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Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Thirteen


          3                  MS. YOUNG:  Oh, okay.  Okay.  My name
          4        is Zula Young.  I work and I live in St. Paul.
          5        I'm the Vice President of Rondo Community Land
          6        Trust, the Board of Directors.  And I wish to
          7        thank the Federal Reserve for giving me the
          8        opportunity to speak on the proposed merger
          9        and -- between North -- Norwest and Wells Fargo
         10        Company.
         11             I'm a single parent who has had the
         12        opportunity to purchase the first completed land
         13        trust home in St. Paul.  I grew up in the
         14        neighborhood where my home is located.  I'm very
         15        active within my community.  I'm also an
         16        organize -- organizer of the Community Guidance
         17        Project called SAGE.  I'm a member of the
         18        Summit-University Weed & Seed Project.  And I
         19        work as a paraprofessional in the public school
         20        systems.
         21             The land trust model is fairly new to the
         22        Twin Cities and Minnesota.  And Norwest was the
         23        first and to date the only mortgage company
         24        willing to take a chance with Rondo Community
         25        Land Trust and separating the land from the

          1        building and agreeing to the ground lease
          2        documents.  The land trust model is unique in
          3        its limits -- and it does limit the equity, but
          4        it provides a long-term 99-year affordable
          5        housing for low and moderate-income families.
          6        Norwest was willing to put the extra time in to
          7        understand the land trust model that works and
          8        the ability to make lending decisions here in
          9        the community.  They have had the ability to say
         10        yes to new ideas at a local level.  Norwest has
         11        not done land trust mortages before mine, but
         12        because of Rondo Community and Norwest, I had
         13        that opportunity to own my own home now.
         14             Our relationship with Norwest is built
         15        around people.  And we work on a -- that we work
         16        with on a regular basis and also affordable
         17        housing.  Rondo has developed a trusting working
         18        relationship with some individuals at Norwest
         19        Corporation.  We deal with Carl Swindinberg of
         20        Norwest Mortgage; Sally Burke from Norwest Real
         21        Estate Management Services; Mary Gabler, Norwest
         22        Twin City Community Development; and Bill
         23        Canfield, Norwest Mortgage.
         24             Rondo would like and hope and expect the
         25        Norwest philosophy will continue that allows us

          1        to work with Carl, Sally, Mary and Bill after
          2        the merger.  And it's the individual people
          3        within an already very large corporation that
          4        makes it work now.  And these are the people
          5        that help it work in the future.
          6             Norwest was willing to take a chance with
          7        their ground leased.  And we hope the Norwest
          8        philosophy to continue that allows people within
          9        the corporation to listen to new ideas, such as
         10        land trust, and act on them also on a local
         11        level.  While Rondo Community Land Trust is a
         12        small housing organization in St. Paul, we are
         13        providing affordable housing one house at a
         14        time.  And so far Norwest has been there one
         15        mortgage at a time.  When the shortage of
         16        affordable housing is better understood at both
         17        the local and national level, there is more
         18        willingness to provide funds to build and
         19        renovate affordable housing.  And we all
         20        increase our production levels.  And when that
         21        day comes, we hope the Norwest philosophy of
         22        working with neighborhood housing
         23        organizations -- organizations -- excuse -- to
         24        be there with us.  And we want to see Norwest
         25        Mortgage expand the use of the land trust and

          1        affordable mortgages throughout the country.
          2        And we believe the philosophy of local
          3        decision-making and a regional approach will
          4        insure Rondo Community Land Trust will have the
          5        same working relationship we now have with
          6        Northwest -- I'm sorry -- Norwest.  You know I'm
          7        nervous.  Bear with me.
          8             So we hope that as the merger talks
          9        continue both here and in Washington that
         10        Norwest and Wells would commit to the
         11        following:  One, a defined regional approach
         12        which will be established throughout the
         13        country, a regional system that allows real
         14        decision-making within each area for -- and,
         15        two, Carl, Sally, Mary and Bill should keep
         16        their current phone numbers without an 800
         17        prefix.  While some departments in Norwest are
         18        currently centralized, every effort should be
         19        made that allows for decision-making at a local
         20        level.  And, three, to continue to take risks,
         21        listen to the ideas within the low-income
         22        community because that is where the answers are
         23        to solving our housing shortage.
         24             And I thank you for your time.
         25                  CHAIRPERSON SMITH:  Thank you very

          1        much.
          2             Mr. Ernest?
          4                  MR. ERNEST:  Thank you.  I'd like to
          5        comment a little bit on Norwest's commitment to
          6        agriculture.  I'm a grain farmer.  I grow corn
          7        and soybeans.  And, in fact, 24 hours ago I was
          8        combining a terrific soybean crop.
          9             What I'd like to do is I'd like to talk
         10        very briefly about a number of kind of mega
         11        trends that's happening in agriculture.  And
         12        some of the things that I'm going to ask you to
         13        consider when you consider the -- the dynamic of
         14        the merger between Wells Fargo and Norwest
         15        Bank.  Many of you have heard of Freedom to
         16        Farm.  Or now they're talking Freedom to Fail a
         17        little bit in the paper.  What's happening in
         18        our business is we're becoming less dependent on
         19        agriculture.  And right now we're kind of going
         20        through a series of streams of declining
         21        payments from the government to get out of
         22        agriculture.  We don't know where we're
         23        ultimately going to end up with Freedom to
         24        Farm.  What we have learned in the last two
         25        years is the business is extremely cyclical.

          1        The highs are very high.  The lows are very
          2        low.  Corn is $1.48 right now.  26 months ago it
          3        was $5.08.  So we're in a business and an
          4        environment where we have to deal with a lot of
          5        volatility.  We're also in an environment that
          6        is speeding up technology -- with technology or
          7        having a biotech -- big technical pieces of
          8        equipment.  And we have extremely high capital
          9        needs.
         10             We're in a business that's really
         11        changing.  And being a customer of Norwest for
         12        approximately 15 years and looking at
         13        agriculture and looking at all these things that
         14        are happening, there's a key element that --
         15        that I think has become apparent.  And that's
         16        what I want to speak to today.
         17             We in production agriculture, the people
         18        that grow the crop and have to endure these
         19        cycles, cannot have fair-weather lenders.  We
         20        need people that are going to be with us in good
         21        times and bad.  We need people that are
         22        committed to agriculture.  We need people that
         23        agriculture is a very big part of their
         24        business.  In fact, when the combination of
         25        Wells Fargo and Norwest originally was announced

          1        in our neck of the woods, which is down by
          2        Mankato, I was not real comfortable about the
          3        whole thing because I knew Norwest's commitment
          4        to agriculture.  And I knew nothing about Wells
          5        Fargo.  Well, I was delighted to learn that
          6        Wells Fargo is the number one ag lender in the
          7        United States.  And it seems to me if you put
          8        the number one ag lender in the United States
          9        and the number two ag lender in the United
         10        States together, you're going to have a pretty
         11        formidable bank that could really help
         12        agriculture.  And, in fact, I, for one, will be
         13        extremely disappointed if, as a by-product of
         14        this merger, if we do not get some new financial
         15        services, some innovative financial services.
         16        And I believe the combination of these two
         17        elements are going to really help production
         18        agriculture.
         19             There's no way, with the commitment of
         20        Wells Fargo and Norwest and how big agriculture
         21        is a part of their business, that they can be a
         22        fair weather lender.  And we cannot endure fair
         23        weather lending in these cyclical environments.
         24             The other thing that is happening in our
         25        business is we no longer grow a generic crop.

          1        We grow specialty crops.  We grow waxy corn.  We
          2        grow high-oil corn.  We grow all these -- these
          3        products.  What works here does not work 100
          4        miles from here.  What works 100 miles from
          5        there doesn't work beyond the road.  What that
          6        speaks to is we need local control and we need
          7        local decision-making and we need people that
          8        can be local and understand our business.  And
          9        in my judgment working with Norwest over the
         10        last 15, 16 years, that's probably been one of
         11        their greatest strengths.  And I am hopeful that
         12        that will continue.  And -- and I'm confident it
         13        will.
         14             So in conclusion, as a producer and a small
         15        businessman and a consumer of credit, I'm
         16        excited about the merger.  And I believe the
         17        merger can be very positive for agriculture.
         18        And I would encourage you to consider these
         19        aspects that I just discussed when you're
         20        considering the merger.
         21             Thank you.
         22                  CHAIRPERSON SMITH:  Thank you very
         23        much.
         24             Mr. Koy?

          1                  MR. KOY:  Thank you, ma'am.  My name
          2        is Chantha Richard Koy.  I'm a mortgate
          3        counselor with the Powderhorn Resident Group.
          4        Powderhorn Resident Group is a nonprofit
          5        corporation -- community corporation.  And the
          6        relationship with PRT, which is what we call
          7        short for Powderhorn Resident Group, PRT, with
          8        Norwest is through a variety of thing.  One is
          9        through the development of multi-family housing
         10        for the low-income people in the Southeast Asian
         11        community.  Norwest has been a great asset for
         12        our community and has been blessed for our
         13        Southeast Asian people that get -- receive
         14        financial -- directly financial support from
         15        Norwest.  The added relationship that we have
         16        with Norwest is the Home Buyer Education Program
         17        and Counseling Program for all -- not just for
         18        Southeast Asian community, but for all the
         19        community at large.  We just design for low to
         20        moderate-income people to understand the process
         21        of buying a home.  Beside that, Norwest has been
         22        a leader in -- in term of developing and
         23        supporting, you know, affordable housing in the
         24        community home buying program.  Muffy Gabler
         25        have spent tremendous of time -- and other

          1        mortgage counselor and other loan officer and
          2        underwriter from Norwest have spent tremendous
          3        of time in our community to study what type of
          4        program should be created and should be
          5        established in term of reaching the goal of
          6        affordable housing in our community.
          7             So I strongly speak not just on behalf of
          8        the Powderhorn Resident Group, but also on
          9        behalf of my Cambodian community that we have
         10        been -- received a lot of support from Norwest.
         11        We hope and I hope that the merger with Wells
         12        Fargo will bring more prosperity for our

         13        community and more opportunity, more program,
         14        you know, in term of affordable housing and home
         15        buying education program and establish more --
         16        more -- you know, expanding the existing
         17        mortgage program that Norwest have with just the
         18        CHOP Program, one of the leader in our, you
         19        know, mortgage lending community and hold
         20        that -- to expand that to our community.
         21             And that's all I have to stay today.  Thank
         22        you.
         23                  CHAIRPERSON SMITH:  Thank you very
         24        much.
         25             Ms. Vitela?

          2                  MS. VITELA:  Thank you.  My name is
          3        Mary Vitela.  I have been a realtor going on ten
          4        years now.  I'm currently with Stevens Realty in
          5        St. Paul.  I am here to speak on the Community
          6        Homeownership Program.  This program is
          7        available through Norwest in Minneapolis and
          8        St. Paul.  I support this program strongly
          9        because I use it in about 95 percent of my
         10        business.  The basis of my business is by word
         11        of mouth or referrals or past clients.  These
         12        clients refer their relatives and their
         13        coworkers to me.  So it is very important that I
         14        am able to help these new buyers.  My clients
         15        are mostly from the West Side of St. Paul.  Some
         16        of them have a limited understanding of the
         17        English language and some of them only speak
         18        Spanish.  For this reason, and because I am
         19        fluent in Spanish, the majority of my business
         20        comes from the Hispanic population.  They rely
         21        very strongly on any information I relate to
         22        them.  I use the Community Homeownership Program
         23        because I feel it is the best for my clients.
         24             Some of the most important highlights are
         25        it's a conventional mortgage with five percent

          1        down.  And extremely important is that it has no
          2        private mortgage insurance payment.  This
          3        insurance can add an average of 38 to $42 to the
          4        mortgage payment.  And to some people that are
          5        working two jobs, this can -- is a large
          6        amount.  In over the life of the loan, it can
          7        become a considerable amount.  Because of the
          8        five percent down and no insurance on top of the
          9        mortgage, the buyer starts the loan off with
         10        some equity.  The mortgage being lower, they
         11        have lower monthly payments.  Also through this
         12        program, the seller can contribute to some of
         13        the closing costs.  And the bank also has
         14        special funds available to help with the down
         15        payment.  And, therefore, the buyers need less
         16        of their own money to purchase a home.  Also
         17        because of the 38 percent qualifying ratios,
         18        more low to moderate-income people are able to
         19        qualify for a nicer home.
         20             The buyers that I help are buying homes for
         21        the first time, the majority of them.  They
         22        basically do not know where to start in the
         23        process of owning their own home and feel they
         24        cannot afford their own home.  They feel they
         25        need thousands of dollars to buy and have no

          1        substantial money saved.  These buyers usually
          2        can pay for their rent and their household
          3        expenses.  But they have no credit cards, they
          4        have no installment loans, and they have no debt
          5        because they can't afford to have any debt.
          6        They prefer to pay for cash.  I mean, they
          7        prefer to pay in cash for items as they need
          8        them.  Their employment outlook is usually
          9        pretty good and constant.  They are reliable and
         10        extremely responsible and hard-working people.
         11        They only need a little direction.  They don't
         12        understand the process.
         13             They -- I feel that these buyers are
         14        classic examples of the type of buyers that the
         15        CHOP Program is designed to help.  This program
         16        has enabled me to obtain mortgages for my
         17        clients that otherwise might not have been able
         18        to buy a house.  I have used this particular
         19        program since 1991.  Through the years, I have
         20        developed a relationship with Norwest, and I
         21        know their policies toward approve -- approval
         22        of obtaining a mortgage.  And I prepare my
         23        clients to meet these policies.  Whether they
         24        are quickly approved or even if it takes a year,
         25        the buyers have a goal, and they work toward

          1        it.  I have gotten a 99 percent approval for
          2        these people.  Most of my -- the majority of my
          3        buyers are satisfied.  Satisfied buyers are very
          4        appreciative of being homeowners.  And they
          5        believe it to be a dream come true.  I feel that
          6        Norwest has enabled them to establish roots in
          7        the community, and all their help throughout the
          8        years has been invaluable to me.  I will
          9        continue to use their services indefinitely,
         10        especially if they continue to use this special
         11        program, the CHOP Program, Community
         12        Homeownership Program.
         13                  CHAIRPERSON SMITH:  Thank you.
         14             Mr. Vitela, were you going to make a
         15        presentation?
         16                  MR. VITELA:  No.  I'm just here for
         17        her.
         18                  CHAIRPERSON SMITH:  For moral and
         19        other support?
         20                  MR. VITELA:  Right.
         21                  MS. VITELA:  Yes.
         22                  CHAIRPERSON SMITH:  Thank you.
         23             If there are no questions from the panel,
         24        this may also turn out to be the last panel.  I
         25        don't know whether we have any other witnesses

          1        who were coming to testify.  Would you like for
          2        us to -- should we wait for a couple of
          3        minutes?
          4             Is there anyone who has not signed up to
          5        present testimony who would like to make a
          6        statement from the audience?  If not, we --
          7        there are a couple of people who were scheduled
          8        to be on later.  We don't know whether they will
          9        appear or not.  Do you want to stay and --
         10                  MR. BINNING:  I wonder if we should --
         11        we should maybe take a quick break?
         12                  CHAIRPERSON SMITH:  We're going --
         13        we'll -- what we'll do is we'll take a break.
         14        And then if -- and reconvene if they come
         15        sometime relatively soon.  It's 4:15 so we're
         16        not -- we're not rushing off anywhere.
         17             But I want to thank you.  And thank you, as
         18        the representatives of all of the panels who
         19        have gone before, in the sense that we
         20        appreciate your coming to present your views, to
         21        sharing information with us, whether it has been
         22        in support of the application that is before the
         23        Federal Reserve or opposing the application.
         24        The information that you have shared has been
         25        important to the process.  And we thank you very

          1        much for coming.
          2             And with that, we will take a small
          3        recess.
          5                  (Whereupon a break was taken.)
          7                  CHAIRPERSON SMITH:  I'm reconvening
          8        the meeting long enough to adjourn since no
          9        other panelists have shown up and since we are
         10        approaching or maybe have hit quarter of 5:00,
         11        which is when they were due to be on the panel
         12        if they were going to be on a panel.  So thank
         13        you all again for coming to this public
         14        meeting.  And we are adjourned.
         16                  (Hearing concluded at 4:45 p.m.)


Last update: December 3, 2010