"The CBS Evening News" pointed its "Eye on America" this week at tiny Henniker, N.H., to illustrate the evils of big bank mergers. The "giant bank" target: $12 billion-asset Peoples Heritage Financial Corp. of Portland, Maine.
The report focused on what had happened to Henniker's "little homegrown bank," Valley Bank. But the Maine company says CBS got a few things wrong.
Firstly, CBS said Valley Bank was gobbled up by Peoples Heritage. Actually, CFX Corp. of Keene, N.H., bought Valley in 1993. Peoples Heritage bought CFX last April.
A small point, maybe, but the error led to Peoples Heritage seeming to be blamed for something that happened before it came on the scene.
Early in the segment, correspondent Ray Brady interviews William J. Ryan, the chairman, chief executive, and president of Peoples Heritage. "The closer you get to the people in the community, the better the banking," Mr. Ryan says.
Cut to Mr. Brady sitting in a deli talking with Henniker businessman Dave Reynolds. Mr. Reynolds says bank mergers are leading to lousy customer service. Once, he says, he asked his bank for a receipt and an irritated teller wrote on it, "Here's your (expletive) receipt, loser."
The implication was that the offending bank was Peoples Heritage. In fact, the Maine company says the incident occurred in 1996, two years before it bought CFX. "We told them that repeatedly," said Peoples Heritage spokesman Brian Arsenault.
Finally, though the TV report noted that the offended Mr. Reynolds is suing the bank, it left the impression that the exchange with the teller was the issue. In fact, the bank says, it is foreclosing on Mr. Reynolds, claiming he defaulted on a loan made by CFX, and Mr. Reynolds is countersuing, charging lender liability.
Mr. Arsenault said his company was caught off-guard by the report. CBS, he said, had requested an interview with Mr. Ryan "to talk about the growth of the bank and our commitment to community banking."
"Frankly," Mr. Arsenault said, "they seemed to have their mind made up before they spoke to us."
Kim Akhtar, a spokeswoman for the "Evening News," said the network stands by the story. "People sometimes don't like pieces done on them," she said. "We understand that."
- Louis Whiteman
Some investors who are out $1.3 million from an electric car manufacturing scam are holding a Minnesota community bank responsible for their losses. The investors-a business and 24 individuals-have sued Heritage Bank in Willmar for allowing the leader of the investment scam to withdraw their contributions from a business account.
Edmond X. Ramirez Sr. had promised to use their $1.3 million to launch an electric car manufacturing business. Instead he deposited the money in a personal bank account in Las Vegas, where he lives.
Mike Milligan, a lawyer for $77 million-asset Heritage vowed to fight the lawsuit. Mr. Milligan said the bank is not to blame for the incident because employees followed the proper withdrawal procedures when Mr. Ramirez cleaned out his account.
The investors, Mr. Milligan said, are seeking restitution from wherever possible-including from Mr. Ramirez, who was convicted and sentenced to five years in prison for his role in the fraud.
"When people have incurred losses they try to recoup them, but the bank is not the appropriate party to be looking to," Mr. Milligan said.