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Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Five

                                                              103

         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

         23        

         24                  MS. KALANT:  My name is Amelia Kalant, and  11:30:40

         25        I'm a member of the New Mexico Community              11:30:42



     
     



                                                                    104

          1        Reinvestment and Development Task Force or Credit.    11:30:44

          2        Credit is a coalition of nonprofit housing and        11:30:48

          3        community development organizations.                  11:30:50

          4             Today I want to briefly address two issues.      11:30:52

          5        The first is a recently announced community lending   11:30:56

          6        initiative by Norwest and Wells Fargo Banks, and the  11:31:00

          7        second is an increasingly serious failure in the      11:31:02

          8        CRA.                                                  11:31:08

          9             First, Credit is pleased that Wells Fargo and    11:31:10

         10        Norwest have just made a $1.3 billion community       11:31:12

         11        lending commitment in New Mexico.  This resulted      11:31:18

         12        from a series of meetings between our organizations   11:31:22

         13        and the following bank officers: Norwest-New          11:31:24

         14        Mexico's president, Larry Willard, and CRA officer    11:31:28

         15        Patricia Nye, Karen Wegman, and Sharon Gerber of      11:31:32

         16        Wells Fargo, and Karen Olnus of Norwest Corporation,  11:31:36

         17        as well as several others.                            11:31:40

         18             The $1.3 billion commitment includes             11:31:42

         19        $90 million for mortgage lending for low or moderate  11:31:44

         20        income or minority borrowers, and $850 million for    11:31:50

         21        loans to small businesses and small farms.  In        11:31:54

         22        addition, the banks made other specific commitments.  11:31:58

         23        They will make a $10 million investment in a special  11:32:02

         24        mortgage program designed to meet the needs of low    11:32:04

         25        and moderate income first-time home buyers.           11:32:08



     
     



                                                                    105

          1             The bank's foundations will continue their       11:32:12

          2        commitments to funding home buyer training and        11:32:14

          3        counseling programs sponsored by not-for-profit       11:32:18

          4        community development organizations.  And, they       11:32:20

          5        promise that there will be no changes in the bank's   11:32:24

          6        New Mexico branch network as a result of the merger,  11:32:28

          7        except in the City of Santa Fe.                       11:32:32

          8             President Willard of Norwest-New Mexico          11:32:34

          9        affirmed the bank's continued commitment to serving   11:32:38

         10        rural communities and to relationship banking.        11:32:40

         11        These are extremely important to New Mexico, which    11:32:44

         12        is largely rural and majority minority population.    11:32:46

         13        Credit looks forward to working out with the banks a  11:32:52

         14        detailed plan for accomplishing the CRA objectives    11:32:58

         15        and to helping the banks improve their capacity to    11:33:00

         16        meet the needs of Native Americans in Native          11:33:04

         17        American communities.                                 11:33:06

         18             Credit specifically commends the work of Larry   11:33:10

         19        Willard and Patricia Nye.  Both from New Mexico,      11:33:14

         20        they have shown sensitivity to and awareness of the   11:33:16

         21        unique needs of the New Mexico communities, and have  11:33:20

         22        demonstrated respect for community leaders.           11:33:22

         23             We urge the banks to continue to entrust         11:33:26

         24        decision-making to local officials who are best       11:33:30

         25        suited to identify and respond to local needs.        11:33:32



     
     



                                                                    106

          1        Credit also very strongly urges the banks to make     11:33:36

          2        similar specific appropriate CRA commitments in all   11:33:40

          3        other states where the banks do business.             11:33:44

          4             Now a word about the CRA.  With the increasing   11:33:48

          5        number of bank mergers, nationwide banking has        11:33:52

          6        become the norm.  The policy of assigning to each     11:33:56

          7        bank a single CRA rating when the bank's CRA          11:33:58

          8        performance can vary widely from state to state is    11:34:02

          9        thoroughly untenable.  It renders the rating          11:34:06

         10        meaningless.  In cases where a bank receives a high   11:34:08

         11        rating in California, for example, but a low rating   11:34:12

         12        in New Mexico, it is awarded an overall high rating.  11:34:16

         13        For New Mexico and other rural, less populated        11:34:20

         14        states, this is unacceptable.                         11:34:24

         15             In conclusion, we thank the Federal Reserve for  11:34:26

         16        holding these hearings, but feel that the federal     11:34:28

         17        banking regulators must address this serious flaw in  11:34:30

         18        the CRA.  And to reiterate, we urge the banks to      11:34:34

         19        negotiate appropriate community lending initiatives   11:34:36

         20        in every state where they do business.  Thank you.    11:34:40

         21        

         22                  CHAIRPERSON SMITH:  Thank you.  Mr. Kamp.   11:34:44

         23        

         24                  MR. KAMP:  My name is Marv Kamp.  On        11:34:46

         25        behalf of the Wisconsin Rural Development Center,     11:34:48



     
     



                                                                    107

          1        the following comments are submitted in opposition    11:34:50

          2        to the application of Norwest Bank to acquire Wells   11:34:54

          3        Fargo Bank.                                           11:34:58

          4             On August 3, 1998, our organization submitted    11:35:00

          5        comments on this proposed application.  Specific      11:35:02

          6        concerns cited in those comments included Norwest's   11:35:08

          7        low level of originations to low to moderate income   11:35:10

          8        conventional home buyers, its lack of participation   11:35:14

          9        in state and federal guarantee programs designed to   11:35:18

         10        assist LMI first-time home buyers, small businesses   11:35:20

         11        and small farms, and its inadequate reinvestment of   11:35:26

         12        deposit dollars back into low income communities in   11:35:30

         13        underserved rural areas.                              11:35:32

         14             Based on asset share, Norwest is the fifth       11:35:34

         15        largest commercial institution in Wisconsin with      11:35:40

         16        over two billion in assets.  Clearly, how it          11:35:42

         17        conducts business and meets its reinvestment          11:35:46

         18        obligations has a substantial impact on our state's   11:35:48

         19        economy and, in particular, the communities it        11:35:52

         20        serves.  Changes in lending policies and practices    11:35:54

         21        can often have devastating consequences, especially   11:35:58

         22        for our state's poor.                                 11:36:02

         23             In our initial comments we raised concerns       11:36:04

         24        about Norwest's low level of reinvestment dollars     11:36:08

         25        back into the community, not only in Wisconsin but    11:36:10



     
     



                                                                    108

          1        nationally.  Norwest has -- currently has a 56.6      11:36:12

          2        percent loan to deposit ratio in Wisconsin, the       11:36:18

          3        lowest loan to deposit ratio of any of the largest    11:36:22

          4        financial institutions serving the state, or any      11:36:24

          5        state bank, for that matter.  The average loan to     11:36:28

          6        deposit ratio of similar institutions of similar      11:36:30

          7        size and resources is over 97 percent in Wisconsin.   11:36:34

          8             In 22 of the 28 markets served by Norwest        11:36:40

          9        nationally, the bank is below average in their        11:36:44

         10        reinvestment of deposit dollars back into these       11:36:46

         11        markets, let's face it, when a number of our state's  11:36:48

         12        community credit needs are going unmet and over 40    11:36:52

         13        percent investments and securities is clearly         11:36:54

         14        unacceptable.  These are dollars which are            11:36:58

         15        desperately needed to revitalize low income inner     11:37:02

         16        city neighborhoods and rural communities.             11:37:04

         17             Also in our comments we attempted to raise       11:37:08

         18        concerns about Norwest's lack of participation in     11:37:10

         19        state and federal credit enhancement programs which   11:37:12

         20        are designed to meet the needs of low to moderate     11:37:16

         21        income borrowers.  We find their participation in     11:37:18

         22        these programs substantially lacking.  Of the 236     11:37:20

         23        million in conventional home mortgages originated by  11:37:24

         24        Norwest in 1996, less than one percent were under     11:37:28

         25        Wisconsin Housing Economic Development Home           11:37:32



     
     



                                                                    109

          1        Guarantee, a highly successful state program which    11:37:34

          2        is designed to assist first-time LMI conventional     11:37:38

          3        home buyers.                                          11:37:44

          4             This morning Mr. Hazen talked about Wells        11:37:44

          5        Fargo' commitment to rural lending.  However, we      11:37:50

          6        find Norwest investment in rural areas of our state   11:37:52

          7        abysmal.  Despite the fact that rural branch          11:37:56

          8        deposits represent over ten percent of the system's   11:38:00

          9        total deposit base, few loans are being originated    11:38:02

         10        to LMI borrowers.                                     11:38:06

         11             In rural Wisconsin, the percentage of low        11:38:08

         12        income families often exceeds rates found in central  11:38:10

         13        cities.  The bank's lack of participation in          11:38:16

         14        programs which serve this population excludes large   11:38:18

         15        numbers of LMI and limited resource borrowers.        11:38:20

         16             Regarding rural credit enhancement programs,     11:38:24

         17        Norwest originated no farm service agency guarantees  11:38:28

         18        in 1995, 1996 or 1997.  Also, for the Credit Relief   11:38:32

         19        Outreach Program, which is a highly successful state  11:38:40

         20        program for farm production loans, they originated    11:38:44

         21        no loans in 1995, 1996 or 1997.  No S.B.A. loans      11:38:48

         22        were originated in 1996 or 1997.                      11:38:56

         23             This morning Mr. Biller talked about Norwest     11:39:00

         24        development programs in the Navajo nation.  In        11:39:02

         25        Wisconsin, Norwest has drawn a big red line around    11:39:06



     
     



                                                                    110

          1        the Ojibwe tribal lands of Menomonie County.          11:39:08

          2             Given both banks' market presence in rural       11:39:14

          3        areas, the merger will make Norwest the nation's      11:39:18

          4        number one agricultural lender.  The lack of any      11:39:20

          5        specific mention by the bank relating to              11:39:24

          6        reinvestment plans for rural areas is especially      11:39:28

          7        troubling.  To date no disclosure of CRA or           11:39:30

          8        community development plans has been made.  The only  11:39:34

          9        commitment we are currently aware of is the           11:39:36

         10        mega-pledge for mostly urban areas of California.     11:39:38

         11        Although we have met several times with Norwest in    11:39:40

         12        Wisconsin to discuss reinvestment plans, there has    11:39:44

         13        been no specific disclosure of how this merger will   11:39:46

         14        affect our state or a willingness to pledge any       11:39:50

         15        similar commitments to Wisconsin.                     11:39:54

         16             We believe that the lack of any CRA community    11:39:56

         17        development plans, any application, is not only a     11:40:00

         18        violation of the Federal Reserve rules and grounds    11:40:02

         19        for denial of the application by itself, but an       11:40:06

         20        insult to the citizens of Wisconsin and our nation.   11:40:08

         21        Thank you.                                            11:40:12

         22        

         23                  CHAIRPERSON SMITH:  Thank you.  Ms.         11:40:14

         24        LaBlanc will be wearing two hats today.  She's        11:40:16

         25        speaking on her own behalf, and then will be          11:40:18



     
     



                                                                    111

          1        speaking on behalf of the Washington Reinvestment     11:40:20

          2        Alliance.

          3        

          4                  MS. LA BLANC:  Right.  Iowa Citizens for    11:40:24

          5        Community Improvement is a state-wide grassroots      11:40:26

          6        community organization, including both rural and      11:40:30

          7        urban chapters, that has been working on lending      11:40:32

          8        since 1977 and on rural lending since 1981 during     11:40:34

          9        the farm crisis.  These efforts have focused on the   11:40:38

         10        policies and practices of the Farmers Home            11:40:42

         11        Administration, Farm Credit Services, commercial      11:40:46

         12        banks, and bank regulatory agencies.                  11:40:46

         13             We got our first family farm lending program     11:40:48

         14        with Norwest in January 1989.  By 1991, we had        11:40:50

         15        agreements with Firstar and Brenton Banks.            11:40:56

         16             Currently our three farm loan programs cover 27  11:40:58

         17        banks in 26 communities across Iowa, and we estimate  11:41:04

         18        that these programs have helped over 12 hundred       11:41:06

         19        small and mid-sized farmers obtain nearly $27         11:41:08

         20        million in credit for annual operating and crop       11:41:12

         21        input expenses, machinery, and real estate            11:41:14

         22        purchases, and other agricultural needs.              11:41:18

         23             We have also used the CRA to help farmers set    11:41:20

         24        up debt restructuring agreements which -- and during  11:41:24

         25        the farm crisis kept a lot of farmers on the farm     11:41:26



     
     



                                                                    112

          1        and kept them from losing everything they had.        11:41:30

          2             Our concerns about this merger include customer  11:41:32

          3        service, commitment to communities, and rural         11:41:36

          4        service.  On customer service.  Wells Fargo has a     11:41:38

          5        poor customer service reputation.  A web site was     11:41:42

          6        set up by and for unhappy customers that has been so  11:41:46

          7        well visited that several magazine articles have      11:41:52

          8        been written about it.                                11:41:54

          9             According to a study done by United              11:41:56

         10        Steelworkers of America, between June 1996 and March  11:41:58

         11        1998, there was a disproportionate decline in the     11:42:02

         12        relative share of branches in nonmetropolitan areas.  11:42:02

         13        For example, in Nevada, Wells Fargo increased its     11:42:06

         14        metropolitan branches by 29 percent while its         11:42:08

         15        nonmetropolitan branches declined by five percent.    11:42:12

         16        And in California, the decline was 34 percent in      11:42:16

         17        nonmetropolitan areas and only nine percent in        11:42:18

         18        metropolitan areas.                                   11:42:22

         19             On rural service.  In response to Question 4 of  11:42:22

         20        the Federal Reserve Board's August 21st letter,       11:42:26

         21        Wells Fargo's rural programs and initiative were all  11:42:30

         22        contributions in investments in other people's        11:42:34

         23        programs.  Wells Fargo showed no initiative on their  11:42:38

         24        own.  While the states that they are in include       11:42:40

         25        rural areas, they could show nothing that they were   11:42:42



     
     



                                                                    113

          1        doing to serve the needs in those areas except        11:42:44

          2        giving money to other people to do something for      11:42:48

          3        them.  Rural people should be able to expect to use   11:42:50

          4        banks like everyone else, not nonprofits and special  11:42:54

          5        programs.  Remember, CRA is about lending and doing   11:42:58

          6        business with people.  It's not about charity and     11:43:00

          7        philanthropy. 

          8             We're also concerned about a statement made by   11:43:04

          9        Tom Unger in a newspaper report announcing Wells      11:43:06

         10        Fargo's closure of 14 branches in Washington, 26 in   11:43:10

         11        Oregon, 10 in Idaho, and 12 in other western rural    11:43:12

         12        areas that "urban areas provide better growth         11:43:16

         13        prospects.  We want to offer a complete network of    11:43:20

         14        services in our locations, but that was not possible  11:43:24

         15        in rural communities where there is simply not        11:43:26

         16        enough people."  We have no reason to believe that    11:43:30

         17        this philosophy will not carry over into the new      11:43:32

         18        company.                                              11:43:36

         19             On mortgage lending.  In our urban chapters      11:43:36

         20        mortgage lending has been a key issue, and Wells      11:43:40

         21        Fargo has not been doing mortgage lending.  In the    11:43:42

         22        documents sent by Norwest and Wells Fargo in          11:43:44

         23        response to Question 2 in the August 21st letter      11:43:46

         24        from the Board of Governors, Norwest and Wells Fargo  11:43:50

         25        did not adequately explain their plans for mortgage   11:43:52



     
     



                                                                    114

          1        lending products post-merger.  Mortgage lending is    11:43:56

          2        the backbone of CRA.  It was the driving force        11:43:58

          3        behind the CRA legislation and is vital to community  11:44:02

          4        development.  Wells Fargo's lack of mortgage lending  11:44:04

          5        in low-mod income areas, originating only 253 loans   11:44:10

          6        in low-mod income census tracts in 1997 nationwide,   11:44:16

          7        is a clear violation of CRA.                          11:44:20

          8             In contrast, Norwest Bank made 85 loans in       11:44:20

          9        low-mod income census tracts in Des Moines alone in   11:44:24

         10        1997.  That's 34 percent of Wells Fargo's nationwide  11:44:28

         11        total.  That's the Iowa CCI testimony.                11:44:32

         12             I know nothing about this, but I'm reading it    11:44:38

         13        for Washington Reinvestment Alliance.                 11:44:42

         14             Honorable Governors of the Federal Reserve:      11:44:46

         15        The Washington Reinvestment Alliance (WRA) offers     11:44:48

         16        testimony regarding the merger of Wells Fargo and     11:44:50

         17        Norwest Mortgage.  The WRA is concerned that          11:44:52

         18        Norwest's poor record of mortgage lending to low-     11:44:56

         19        and mod income communities within Washington State    11:44:58

         20        will result in this merger's negative effect on       11:45:00

         21        these communities.                                    11:45:04

         22             Wells Fargo's presence in Washington has been    11:45:04

         23        marked by honest efforts to expand services to        11:45:08

         24        low-mod income communities.  When the bank acquired   11:45:10

         25        First Interstate in 1996, Wells made contact with     11:45:14



     
     



                                                                    115

          1        the WRA to discuss the merger's impact.  In addition  11:45:20

          2        Wells has made investments and contributions that     11:45:22

          3        First Interstate had previously avoided,              11:45:24

          4        concentrating on corporate giving and investments     11:45:26

          5        for community economic development.                   11:45:30

          6             Norwest's mortgages performance has not been so  11:45:32

          7        praiseworthy.  This subsidiary of Norwest Bank makes  11:45:34

          8        only nominal corporate contributions within the       11:45:38

          9        state.  Unlike its mortgage branches in states with   11:45:42

         10        Norwest Bank branches, Norwest Mortgage does not      11:45:44

         11        widely offer mortgage products to Washington          11:45:48

         12        borrowers that help the bank earn credit under the    11:45:52

         13        CRA.  In 1997, the company made 50 percent more down  11:45:54

         14        payment assistance programs in loans in South         11:45:58

         15        Dakota -- where it originated at least six times      11:46:00

         16        fewer loans to low and moderate income borrowers --   11:46:04

         17        than in Washington.                                   11:46:08

         18             Analysis conducted by the Freemont Public        11:46:08

         19        Association, a HUD-certified agency that provides     11:46:10

         20        mortgage default counseling to at risk borrowers in   11:46:14

         21        the Seattle area, shows that Norwest's default rate   11:46:18

         22        is much higher than area lenders in proportion with   11:46:22

         23        its market share.  The FPA concludes that Norwest     11:46:26

         24        borrowers are much more likely to lose their homes    11:46:28

         25        than customers of nearly any other mortgage company.  11:46:30



     
     



                                                                    116

          1        Norwest's unsatisfactory record is replicated on a    11:46:32

          2        state-wide level.  Norwest originated 2,223           11:46:36

          3        FHA-insured mortgage loans in the Spokane             11:46:42

          4        jurisdiction in the year 1997, ranking second in the  11:46:46

          5        number of FHA loans made; yet, Norwest's default      11:46:48

          6        rate on these loans was higher than 12 of the 24      11:46:52

          7        lenders surveyed.  In Seattle the record is worse.    11:46:56

          8        Norwest Mortgage ranked 34th out of 43 lenders in     11:46:58

          9        loss mitigation performance in 1997.                  11:47:02

         10             Based on these facts, the WRA can only conclude  11:47:04

         11        that Norwest is using its giant market share and its  11:47:06

         12        plentiful supply of HUD-insured mortgages to          11:47:12

         13        originate loans without supporting its low and        11:47:14

         14        moderate income borrowers.                            11:47:16

         15             To ensure that mortgage lending becomes more     11:47:18

         16        supportive of the community in the wake of the        11:47:22

         17        merger, the WRA recommends the following measures be  11:47:22

         18        taken by the combined company.                        11:47:26

         19             One, lending officers and loan servicing agents  11:47:28

         20        employed by Norwest Mortgage-Washington State         11:47:32

         21        branches receive training to provide more customer    11:47:36

         22        centered servicing of their loans, including          11:47:38

         23        specific instruction in preparing loss mitigation     11:47:42

         24        plans in cooperation with borrowers at risk in        11:47:44

         25        mortgage default.                                     11:47:48



     
     



                                                                    117

          1             Two, the combined company make a significant     11:47:48

          2        new lending target on single-family home loans to     11:47:52

          3        low and mod income individuals and census tracts and  11:47:56

          4        minority home buyers.  The commitment should          11:47:58

          5        anticipate Norwest's expanded market share due to     11:48:00

          6        customers that currently shop for home loans through  11:48:04

          7        Wells Fargo.                                          11:48:08

          8             Three, the combined company contribute $1.25     11:48:08

          9        million to home pre-purchase and mortgage default     11:48:12

         10        counseling agencies over the next five years.  Thank  11:48:16

         11        you for your consideration.                           11:48:18

         12        

         13                  CHAIRPERSON SMITH:  Thank you.  We'll go    11:48:20

         14        to Ms. Wegner.

         15        

         16                  MS. WEGNER:  Good morning.  My name is      11:48:24

         17        Ferol Wegner.  I'm a board member of the Citizens     11:48:26

         18        for Community Improvement of Des Moines, Iowa.        11:48:30

         19        Citizens for Community Improvement of Des Moines has  11:48:32

         20        been working on the CRA in Des Moines' neighborhoods  11:48:36

         21        since 1977.  Our work has resulted in over $50        11:48:38

         22        million in loans and grant money being brought into   11:48:42

         23        our low and moderate income neighborhoods.            11:48:44

         24             Citizens for Community Improvement of Des        11:48:46

         25        Moines has three main concerns with the merger of     11:48:50



     
     



                                                                    118

          1        Wells Fargo and Norwest Bank.  These concerns are     11:48:52

          2        customer service, mortgage lending, and commitment    11:48:54

          3        to communities.                                       11:48:58

          4             There's a real concern that services will be     11:49:00

          5        drastically reduced in low to moderate income         11:49:02

          6        neighborhoods as well as in smaller urban and rural   11:49:06

          7        communities.  Norwest stresses people are their       11:49:08

          8        greatest asset for growth, while Wells Fargo closed   11:49:10

          9        hundreds of branches, eliminated 7,000 jobs in the    11:49:14

         10        hostile takeover of First Interstate Bank, slashing   11:49:18

         11        a total of 12,600 jobs to date.  This can and         11:49:20

         12        probably will occur again with this proposed merger.  11:49:24

         13             Wells Fargo uses ATM machines and other          11:49:26

         14        technology where there are fewer flesh and blood      11:49:28

         15        bankers.  People like to see and talk to a friendly   11:49:32

         16        face, someone they can trust and feel comfortable     11:49:34

         17        with, knowing their concerns can be addressed by the  11:49:36

         18        bank's president or CEO.  They still want             11:49:38

         19        old-fashioned customer service with ATMs and          11:49:42

         20        Internet banking services as an extra amenity.        11:49:44

         21             We all know that technology plays a major role   11:49:48

         22        in our daily lives today.  What's wrong with          11:49:50

         23        traditional banking made better?  It appears to me    11:49:54

         24        that it all boils down to the bottom line: profits    11:49:56

         25        versus the human factor.  Where does that leave the   11:49:58



     
     



                                                                    119

          1        other part of the equation, the human factor, and     11:50:02

          2        when does the steamroller stop?                       11:50:04

          3             In the documents sent by Norwest and Wells       11:50:08

          4        Fargo in response to Question 2 in the August 21st    11:50:10

          5        letter from the Board of Governors, Norwest and       11:50:12

          6        Wells Fargo did not explain their plans for mortgage  11:50:16

          7        lending products post-merger.  Mortgage lending is    11:50:18

          8        the backbone of CRA.  It was the driving force        11:50:22

          9        behind the CRA legislation, and is vital to           11:50:26

         10        community development.  Wells Fargo's lack of         11:50:28

         11        mortgage lending in low to mod income areas,          11:50:32

         12        originating only the 253 loans in low to moderate     11:50:36

         13        income census tracts in 1997, is a clear violation    11:50:40

         14        of the CRA.                                           11:50:44

         15             CCI is very concerned and uncomfortable in       11:50:50

         16        regard to the response from -- in from Norwest and    11:50:54

         17        Wells Fargo.  We are not satisfied that they          11:50:58

         18        neglected to explain their plans for mortgage         11:51:04

         19        lending products after the proposed merger.  We and   11:51:06

         20        other groups across the nation have worked and        11:51:08

         21        fought too long and hard to abandon our CRA efforts   11:51:10

         22        and the impact that CRA has done in our               11:51:14

         23        neighborhoods.  None of us want to return to the      11:51:16

         24        days of red lining.  Our low and moderate income      11:51:20

         25        areas in our communities will suffer, and our         11:51:22



     
     



                                                                    120

          1        struggling inner cities will surely die.              11:51:24

          2             This issue is a serious one and it must be       11:51:28

          3        addressed in this merger and subsequent proposed      11:51:30

          4        mergers.  Citizens of Community Improvement Des       11:51:32

          5        Moines has been working with lenders on reinvestment  11:51:36

          6        since 1977.  We have lending agreements with several  11:51:38

          7        local lenders.  While we have worked with Norwest     11:51:42

          8        since 1992, when we asked for a meeting and written   11:51:44

          9        commitment with Norwest that would include national   11:51:48

         10        decision-makers, we were offered a meeting with       11:51:52

         11        local people only during the day when many of our     11:51:54

         12        task force members are at work.  We were also told    11:51:58

         13        that there was no need for a written, signed          11:52:02

         14        agreement.  There is no reason not to sign a          11:52:04

         15        commitment unless you have no intention of honoring   11:52:06

         16        it.                                                   11:52:10

         17             Our task force must ensure that the positive     11:52:10

         18        things that have happened in our communities          11:52:14

         19        continue to happen.  And with banks merging and       11:52:16

         20        decisions made farther and farther away, we need      11:52:18

         21        written commitments from lenders more than ever so    11:52:22

         22        we can be sure that our communities continue to       11:52:24

         23        grow.                                                 11:52:28

         24             Local banking institutions should be able to     11:52:30

         25        make their own decisions locally, not by those        11:52:32



     
     



                                                                    121

          1        decision-makers in another state halfway across the   11:52:36

          2        country.  The financial needs in Iowa, which is an    11:52:38

          3        agricultural state, is much more different than in    11:52:40

          4        North Carolina or California.  We have been           11:52:44

          5        monitoring our local lenders and note that as         11:52:46

          6        mergers continue, it has become increasingly          11:52:48

          7        difficult to obtain written agreements with them;     11:52:52

          8        however, our local banks have no qualms about this.   11:52:56

          9        They want to do this.  This indicates to us that as   11:53:00

         10        banks merge, becoming larger and not locally owned,   11:53:02

         11        written agreements are crucial for our continued      11:53:06

         12        community growth in cities such as Des Moines, Iowa.  11:53:10

         13        Thank you very much for your time.                    11:53:14

	
Last update: December 3, 2010