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Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Eleven

          5                  MS. NUGENT:  Okay.  Well, I just
          6        wanted to thank you for allowing me to testify
          7        in front of you today.  My name is Danielle
          8        Nugent, and I'm a senior at the University of
          9        Minnesota Duluth.  I'm also the Chair of the
         10        State Board of Directors for the Minnesota
         11        Public Interest Research Group, the group that
         12        was listed to testify.  They've asked me to
         13        testify for them.
         14             MPIRG is a student-run and funded
         15        nonpartisan nonprofit organization.  We work on
         16        consumer and environmental issues that students
         17        raise as concerns.  I'm here today to
         18        represented the concerns of MPIRG, its state
         19        board, as well as the organization's 45,000
         20        student and community members.
         21             Our concerns over the proposed merger of
         22        Wells Fargo/Norwest include the decreased
         23        competition within the Minnesota marketplace,
         24        the rise in banking fees that the merger could
         25        cause the consumer, especially in light of Wells

          1        Fargo's less consumer-friendly fee schedule; the
          2        concern that this merger would move the
          3        headquarters of Norwest, making the bank less
          4        responsive to the Minnesota consumer.
          5             I would first like to address my testimony
          6        to the lack of competition this merger will
          7        create.  This lack of competition would mean
          8        that the ever-growing emerging banks would be
          9        the only ones left for consumers to choose
         10        from.  The Federal Deposit Insurance Corporation
         11        reports this trend is continuing at an even
         12        faster pace, showing 146 banks have been
         13        absorbed just in the first quarter of 1998
         14        alone.  This trend is the same in Minnesota.
         15        Fewer banks means fewer choices, according to
         16        our research, and higher fees.  In our report
         17        last fall, the big fee squeeze, we showed that
         18        bigger banks mean bigger fees.  An example,
         19        Minnesota, the cost of maintaining a regular
         20        checking account is 40 percent -- 46 percent
         21        higher in a large bank than a credit union and 4
         22        percent higher than in a small bank.  A
         23        no-frills checking account at a big bank costs
         24        54 percent more than at a credit union and 13
         25        percent more than a small bank.  Bank fees for

          1        overdraft and ATM withdrawals are also on an
          2        average higher at large banks.  Large banks are
          3        also more likely to charge service fees, which
          4        impact low and fixed income consumers, such as
          5        students, seniors are especially hit by this
          6        fee.
          7             On August 1st, 1998, Norwest raised its fee
          8        for overdrafts from $21 to $25, almost a 20
          9        percent increase.  Is this because the new rate
         10        is comparable with fees charged by Wells Fargo?
         11        Can we expect these type of fee increases and
         12        service costs to expand after the merger?  Wells
         13        Fargo discontinued its free checking for seniors
         14        last year.  Will we in Minnesota have the same
         15        thing happen here?
         16             Finally, we are concerned that the merger
         17        would cause a lack of responsiveness from the
         18        bank to the Minnesota consumer.  If this merger
         19        goes through, Norwest will be moving its
         20        headquarters from Minnesota to San Francisco and
         21        we no longer will have that management here.
         22        Instead, they'll be on the other side of the
         23        country.  How will this new entity stay in touch
         24        with the needs of the Minnesota consumer?
         25        Instead of being a neighbor to Norwest, the

          1        consumer becomes a number on a computer screen
          2        in some far away headquarter.
          3             As a student and a leader of a student
          4        organization, I must tell you that these mergers
          5        are not in our best interest.  We do not have
          6        disposable income to spend on large fees and
          7        charges.  We need access and affordability in
          8        our financial services.  We need banks that are
          9        responsive to our credit demands.  Lower prices
         10        require competition.  We are concerned that by
         11        allowing more of these banks to take over the
         12        marketplace, you are dooming us to a future
         13        where banking becomes a luxury only the rich can
         14        afford.  If two or three large banks are allowed
         15        to become the consumers' only choice, then what
         16        will stop them from adding service charges to
         17        every transaction, slowly taking the money from
         18        people who need it the most?  Low income
         19        individuals, senior citizens, as well as
         20        students will suffer from this.
         21             Please, we are asking you to deny this
         22        merger.  Give us a chance to not only have
         23        access to but the ability to afford our banking
         24        services.
         25             Thank you.

          1                  CHAIRPERSON SMITH:  Thank you.
          2             Mr. Tatum?
          4                  MR. TATUM:  Yes.  My name is Steve
          5        Tatum, and I am the President of New Century I
          6        Community Lending Cooperative.  And we have a
          7        brief statement that we would like to read to be
          8        included in the record.  New Century I Community
          9        Lending Cooperative's mission is to pursue the
         10        economic development and well-being of its
         11        members.  New Century was established to provide
         12        lending and borrowing opportunities to
         13        individuals and organizations previously
         14        excluded from the traditional sources of these
         15        services.  As a result of these exclusionist
         16        practices, a fundamental economic incentive had
         17        been created.  This incentive joins us together
         18        to provide for ourselves the capital that is the
         19        economic life blood of our community.
         20             Because of the -- our late notice of this
         21        public hearing, we haven't had the opportunity
         22        to review all the technical aspects of this
         23        merger, but our members felt it was important
         24        that we attend and participate.  Because the
         25        Federal Reserve Bank has the mandate to protect

          1        the interests of all citizens of this country as
          2        it pertains to banking and banking practices, we
          3        are here to get the assurance of the Federal
          4        Reserve that the important issues of
          5        discrimination, access to banking services by
          6        low-income individuals and the prevailing
          7        practices of red lining minority and low-income
          8        communities are addressed in this merger.
          9             Also, we feel there should be a formal
         10        commitment made by both financial institutions
         11        involved in this merger that minority and
         12        low-income individuals will have equal access to
         13        the capital that will insure the continued
         14        development of our businesses and communities.
         15        In this situation, the standard rhetoric "We
         16        will do better" is grossly inadequate.  It is
         17        our position to insure the fulfillment of this
         18        commitment.  A specific dollar figure should be
         19        designated as investment in traditionally
         20        underserved businesses and communities.  Our
         21        organization feels strongly that these issues
         22        are important to a large and growing
         23        constituency and be served the same
         24        consideration as any other financial element of
         25        this merger.

          1             Lastly, financial institutions that operate
          2        at the public trust have a legal, moral, and
          3        ethical responsibility to insure equal treatment
          4        of all citizens.  And it is the responsibility
          5        of the Federal Reserve Bank to insure that these
          6        institutions are in compliance with this
          7        mandate.  We plan to collaborate with all
          8        interested groups and organizations to monitor
          9        this process.
         10             Thank you.
         11                  CHAIRPERSON SMITH:  Thank you.
         12        Ms. Therkelsen.
         14                  MS. THERKELSEN:  Thank you for
         15        allowing me to speak.  I was under the
         16        impression that this had already been decided,
         17        that -- that Norwest and Wells Fargo were going
         18        to merge.  So I appreciate your allowing me to
         19        speak at this time.
         20             I've been a customer of Norwest Bank since
         21        1972.  And I was a customer at the Nor --
         22        North -- Nor -- well, they call it Nordeast
         23        Minneapolis office.  And then when I moved to
         24        south, I'm still a customer of the northeast
         25        office.  I'm very pleased with Norwest Bank.

          1        They're very helpful.  And I'm on direct deposit
          2        so it goes directly into the bank.  But, I mean,
          3        joining a bank is not for me a thermos or a
          4        blanket or something like that.  That's not
          5        what's important to me.
          6             I understand when you have to pay for
          7        checks.  That I understand, and overdrafts and
          8        things like that.  That makes sense to me.  But
          9        being on direct deposit, I have 50 cents in the
         10        bank right now.  And I just -- you know,
         11        Norwest, as long as I keep the 50 cents there,
         12        is not going to be charging me extra money to
         13        keep the 50 cents, like if you fall below a
         14        certain amount, which is common for most banks.
         15        I do miss more ATMs.  Norwest doesn't have
         16        enough.  But I -- I just think that they are
         17        known very much for their customer service and
         18        their good record.  And I'm opposing the merger
         19        partly because of that basis.  I had heard some
         20        concerns about customer service of Wells Fargo.
         21        I'm sorry.  I can't tell you exactly where I
         22        heard it, so I'm not going to quote somebody
         23        that I might be wrong about.  But it talked
         24        about taking away the free checking and things
         25        like that, and I can't afford it.  And I don't

          1        think a lot of other people who have the senior
          2        rate can, and so I'm opposing it respectfully.


Last update: December 3, 2010