BofA Chairman Takes on Critics During L.A. Visit

Nobody tells former Marine Hugh McColl what to do.

Particularly not the community reinvestment groups that want McColl, as chief executive and chairman of the newly merged Bank of America, to commit to minority lending goals in California.

McColl’s four-day tour of California cities, which included a stop Wednesday in Los Angeles, was designed to reassure public officials and business leaders that the bank was committed to California lending and to philanthropic giving in the state.

McColl told a Town Hall of Los Angeles luncheon that Southern California was the bank’s largest and most profitable market and that the bank’s lending and charitable giving in the Southland had grown since the merger.

But while pledging to spend $350 billion nationwide on community reinvestment over 10 years, including at least $70 billion in California, McColl repeated his opposition to being dictated to by groups such as the Greenlining Institute or the California Reinvestment Committee, two minority lending advocates that have pressed McColl to set specific lending goals in California.

“We’re willing to sit down and talk about it, but we won’t respond to threats, demands or anything else. We don’t do that,” McColl said in an interview with The Times on Wednesday.

The groups have wrested commitments from Wells Fargo and Washington Mutual to meet specific lending goals and to make their minority-lending data public. Wells Fargo was taken over last year by Minneapolis-based Norwest Bank, which took Wells’ name and moved its headquarters to San Francisco, while Seattle-based Washington Mutual has taken over several California thrifts, including Home Savings Bank.

McColl said he saw the Community Reinvestment Act, which sets guidelines for minority lending, as beneficial, because it requires bankers to seek out loans they might not otherwise have made. But he said meetings with community reinvestment activists in San Francisco almost changed his mind about the efficacy of the act.

“The act was not meant to be an extortion act,” McColl said.

Greenlining Institute leader Bob Gnaizda said specific commitments and review by outside groups are needed to make sure the bank honors its pledges. Minority business groups petitioned the Federal Reserve on Tuesday, asking the federal banking regulator to scrutinize and enforce BofA’s community reinvestment commitment.

McColl said the new bank, created by its merger with NationsBank Corp. last year and now headquartered in Charlotte, N.C., values action over pledges. McColl said the bank has already doubled the amount of loans made for affordable housing in the months since the Sept. 30 merger and increased small-business lending as well. The old BofA made $172 million in affordable housing loans in the eight months before the merger, while the new bank made $171 million in the four months following, he said. Likewise, small-business lending has jumped from $21 million a month to $31 million, McColl said.

“People say, ‘There’s no money being lent in California.’ That’s a joke,” McColl said. “We’re pouring money into that place.”

McColl said the bank wants to be the leading lender in every Southern California market segment, including minority communities. To accomplish that, McColl said he has increased the autonomy and authority of its Southern California banking officials, creating regional banks within the bank and naming Liam McGee as president for Southern California and Barbara Desoer as president in Northern California.

“Candidly, there was no one of any significant authority here” in Southern California before the merger, McColl said. The old BofA’s headquarters was in San Francisco.

McColl also dismissed concerns that the former NationsBank was dominating the top leadership roles and that female executives were leaving the bank in disproportionate numbers.

McColl said the executives who left had a variety of reasons, including some who simply did not want to relocate to North Carolina.

McColl said the bank’s commitment to charitable giving has also increased, with $18 million of its $100-million budget for charitable contributions--what he said was the largest philanthropic budget of any financial services company--earmarked for California causes this year. That’s an increase from last year’s California budget of $14 million, he said.

On Wednesday, McColl announced a $2.5-million pledge to support Southern California childhood literacy programs, including a $1-million donation to The Times’ Reading by 9 program. Two days earlier, McColl pledged $5 million to help the University of California at San Francisco build a new waterfront campus in the city.

Some community activists immediately criticized the Los Angeles pledge as too small, given the Southland’s greater population. “The philanthropic commitments are surprisingly modest,” Gnaizda said. L.A. charities “should be getting three to five times what San Francisco is getting.”

BofA spokesman Cary Walker said $9 million to $10 million of the $18 million slated for the state will probably go to Southern California causes.

McColl’s last stop is Sacramento, where he will meet with legislators today.

* SPEECH ON THE WEB: The text of Hugh McColl’s Wednesday speech to Town Hall of Los Angeles appears at http://mediakit.nohib.com/mccoll.