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Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Six

                                                                  121

      

         15                  CHAIRPERSON SMITH:  Thank you.  If there    11:53:16

         16        are no questions, then we thank you again for being   11:53:16

         17        here this morning, and we'll move on to the next      11:53:20

         18        panel, which is Panel 6.  We'll start with            11:53:22

         19        Mr. Brantley.                                         11:54:02

         20        

         21                  MR. BRANTLEY:  Thank you, Madame Chair.     11:54:06

         22        I'd like to take this opportunity to express my       11:54:10

         23        appreciation on behalf of the metropolitan Denver     11:54:12

         24        community to testify before the Federal Reserve in    11:54:16

         25        regards to the merger between Norwest and Wells       11:54:18



     
     



                                                                    122

          1        Fargo.                                                11:54:22

          2             I'd like to start off by saying not only do I    11:54:24

          3        express my appreciation to the Federal Reserve        11:54:26

          4        panel, but I'd like to express my appreciation to     11:54:30

          5        those individuals who have testified as well.  And I  11:54:32

          6        have to share with you that based upon that           11:54:34

          7        testimony, my testimony has changed somewhat.  And I  11:54:36

          8        think that certainly what I'll be taking back to my   11:54:40

          9        community will reflect some of those changes.  I      11:54:44

         10        really do feel that individuals who come and          11:54:48

         11        participate in testimony such as this should not      11:54:52

         12        only testify but should listen very carefully to the  11:54:56

         13        individuals who are bringing information to share     11:54:58

         14        with them.  I have heard some outstanding,            11:55:00

         15        outstanding comments that I think will benefit my     11:55:04

         16        community and certainly plan to take it back to the   11:55:08

         17        metropolitan Denver community for hopefully sharing,  11:55:10

         18        and even more so, implementation.  But I've also      11:55:14

         19        heard some concerns, some concerns that I hadn't      11:55:18

         20        heard before, and I need to share with you that       11:55:22

         21        basically I will also be addressing those concerns    11:55:24

         22        as I go back to my community.                         11:55:28

         23             First of all, let me share with you, though,     11:55:30

         24        some of the very basic things that I had prior to     11:55:32

         25        hearing some of the comments today.  I really do      11:55:34



     
     



                                                                    123

          1        feel that one of the primary factors of business      11:55:36

          2        mergers and concepts related to concepts of business  11:55:40

          3        within our community relate to the quality of life.   11:55:44

          4        I have to share with you that in the Denver           11:55:46

          5        metropolitan community, I feel that we have an        11:55:48

          6        outstanding quality of life.  The individuals that    11:55:52

          7        will also be sharing some of our comments related to  11:55:54

          8        our community, I think, are enviable throughout the   11:55:58

          9        rest of the country.  The quality of life is          11:56:02

         10        extremely important to me and, I'm sure, to you.  As  11:56:04

         11        we move throughout this community, as we take jobs    11:56:08

         12        and as we raise families, one of the primary things   11:56:10

         13        that we're looking for is an increase in the quality  11:56:12

         14        of life for our children and for our families.        11:56:14

         15             In relationship to quality of life, quality of   11:56:18

         16        life relates to the participation of individuals,     11:56:20

         17        those individuals who are in the three sectors of     11:56:24

         18        our economy.  We have the private sector, we have     11:56:28

         19        the governmental sector, and we have the nonprofit    11:56:30

         20        sector. 

         21             I represent the nonprofit sector.  I'm           11:56:34

         22        executive director of a private, nonprofit            11:56:36

         23        organization serving children within the              11:56:40

         24        metropolitan Denver area.  We have been very          11:56:42

         25        fortunate over the past several years to have the     11:56:44



     
     



                                                                    124

          1        involvement of Norwest Bank within the development    11:56:48

          2        of our programs in early childhood education.  We     11:56:50

          3        have started some new programs within our             11:56:54

          4        metropolitan area.  One of them which our agency has  11:56:56

          5        initiated has been one which seeks out gifted         11:57:00

          6        children within the inner city.                       11:57:02

          7             I have to share with you a very small, almost    11:57:04

          8        joke, but it's not a joke.  When we first started     11:57:08

          9        looking for supporters of this program and shared     11:57:10

         10        with a couple of potential funders that we were       11:57:14

         11        looking for support for children -- for our program   11:57:16

         12        for gifted children within the inner city, one of     11:57:20

         13        our potential funders said, where do you expect to    11:57:22

         14        find them?  I asked the gentleman to leave my office  11:57:24

         15        because our discussion was over at that time.         11:57:28

         16             I think that -- that certainly, you know, the    11:57:30

         17        attitude that came forth from our Norwest Bank        11:57:34

         18        community was much, much different, and certainly     11:57:36

         19        exemplifies the concept of support that we have       11:57:40

         20        received for new projects and programs like our       11:57:44

         21        program for inner city gifted children.               11:57:46

         22             Once we heard the concept about the              11:57:50

         23        presentation to be shared with you today, we began    11:57:54

         24        to look at what CRA was specifically looking for.     11:57:56

         25        We heard the concepts of lending, we heard the        11:57:58



     
     



                                                                    125

          1        concepts of investment, and we heard the concepts of  11:58:02

          2        service.                                              11:58:04

          3             One of the things that has changed today that I  11:58:06

          4        will certainly be going back to my community will be  11:58:08

          5        looking at the concept of lending.  I have heard      11:58:10

          6        some very, very disturbing concepts in regards to     11:58:14

          7        lending, and I think that basically there is a        11:58:16

          8        concept of CRA that not only relates to the business  11:58:18

          9        community, there's a concept of CRA that relates      11:58:22

         10        back to individuals, and that is community            11:58:24

         11        responsibility activities.  And that will be the CRA  11:58:28

         12        that I'll be taking back to our community because I   11:58:32

         13        think that if indeed there are responsibilities and   11:58:34

         14        concerns related to lending, then I feel that we      11:58:38

         15        have a responsible role to play in that.              11:58:40

         16             The second is investment.  You've heard and      11:58:44

         17        reviewed some outstanding statistical numbers         11:58:48

         18        related to investment.  And to be very frank with     11:58:52

         19        you, that's what I was going to share with you        11:58:54

         20        today, too, statistical numbers, but they were        11:58:56

         21        certainly outclassed by the individuals that are      11:58:58

         22        represented to you today in the formal documentation  11:59:02

         23        that you've received from both major CEOs of these    11:59:04

         24        corporations.  But, indeed, within our community I    11:59:08

         25        think that investment with the community has not      11:59:10



     
     



                                                                    126

          1        only meant dollar and cent investment; it has meant   11:59:12

          2        the investment of the time and effort of the          11:59:16

          3        individuals within our community.                     11:59:18

          4             Our organization is a very small organization    11:59:22

          5        in comparison to many of the others in our            11:59:24

          6        community, and I think that was one of the reasons    11:59:26

          7        that I was asked to come and present to you today.    11:59:28

          8        But in the relationship to it being a small           11:59:32

          9        organization, I can list for you outstanding members  11:59:34

         10        of our community, such as John Nelson, David Bailey,  11:59:38

         11        David Jones, Chuck Henderson, Patricia Cortez, who    11:59:42

         12        have been outstanding members of our community and    11:59:46

         13        have served our community and the community has       11:59:48

         14        benefited from it, thus improving our quality of      11:59:52

         15        life.  And it is with those concepts in mind that I   11:59:54

         16        support the merger between the Norwest Bank and       11:59:58

         17        Wells Fargo.  Thank you very much.                    12:00:00

         18        

         19                  CHAIRPERSON SMITH:  Thank you.              12:00:02

         20        Mr. Garcia.                                           12:00:02

         21        

         22                  MR. GARCIA:  My name is Pete Garcia.  I'm   12:00:04

         23        the president of Chicanos Por la Causa in Phoenix.    12:00:06

         24        We're a state-wide community development corporation  12:00:08

         25        having 46 offices in 22 cities, and we see over       12:00:12



     
     



                                                                    127

          1        66,000 people annually.  There are over one million   12:00:16

          2        Hispanics in Arizona that we consider ourselves to    12:00:20

          3        be a niche market that both of these institutions     12:00:24

          4        are interested in and have been interested.           12:00:26

          5             Our organization has had an extensive            12:00:28

          6        partnership with Wells Fargo Bank and Norwest Bank.   12:00:32

          7        As a personal member of the Norwest Bank Minority     12:00:36

          8        Advisory Council, we have provided input and set      12:00:42

          9        goals with the other John Campbell from Arizona, and  12:00:44

         10        top management on a number of key issues and factors  12:00:48

         11        that affect our communities in Arizona.  These        12:00:50

         12        include mortgages, affordable housing, small          12:00:54

         13        business lending, minority contracting, and           12:00:56

         14        contracting with vendors.                             12:01:00

         15             Our small business and S.B.A. micro-loan         12:01:02

         16        program have received loan loss reserve funds from    12:01:06

         17        Norwest Bank and Wells Fargo Bank, which has helped   12:01:12

         18        us lend over $2 million to over 225 companies, small  12:01:14

         19        businesses, in Arizona in the last three years.       12:01:18

         20        Norwest's deposit and Wells Fargo's $100,000 deposit  12:01:22

         21        in our federal credit union has enabled us to lend    12:01:28

         22        over $1.7 million to 16 hundred members of our        12:01:34

         23        credit union.  This is a real interesting concept     12:01:36

         24        here of a bank lending to a credit union.             12:01:40

         25             Most of these borrowers are first-time           12:01:44



     
     



                                                                    128

          1        borrowers and bilingual Spanish speaking.  Norwest    12:01:46

          2        and Wells Fargo's investment of CPLC small business   12:01:50

          3        incubator has started the opportunity for small       12:01:56

          4        businesses in south central Phoenix to access         12:01:58

          5        affordable work space.  A second business incubator   12:02:02

          6        in Phoenix is currently under construction, and a     12:02:04

          7        rural, small business incubator will go to            12:02:06

          8        construction in Nogales, Arizona, along the           12:02:10

          9        Arizona/Mexican border in early 1999.                 12:02:10

         10             Other investments and grants that we have        12:02:14

         11        worked with with both institutions have targeted our  12:02:14

         12        special events and organizational capacity building   12:02:18

         13        in Phoenix and Tucson and other rural communities     12:02:22

         14        that we serve.  Our affordable housing programs in    12:02:24

         15        Somerton, Nogales, Tucson, South Tucson, Guadalupe, 

         16        and Phoenix have also benefited.  We have mortgages,  12:02:30

         17        mortgage write-downs for closing costs, funds to      12:02:34

         18        make housing affordable, investments of Norwest       12:02:36

         19        staff.  As board member of the Latino community for   12:02:40

         20        Norwest, our organization and our subsidiary, boards  12:02:44

         21        also contribute to the sound managements of our       12:02:48

         22        organization. 

         23             Our expanding partnership with Karen Wegman,     12:02:54

         24        Alonzo Morale, Edmundo Givalgo, with Wells Fargo      12:02:58

         25        Bank has also been rewarding, in many instances very  12:03:00



     
     



                                                                    129

          1        creative and challenging, in that they have come to   12:03:02

          2        us and asked us what kind of mortgage products do     12:03:04

          3        our communities need, what kind of business           12:03:08

          4        investments do we need to make our communities work?  12:03:10

          5             Our purchase of a Wells Fargo Bank -- yes, we    12:03:14

          6        purchased one of your banks in south central Phoenix  12:03:18

          7        -- has enabled us to double the space of the Federal  12:03:22

          8        Credit Union.  We also maintain Wells Fargo as a      12:03:24

          9        presence in this particular facility in the Grant     12:03:28

         10        Park neighborhood, and it also provides incubator     12:03:30

         11        space for small businesses and minority               12:03:34

         12        entrepreneurs. 

         13             Wells Fargo's bank investment of $1,250,000 at   12:03:40

         14        zero percent interest for five years with an          12:03:44

         15        additional two percent over the next ten years, is    12:03:46

         16        way beyond the cutting edge.  These are the kind of   12:03:50

         17        partnerships that we're interested in developing      12:03:54

         18        with both institutions and continuing.  This          12:03:56

         19        investment expands our ability to lend to             12:03:58

         20        micro-borrowers, create a venture capital pool, a     12:04:00

         21        revolving line for new construction in Tucson for     12:04:06

         22        our for-profit construction company, and it enables   12:04:10

         23        us to leverage $600,000 to build a new office         12:04:14

         24        building in Tucson and pay off an office complex      12:04:18

         25        mortgage in a small rural town in southwestern        12:04:22



     
     



                                                                    130

          1        Arizona that leases office space from the state of    12:04:24

          2        Arizona.                                              12:04:28

          3             Funding of special projects, community           12:04:28

          4        celebrations has made Wells Fargo a new power in the  12:04:32

          5        Arizona bank market.  Grants to organizations has     12:04:34

          6        involved small business lending, social work, arts,   12:04:38

          7        that round out a true concept of partnering in our    12:04:40

          8        community: not just taking our deposits but actually  12:04:44

          9        putting something back.                               12:04:48

         10             We would point to the exemplary record of staff  12:04:48

         11        involvement and outreach in how community             12:04:52

         12        reinvestment is truly done in America.  Management    12:04:54

         13        of both institutions still needs to work on board     12:04:56

         14        membership.  Upper level executives are still         12:05:00

         15        lacking, but through our ongoing efforts, these are   12:05:04

         16        problems we can solve together.  Branching            12:05:08

         17        duplication can be solved through partnership with    12:05:10

         18        nonprofits that benefits the total community as well  12:05:12

         19        as my first example of the Wells Fargo branch in      12:05:14

         20        south central Phoenix.                                12:05:16

         21             Our community meetings with citizens and         12:05:18

         22        organizations, community leaders in the upcoming      12:05:20

         23        follow-up meeting state-wide leaves us with a strong  12:05:24

         24        indication that more progress will occur with the     12:05:26

         25        merged institution, and we encourage your positive    12:05:28



     
     



                                                                    131

          1        confirmation of this merger and invite you to visit   12:05:32

          2        and seek community reinvestment at work in Arizona.   12:05:34

          3        Thank you.                                            12:05:36

          4        

          5                  CHAIRPERSON SMITH:  Ms. Gold.

          6        

          7                  MS. GOLD:  My name is Autumn Gold, and I'm  12:05:42

          8        from Denver, Colorado.  I work for Atlantis 

          9        Community.  I'd just like to thank you for giving me  12:05:48

         10        this opportunity to speak today.  Atlantis            12:05:50

         11        Community, Incorporated is a 23-year old Colorado     12:05:52

         12        not-for-profit corporation providing services to      12:05:56

         13        people with disabilities in metro Denver, and, when   12:05:58

         14        necessary, throughout Colorado.  Atlantis services    12:06:04

         15        include home health, housing benefits advocacy,       12:06:06

         16        independent living skills training, basic education   12:06:10

         17        and home ownership counseling and education.          12:06:16

         18        Atlantis is recognized nationally for its work in     12:06:16

         19        disability rights and for creating new and            12:06:20

         20        innovative programs.                                  12:06:22

         21             In 1992, Atlantis Community, Incorporated        12:06:22

         22        brought to Norwest Bank a unique concept that became  12:06:26

         23        the first home ownership mortgage program for people  12:06:28

         24        with disabilities in America.  In conjunction with    12:06:32

         25        Atlantis, Norwest created the Disability Community    12:06:34



     
     



                                                                    132

          1        Home Mortgage Program, known as DCHOP.  The DCHOP     12:06:38

          2        home mortgage program for people with disabilities    12:06:44

          3        was the first to offer an opportunity to participate  12:06:46

          4        in the American dream of home ownership.              12:06:48

          5             Norwest, at Atlantis's direction, developed a    12:06:50

          6        program that accepts alternative income such as       12:06:54

          7        social security, food stamps, tax credits, and much   12:06:56

          8        more.  High debt to income ratios play a large part   12:07:00

          9        in success of the program as well as reduced closing  12:07:04

         10        costs and only a two percent down payment.            12:07:08

         11             The American dream of owning your own home was   12:07:10

         12        just that, a dream for people with disabilities,      12:07:12

         13        until Norwest introduced the DCHOP program in 1993.   12:07:14

         14        Prior to the DCHOP program, people with disabilities  12:07:18

         15        and their families' only choice was to rent an        12:07:20

         16        apartment or someone else's home.  That apartment or  12:07:24

         17        home was most likely not accessible, either.  With a  12:07:26

         18        population that is 80 percent unemployed and living   12:07:30

         19        on a fixed income from social security of $700 a      12:07:34

         20        month or less, they had little chance to even dream   12:07:36

         21        of home ownership.  The DCHOP program offers more     12:07:40

         22        than just a dream.  It offers but does not guarantee  12:07:46

         23        the reality of home ownership.  People with           12:07:50

         24        disabilities still must qualify for a home loan just  12:07:52

         25        as everybody else.  Norwest simply leveled the        12:07:54



     
     



                                                                    133

          1        playing field.                                        12:07:58

          2             Norwest was bold to move to create the           12:07:58

          3        Disability Home Ownership Program when no other       12:08:04

          4        lending institution had the courage to take the       12:08:06

          5        first step.  They must be applauded.  Had not         12:08:10

          6        Norwest taken that step, people with disabilities     12:08:14

          7        still today would be excluded from the American       12:08:16

          8        dream.  Those first steps designed a program that     12:08:18

          9        has proved that people with disabilities could be     12:08:22

         10        homeowners without high foreclosure rates and         12:08:24

         11        without high delinquency rates.  The DCHOP program    12:08:28

         12        encouraged US Banks to create their Disability        12:08:32

         13        Advantage Program because another lending             12:08:36

         14        institution, Norwest, had taken the initial risk.     12:08:38

         15             Norwest's success with the DCHOP program         12:08:42

         16        brought Fannie Mae to Denver to learn about and to    12:08:46

         17        study its workings.  From that visit came Fannie      12:08:48

         18        Mae's home choice program: 16 states, $50 million     12:08:52

         19        pilot project modeled after the DCHOP program.        12:08:58

         20        Fannie Mae's pilot project and US Bank's Disability   12:09:00

         21        Home Advantage Program validates Norwest's wisdom in  12:09:06

         22        1992.                                                 12:09:06

         23              After five years of providing home ownership    12:09:08

         24        counseling, there is no doubt that these potential    12:09:12

         25        home buyers have the ability and the desire to own    12:09:14



     
     



                                                                    134

          1        homes.  Atlantis's home ownership program aspires to  12:09:16

          2        increase awareness and availability of home           12:09:22

          3        ownership opportunities for people with               12:09:26

          4        disabilities.  Atlantis's commitment is to assist     12:09:28

          5        potential buyers in understanding the complex         12:09:32

          6        process by providing them with the information that   12:09:34

          7        along with their own determination will prepare them  12:09:38

          8        to become homeowners and improve their quality of     12:09:42

          9        life, like you said.                                  12:09:44

         10             My goal is to see people feel confident about    12:09:46

         11        the home buying process and comfortable with home     12:09:48

         12        ownership, comfortable as homeowners armed with the   12:09:52

         13        knowledge and empowered to make the important         12:09:54

         14        decisions to undertake their responsibility of home   12:09:56

         15        ownership.  I personally and strongly believe in      12:10:00

         16        home ownership counseling and education.  And         12:10:02

         17        partnered with the DCHOP program, Atlantis and        12:10:04

         18        Norwest have pioneered home ownership for             12:10:08

         19        individuals with disabilities.                        12:10:12

         20             It is Atlantis's hope that with the merger of    12:10:12

         21        Norwest and Wells Fargo that the commitment to the    12:10:16

         22        DCHOP not only continue but the size of the program   12:10:20

         23        increase to reflect the size of the merger.  To date  12:10:22

         24        Norwest has provided 955 mortgages to people with     12:10:24

         25        disabilities and families in Colorado, valued in      12:10:30



     
     



                                                                    135

          1        excess of $64 million.  Norwest has made it possible  12:10:34

          2        for people with disabilities to dream the impossible  12:10:38

          3        dream of home ownership.  Thank you.                  12:10:40

          4        

          5                  CHAIRPERSON SMITH:  Thank you.              12:10:42

          6        Mr. Jimenez.                                          12:10:42

          7        

          8                  MR. JIMENEZ:  Thank you, Governor Smith,    12:10:46

          9        Board of Governors, and Federal Reserve staff.  My    12:10:50

         10        name is Pierre Jimenez.  I'm the director of Denver   12:10:52

         11        Community Television, but that's not why I'm here     12:10:54

         12        today.  I was originally solicited to become a        12:10:56

         13        member of the Norwest community forum because of my   12:11:00

         14        community activism.  And when we were coming up in    12:11:02

         15        the shuttle today, I felt a sense of ambivalence      12:11:08

         16        seeing the demonstrators sitting on the side of the   12:11:10

         17        sidewalk, because I think after hearing a lot of the  12:11:14

         18        testimony today, you have to give validity to many    12:11:16

         19        of the comments that were made, and so I would ask    12:11:18

         20        the executives of Norwest and Wells Fargo to please   12:11:22

         21        keep in mind what these people are saying because     12:11:24

         22        much of this testimony comes from the heart.  It's    12:11:28

         23        what they believe to be true.  Now we can quarrel     12:11:30

         24        about the degree and the magnitude, but we can't      12:11:32

         25        quarrel about the fact that it exists.  Because, for  12:11:36



     
     



                                                                    136

          1        example, I can recall back in 1950, my father         12:11:40

          2        returned from World War II and decided to become      12:11:44

          3        part of the American dream as a Mexican American in   12:11:46

          4        Denver, Colorado, first by becoming a licensed        12:11:50

          5        electrician, the second one in the state, but more    12:11:54

          6        importantly, trying to borrow $10,000 from a bank to  12:11:58

          7        build a house, to begin building the foundation of    12:12:00

          8        becoming part of the stakeholders in America.  He     12:12:04

          9        was denied that opportunity.  Fortunately for him,    12:12:08

         10        he had the opportunity to borrow from friends, and    12:12:10

         11        they built this house.                                12:12:14

         12             In the same spirit that my father built that     12:12:16

         13        house back 1950, 48 years ago, we are here today      12:12:20

         14        discussing what CRA means to the American public.     12:12:24

         15        And at the heart of that is loans to people to        12:12:28

         16        become stakeholders in the American dream.            12:12:30

         17             Now, it's been my experience with Norwest Banks  12:12:34

         18        for the past several years that I've been on the      12:12:36

         19        community forum that they have listened, often times  12:12:40

         20        not very well, but they have changed their behavior,  12:12:42

         21        sometimes reluctantly.  And as one of them said,      12:12:46

         22        well, if you drag us kicking and screaming into the   12:12:50

         23        21st century, maybe it will do some good, and it      12:12:52

         24        has, because what it's done, it's created an          12:12:56

         25        opportunity for, one, more loans to low to moderate   12:13:00



     
     



                                                                    137

          1        income families seeking loans for mortgages since     12:13:04

          2        I've been on the forum.                               12:13:06

          3             Secondly, what it's done is gone into other      12:13:08

          4        areas where traditional banks have refused to go.     12:13:12

          5        Several years ago we talked about a concept of urban  12:13:14

          6        banking, which was creating branches, either loan     12:13:18

          7        offices or full service branches, in inner city       12:13:22

          8        neighborhoods.  Some in the banking community said    12:13:28

          9        it won't work.  Poor people don't take advantage of   12:13:30

         10        banking services or products.  Well, today the        12:13:34

         11        bottom line is -- and that's why we're here -- the    12:13:36

         12        bottom line is banks are in the business to make      12:13:40

         13        money.  We know that, we're not going to argue that   12:13:42

         14        point, but the fact of the matter is in Denver,       12:13:46

         15        Colorado, they are making money in the inner city,    12:13:50

         16        and they're meeting their bottom line.  And when you  12:13:52

         17        meet your bottom line that means then you can move    12:13:54

         18        on to other areas.  So they've expanded loans to      12:13:56

         19        small businesses, and I speak specifically about      12:14:00

         20        people of color.                                      12:14:02

         21             Beyond that, they're taking a look now about     12:14:04

         22        micro loans, smaller amounts to people who really     12:14:06

         23        have an idea.  The concept of entrepreneurship,       12:14:10

         24        especially in the Latino community, is huge.  What    12:14:16

         25        they need is the opportunity to find a way to make    12:14:20



     
     



                                                                    138

          1        it happen.  Norwest Banks in Denver is making that    12:14:22

          2        happen.                                               12:14:26

          3             Now you had an earlier speaker that talked       12:14:26

          4        about how wonderful Wells Fargo was, and they may     12:14:28

          5        be.  You know, the agreements to provide billions of  12:14:34

          6        dollars of loans to people of color I think is        12:14:34

          7        important.  At the same time, let's not forget that   12:14:38

          8        banking is more about personal relationships than     12:14:40

          9        products or services.  It's about the one-to-one      12:14:44

         10        personal contact.  I really don't care if the bank    12:14:50

         11        president comes down to greet me in the lobby.        12:14:52

         12        However, I do care if somebody treats me with         12:14:54

         13        dignity and respect as an individual, and I think     12:14:58

         14        the people that I represent or that I consider to be  12:15:02

         15        constituents are those type of individuals.           12:15:06

         16        Otherwise, one fourth of the American public would    12:15:08

         17        be taking advantage of banking services.              12:15:12

         18             So I would say to you at the point in this       12:15:14

         19        discussion that we asked about this merger, I would   12:15:16

         20        have us keep in mind if we're providing a service to  12:15:20

         21        the American public that will make us a stronger      12:15:24

         22        country and still meet the bottom line, then let's    12:15:26

         23        add that final bid of compassion that people talked   12:15:30

         24        about earlier and will talk about this afternoon so   12:15:34

         25        that we can become the country that we have always    12:15:38



     
     



                                                                    139

          1        been and can become even greater than we know.        12:15:40

          2        Thank you.                                            12:15:44

          3        

          4                  CHAIRPERSON SMITH:  Thank you.  We'll go    12:15:46

          5        to Ms. Tingerthal.                                    12:15:46

          6        

          7                  MS. TINGERTHAL:  That's correct.  Thank     12:15:50

          8        you.                                                  12:15:50

          9             Good afternoon.  My name is Mary Tingerthal,     12:15:50

         10        and I'm the president and chief executive officer of  12:15:52

         11        the National Equity Fund, commonly referred to as     12:15:56

         12        NEF.  I'm also here speaking on behalf of National    12:16:00

         13        Equity Fund's parent organization, the Local          12:16:02

         14        Initiatives Support Corporation, commonly referred    12:16:06

         15        to as LISC.                                           12:16:08

         16             To understand our long-term relationship with    12:16:10

         17        Wells Fargo and Norwest, let me first explain who     12:16:14

         18        LISC and NEF are.  LISC is the nation's largest       12:16:18

         19        community development intermediary and is a           12:16:22

         20        certified community development financial             12:16:24

         21        institution.  In that role LISC often serves as an    12:16:26

         22        intermediary for banks like Norwest and Wells Fargo   12:16:30

         23        to invest in low income communities.                  12:16:32

         24             Since its founding 19 years ago, LISC has        12:16:36

         25        helped nearly 18 hundred community development        12:16:38



     
     



                                                                    140

          1        corporations, like many of those that you've heard    12:16:42

          2        from today, in more than a hundred cities and rural   12:16:44

          3        areas across 39 states and Puerto Rico.  In this      12:16:48

          4        work, LISC has attracted the support of almost 2,000  12:16:50

          5        donors and investors, including Norwest and Wells     12:16:56

          6        Fargo.                                                12:17:00

          7             Through that support, LISC has raised $3.1       12:17:00

          8        billion in grants, loans, and equity investments,     12:17:06

          9        and an additional $3.5 billion of public and private  12:17:08

         10        support has been leveraged by those dollars.  That's  12:17:12

         11        meant 80,000 affordable homes and over 12 million     12:17:14

         12        square feet of community facilities, commercial and   12:17:18

         13        industrial space.                                     12:17:22

         14             Both Norwest and Wells Fargo have been           12:17:24

         15        instrumental in their support of LISC in bringing     12:17:26

         16        about revitalized neighborhoods in the cities where   12:17:28

         17        they operate by working with LISC and NEF.  NEF is    12:17:32

         18        the largest nonprofit syndicator of the federal       12:17:38

         19        government's low income housing tax credits.          12:17:40

         20             For 11 years now we've used that program to      12:17:44

         21        stimulate investment in affordable housing built and  12:17:46

         22        operated exclusively by nonprofit organizations that  12:17:50

         23        work exclusively within their communities.            12:17:54

         24             To date, we've raised nearly $2 1/2 billion      12:17:56

         25        from 140 investors, which has resulted in over        12:18:00



     
     



                                                                    141

          1        44,000 rental homes targeted to low income families.  12:18:04

          2             LISC and NEF are national organizations, but we  12:18:10

          3        operate very much on a local level, and we rely on    12:18:14

          4        local decision-making and local leadership such as    12:18:18

          5        that that's been provided by numerous individuals in  12:18:22

          6        our local programs by executives from Wells Fargo     12:18:26

          7        and Norwest.                                          12:18:30

          8             I can point to Norwest and Wells Fargo being     12:18:32

          9        instrumental in community development because of      12:18:34

         10        their historical core contributions to LISC and       12:18:36

         11        their continuing investments in NEF, as well as       12:18:40

         12        their long-term active involvement in the local       12:18:44

         13        communities on a first-hand basis.                    12:18:48

         14             From 1989 through today, Norwest has invested    12:18:52

         15        almost $14 1/2 million in LISC and NEF, with $14      12:18:56

         16        million of that being NEF investments since 1990,     12:19:00

         17        and about 350,000 in grants to LISC since 1989,       12:19:04

         18        which supports six of our local programs, in          12:19:10

         19        Minneapolis, Duluth, Las Vegas, Milwaukee, Phoenix    12:19:14

         20        and St. Paul.                                         12:19:18

         21             From 1983 through today, Wells Fargo Bank has    12:19:20

         22        invested over $120 million with LISC and NEF.  This   12:19:24

         23        total includes approximately $117 million in equity   12:19:30

         24        investments in our national fund and our California   12:19:34

         25        fund, with Wells Fargo serving as one of our very     12:19:38



     
     



                                                                    142

          1        first investors when the low income housing tax       12:19:42

          2        credit was created.  It also includes almost $3       12:19:46

          3        million in grants to LISC since 1983, which supports  12:19:48

          4        seven local programs, which include the San           12:19:54

          5        Francisco bay area, Houston, Las Vegas, Los Angeles,  12:19:56

          6        again Phoenix, San Diego, and Puget Sound, as well    12:20:00

          7        as LISC's national rural program.                     12:20:06

          8             The financial support from Norwest and Wells     12:20:10

          9        Fargo over the years has been matched in many places  12:20:14

         10        by the people leadership as bank executives serve on  12:20:16

         11        our advisory committees in eight of our local         12:20:20

         12        programs and also with our rural LISC program.        12:20:24

         13             I heard a comment earlier today from someone     12:20:28

         14        indicating that they were disappointed at the use of  12:20:30

         15        intermediaries by these banks in providing services,  12:20:34

         16        particularly in rural areas.  I can understand that   12:20:36

         17        there's some disappointment at the loss of banking    12:20:40

         18        presence, but I do applaud these organizations for    12:20:44

         19        reaching out in ways that may be unconventional to    12:20:46

         20        continue to serve these important organizations.      12:20:50

         21             We do urge that as the bank executives approach  12:20:54

         22        the merger that they consider not stepping away from  12:20:58

         23        the level of investment that they've shown to LISC    12:21:02

         24        and NEF in the past, but to continue those levels     12:21:04

         25        and to continue their support of community            12:21:08



     
     



                                                                    143

          1        development.  Thank you.                              12:21:10

          2        

          3                  CHAIRPERSON SMITH:  Thank you.  Any         12:21:14

          4        questions?  Okay.  If not, then we thank you very     12:21:14

          5        much, and we were scheduled to reconvene at 1:30.     12:21:22

          6        We are hoping to -- we were scheduled to reconvene    12:21:32

          7        at 1:30.  We would like to reconvene at 1:15.  It     12:21:36

          8        will depend on whether we can assemble the 1:30       12:21:42

          9        panel to be here at that time.  So you might try to   12:21:44

         10        be back here by 1:15.                                 12:21:50

         11                  

         12                  VOICE:  We will be here at 1:15.            12:21:54

         13        

         14                  CHAIRPERSON SMITH:  Great.  Then we'll      12:21:56

         15        start at 1:15 and see you then.                       12:21:56

         16        

         17                           (Recess taken.)

         18        

         19        

         20        

         21        

         22        

         23        

         24        

         25 
	
Last update: December 3, 2010