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Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Four

                                                                   83

          1                           (Recess taken.)

          2         

          3                  CHAIRPERSON SMITH:  We have both the        11:01:32

          4        witness panel and the Federal Reserve panel, so I     11:01:32

          5        think we'll go ahead and start, and our first         11:01:36

          6        speaker is Mr. Gnaizda.                               11:01:38

          7        

          8                  MR. GNAIZDA:  Good morning.  I'm the        11:01:42

          9        policy director with the Greenlining Institute.  To   11:01:44

         10        put background on the Greenlining Institute, in the   11:01:46

         11        last year we have been involved in opposing six       11:01:50

         12        major mergers, including the City Corp merger, which  11:01:52

         13        we believe is illegal, and the Bank of                11:01:58

         14        America/Nations Bank merger, and opposition to State  11:02:00

         15        Farm becoming a thrift institution.                   11:02:06

         16             Historically Greenlining is also opposed to      11:02:06

         17        many Wells Fargo mergers, including one as early as   11:02:10

         18        1971, before there was a CRA, and we were             11:02:14

         19        successful, and we opposed a Wells Fargo merger in    11:02:16

         20        1989 as well.                                         11:02:22

         21             I'd like to offer five preliminary observations  11:02:24

         22        that will put our remarks in context.  First, we      11:02:26

         23        strongly support hearings by the Federal Reserve.     11:02:32

         24        We believe, however, there should be many more        11:02:34

         25        hearings, and we believe that the Federal Reserve     11:02:38



     
     



                                                                     84

          1        should change its policy and permit community groups  11:02:40

          2        to cross examine banks when there are mergers, and    11:02:44

          3        to secure information in advance.  This will help     11:02:46

          4        your task as well.                                    11:02:52

          5             Secondly, this merger that's before you          11:02:52

          6        probably would not have occurred were it not for      11:02:56

          7        Federal Reserve policies that we consider quite       11:02:58

          8        reckless; that is, the green light to the City        11:03:02

          9        Corp/Travelers merger and the B of A/Nations Bank     11:03:06

         10        merger.  You have forced other banks into an unfair   11:03:10

         11        competitive position into which they, too, must       11:03:14

         12        merge.                                                11:03:18

         13             Third, we oppose the trend of high risk          11:03:20

         14        investments in foreign nations at the cost of         11:03:24

         15        investing in the inner city.  Our motto is invest in  11:03:26

         16        Minnesota, not Moscow, invest in Los Angeles, not     11:03:30

         17        Leningrad.  And we're pleased to observe that         11:03:34

         18        neither Wells Fargo nor Norwest has invested in       11:03:38

         19        Russia, unlike some of their competitors such as      11:03:40

         20        City Corp, Chase Manhattan, and Bank of America.      11:03:44

         21             Fourth, we believe when you have a mega-merger,  11:03:48

         22        there have to be unique circumstances to permit the   11:03:54

         23        merger.  There must be a very strong CRA commitment,  11:03:56

         24        as we believe you have here with Wells Fargo.  This   11:04:00

         25        is especially important because the Federal Reserve   11:04:04



     
     



                                                                     85

          1        and the office of the controller of the currency      11:04:08

          2        have engaged in an epidemic of great inflation where  11:04:10

          3        every bank that's large gets an outstanding.  So      11:04:14

          4        when a bank is outstanding, such as Wells Fargo, it   11:04:18

          5        cannot be distinguished from any of its competitors   11:04:20

          6        that are not outstanding but receive the same grade.  11:04:26

          7             The last preliminary point, Wells has made       11:04:28

          8        pledges in '90, '93 and '95 to the community.  In     11:04:32

          9        each case it has met its pledge, in each case it has  11:04:36

         10        exceeded its pledge, and it has exceeded it in less   11:04:40

         11        than half the time in many cases.                     11:04:44

         12             These are the brief facts I want to wish -- I    11:04:46

         13        wish to provide to you.  They are provided in our     11:04:48

         14        August 27th letter to Chairman Greenspan, and we      11:04:52

         15        have provided you with a copy.  I make these eight    11:04:56

         16        points to contrast this merger from our point of      11:05:00

         17        view from some of the other mergers that you have     11:05:04

         18        routinely approved, such as the Nations Bank/B of A   11:05:06

         19        one.                                                  11:05:10

         20             One, unlike Nations Bank's hollow pledge, this   11:05:10

         21        is an enforceable pledge by Wells Fargo.  The key     11:05:16

         22        community groups involved in developing the pledge    11:05:18

         23        will meet with the CEO on a semi-annual basis and     11:05:20

         24        will be given all necessary data in advance, as we    11:05:24

         25        have been for many years.                             11:05:26



     
     



                                                                     86

          1             Two, unlike Nations Bank, this pledge is         11:05:28

          2        geographically specific to California.  We know       11:05:34

          3        exactly what it is.                                   11:05:36

          4             Third, unlike Nations Bank, this pledge had      11:05:38

          5        very substantial and widespread community input       11:05:40

          6        before being finalized.  240 groups were represented  11:05:46

          7        in developing the pledge.                             11:05:50

          8             Four, unlike Nations Bank, this pledge is        11:05:50

          9        specific as to assisting the most underserved; for    11:05:56

         10        example, specific minority and low income goals for   11:05:58

         11        business and home lending.  You will learn more       11:06:02

         12        about it from other panelists.                        11:06:04

         13             Five, unlike Nations Bank, the philanthropic     11:06:06

         14        investment commitments of Wells Fargo are toward the  11:06:10

         15        underserved and represent a substantial percent of    11:06:14

         16        pre-tax income.  Wells' motto is to the barrio, not   11:06:18

         17        the ballet, and we hope that will be the standard     11:06:22

         18        for all banks.                                        11:06:26

         19             Unlike Nations Banks, CRA-related commitments    11:06:30

         20        have been made for women and minority contracts for   11:06:34

         21        small inner city businesses.  And unlike Nations      11:06:38

         22        Bank, Wells Fargo has committed itself to an          11:06:42

         23        important principle Chairman Greenspan has spoken so  11:06:46

         24        eloquently on in his Wall Street address in January   11:06:50

         25        of '98.  It is committed to diversity, and            11:06:54



     
     



                                                                     87

          1        specifically so.                                      11:06:58

          2             Unlike Nations Bank, Wells has had a policy of   11:07:00

          3        not investing abroad, instead investing in the inner  11:07:04

          4        city, contrast that with B of A's 600 million at      11:07:08

          5        risk in Russia.                                       11:07:12

          6             And, lastly, unlike Nations Bank, Wells has had  11:07:14

          7        a long history of securing community input and        11:07:18

          8        meeting long-term CRA commitments.                    11:07:20

          9             There's one other point that is not so tangible  11:07:24

         10        but is perhaps more important, and that's the         11:07:30

         11        leadership.  We in California have been able to       11:07:32

         12        count on Paul Hazen, Karen Wegman, and Wells Fargo    11:07:34

         13        to be a leader.  The Hmong community's going to tell  11:07:38

         14        you about one of the greatest experiments in moving   11:07:42

         15        70,000 people from welfare to work, something the     11:07:46

         16        United States government has been under -- to do.     11:07:48

         17        Wells took the leadership and in effect convinced     11:07:52

         18        nine other major institutions to join it.             11:07:56

         19             And lastly, Wells is a founder of an exciting    11:07:58

         20        new partnership that I believe Chairman Greenspan     11:08:02

         21        will be very excited about; we hope to have him       11:08:06

         22        address.  Twelve major corporations will be joining   11:08:10

         23        community groups in developing a diversity business   11:08:14

         24        partnership to discuss how investing in the merging   11:08:18

         25        markets at home can be highly profitable and produce  11:08:24



     
     



                                                                     88

          1        safety and soundness everywhere.                      11:08:26

          2             I thank you very much.  We do hope you will      11:08:28

          3        closely question us when we are all finished.  Thank  11:08:32

          4        you.                                                  11:08:36

          5        

          6                  CHAIRPERSON SMITH:  Thank you.  Mr. Dean.   11:08:38

          7        

          8                  MR. DEAN:  Thank you very much, Governor    11:08:40

          9        Smith and the rest of the members of the panel.       11:08:44

         10        Good morning.  My name is George Dean, and for the    11:08:44

         11        past six years I have been president and CEO of the   11:08:46

         12        greater Phoenix, Arizona Urban League, a leading      11:08:50

         13        provider of human services in the valley of the sun.  11:08:54

         14        Prior to relocating to Arizona, for 13 years I was    11:08:56

         15        president and CEO of the Sacramento, California       11:08:58

         16        Urban League, and president of the California         11:09:02

         17        Council of Urban Leagues, which include Urban League  11:09:06

         18        affiliates in Los Angeles, San Diego, Riverside, San  11:09:10

         19        Francisco, Oakland, and, of course, Sacramento.       11:09:12

         20             Our mission in the Urban League is to assist     11:09:16

         21        African-Americans, other minorities and the           11:09:18

         22        disadvantaged in achieving economic and social        11:09:20

         23        equality.  While serving as president of the Urban    11:09:24

         24        League, I have also been a founding member and        11:09:26

         25        co-chair of the Greenlining Institute.                11:09:30



     
     



                                                                     89

          1             Let me begin by saying that the Urban League,    11:09:32

          2        as well as the Greenlining Institute, has been        11:09:36

          3        generally opposed to mega-mergers, as we believe it   11:09:40

          4        decreases the number of institutions that can         11:09:44

          5        provide substantial commitments through CRA to our    11:09:46

          6        communities.  I hasten to add that we have been       11:09:50

          7        active in CRA protests for a number of years,         11:09:52

          8        including the Wells Fargo and First Interstate Bank   11:09:56

          9        merger, as well as Bank One and another bank, and     11:10:00

         10        others, as well as the Norwest acquisition of both    11:10:04

         11        Citibank and Caliber Bank in Arizona.                 11:10:08

         12             I am pleased to state that Norwest Bank-Arizona  11:10:10

         13        has been an excellent corporate citizen and has       11:10:12

         14        performed well in its CRA commitments.  Wells         11:10:16

         15        Fargo's primary entree into the Arizona market came   11:10:20

         16        about with its acquisition of First Interstate, and   11:10:24

         17        I am pleased to say that the Wells Fargo people hit   11:10:26

         18        the ground running and has been second to none in     11:10:30

         19        fulfilling the CRA commitments they made at the time  11:10:34

         20        of the acquisition.                                   11:10:36

         21             Wells' position on affirmative action awarded    11:10:38

         22        to vendor contracts to minority and females           11:10:42

         23        businesses, lending goals, both generally and         11:10:44

         24        specifically for minorities and women, and its        11:10:48

         25        commitment to focus the majority of their charitable  11:10:50



     
     



                                                                     90

          1        contributions to underserved communities are all      11:10:54

          2        reasons why they are held in such high esteem and     11:10:56

          3        why we don't see this particular merger as being a    11:11:00

          4        hindrance or a detriment to the progress being made   11:11:04

          5        in our communities.                                   11:11:04

          6             In the case of Norwest-Arizona, much of the      11:11:06

          7        same can be said.  In 1994, shortly after they        11:11:10

          8        became the fourth largest bank in Arizona, they       11:11:14

          9        established a five-year, $50 million community        11:11:18

         10        lending initiative for a community home buyers        11:11:20

         11        program.  This program was designed specifically to   11:11:24

         12        help increase home ownership opportunities for        11:11:26

         13        creditworthy families earning 80 percent or less of   11:11:30

         14        the areas's median family income, and who did not     11:11:34

         15        typically qualify for mortgages under the             11:11:38

         16        conventional financing terms, with lower down         11:11:40

         17        payment requirements, higher loan-to-value ratio,     11:11:44

         18        higher debt-to-income ratios, and a requirement for   11:11:46

         19        prepurchase housing counseling.                       11:11:50

         20             This program has, through July of this year,     11:11:52

         21        reached 90 percent of its five-year goals, and of     11:11:54

         22        those -- and 70 percent of those loans have been      11:12:00

         23        made to people of color.                              11:12:02

         24             It has been especially meaningful to have        11:12:04

         25        direct access to similar management with both banks.  11:12:06



     
     



                                                                     91

          1        Karen Wegman, the executive vice president with       11:12:10

          2        Wells Fargo, and John Campbell, the president and     11:12:14

          3        CEO of Norwest-Arizona, can both be accessed          11:12:16

          4        directly.  And, in addition, there has been           11:12:20

          5        semi-annual meetings with Paul Hazen, the chairman    11:12:22

          6        and CEO of Wells, since the First Interstate          11:12:26

          7        acquisition.                                          11:12:28

          8             Based on the follow-through of the CRA           11:12:30

          9        commitments of the two merging institutions in        11:12:32

         10        California and Arizona, and the commitments of the    11:12:34

         11        new institution once the merger is complete, it is    11:12:38

         12        without hesitation that I support the merger of       11:12:40

         13        Norwest-Wells Fargo.  I am pleased that the proposed  11:12:44

         14        new bank has made many commitments to California's    11:12:48

         15        low income communities and communities of color, and  11:12:50

         16        I look forward to working with the new bank to have   11:12:54

         17        similar type commitments in Arizona.  Thank you.      11:12:56

         18        

         19                  CHAIRPERSON SMITH:  Thank you.  We'll go    11:13:00

         20        to Mr. Correlejo.                                     11:13:02

         21        

         22                  MR. CORRELEJO:  Hello.  My name is Jorge    11:13:04

         23        Correlejo.  I'm the owner of Mecunda Leasing          11:13:06

         24        Company, and for 15 years I'm on the board of         11:13:08

         25        directors, with the Latin Business Association for    11:13:12



     
     



                                                                     92

          1        14 years, and I've been a strong advocate on behalf   11:13:14

          2        of business advocacy with all of the financial        11:13:20

          3        institutions over the last several years.  I've had   11:13:24

          4        the responsibility, along with the individuals up     11:13:26

          5        here, of monitoring Wells Fargo and the agreements    11:13:28

          6        that they have made, and I do want to state that I'm  11:13:32

          7        very proud of the fact that they have committed and   11:13:36

          8        kept to their commitments far and above what any      11:13:40

          9        other financial institution has achieved to date.     11:13:42

         10             What has been their experience in the Latino     11:13:44

         11        community?  Well, they have recently opened a         11:13:48

         12        billion dollar Latino loan line, as they have done    11:13:54

         13        with other minority groups as well.  They have made   11:13:56

         14        commitments in terms of accessibility with the        11:14:02

         15        members of the Latino community.  I can tell you      11:14:04

         16        this: we've met with several institutions about the   11:14:08

         17        -- what does it take to make more members of our      11:14:10

         18        community bankable?  And they seem to be -- have      11:14:14

         19        been to date the only ones that have listened.        11:14:18

         20             We've spoken about the need for some technical   11:14:22

         21        assistance.  You can go with any group -- many years  11:14:26

         22        ago I used to provide business training technical     11:14:30

         23        assistance -- any group you're going to do all right  11:14:34

         24        by approaching them and get a -- small numbers that   11:14:36

         25        are eligible for loans that can be approved today.    11:14:38



     
     



                                                                     93

          1             Most institutions aren't interested in any       11:14:42

          2        longer term commitments to business people to see     11:14:44

          3        about their longer term needs.  I think it's a great  11:14:48

          4        opportunity certainly, but this is something that     11:14:50

          5        we've discussed, and Wells Fargo has been the only    11:14:54

          6        one who's had an interest in funding an institute     11:14:56

          7        that would provide business training technical        11:15:00

          8        assistance to business owners that, one, either have  11:15:02

          9        no credit, or have blemishes on their credit, or      11:15:04

         10        some other problems that would not enable them to be  11:15:08

         11        eligible for a loan.  They have taken this step       11:15:10

         12        forward and made a long-term commitment to providing  11:15:14

         13        business training technical assistance to minority    11:15:18

         14        members and are seeing, I think, some good success.   11:15:20

         15             I think over the past six months that that       11:15:26

         16        program, in particular, has been able to fund to      11:15:30

         17        well over $2 million to Wells Fargo, but other banks  11:15:32

         18        as well, providing one-on-one technical assistance.   11:15:36

         19        I don't recall the exact numbers, but it's up and     11:15:40

         20        running since about the beginning of the year.  So    11:15:44

         21        this is the kind of initiative that Wells Fargo has   11:15:46

         22        certainly demonstrated to our community.  We're       11:15:50

         23        working very closely, they meet regularly with the    11:15:52

         24        leaders of the community, and it seems like they      11:15:56

         25        have a sincere commitment, and I'm here to offer my   11:15:58



     
     



                                                                     94

          1        respects to their commitment to date and let you      11:16:02

          2        know that certainly in California, Wells Fargo has    11:16:04

          3        been achieving its goals.                             11:16:08

          4        

          5                  CHAIRPERSON SMITH:  Thank you very much.    11:16:12

          6        Ms. Borromeo.                                         11:16:12

          7        

          8                  MS. BORROMEO:  Good morning.  My name is    11:16:16

          9        Gelly Borromeo.  I'm the publisher of Asian           11:16:16

         10        Enterprise Magazine, the largest circulated Asian     11:16:18

         11        American business focus magazine in the United        11:16:22

         12        States.  Thank you for giving us the opportunity to   11:16:24

         13        testify.                                              11:16:26

         14             I'm here today because I am going to stress and  11:16:28

         15        underscore the fact that the specific goal for        11:16:32

         16        utilization of minority and women business            11:16:36

         17        enterprises by Wells Fargo, 40 percent, I think is    11:16:38

         18        very significant.  As we all know, small business     11:16:42

         19        enterprise is largely responsible for the economic    11:16:44

         20        renaissance of the United States, which we have been  11:16:48

         21        enjoying in the last five years.  A large percentage  11:16:50

         22        of small businesses consist of women and              11:16:52

         23        minority-owned businesses, yet industries across the  11:16:56

         24        United States -- across the United States still       11:16:58

         25        utilize and spend very marginally within the          11:17:02



     
     



                                                                     95

          1        minority and women business enterprise sector.        11:17:04

          2             Of 21 banks surveyed nationwide, which was       11:17:08

          3        conducted in December of '97, the average percentage  11:17:12

          4        of minority business utilization was 2.9 percent and  11:17:16

          5        2.5 percent for women business enterprises, which is  11:17:20

          6        lower than the average of all industries across the   11:17:24

          7        nation.                                               11:17:26

          8             A total of 485 companies in a cross-industry     11:17:28

          9        comparison of standard benchmarks -- a copy of which  11:17:32

         10        I will be leaving for the record -- indicates that    11:17:34

         11        the average percentage of MBE utilization across the  11:17:38

         12        United States was only 3.4 percent for MBEs, and 2.8  11:17:42

         13        percent for WBEs.  Municipal government's rated       11:17:48

         14        highest at 8 percent average for MBEs and 6.3         11:17:52

         15        percent for WBEs.  So, again, I'd like to underscore  11:17:54

         16        the fact that the 40 percent minority and women       11:17:56

         17        business enterprise goals that Wells Fargo has        11:17:58

         18        committed to our community is very, very              11:18:02

         19        significant.                                          11:18:04

         20             Two years ago during the First Interstate Bank   11:18:06

         21        and Wells Fargo merger, the combined banks were       11:18:08

         22        under five percent of their MBE/WBE utilization;      11:18:12

         23        however, today, after two years, they're a little     11:18:16

         24        over or slightly over 15 percent.  I think that's a   11:18:18

         25        significant change, and I think this is really the    11:18:22



     
     



                                                                     96

          1        spirit of the commitment that they have done.  Many   11:18:26

          2        would say it's far from the 40 percent, but you must  11:18:26

          3        remember the 40 percent was to be achieved over ten   11:18:30

          4        years.  If they go with the acceleration of what      11:18:32

          5        they've done with the utilization of minority and     11:18:34

          6        women business enterprises, I think they're going to  11:18:38

          7        achieve well beyond the 40 percent they have done.    11:18:40

          8             How have we accomplished this in California?     11:18:42

          9        Well, first of all, we have not only held them        11:18:44

         10        accountable by meeting and dialoguing with -- at      11:18:46

         11        least twice other year with Paul Hazen and all of     11:18:50

         12        the senior management of Wells Fargo, but I think it  11:18:54

         13        truly has to do with the personal engagement and      11:18:56

         14        commitment that Paul and Karen Wegman and their       11:18:58

         15        staff within Wells Fargo have.                        11:19:02

         16             We have a developed a personal relationship      11:19:04

         17        with them, and we have the personal access to them.   11:19:06

         18        As a matter of fact, I think what all of you should   11:19:10

         19        do here, trying to do today is talk to them after     11:19:12

         20        this or, you know, when you have a chance to, ask     11:19:14

         21        them for their telephone numbers, and I'm sure        11:19:16

         22        they're going to provide that for you so you can      11:19:20

         23        have the same access -- personal access that you      11:19:22

         24        have.  And I understand that Leslie would also do     11:19:24

         25        the same for all of us.  Thank you.                   11:19:26



     
     



                                                                     97

          1        

          2                  CHAIRPERSON SMITH:  Mr. Bivins.             11:19:28

          3        

          4                  MR. BIVINS:  Yes, good morning.  I want to  11:19:30

          5        thank the Board of Governors for this opportunity     11:19:32

          6        that they have afforded with this public hearing.     11:19:34

          7        My name is George Bivins.  I'm the chairman of the    11:19:38

          8        Black Business Association in Los Angeles.  I'm also  11:19:40

          9        a businessman; I'm an insurance agent.  I've been in  11:19:44

         10        the business 25 years.  I advised the State of        11:19:46

         11        California on insurance when Juanita                  11:19:50

         12        Millener-McDonald was the chair of the state          11:19:56

         13        assembly.  I'm also a board member of the             11:19:58

         14        Greenlining Institute.                                11:20:00

         15             And basically I want to make just a couple       11:20:02

         16        observations about this proposed merger because my    11:20:04

         17        colleagues have made some finer points, but I'm       11:20:10

         18        going to give you some personal observations that I   11:20:14

         19        have with regards to Wells Fargo.                     11:20:16

         20             The Black Business Association supports the      11:20:20

         21        merger.  Wells has went out of their way to serve     11:20:22

         22        our community.  Wells has targeted the inner cities   11:20:28

         23        with a $2.5 billion mortgage commitment for low       11:20:32

         24        income and minority home buyer.  Wells-Norwest has    11:20:34

         25        committed $1 billion over 12 years specifically for   11:20:40



     
     



                                                                     98

          1        African-American loan program.                        11:20:44

          2             Bank of America moved to North Carolina with no  11:20:48

          3        regard for California, the state that made it what    11:20:50

          4        it was.  And most of the base in that merger, most    11:20:54

          5        of the income, comes from California, yet still,      11:20:58

          6        they moved to North Carolina and they became          11:21:04

          7        absentee owners -- absentee landlords.  Bank of       11:21:06

          8        America has reluctantly announced, due to the global  11:21:14

          9        market conditions and the swings, their third         11:21:16

         10        quarter, which was just reported yesterday, they      11:21:22

         11        lost $33 million in red ink in their third quarter.   11:21:24

         12        If the red ink keeps coming each quarter, and it      11:21:30

         13        will, can you spell bailout?                          11:21:32

         14             Wells loans no monies outside of the borders of  11:21:36

         15        the United States.  $600 million at risk in Russia,   11:21:40

         16        $3.1 billion at risk in South Korea.                  11:21:42

         17             The BBA has had a long, positive relationship    11:21:48

         18        with Wells Fargo, and so have many of our members     11:21:52

         19        have their accounts at Wells Fargo.                   11:21:56

         20             The other point I want to make, because I am in  11:21:58

         21        the insurance business I do represent the National    11:22:00

         22        Equity Fund, which purchases tax credits in the       11:22:04

         23        State of California.  Wells Fargo is a customer or    11:22:06

         24        has relationships with many of these community        11:22:12

         25        development agencies, one of which is the Tenderloin  11:22:14



     
     



                                                                     99

          1        neighborhood agency is one of my newest clients,      11:22:18

          2        spoke very highly of Wells Fargo two weeks ago when   11:22:22

          3        I was in San Francisco.  This is the type of          11:22:26

          4        outreach that this organization provides.             11:22:28

          5             They do have access -- you do have access to     11:22:30

          6        their management, but I would like to say there's     11:22:32

          7        been some gracious words.  Mr. Hazen is always        11:22:36

          8        available, so is Karen Wegman, but her staff under    11:22:40

          9        her, Brenda Ross-Dulin some of the staff, Gladys      11:22:42

         10        Ross in Los Angeles, is always available, so I urge   11:22:48

         11        you, no matter what you've heard, this organization   11:22:52

         12        is accessible, and I do recommend the merger.  Thank  11:22:56

         13        you very much.                                        11:23:00

         14        

         15                  CHAIRPERSON SMITH:  Mr. Lee.                11:23:02

         16        

         17                  MR. LEE:  Thank you for the Federal         11:23:06

         18        Reserve by allowing me to take this opportunity to    11:23:10

         19        speak.  My name is Pheng Lee.  I'm the Secretary of   11:23:12

         20        the Hmong American Political Organization.  I'm here  11:23:18

         21        to speak on behalf of our president, Mr. Toulu Thao,  11:23:20

         22        who has other prior commitment and cannot be here     11:23:22

         23        today.                                                11:23:26

         24             May I tell you a little bit of what Wells Fargo 

         25        has helped create, something that inspired many       11:23:30



     
     



                                                                    100

          1        other leaders to follow, something that no one, no    11:23:32

          2        corporation, has done in American history, something  11:23:38

          3        that will make major economic impact on the life of   11:23:40

          4        many thousands of Hmong residents throughout the      11:23:46

          5        United States.                                        11:23:48

          6             In America, the Hmong, who have little or no     11:23:48

          7        marketable skill, receive no more than a minimum      11:23:52

          8        wage and cannot support a large family.               11:23:54

          9             While searching for opportunity, Hmong found     11:23:58

         10        Fresno one of the richest agricultural land in        11:24:04

         11        California, and began moving there since 1980.  For   11:24:04

         12        almost 20 years, Hmong in Fresno work very hard and   11:24:08

         13        farm almost every vacant lot or land they can find    11:24:12

         14        in and around the outskirt of Fresno.  Despite their  11:24:16

         15        great effort, Hmong have not been able to support     11:24:20

         16        themself.                                             11:24:22

         17             By recognizing Hmong's struggle, hardship and    11:24:24

         18        their strong desire to become economically            11:24:30

         19        independent, Wells Fargo, under the leadership of     11:24:32

         20        Karen Wegman, Executive Vice President, and Sharon    11:24:34

         21        Gerber, Vice President of Community Development,      11:24:42

         22        began looking for way to invest in the Hmong          11:24:44

         23        community and to help them become economically        11:24:48

         24        self-sufficient.  While Wells Fargo was doing that,   11:24:52

         25        many other corporate leaders view Hmong as risky      11:24:56



     
     



                                                                    101

          1        investment and would have no consideration at all     11:25:00

          2        due to many reasons, such as the Hmong community is   11:25:02

          3        not well-known to average American and corporation,   11:25:06

          4        and we have no credit history, and many do not read   11:25:10

          5        and write and speak English, and also they do not     11:25:18

          6        have business plan, and a number of reasons.  But     11:25:22

          7        Karen Wegman, Sharon Gerber, and the leaders of       11:25:26

          8        Wells Fargo are not afraid to be involved with the    11:25:30

          9        Hmong.  They see something beyond ordinary leaders    11:25:34

         10        can see; that is, Hmong who once was very loyal to    11:25:38

         11        our ally U.S. will once again, when they are ready,   11:25:42

         12        be loyal customers.  Therefore, investing in the      11:25:46

         13        Hmong is not a one-way street, but rather, it will    11:25:52

         14        be a two-way street and a great opportunity that      11:25:54

         15        will mutually be beneficial. 

         16             In finding ways to help Hmong, Wells Fargo       11:25:58

         17        funded an in-depth study of Hmong community and paid 

         18        for an agribusiness expert design of the business     11:26:06

         19        plan with step-by-step layout to take the Hmong from  11:26:08

         20        poverty to economic self-sufficiency.                 11:26:14

         21             It takes a very special leadership; it takes a   11:26:16

         22        strong commitment; it takes a lot of caring; and it   11:26:20

         23        takes a lot of courage as a leader, as a corporation  11:26:22

         24        to do what Wells have done.                           11:26:26

         25             The leadership taken by Wells Fargo in the       11:26:30



     
     



                                                                    102

          1        Hmong community inspired many other corporations.     11:26:32

          2        Soon after Wells Fargo made its first step, nine      11:26:36

          3        other corporations follow and give their support to   11:26:38

          4        the Hmong project.                                    11:26:42

          5             I proudly testify on behalf of Mr. Toulu Thao    11:26:42

          6        and the Hmong American community, who proudly show    11:26:48

          7        our full support to Wells Fargo.                      11:26:50

          8             Special thanks to Karen Wegman, Sharon Gerber,   11:26:52

          9        and the other leaders of Wells Fargo who have made    11:26:56

         10        this difference in our life.  I'd like to thank you.  11:26:58

         11        

         12                  CHAIRPERSON SMITH:  Thank you.  Mr. Thao.   11:27:04

         13        

         14                  MR. THAO:  Thank you.  My name is Cheng     11:27:06

         15        Thao.  I am a cooperative marketing assistant of      11:27:10

         16        Hmong American community of Fresno, California.  I    11:27:12

         17        am so happy to be here, part of Hmong farmer in       11:27:16

         18        Fresno. 

         19             I would like you to know that because of Wells   11:27:20

         20        Fargo, we were able to start a Hmong Farmers          11:27:26

         21        Cooperative.  Wells Fargo helped us plant the seeds   11:27:28

         22        to help hundred of Hmong farmer and their family      11:27:32

         23        achieve their dream as Americans.  Because of Wells   11:27:38

         24        Fargo, we will be able to some day buy our own cold   11:27:40

         25        storage/packing house to help Hmong farmers in the    11:27:44



     
     



                                                                    103

          1        Central Valley.  Wells Fargo has made a tremendous    11:27:48

          2        impact on the life of the Hmong, and they help give   11:27:50

          3        back to the communities and invest in not only money  11:27:56

          4        but care and love to the Hmong people of Fresno.      11:28:00

          5             As a Hmong farmer, I know how much of a          11:28:02

          6        difference Wells Fargo has make in my life and their  11:28:06

          7        life.  I visit every day.  They thank me for helping  11:28:10

          8        them, but I want you to know that Wells Fargo         11:28:18

          9        helping and supporting Hmong farmer.                  11:28:22

         10             I am very proud to say that Hmong farmer and     11:28:26

         11        their family, Hmong American Community, Inc., and     11:28:28

         12        Toulu Thao are very proud of Wells Fargo to help us   11:28:34

         13        understand what it means to be an American.           11:28:38

         14             We are honored to come today to support Wells    11:28:40

         15        Fargo.  Thank you.                                    11:28:44

         16        

         17                  CHAIRPERSON SMITH:  Thank you very much.    11:28:48

         18        Any questions from the panel?  We thank you for       11:28:48

         19        coming.  You came a long way and we appreciate your   11:28:54

         20        being here to present your testimony.                 11:28:58

         21             With that, we'll go on to the next panel, Panel  11:29:02

         22        5.  We'll start with Ms. Kalant.                      11:30:30

	
Last update: December 3, 2010