skip to main navigation skip to secondary navigation skip to content
Board of Governors of the Federal Reserve System
skip to content

Public Meeting Transcripts

Public Meeting Regarding Norwest Corporation and Wells Fargo & Company

Thursday, September 17, 1998

Transcript of Panel Ten


         24                  CHAIRPERSON SMITH:  We're ready to
         25        start with Panel 10.  I think you can sit

          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.
         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

          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

          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.

          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

          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?
         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 --

          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

          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

          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

          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?
         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

          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

          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?
         24                  MR. FULTON:  Thank you.  It is really
         25        a privilege to be here today.  The Family

          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

          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

          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

          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.
         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.

          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

          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.

          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.

Last update: December 3, 2010