Public Meeting Regarding Norwest Corporation and Wells Fargo & Company
Thursday, September 17, 1998
Transcript of Panel Ten
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24 CHAIRPERSON SMITH: We're ready to
25 start with Panel 10. I think you can sit
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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
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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
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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.
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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
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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 --
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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.