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Keeping the Heat on NHSB
DeStefano hopes to galvanize anti-conversion opposition
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Business New Haven
12/08/2003
By: M.C.B.
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"This is Enron, CRRA and World.com, Part II," said Mayor John DeStefano Jr. at a December 1 press conference urging depositors and citizens to continue to oppose New Haven Savings Bank's announced intention to convert from a mutual savings bank to public stock ownership.
"We are not going to go away," DeStefano said of himself and a group of community activists formed in the wake of the bank's July announcement that it would go public in order to raise the cash necessary to acquire the Savings Bank of Manchester and Tolland Bank for a combined $677 million.
From the sidewalk in front of the bank's headquarters at 195 Church Street, DeStefano urged citizens to attend a public hearing held by the state's Department of Banking. The hearing was scheduled for December 4 in Hamden, after this edition of BNH went to press.
The mayor issued four demands: 1) That bank insiders not profit from the conversion; 2) that NHSB improve its record of lending to minorities; 3) that the bank increase its commitment to community philanthropy; and that the bank's board of directors be broadened "to reflect the community, not just the United Illuminating Co. and Yale-New Haven Hospital."
Many of the bank's directors, including UI CEO Nathaniel D. Woodson and YNHH CEO Joseph A. Zaccagnino, have present or past ties to those two organizations.
DeStefano and others have alleged that NHSB's senior management and directors are motivated by personal gain in planning the conversion.
"Fourteen percent of the $600 million to $800 million raised [by the stock offering] is set aside for directors and officers," said DeStefano. "That's what this is all about."
"We understand the mayor's concerns," countered NHSB Vice President Paul McCraven, "but we feel we need to grow to stay competitive. That growth will allow us to do more than in the past for the community."
To the charge that NHSB has ignored or under-served economically disadvantaged neighborhoods and potential customers, McCraven said his bank "has a specific plan to address those issues, which we'll be releasing in the next few days."
- Michael C. Bingham
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