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Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Two

                                                                   41
          5        

          6                  MS. BANSEN:  Good morning, Ms. Smith and    09:51:44

          7        Members of the Board.  Thank you for the opportunity  09:51:46

          8        to be here this morning.  My name is Kirsten Bansen.  09:51:48

          9        I'm with the Minnesota Housing Partnership.  We're a  09:51:52

         10        state-wide nonprofit organization, and one of our     09:51:54

         11        major roles is to support the nonprofit housing       09:51:58

         12        sector in its work, particularly in greater           09:52:02

         13        Minnesota.  Before expressing our concerns related    09:52:04

         14        to the merger, we'd like to make note of the value    09:52:08

         15        of Norwest Corporation to Minnesota nonprofits        09:52:12

         16        working in the field of affordable housing.           09:52:14

         17             Norwest has been a generous and consistent       09:52:16

         18        supporter of nonprofit developers and housing         09:52:20

         19        agencies in many Minnesota communities.  For          09:52:22

         20        example, Norwest has committed five years of funding  09:52:24

         21        at an interest rate of one percent to 27 Minnesota    09:52:26

         22        based affiliates of Habitat for Humanity.  Norwest    09:52:30

         23        was an initial sponsor and has been a constant        09:52:34

         24        supporter of the Home Ownership Center, the 

         25        organization funding and assisting nonprofit housing 



     
     



                                                                     42

          1        counseling programs in the Twin Cities.  Norwest has  09:52:42

          2        also been a major contributor to the Twin Cities and  09:52:44

          3        Duluth programs of the Local Initiatives Support      09:52:48

          4        Corporation (LISC).  This provides technical and      09:52:52

          5        financial support to community development            09:52:54

          6        corporations operating in these cities.  Through its  09:52:56

          7        affiliate, the National Equity Fund, Norwest has      09:53:02

          8        invested 8 million in nonprofit-sponsored low income  09:53:04

          9        housing tax credit projects.  Norwest was one of the  09:53:10

         10        founding members and is a continuing supporter of     09:53:10

         11        the Greater Minneapolis Housing Corporation, a        09:53:14

         12        nonprofit innovator of homeowner assistance           09:53:16

         13        programs.                                             09:53:20

         14             And, finally, Norwest has been a major           09:53:20

         15        contributor to nonprofit housing agencies in smaller  09:53:22

         16        metropolitan communities, such as Rochester, where    09:53:26

         17        it was the first significant funder of the Community  09:53:28

         18        Housing Partnership, a development agency serving     09:53:32

         19        two southeastern Minnesota counties.                  09:53:34

         20             In addition to the direct financial support      09:53:36

         21        provided to nonprofit housing agencies, Norwest       09:53:38

         22        indirectly supports the work of these agencies in     09:53:42

         23        two important ways.  First, it has been a major       09:53:44

         24        supplier of capital to the State Housing Finance      09:53:46

         25        Agency, whose programs are utilized by nonprofits     09:53:50



     
     



                                                                     43

          1        across the state.                                     09:53:54

          2             Second, and most importantly, Norwest, through   09:53:54

          3        its many branches in Minnesota, particularly in       09:53:56

          4        smaller towns, provides a source of community         09:54:00

          5        leadership.  Frequently Norwest branch managers and   09:54:02

          6        loan officers contribute their financial expertise    09:54:06

          7        and advocate on behalf of community development       09:54:10

          8        projects, thereby enabling nonprofit agencies to      09:54:12

          9        make Minnesota communities more viable.               09:54:16

         10             It is because Norwest has been so significant    09:54:18

         11        to this industry in Minnesota that we ask for a       09:54:22

         12        concrete assurance that the merged corporation, once  09:54:24

         13        headquartered in California, will not forget its      09:54:26

         14        reinvestment obligations in this state.  We agree     09:54:30

         15        with Minnesota's U.S. Representative Bruce Vento      09:54:32

         16        that there's a risk that the bi-coastal               09:54:34

         17        concentrations of financial services may lead to      09:54:38

         18        diminished community involvement and investment in    09:54:42

         19        the nation's heartland.                               09:54:44

         20             In the September 10 letter to the Federal        09:54:44

         21        Reserve Bank of San Francisco, Stanley Stroup, the    09:54:50

         22        Executive Vice President and General Counsel of the   09:54:50

         23        Norwest Corporation, addressed many of our concerns.  09:54:52

         24        Mr. Stroup wrote that, post-merger, the strong ties   09:54:56

         25        to Minnesota will remain, branch locations will not   09:55:00



     
     



                                                                     44

          1        be changed, and the bank will remain a member of the  09:55:02

          2        Des Moine Federal Home Loan Bank.  It is vital to     09:55:06

          3        Minnesota that the merged institution follow through  09:55:08

          4        on Mr. Stroup's assurances.                           09:55:10

          5             In addition to what he wrote, however, we        09:55:12

          6        believe that it is equally important that as a part   09:55:14

          7        of this merger, Wells-Norwest, the new Wells Fargo,   09:55:16

          8        make a commitment to an investment pledged to         09:55:20

          9        Minnesota and other states in its service region      09:55:22

         10        that is similar to the multi-billion dollar           09:55:26

         11        commitment that was made to California.  The new      09:55:28

         12        Norwest should make parallel pledges to these states  09:55:30

         13        proportionate to that one made in California based    09:55:34

         14        on the relative amounts of deposits obtained by the   09:55:36

         15        bank from the respective states.                      09:55:40

         16             In conclusion, we appreciate what has been done  09:55:42

         17        and what has been promised by Norwest Corporation     09:55:44

         18        and Wells Fargo & Company, but we also believe that   09:55:46

         19        the risks are very high for our state.  Minnesota is  09:55:50

         20        losing one of its most important corporate            09:55:52

         21        headquarters.  In addition to the general             09:55:56

         22        commitments made by these banks to Minnesota,         09:55:58

         23        Norwest-Wells should identify a dollar amount that    09:56:00

         24        they can commit that will enable Minnesota and like   09:56:04

         25        states to meet their needs for community              09:56:08



     
     



                                                                     45

          1        reinvestment.                                         09:56:10

          2             Thank you for your time.                         09:56:10

          3        

          4                  CHAIRPERSON SMITH:  Thank you very much.    09:56:12

          5        We'll go next to Mr. Bryant.                          09:56:12

          6        

          7                  MR. BRYANT:  Good morning.                  09:56:14

          8        

          9                  CHAIRPERSON SMITH:  Good morning.

         10        

         11                  MR. BRYANT:  In an effort to keep my        09:56:16

         12        remarks within the lines of your time line, I'm       09:56:16

         13        going to abridge my remarks.  The full text of the    09:56:20

         14        testimony is available outside for anyone who wants   09:56:24

         15        a copy.                                               09:56:26

         16             Allow me to begin my prepared remarks by         09:56:26

         17        reminding us all that CRA is not a government         09:56:30

         18        mandated corporate give-away program or that          09:56:34

         19        minority thing that a company does, nor the           09:56:38

         20        loss-leader activity a financial institution engages  09:56:40

         21        in in order to simply continue to conduct its normal  09:56:44

         22        or traditional business practices.  In short, CRA     09:56:48

         23        simply means new markets.                             09:56:52

         24             Former U.S. Comptroller Ludwig often referred    09:56:56

         25        to the democratization of credit America as it        09:56:56



     
     



                                                                     46

          1        relates to the historic evolution of credit           09:56:58

          2        availability and access to credit in this country.    09:57:02

          3        Bless you.  In fact, in the year 1901, most           09:57:04

          4        middle-aged, middle income Caucasians -- arguably     09:57:10

          5        the underwriting standard that modern day criteria    09:57:12

          6        has been fashioned around -- could not themselves     09:57:14

          7        obtain credit, precisely because the only credit      09:57:16

          8        available in 1901 was a commercial credit.            09:57:20

          9        Continuing along this line of thought, one of the     09:57:22

         10        safest and most acceptable forms of credit            09:57:26

         11        collateral during this time was in fact inventory,    09:57:28

         12        one of the least perceived safe forms of collateral   09:57:30

         13        today.  The point here is that CRA is not about some  09:57:32

         14        new form of social subsidy, but a serious new,        09:57:36

         15        substantial and permanent evolution in the            09:57:40

         16        democratization of credit process.  Low to moderate   09:57:42

         17        income communities are growing segments of our        09:57:44

         18        larger national economy and community, and, as such,  09:57:46

         19        should represent a substantial component of any       09:57:50

         20        bank's future business strategy.                      09:57:52

         21             Turning my attention to this new merger          09:57:54

         22        proposal, let me say that the company I know best     09:57:56

         23        here is Wells Fargo & Company, or as we say in        09:57:58

         24        California, Wells Fargo.  It is, of course, no        09:58:02

         25        secret that Wells Fargo has moved aggressively away   09:58:04



     
     



                                                                     47

          1        from their traditional branch network that most of    09:58:08

          2        us grew up on, and they have likewise moved toward    09:58:10

          3        the technology and information based system on        09:58:12

          4        banking.  It is also fairly common within the bank    09:58:16

          5        that I have sparred with officials from Wells Fargo   09:58:18

          6        on occasion concerning their inner city strategy.     09:58:20

          7        This said, from a business perspective, I happen to   09:58:24

          8        believe that the bank's overall strategy is a smart   09:58:28

          9        one.  Branch banking as we know it is a memory of     09:58:32

         10        the past, but our communities are not.                09:58:36

         11             Wells Fargo's general success with this new 

         12        approach to banking over the past few years is        09:58:40

         13        precisely why Wells Fargo loves their stock.  The     09:58:40

         14        downside to this general strategy, unfortunately, is  09:58:44

         15        that relationship based communities were less than    09:58:46

         16        thrilled.  Wall Street is a left brain thinker, and   09:58:48

         17        communities tend to be more contextual in their       09:58:52

         18        understanding, or as I would call right brain         09:58:54

         19        thinkers.  In short, communities were saying we want  09:58:56

         20        high-touch, too, Wells Fargo.                         09:58:58

         21             To the bank's credit, in time they began to      09:59:00

         22        realize there was a true win-win business strategy    09:59:04

         23        here in marrying high tech and high touch.  Our       09:59:06

         24        recent $1.4 million partnership between Operation     09:59:10

         25        HOPE and Wells Fargo to build and operate an          09:59:12



     
     



                                                                     48

          1        Operation HOPE banking center in the low income       09:59:16

          2        Watts/Willowbrook area of Los Angeles, is in our      09:59:18

          3        opinion one of the many examples of how the bank has  09:59:20

          4        successfully moved to bridge the gap.  This new       09:59:22

          5        banking center, like the two we currently operate in  09:59:26

          6        black and Latino communities, will focus on economic  09:59:28

          7        education, borrower readiness, and credit             09:59:32

          8        availability, in that order.  Our $32 million in      09:59:34

          9        performing loans and investments in over 20,000       09:59:36

         10        adults educated in economic education suggest it's a  09:59:38

         11        strategy that works.                                  09:59:42

         12             We are pleased that Wells Fargo was able to see  09:59:42

         13        the bigger picture, and then adapt their business     09:59:46

         14        model to include this make-sense strategy.            09:59:48

         15             I also want to note, for the record, we do       09:59:50

         16        business with people and not companies.  And without  09:59:52

         17        a doubt, I know that one of the reasons that the      09:59:54

         18        bank decided to ultimately move on this proposal and  09:59:56

         19        others like it was the organizational focus and       09:59:58

         20        leadership provided by the Wells Fargo Community      10:00:02

         21        Development Group and the Wells Fargo Foundation.     10:00:04

         22        Our communities know these people, and, more          10:00:06

         23        importantly, they know and understand our             10:00:10

         24        communities.  It's called mutual respect.             10:00:10

         25             Yes, Norwest is known for its successful high    10:00:14



     
     



                                                                     49

          1        touch community banking approach to doing business,   10:00:18

          2        but with great respect, generalized strategies and    10:00:20

          3        approaches used successfully in the past in other     10:00:22

          4        regions of the country simply will not fly in         10:00:26

          5        California, which I might remind everyone is the      10:00:28

          6        largest banking market in the continental United      10:00:30

          7        States.  Just like the City of Minneapolis requires   10:00:34

          8        that all new buildings in downtown Minneapolis        10:00:34

          9        connect to neighboring businesses by way of a         10:00:38

         10        secondary walkway called a skyway, community          10:00:40

         11        development organizations in California and other     10:00:42

         12        cutting edge regions have a different type of         10:00:44

         13        relationship with their banks.                        10:00:48

         14             As an example, you have the $18 million Urban    10:00:48

         15        League in Los Angeles, or the 17,000 member First     10:00:52

         16        A.M.E. Church, with 180 full-time employees, or       10:00:56

         17        TELACU with $200 million in annual revenues, or the   10:01:00

         18        Church of God in Christ was building a $50 million    10:01:02

         19        cathedral in South Central, creating a hundred        10:01:08

         20        million dollars in spin-off economic activity, or     10:01:08

         21        take Operation HOPE, with three quarters of a         10:01:10

         22        million dollars on deposit at any time in a bank in   10:01:14

         23        Los Angeles.  These organizations will not respond    10:01:18

         24        well if their local decision-making capacity is       10:01:20

         25        taken away.                                           10:01:24



     
     



                                                                     50

          1             I did hear the bell.  Thank you.                 10:01:24

          2                  

          3                  CHAIRPERSON SMITH:  By all means, make      10:01:30

          4        sure that we have a copy of your full statement and   10:01:32

          5        we'll enter it into the record.                       10:01:34

          6        

          7                  MR. BRYANT:  Seventy-five copies are        10:01:44

          8        available in your lobby.  

          9        

         10                  CHAIRPERSON SMITH:  Thank you very much.  

         11        We'll go to Ms. Haines.  

         12        

         13                  MS. HAINES:  Thank you.  I'd like to thank  10:01:46

         14        the Federal Reserve Board for this opportunity to     10:01:46

         15        speak.  My name is Anne Haines Yatskowitz, and I'm    10:01:48

         16        the president and CEO of ACCION New Mexico, which is  10:01:52

         17        an Albuquerque based micro-lending organization.  I   10:01:54

         18        wish to comment today on the positive impact that     10:01:58

         19        support from both Norwest Bank and Wells Fargo Bank   10:02:02

         20        has had on ACCION New Mexico's ability to serve       10:02:06

         21        disenfranchised and emerging entrepreneurs and also   10:02:12

         22        to strengthen the economies of Albuquerque's low and  10:02:16

         23        moderate income neighborhoods.                        10:02:20

         24             I'd like to first begin by giving you just a     10:02:20

         25        little background about ACCION New Mexico.  ACCION    10:02:24



     
     



                                                                     51

          1        New Mexico was created four and a half years ago in   10:02:28

          2        response to the escalating poverty conditions in New  10:02:32

          3        Mexico.  And, unfortunately, New Mexico is the state  10:02:36

          4        now that has the highest poverty rate in the          10:02:38

          5        country.  An associate of ACCION International,       10:02:42

          6        ACCION New Mexico is a local private nonprofit        10:02:48

          7        organization that extends a life-line to very small   10:02:50

          8        or micro businesses in New Mexico by offering tools   10:02:52

          9        of economic self-reliance; namely, business credit    10:02:58

         10        and business training.  It is these hard-working      10:03:02

         11        entrepreneurs, home-based mechanics, seamstresses,    10:03:08

         12        artists, woodworkers and others, who make up a        10:03:12

         13        growing sector of self-employed families and          10:03:14

         14        individuals in New Mexico.                            10:03:18

         15             And because of a lack of collateral, credit      10:03:20

         16        history or the need for only a small loan amount,     10:03:24

         17        many emerging entrepreneurs do not have access to     10:03:28

         18        business credit from traditional sources.  Yet,       10:03:34

         19        capital is an essential ingredient in helping boost   10:03:36

         20        a small business from subsistence to                  10:03:42

         21        self-sufficiency and to success.                      10:03:44

         22             Today ACCION New Mexico, since we started        10:03:48

         23        lending about four and a half years ago, has made     10:03:52

         24        over 760 micro loans of an average size of $12        10:03:54

         25        hundred to over 400 businesses in the Albuquerque     10:04:00



     
     



                                                                     52

          1        area.  The organization has written off less than     10:04:04

          2        two percent of the slightly less than $1 million      10:04:06

          3        that we've lent.  Nearly two thirds of our client     10:04:10

          4        base is minority, and the median yearly household     10:04:14

          5        income of our borrowers is about $21,000, which is    10:04:18

          6        substantially lower than the area median income for   10:04:24

          7        Albuquerque, which is approximately $33,000.          10:04:28

          8             By June of 1996, ACCION New Mexico had enough    10:04:32

          9        multiple loan clients to analyze certain changes      10:04:36

         10        entrepreneurs experienced over time.  And in a        10:04:40

         11        sample size of some of our clients who had received   10:04:44

         12        at least three consecutive loans, we have found an    10:04:46

         13        average increase of 71 percent in business assets,    10:04:50

         14        61 percent in business revenues, 87 percent in        10:04:54

         15        take-home income from the business, 21 percent in     10:05:00

         16        overall household income, and 21 percent in           10:05:04

         17        full-time jobs.                                       10:05:06

         18             The reason I wanted to touch on some of these    10:05:08

         19        statistics is because I do believe that we would not  10:05:12

         20        have achieved some of these successes and already     10:05:16

         21        seen some of these economic changes had it not been   10:05:20

         22        from the tremendous support that both Norwest and     10:05:24

         23        Wells Fargo have provided to ACCION New Mexico.       10:05:28

         24             When ACCION New Mexico was first created,        10:05:32

         25        Norwest was one of the few banks that stepped         10:05:36



     
     



                                                                     53

          1        forward in the Albuquerque area to support the        10:05:38

          2        program, and Norwest supported us in a number of      10:05:42

          3        different ways.  One way was by providing office      10:05:46

          4        space and furniture, leadership support, strategic    10:05:50

          5        thinking, marketing support, and a line of credit to  10:05:54

          6        enable us to launch the program.  We used the line    10:05:58

          7        of credit to turn around and make loans to our        10:06:02

          8        borrowers.  Norwest has provided considerable fund    10:06:06

          9        raising support by offering challenge grants which    10:06:10

         10        have enabled us to catalyze and challenge the         10:06:14

         11        surrounding community and business community to       10:06:18

         12        support the program as well.                          10:06:20

         13             Last year Wells Fargo made a $200,000            10:06:22

         14        investment in ACCION New Mexico.  Wells Fargo did     10:06:26

         15        not have a very visible presence at the time in       10:06:30

         16        Albuquerque, there were no branches in Albuquerque,   10:06:34

         17        and yet Wells Fargo took a very proactive role in     10:06:38

         18        supporting our program.  And with a $200,000          10:06:42

         19        investment, which was a loan, Wells Fargo also        10:06:44

         20        helped change the playing field.                      10:06:48

         21             My time is up.  I would like to say that I do    10:06:52

         22        not think this program would exist without the        10:06:54

         23        support of both banks.  Thank you.                    10:06:58

         24                  

         25                  CHAIRPERSON SMITH:  Thank you very much.    10:07:00



     
     



                                                                     54

          1        Mr. Rainey.                                           10:07:02

          2        

          3                  MR. RAINEY:  Yes.  Thank you.  My name is   10:07:04

          4        Clive Rainey, and I'm here to represent Willard       10:07:06

          5        Fuller, the founder and president of Habitat for 

          6        Humanity.  As Mr. Biller has already testified,       10:07:10

          7        Norwest has a tremendous leadership commitment to     10:07:14

          8        Habitat for Humanity, and I'm simply going to read    10:07:18

          9        from Mr. Fuller's letter to Ms. Levert.               10:07:18

         10             I'm pleased to write you regarding the           10:07:22

         11        partnership between Norwest Mortgage and Habitat for  10:07:24

         12        Humanity.  This partnership reflects real leadership  10:07:26

         13        I know as (inaudible), most significantly through     10:07:30

         14        the partnership in the Rebuilding Our Communities     10:07:32

         15        Campaign.  The Rebuilding Our Communities Campaign    10:07:34

         16        is an effort to raise 250 million of additional       10:07:36

         17        money for Habitat's work by our 25th anniversary in   10:07:40

         18        September of 2001.  Norwest committed in October of   10:07:44

         19        1996 to be the lead sponsor in this effort.  This     10:07:48

         20        commitment of 16.5 million over five years includes   10:07:52

         21        seasonal construction loans of $2 million interest    10:07:56

         22        free each year for materials.                         10:07:58

         23             Norwest's contribution here has encouraged       10:08:00

         24        others.  For example, Fannie Mae has matched this     10:08:02

         25        two million seasonal construction loan for the past   10:08:06



     
     



                                                                     55

          1        two years, investments in home loan pools of a        10:08:08

          2        million dollars annually at nominal or no interest    10:08:12

          3        to accelerate more construction.                      10:08:14

          4             Norwest is also recruiting other lenders to      10:08:16

          5        come in so that the total should exceed $1 million a  10:08:20

          6        year, matching Norwest employee contributions to      10:08:22

          7        Habitat with a guaranteed minimum of $100,000 a       10:08:26

          8        year.  Site participation grants to Habitat           10:08:28

          9        affiliates in cities where ten or more of Norwest     10:08:34

         10        corporation's 53,000 employees volunteer, these       10:08:36

         11        grants, a minimum of $100,000 a year, will fund       10:08:40

         12        volunteer Habitat projects.  Grants of up to $2,000   10:08:44

         13        to help Habitat homeowners with closing and related   10:08:48

         14        costs, the minimum is a hundred thousand dollars per  10:08:52

         15        year.                                                 10:08:54

         16             As you can see, leadership on the part of        10:08:54

         17        Norwest has not been limited to their own             10:08:56

         18        commitment.  They have encouraged and challenged      10:08:58

         19        other members of their industry to match their        10:09:00

         20        efforts.  Norwest Mortgage has demonstrated           10:09:02

         21        exemplary corporate citizenship and Habitat for       10:09:06

         22        Humanity is proud to call them our partners.          10:09:10

         23             Habitat for Humanity International is a          10:09:14

         24        nonprofit, ecumenical, Christian housing              10:09:14

         25        organization dedicated to the elimination of          10:09:16



     
     



                                                                     56

          1        substandard housing.  Habitat works in partnership    10:09:18

          2        with people in need to build simple, decent houses    10:09:20

          3        that are sold at no profit through no interest        10:09:22

          4        mortgages.                                            10:09:26

          5             Founded in 1976 in Americus, Georgia, Habitat    10:09:26

          6        has more than 1,450 U.S. affiliates, and together     10:09:30

          7        with affiliates in 59 other countries, has built      10:09:32

          8        over 70,000 homes.  Thank you very much.              10:09:36

          9         

         10                  CHAIRPERSON SMITH:  Thank you.  We'll go    10:09:38

         11        to Ms. Saweuyer-Parks.                                10:09:40

         12        

         13                  MS. SAWEUYER-PARKS:  Distinguished members  10:09:46

         14        and staff of the Federal Reserve, good morning.  I'm  10:09:48

         15        Deborah Saweuyer-Parks, CEO of the Oregon             10:09:52

         16        Corporation for Affordable Housing in Portland,       10:09:56

         17        Oregon.  We are a nonprofit syndicator of federal     10:09:58

         18        low-income housing tax credits, and invest            10:10:02

         19        exclusively in affordable housing throughout the      10:10:08

         20        State of Oregon, and now in Washington State and      10:10:10

         21        soon to enter into Idaho.                             10:10:12

         22             I am here this morning to testify in support of  10:10:14

         23        the merger between Norwest Corporation and Wells      10:10:18

         24        Fargo & Company.  My remarks are designed to          10:10:22

         25        illustrate what can be done when a local nonprofit    10:10:26



     
     



                                                                     57

          1        corporation partners with a large financial           10:10:30

          2        institution new to the Oregon market.  Specifically,  10:10:34

          3        I'm talking about Wells Fargo & Company.              10:10:38

          4             I founded OCAH five years ago.  Our aim was to   10:10:42

          5        raise capital from Oregon's corporate and financial   10:10:46

          6        community to reinvestment that capital in             10:10:50

          7        multi-family housing throughout the state, initially  10:10:52

          8        the State of Oregon.  It was our hope to demonstrate  10:10:54

          9        that it was realistic to merge social objectives      10:10:58

         10        with business goals and to create an opportunity      10:11:02

         11        that was worthwhile for both the public and private   10:11:06

         12        sectors.  Oregon's economy was quite robust, so we    10:11:08

         13        at OCAH planned to help eliminate a social need in    10:11:14

         14        our state, which was to finance a portion of the      10:11:18

         15        projected 50,000 affordable housing units needed to   10:11:22

         16        house over 125,000 working poor and their families.   10:11:26

         17             The vehicle we created was the Oregon Equity     10:11:34

         18        Fund, a limited partnership designed to provide       10:11:36

         19        equity to developers of affordable housing.  I        10:11:40

         20        raised $20 million in Fund I -- for Fund I.  The      10:11:46

         21        first -- no.  Because of time, I crossed so much of   10:11:52

         22        this out, so I'm having trouble following.            10:11:54

         23             Since Fund I was so successful, we proceeded     10:11:56

         24        with Fund II.  Raising equity this time was           10:12:02

         25        extremely difficult.  Former Fund I commercial banks  10:12:04



     
     



                                                                     58

          1        created their own hundred million dollar plus funds   10:12:08

          2        and left OCAH, or either they merged with other       10:12:12

          3        financial institutions and retreated from their       10:12:16

          4        local community promises.                             10:12:20

          5             I had some trepidation approaching Wells Fargo,  10:12:26

          6        but at the urgence of a friend, I called Karen        10:12:30

          7        Wegman.  Karen, in turn, referred me to another       10:12:32

          8        Wells Fargo staffer, and much like John said a few    10:12:38

          9        minutes ago, it's about the people at Wells Fargo     10:12:42

         10        that makes the difference in our business.  Six       10:12:44

         11        weeks after that call, I had a $4 million commitment  10:12:48

         12        from Wells Fargo.  One year later I approached Wells  10:12:52

         13        Fargo again for Fund III, asked for $10 million.  It  10:12:58

         14        was not only granted -- or not granted, invested,     10:13:02

         15        but they also agreed to provide me with a $10         10:13:04

         16        million line of credit for the partnership.           10:13:08

         17             For my Board and those of us who manage the      10:13:12

         18        fund, this level of commitment that Wells Fargo       10:13:14

         19        demonstrated was unparalleled.                        10:13:18

         20             The following are a few examples of the results  10:13:24

         21        that were achieved because of Wells Fargo's           10:13:26

         22        investment in the Oregon Equity Fund.  In Medford,    10:13:30

         23        southern Oregon, in a rural community, we developed   10:13:34

         24        80 units of affordable housing for families, one,     10:13:38

         25        two, three and four-bedroom units, and four bedrooms  10:13:42



     
     



                                                                     59

          1        are extremely difficult to locate.                    10:13:46

          2             In far eastern Oregon, Sierra Vista, largely an  10:13:48

          3        Hispanic community, we developed housing for farm     10:13:54

          4        workers.                                              10:13:56

          5             In Cannon Beach, Twelfth Avenue Terrace -- I'm   10:13:56

          6        speeding up because I saw that minute -- there were   10:14:02

          7        housing projects developed, in Bend, the Bill Healy   10:14:04

          8        Family Center for previously homeless families who    10:14:08

          9        are gainfully employed, in Eugene and other           10:14:12

         10        communities throughout our state.                     10:14:14

         11             Wells Fargo has done much in Oregon.  Through    10:14:18

         12        its foundation, countless grants were given, 600,000  10:14:22

         13        to Portland Public Schools, a hundred thousand        10:14:28

         14        dollars to Umpqua Community Development, over         10:14:30

         15        400,000 to United Way, and a hundred thousand         10:14:34

         16        dollars to Albina Community Bank.  It was the only    10:14:36

         17        bank in the state of Oregon that did not -- that      10:14:38

         18        received an investment from a large commercial bank,  10:14:42

         19        and it was established to serve a population          10:14:46

         20        formerly denied access to capital for homeowners or   10:14:48

         21        small businesses.                                     10:14:54

         22             My time's up.  Thank you very much.  I did       10:14:54

         23        prepare a record of my comments for the record.       10:14:56

         24        

         25                  CHAIRPERSON SMITH:  Thank you, and we'll    10:15:00



     
     



                                                                     60

          1        go to Ms. Wheeler.                                    10:15:02

          2        

          3                  MS. WHEELER:  Thank you, and thank you for  10:15:04

          4        this opportunity to be here as well.  My name is      10:15:04

          5        Suzy Wheeler, and I work for an organization called 

          6        Consumer Credit Counseling Services of Minnesota.     10:15:10

          7        We're a private nonprofit agency.  We have about six  10:15:10

          8        offices around the metro area.  We provide four main  10:15:14

          9        programs: budget counseling, debt management,         10:15:18

         10        housing counseling, and community education.          10:15:20

         11             We've been very pleased with the relationship    10:15:22

         12        we've had with Norwest Bank over the last few years,  10:15:26

         13        especially in the area of community education.  We    10:15:28

         14        find that there's much a very big need for education  10:15:32

         15        regarding money management out in the community.      10:15:36

         16             I'm an education coordinator, and I spend all    10:15:38

         17        my time in the community talking to people about      10:15:40

         18        managing their money, how to manage it better, how    10:15:42

         19        to take care of credit problems.  I talk to high      10:15:46

         20        school kids about using credit wisely, and that's     10:15:48

         21        starting to become a very needed issue because high   10:15:52

         22        school kids are starting to get credit cards, and     10:15:54

         23        that's very scary.  So as part of our mission at the  10:15:56

         24        agency is we try to go out and provide education to   10:16:00

         25        the community about money management.                 10:16:02



     
     



                                                                     61

          1             Our relationship with Norwest Bank has           10:16:04

          2        primarily been with community education focusing on   10:16:08

          3        bringing education into places where they have not    10:16:10

          4        had the opportunity to get education about money      10:16:14

          5        management.  One particular example is my work with   10:16:16

          6        the treatment centers in the cities, the Twin         10:16:18

          7        Cities.  One particular organization comes to mind    10:16:22

          8        is the Wayside House, and this is a treatment         10:16:24

          9        facility for women for drugs and alcohol.  And what   10:16:26

         10        we've developed is a four-part workshop on money      10:16:28

         11        management.  And I go out into the center, and the    10:16:32

         12        Norwest bankers join me as well, and we provide       10:16:36

         13        topics on money management so that these women can    10:16:38

         14        get their financial life under control before they    10:16:42

         15        actually leave the center.  So we discuss topics      10:16:44

         16        such as basic banking, credit, money management,      10:16:48

         17        housing issues, as well as student loan default.  So  10:16:50

         18        we spend a lot of time with the women, and we've had  10:16:54

         19        a lot of support with Norwest Bank to provide the     10:16:58

         20        information to these individuals so when they leave   10:17:00

         21        the center, at least they have a pretty good idea on  10:17:02

         22        how to tackle some of these issues that come up.  So  10:17:04

         23        we've been very pleased and we hope to see that       10:17:08

         24        relationship continue.                                10:17:10

         25             Other organizations that we're very involved     10:17:10



     
     



                                                                     62

          1        with, we also do the same thing at a men's treatment  10:17:12

          2        center called the Eden Programs, and we do the same   10:17:16

          3        sort of thing: we go out and provide the education    10:17:18

          4        so that these folks at least have a better handle on  10:17:22

          5        how to start tackling some of the financial issues    10:17:24

          6        that they encounter prior to going into treatment,    10:17:26

          7        as well as trying to get things under control so      10:17:30

          8        that when they get out of treatment they can start    10:17:30

          9        rebuilding their life, find an apartment, try to      10:17:34

         10        deal with credit problems that come up, and start to  10:17:36

         11        get things under control.                             10:17:38

         12             So we have been very, very excited, and the      10:17:40

         13        people are very positive as far as how they have      10:17:42

         14        been responding to the program because this is        10:17:44

         15        information that they have not received other         10:17:46

         16        places.  So this is something we've been very, very   10:17:48

         17        pleased with.                                         10:17:50

         18             Other organizations that we go out to, we also   10:17:52

         19        go to visit a -- been to a program called the Step    10:17:54

         20        Program, which is a self-sufficiency program in St.   10:17:58

         21        Paul, and this is a program for people that are       10:18:00

         22        living in public housing that need to get things      10:18:02

         23        under control so they can become self-sufficient.     10:18:04

         24        We go out and talk to the folks about credit.         10:18:06

         25             The Norwest bankers have been very positive.     10:18:08



     
     



                                                                     63

          1        We usually have a Norwest banker join us at these     10:18:12

          2        workshops, and it really helps for the participants   10:18:16

          3        to be able to talk to a banker and actually feel      10:18:18

          4        like they can connect a person at the bank.  They     10:18:22

          5        get the business card of the banker; then they know   10:18:24

          6        that they can go down and talk to that particular     10:18:28

          7        banker.  It takes a lot of the intimidation out, and  10:18:30

          8        we've found that that really works well.  So that     10:18:34

          9        way they can say okay, I'm going to go down and talk  10:18:36

         10        to this banker and deal with my issues that I've had  10:18:38

         11        with my checking account.  I've had checking account  10:18:42

         12        problems in the past, maybe I've bounced a few        10:18:44

         13        checks, but what happens is is sometimes there's a    10:18:46

         14        barrier that gets developed and people don't -- they  10:18:48

         15        don't feel comfortable actually calling the bank up   10:18:50

         16        because they're embarrassed.  So what we've done is   10:18:54

         17        developed information so that people -- take the --   10:18:56

         18        the intimidation is gone, they can feel like they     10:19:00

         19        can now go down and talk to the banker, and feel      10:19:02

         20        like okay, now I can address some problems because I  10:19:04

         21        feel a lot more comfortable: I've actually met the    10:19:08

         22        banker.  So we really found that that's been          10:19:10

         23        successful, and we hope to see that kind of           10:19:12

         24        relationship continue.  Thank you.                    10:19:16

         25                     
	
Last update: December 3, 2010