high rates in terms of the interest on checking and their CDs and on mortgage products that really meets the needs of low- and moderate-income communities and of people, and particularly the minority community. Because when--our experience with Bank of America and Fleet I think is telling. With Fleet, they set the standard on predatory lending.

Bank of America, they had Nations Credit at that time and they had Eckert Credit(ph), two predatory subprime lending entities. They made a decision years ago to get out of that business. Now it took them a year to do that but they got out of that business because they said that's not profitable and that's not good business over the long run. And then they had put together mortgage products out there that really meet the needs of working people and particularly in the minority community where working people can get a mortgage with no down payment and no closing costs and no fees at a below-market interest rate. So that's the counter. So when you provide a prime loan to a subprime borrower, what that means is they become a prime borrower. This concept that when you talk about red lining--and red lining is worse now, I believe, than what it was years ago. Years ago it would be where it's said--where a person of color would go in the front door of the bank and the bank would say, 'We're closed for business. You cannot be served.' Now when a person of color goes into a bank, they say, 'Yes. Please come on in. Sit down' and what they find out is, instead of getting a conventional loan, getting a loan of 14, 15 percent, four or five points on there. So what these brokers and lending institutions have found out is saying, 'It's good business to exploit people.' And...

SMILEY: Let me...

Mr. MARKS: Yeah?

SMILEY: I'm sorry. I didn't mean to interrupt.

Mr. MARKS: And I think Bank of America has set a positive standard on that. Fleet tried to change its ways for the last two years. It was too little, too late.

SMILEY: Julianne, let me ask you in general as my time is running here what these national bank mergers mean overall.

Ms. MALVEAUX: If you could go back 20 years, you had regulatory laws that prevented national banking. You basically had regional banking. There were preventions in many states for state banking. Now you have a very robust competition among banks to try to blanket the nation. And if you look at some of the maps that were shown in The New York Times yesterday or The Wall Street Journal about what happened, it's basically you have Bank of America-Fleet merger creating a quasi-national bank and you see that also with Citicorp and others. So you have a very vibrant competition among the largest banks in terms of who can blanket the nation. We have a number of others that have--as Bruce as said, much further down you're looking at a Wachovia with assets of $400 billion, so it's, you know, clearly dwarfed by the new Bank of America and Citigroup. You've got a Banc One with assets of about $300 billion. So you've got these huge banks that are competing. The question is how they're going to compete.

One of the things that troubled me yesterday, Tavis, was the announcement that the new bank is going to go after high net worth individuals. That's one of the--they hope that 15 percent of their deposits will come from high net worth individuals and one wonders if the lower net worth individual or the unbanked--and we still have about 15 percent of America that we describe as the unbanked, people who do not have bank accounts, who for whatever reason are maintaining their financial affairs with money orders and, you know, all kinds of quasi-banking instruments. And really the issue is how do those people get pulled into the system. Because as Bruce has said when he'd talked about mortgages and how you go into a mortgage, you want institutions that are willing to respond to people who want to be homeowners, want to be savers and investors. They may not have a million dollars. They may not even have $100,000, but if they have $100 and they're willing to begin to play the game, we want banks that are going to respond to that. And I just have a big question mark. I'm just not sure what's going to happen with these large banks. There may well be a bifurcation where the large banks end up doing that which is high profit and the medium-size banks end up...

SMILEY: Julianne.

Ms. MALVEAUX: ...reaching out to the consumer.

SMILEY: Hate to cut you off. I'm out of time here. That is a good question. We will see what happens to the little guy, as it were, given this merger between B of A and Fleet.

Julianne Malveaux, author and economist based in DC; Bruce Marks in Boston, CEO of the Neighborhood Assistance Corporation of America. Thank you both for your time and for your insight. I appreciate it.

Ms. MALVEAUX: Thank you.

Mr. MARKS: Any time. Thank you.

SMILEY: My pleasure.

Just ahead, correspondent Tony Cox talks with Ethiopian-born king of cooking Marcus Samuelsson about how he's become America's top Swedish chef.

It's 19 minutes past the hour.