Home > Banking Information & Regulation > Public Meeting Transcripts > PMT - Agendas September 17, 1998
Public Meeting Transcripts
Public Meeting Regarding Norwest Corporation and Wells Fargo & Company
Thursday, September 17, 1998
Transcript of Panel Ten
201 24 CHAIRPERSON SMITH: We're ready to 25 start with Panel 10. I think you can sit 202 1 anywhere. I'll call you in the order that you 2 appear, but you may sit anywhere. 3 Okay. Again, a reminder that if the five 4 minutes expire before you have finished your 5 statement, we will include the -- your complete 6 statement in the record, if you will make sure 7 that we have a copy of it at the registration 8 desk. So if they don't have one now, make sure 9 that they have one before you leave. And we'll 10 start with Mr. Cody. 11 12 MR. CODY: Well, thank you. I'm Ron 13 Cody, President of Junior Achievement of the 14 Upper Midwest. And I appreciate the opportunity 15 to speak on behalf of Norwest Bank and share our 16 views on the impending merger. Norwest Bank's 17 commitment to youth and education we feel is 18 exemplified by their very extensive involvement 19 with the organization I represent, Junior 20 Achievement, throughout our assigned geographic 21 territory, which includes the States of 22 Minnesota and North Dakota and, incidentally, 23 four boarder counties in Wisconsin. 24 So that you know what we do to refresh you, 25 Junior Achievement's purpose is to educate and 203 1 inspire young people, to value free enterprise, 2 business and economics, to improve the quality 3 of their lives. And Junior Achievement's 4 mission is to insure that every child in America 5 has a fundamental understanding of our free 6 enterprise system. And Norwest Bank is a 7 natural and valued partner in those endeavors. 8 During the school year just underway, 9 partnerships with various sponsoring 10 organizations both in the private and public 11 sector, and including Norwest, will result in 12 75,000 students meeting weekly in their 13 classrooms with over 3,000 volunteers who will 14 transform textbook theory into real-life 15 situations and, in the process, persuade young 16 people of the critical importance of education. 17 And as a very conscientious corporate citizen, 18 Norwest has played a critical role in this area 19 by actively encouraging and supporting 20 employees' weekly visits to area classrooms to 21 work with students and deliver the Junior 22 Achievement curriculum. The primary thrust of 23 Norwest's involvement with JA is financial 24 education. At the elementary, middle and senior 25 high grade levels, Norwest employees make 204 1 personal and business finance come alive for 2 students. And are they making an impact? 3 Absolutely. We know that by not only local 4 surveys and evaluations, but national studies 5 done by outside evaluation firms. 6 Last school year, 146 Norwest Bank 7 Minnesota employees contributed 1,022 hours of 8 time in classrooms teaching finance and 9 economics to approximately 4,370 students K 10 through 12. That took place in 168 Metro area 11 classrooms. Norwest banking officials have 12 indicated to us they fully expect the number of 13 volunteers to increase during the current and 14 subsequent school years. 15 In addition, various Norwest banking sites 16 arrange with Junior Achievement to host 17 approximately 200 area students in a 18 finance-related career-oriented job shadow 19 experience on site in the banks during spring of 20 last year. And we will -- we anticipate they 21 will provide a similar opportunity this year for 22 young people to see what goes on in those tall 23 buildings and encourage them to develop the 24 marketable skills they'll need to work in those 25 buildings. 205 1 In addition to all of this, Norwest Bank 2 Minnesota is a major financial supporter of 3 Junior Achievement. And this financial support 4 provides the funds for the classroom materials, 5 the textbooks, the workbooks that are provided 6 to the schools and the students at no cost. And 7 this is in the seven-county Metro area alone. 8 Norwest Bank Minnesota financially supports JA 9 programs in many communities throughout 10 Minnesota, provides volunteers, financial 11 support and serves on the boards in Duluth, 12 Mankato, Moorhead, Brainerd and in North 13 Dakota -- several communities in North Dakota as 14 well. Norwest Bank Minnesota's management has 15 been represented on the Junior Achievement Board 16 of the Upper Midwest, the corporate board, for 17 45 consecutive years. And Jim Campbell and Pat 18 Donovan have both served on the Junior 19 Achievement Board and have personally 20 volunteered time with the Junior Achievement 21 programs. 22 In closing, I want to -- in speaking for 23 our Board of Directors and our staff, the staff 24 of Junior Achievement of the Upper Midwest, we 25 regard Norwest Bank Minnesota as the ideal 206 1 corporate citizen in light of Norwest's 2 long-term, demonstrated commitment to community, 3 to young people, to education. And we're proud 4 to say to Junior Achievement, "We're absolutely 5 confident of Norwest's continued commitment to 6 this community following a merger regardless of 7 where the headquarters is located. In fact, at 8 Junior Achievement, we view a larger, stronger 9 banking organization as being able to generate 10 additional resources that can, in turn, be 11 reinvested in the local communnities in various 12 ways, and including organizations like Junior 13 Achievement. Again, we appreciate the 14 opportunity to share our views with you. 15 CHAIRPERSON SMITH: Thank you. 16 Mr. Cramer? 17 18 MR. CRAMER: Good afternoon. My name 19 is Steve Cramer. I'm the Executive Director of 20 Project for Pride in Living. We are a Twin 21 Cities area nonprofit working on community 22 redevelopment inner city neighborhoods. I 23 appreciate the opportunity, as well, to express 24 to you our confidence that our long-standing, 25 multifaceted relationship with Norwest in our -- 207 1 in helping us accomplish our mission of 2 revitalizing inner city communities will 3 continue and be strengthened in the future under 4 this proposed merger. 5 I'd like to just very briefly reflect on 6 the many ways in which we interact with Norwest 7 to accomplish this mission of inner city 8 revitalization. One way is through the 9 financing that is extended by Norwest to low 10 income buyers of single-family homes that we 11 construct or renovate in inner city 12 neighborhoods. Norwest is a consistent and 13 reliable lender for our buyers, all of whom are 14 low income, 80 percent of whom are people of 15 color, including buyers from emerging ethnic 16 communities in the Twin Cities, new Americans. 17 And their CHOP product in particular extends 18 affordability to very low-income buyers and is a 19 very effective tool for promoting ownership in 20 inner city neighborhoods. 21 Norwest also services loans in programs 22 that we administer in communities and 23 neighborhoods throughout the Twin Cities. And I 24 must say that in many neighborhoods that we work 25 with, the request is specifically that we 208 1 partner with Norwest for loan servicing because 2 of the high degree of customer service that 3 their local branch banks throughout the Twin 4 Cities and neighborhoods that we work in offer 5 to area residents. 6 As Ron indicated, Norwest extends its 7 professional expertise to community development 8 work through their active participation in our 9 board and committees that we have overseeing our 10 various programs in housing, employment and 11 training, education and human services. They 12 provide technical assistance to our staff in 13 areas including residential finance, 14 underwriting of our various development projects 15 and even occasionally helping us work out some 16 of the problems that our projects run into. And 17 as much as is money, whether it's financing or 18 grant funds through the foundation, that 19 extension of professional expertise into the 20 community is extremely valuable in the work that 21 we do. 22 Norwest has also sponsored for us 23 applications to the Federal Home Loan Bank that 24 has resulted in affordable housing program 25 grants to projects that we have been involved 209 1 in; most recently, a project called Anishinabe 2 Wakiagun, which you, perhaps, heard about from 3 an earlier panel, a project that houses homeless 4 chronic inebriates in the poorest neighborhood 5 in the City of Minneapolis. We have partnered 6 with Norwest to our mutual benefit in trying to 7 place hard-to-employ men and women that we work 8 with, especially through our Welfare to Work 9 Program, in their operations center meeting both 10 their employment need, but also providing an 11 effective outlet for our employment placement 12 efforts and then working together to make that 13 employment placement successful. And then also, 14 their foundation has been quite supportive of 15 all of our programming areas; housing, 16 employment training, self-sufficiency services 17 and education. Norwest was the single largest 18 giver to our recently established endowment for 19 our self-sufficiency program. And their most 20 recent gift will support our efforts in 21 improving educational achievement in many of the 22 inner city neighborhoods that we -- that we live 23 in. So across these many dimensions, our 24 partnership with Norwest has been effective, 25 long-standing, focused on the poorest and lowest 210 1 income and most diverse neighborhoods of the 2 Twin Cities. And they have consistently been a 3 reliable partner. 4 I, as well, believe that this mode of 5 operations will continue. It's clear to me that 6 decision-making is decentralized in Norwest, 7 that autonomy flows to the people that we need 8 to work with sort of closest to the action, so 9 to speak. And I am confident that that -- that 10 corporate culture will be maintained and our 11 partnership will -- will flourish into the 12 future. 13 Thank you. 14 CHAIRPERSON SMITH: Thank you. 15 Mr. Cutts? 16 17 MR. CUTTS: My name is Jerry Cutts. 18 I'm the Executive Director of the Development 19 Corporation for Children. We're a state-wide 20 nonprofit organization. We help lower income 21 communities to plan, develop and finance 22 children's facilities, like Headstarts and child 23 care centers. 24 We -- our key activities have been in the 25 area of actual development and construction of 211 1 facilities. And a couple years ago we decided 2 that we were interested in investigating the 3 creation of a loan fund to help participate in 4 these activities. And so what I wanted to do is 5 just very quickly tell you the brief story of 6 Norwest's involvement because I think it's 7 good. 8 We started by working with some funds from 9 a national foundation to coordinate statewide 10 policy round tables to look at the demand for 11 this kind of fund. And Norwest immediately 12 jumped in and played a very critical role in 13 that process. Muffy Gabler in particular was 14 very, very involved with us, not only in 15 participating in the round tables and playing a 16 leadership role, but in giving us advice -- our 17 advice that we settle on along the way about how 18 we might effectively be able to pull in other 19 banks, investors, as well. And over the series 20 of four or five round tables, we were able to 21 come up with recommendations to the Legislature 22 and to the private sector, as well, for 23 potential for their involvement. And we were 24 successful in doing that. 25 I wanted to point out a couple things. One 212 1 is that this fund, which is called First 2 Children's Finance. It's now up and running and 3 make loans left and right. Norwest has a loan 4 officer on our loan committee and continues to 5 provide us with technical assistance. The 6 foundation as well provides us with operating 7 support. And Norwest has made an equity 8 investment into the pool -- revolving pool of 9 financing. So that's all been very, very 10 valuable to us. I'm -- have been very happy 11 with not only the technical assistance, but 12 their collaborative spirit. And I think that's 13 hard to do in a competitive environment where 14 you -- we have a situation where we've got lots 15 of high-profile investors and lenders. And 16 Norwest has done a great job of providing 17 leadership and kind of keeping a quality among 18 the players. So that's the main story that I 19 wanted to tell. I'm very appreciative of all 20 aspects of their support and anticipate that 21 that will continue. 22 CHAIRPERSON SMITH: Mr. Fulton? 23 24 MR. FULTON: Thank you. It is really 25 a privilege to be here today. The Family 213 1 Housing Fund, the organization of which I'm 2 president, was formed back in 1980. And its 3 mission is to sort of rally the private 4 philanthropic sector as a partner for -- with 5 the federal government, the state government, 6 local government in providing for the affordable 7 housing needs of people in our community. So 8 the fund is really an intermediary 9 organization. And one of our responsibilities 10 is to kind of keep track of everything that's 11 going on in the community in terms of knowing 12 exactly where the needs are. We divide our 13 programs up into three general areas, 14 homeownership -- affordable homeownership for 15 lower income working families. Secondary is the 16 production of affordable generic rental housing 17 for people who don't have quite the incomes to 18 get into homeownership. And the third area is 19 what we call special needs housing or more than 20 shelter, which is the combination of housing and 21 human services for very vulnerable people, 22 people who are often homeless. So basically a 23 good community housing policy, good community 24 housing programs, will involve a partnership 25 between the public and private sector and will 214 1 address the housing needs along that entire 2 continuum; homeownership, rental housing, 3 special needs housing. 4 I have worked with Norwest closely for the 5 entire 18 years, just about, that I've been 6 president of the Family Housing Fund. And I can 7 report that they, Norwest, has been extremely 8 active, played critical, decisive roles in each 9 one of those three areas; homeownership, rental 10 housing, special needs housing. Norwest has 11 what I would consider a state-of-the -- 12 state-of-the-art mortgage lending program that's 13 targeted to lower income buyers, communities of 14 color, first time home buyers. They have a 15 very -- a very, very successful commitment 16 through the CHOP Program, which Steve has 17 mentioned, in providing flexible financing 18 that's helped, I would say, hundreds of families 19 become homeowners. We have a lot of special 20 programs. For example, programs to help public 21 housing tenants become homeowners, to help 22 people move from rental to ownership, to help 23 people convert their Federal Section VIII 24 certificates to homeownership. Each one of 25 those programs to be successful combines public 215 1 subsidies with a private mortgage. And I can 2 say that Norwest has worked just extraordinarily 3 well with each of those programs to provide 4 those homeownership opportunities for those 5 special populations. 6 One of the things that my experience has 7 been with Norwest is that some organizations and 8 businesses do little, if anything, in the area 9 of housing and community development. Some do 10 it in kind of a token or begrudging way and some 11 do it with genuine commitment and enthusiasm. 12 And that -- my uniform experience with Norwest 13 as an institution and all the people that work 14 there is that there is genuine commitment to 15 affordable housing and community development in 16 this community. It's expressed through their 17 willingness to provide financial resources that 18 are needed both through the normal bank lending 19 programs wherever possible and investment 20 programs and tax credits. The -- in addition to 21 the homeownership programs in the area of rental 22 housing and special needs housing, Norwest Bank 23 has invested in -- as an equity partner in 24 specific rental projects serving low-income 25 people and projects that have combined housing 216 1 with support services for people with special 2 needs. Unusual kinds of loans, but critical in 3 terms of the successful financing of those 4 projects. 5 The other -- the other one thing that I'll 6 mention is that -- the volunteers of Nor -- 7 Norwest. We've talked about some of the 8 individual employees. Norwest executives have 9 served on countless boards and organizations 10 with which we've come into contact. Pat Hanson 11 from Norwest serves on the Board of the Family 12 Housing Fund. And everybody I've seen here from 13 Norwest today is -- I have had personal 14 experience with them in terms of their being 15 active volunteers and decision-making bodies. 16 CHAIRPERSON SMITH: Thank you. 17 We'll go on to Mr. Watt. 18 19 MR. WATT: Good afternoon. My name is 20 Jim Watt. I'm Executive Director of Twin Cities 21 Neighborhood Housing Services. And thank you 22 very much for the opportunity to be here and 23 express my views and those of Twin Cities 24 Neighborhood Housing Services and our affiliated 25 partners. 217 1 A brief overview. For more than 20 years 2 Twin Cities NHS has been rebuilding the American 3 dream one home at a time. We help low and 4 moderate-income families purchase a home by 5 arranging financing for families who might not 6 qualify or even know how to get conventional 7 mortgages by providing home buyer education to 8 more than 1,100 first time home buyers in 1997 9 alone and by rehabilitating decaying 10 neighborhoods, resulting in revitalized 11 communities. Yearly we also sponsor Neighbor 12 Works Week, a community beautification program 13 that brings more than 400 volunteers together in 14 various inner city neighborhoods to make their 15 communities better places to live. We couldn't 16 do any of it without partners like Norwest 17 Bank. 18 Our relationship with them goes back 20 19 years. Norwest and its predecessors have been 20 there since the beginning working with us, 21 assisting low and moderate-income families. 22 Norwest plays a significant role in our lending 23 efforts within the inner city. We work together 24 in true partnership to provide homeownership 25 opportunities for families who might not 218 1 otherwise qualify for conventional financing. 2 Norwest also supports us in the form of 3 operating and program grants. They have already 4 contributed more than $500,000 to Twin Cities 5 NHS in operating grants alone. They also 6 support us with a variety of mortgage and rehab 7 loan products designed specifically for our 8 constituents. These products are necessary for 9 the success of our mission. Knowing that grants 10 and loans are decided upon on a regional and 11 local basis is very important to us. We have no 12 concern that philanthropic decision-making will 13 change with either their headquarters or their 14 name. Norwest corporate citizen philosophy and 15 the trust we have in them based on our 16 experience are enough for us to feel very 17 comfortable with the merger. 18 Norwest executives sit on our various 19 boards and get involved. Pat Hanson is 20 treasurer of our Board of Directors. Pat 21 Donovan chairs our campaign. The corporation 22 itself supports employee volunteer efforts 23 throughout the year and is another sign of being 24 a great corporate partner and meeting the 25 additional needs of area nonprofits. 219 1 To reiterate and conclude, we truly believe 2 this merger with Wells Fargo will be a good 3 thing, bringing Norwest corporate citizen 4 philosophy to the merged organization, will 5 enhance the cultural differences with Wells that 6 have been talked about. Because of the 7 leadership roles that it looks like Norwest will 8 be taking with the merger, because of the 9 outstanding CRA rating Norwest has maintained, 10 because of the continuation of regional and 11 local philanthropic decision-making and because 12 of our history with Norwest Corporation, we 13 strongly support their merger. 14 Thank you.
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