Public Meeting Regarding Norwest Corporation and Wells Fargo & Company
Thursday, September 17, 1998
Transcript of Panel Six
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15 CHAIRPERSON SMITH: Thank you. If there 11:53:16
16 are no questions, then we thank you again for being 11:53:16
17 here this morning, and we'll move on to the next 11:53:20
18 panel, which is Panel 6. We'll start with 11:53:22
19 Mr. Brantley. 11:54:02
20
21 MR. BRANTLEY: Thank you, Madame Chair. 11:54:06
22 I'd like to take this opportunity to express my 11:54:10
23 appreciation on behalf of the metropolitan Denver 11:54:12
24 community to testify before the Federal Reserve in 11:54:16
25 regards to the merger between Norwest and Wells 11:54:18
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1 Fargo. 11:54:22
2 I'd like to start off by saying not only do I 11:54:24
3 express my appreciation to the Federal Reserve 11:54:26
4 panel, but I'd like to express my appreciation to 11:54:30
5 those individuals who have testified as well. And I 11:54:32
6 have to share with you that based upon that 11:54:34
7 testimony, my testimony has changed somewhat. And I 11:54:36
8 think that certainly what I'll be taking back to my 11:54:40
9 community will reflect some of those changes. I 11:54:44
10 really do feel that individuals who come and 11:54:48
11 participate in testimony such as this should not 11:54:52
12 only testify but should listen very carefully to the 11:54:56
13 individuals who are bringing information to share 11:54:58
14 with them. I have heard some outstanding, 11:55:00
15 outstanding comments that I think will benefit my 11:55:04
16 community and certainly plan to take it back to the 11:55:08
17 metropolitan Denver community for hopefully sharing, 11:55:10
18 and even more so, implementation. But I've also 11:55:14
19 heard some concerns, some concerns that I hadn't 11:55:18
20 heard before, and I need to share with you that 11:55:22
21 basically I will also be addressing those concerns 11:55:24
22 as I go back to my community. 11:55:28
23 First of all, let me share with you, though, 11:55:30
24 some of the very basic things that I had prior to 11:55:32
25 hearing some of the comments today. I really do 11:55:34
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1 feel that one of the primary factors of business 11:55:36
2 mergers and concepts related to concepts of business 11:55:40
3 within our community relate to the quality of life. 11:55:44
4 I have to share with you that in the Denver 11:55:46
5 metropolitan community, I feel that we have an 11:55:48
6 outstanding quality of life. The individuals that 11:55:52
7 will also be sharing some of our comments related to 11:55:54
8 our community, I think, are enviable throughout the 11:55:58
9 rest of the country. The quality of life is 11:56:02
10 extremely important to me and, I'm sure, to you. As 11:56:04
11 we move throughout this community, as we take jobs 11:56:08
12 and as we raise families, one of the primary things 11:56:10
13 that we're looking for is an increase in the quality 11:56:12
14 of life for our children and for our families. 11:56:14
15 In relationship to quality of life, quality of 11:56:18
16 life relates to the participation of individuals, 11:56:20
17 those individuals who are in the three sectors of 11:56:24
18 our economy. We have the private sector, we have 11:56:28
19 the governmental sector, and we have the nonprofit 11:56:30
20 sector.
21 I represent the nonprofit sector. I'm 11:56:34
22 executive director of a private, nonprofit 11:56:36
23 organization serving children within the 11:56:40
24 metropolitan Denver area. We have been very 11:56:42
25 fortunate over the past several years to have the 11:56:44
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1 involvement of Norwest Bank within the development 11:56:48
2 of our programs in early childhood education. We 11:56:50
3 have started some new programs within our 11:56:54
4 metropolitan area. One of them which our agency has 11:56:56
5 initiated has been one which seeks out gifted 11:57:00
6 children within the inner city. 11:57:02
7 I have to share with you a very small, almost 11:57:04
8 joke, but it's not a joke. When we first started 11:57:08
9 looking for supporters of this program and shared 11:57:10
10 with a couple of potential funders that we were 11:57:14
11 looking for support for children -- for our program 11:57:16
12 for gifted children within the inner city, one of 11:57:20
13 our potential funders said, where do you expect to 11:57:22
14 find them? I asked the gentleman to leave my office 11:57:24
15 because our discussion was over at that time. 11:57:28
16 I think that -- that certainly, you know, the 11:57:30
17 attitude that came forth from our Norwest Bank 11:57:34
18 community was much, much different, and certainly 11:57:36
19 exemplifies the concept of support that we have 11:57:40
20 received for new projects and programs like our 11:57:44
21 program for inner city gifted children. 11:57:46
22 Once we heard the concept about the 11:57:50
23 presentation to be shared with you today, we began 11:57:54
24 to look at what CRA was specifically looking for. 11:57:56
25 We heard the concepts of lending, we heard the 11:57:58
125
1 concepts of investment, and we heard the concepts of 11:58:02
2 service. 11:58:04
3 One of the things that has changed today that I 11:58:06
4 will certainly be going back to my community will be 11:58:08
5 looking at the concept of lending. I have heard 11:58:10
6 some very, very disturbing concepts in regards to 11:58:14
7 lending, and I think that basically there is a 11:58:16
8 concept of CRA that not only relates to the business 11:58:18
9 community, there's a concept of CRA that relates 11:58:22
10 back to individuals, and that is community 11:58:24
11 responsibility activities. And that will be the CRA 11:58:28
12 that I'll be taking back to our community because I 11:58:32
13 think that if indeed there are responsibilities and 11:58:34
14 concerns related to lending, then I feel that we 11:58:38
15 have a responsible role to play in that. 11:58:40
16 The second is investment. You've heard and 11:58:44
17 reviewed some outstanding statistical numbers 11:58:48
18 related to investment. And to be very frank with 11:58:52
19 you, that's what I was going to share with you 11:58:54
20 today, too, statistical numbers, but they were 11:58:56
21 certainly outclassed by the individuals that are 11:58:58
22 represented to you today in the formal documentation 11:59:02
23 that you've received from both major CEOs of these 11:59:04
24 corporations. But, indeed, within our community I 11:59:08
25 think that investment with the community has not 11:59:10
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1 only meant dollar and cent investment; it has meant 11:59:12
2 the investment of the time and effort of the 11:59:16
3 individuals within our community. 11:59:18
4 Our organization is a very small organization 11:59:22
5 in comparison to many of the others in our 11:59:24
6 community, and I think that was one of the reasons 11:59:26
7 that I was asked to come and present to you today. 11:59:28
8 But in the relationship to it being a small 11:59:32
9 organization, I can list for you outstanding members 11:59:34
10 of our community, such as John Nelson, David Bailey, 11:59:38
11 David Jones, Chuck Henderson, Patricia Cortez, who 11:59:42
12 have been outstanding members of our community and 11:59:46
13 have served our community and the community has 11:59:48
14 benefited from it, thus improving our quality of 11:59:52
15 life. And it is with those concepts in mind that I 11:59:54
16 support the merger between the Norwest Bank and 11:59:58
17 Wells Fargo. Thank you very much. 12:00:00
18
19 CHAIRPERSON SMITH: Thank you. 12:00:02
20 Mr. Garcia. 12:00:02
21
22 MR. GARCIA: My name is Pete Garcia. I'm 12:00:04
23 the president of Chicanos Por la Causa in Phoenix. 12:00:06
24 We're a state-wide community development corporation 12:00:08
25 having 46 offices in 22 cities, and we see over 12:00:12
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1 66,000 people annually. There are over one million 12:00:16
2 Hispanics in Arizona that we consider ourselves to 12:00:20
3 be a niche market that both of these institutions 12:00:24
4 are interested in and have been interested. 12:00:26
5 Our organization has had an extensive 12:00:28
6 partnership with Wells Fargo Bank and Norwest Bank. 12:00:32
7 As a personal member of the Norwest Bank Minority 12:00:36
8 Advisory Council, we have provided input and set 12:00:42
9 goals with the other John Campbell from Arizona, and 12:00:44
10 top management on a number of key issues and factors 12:00:48
11 that affect our communities in Arizona. These 12:00:50
12 include mortgages, affordable housing, small 12:00:54
13 business lending, minority contracting, and 12:00:56
14 contracting with vendors. 12:01:00
15 Our small business and S.B.A. micro-loan 12:01:02
16 program have received loan loss reserve funds from 12:01:06
17 Norwest Bank and Wells Fargo Bank, which has helped 12:01:12
18 us lend over $2 million to over 225 companies, small 12:01:14
19 businesses, in Arizona in the last three years. 12:01:18
20 Norwest's deposit and Wells Fargo's $100,000 deposit 12:01:22
21 in our federal credit union has enabled us to lend 12:01:28
22 over $1.7 million to 16 hundred members of our 12:01:34
23 credit union. This is a real interesting concept 12:01:36
24 here of a bank lending to a credit union. 12:01:40
25 Most of these borrowers are first-time 12:01:44
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1 borrowers and bilingual Spanish speaking. Norwest 12:01:46
2 and Wells Fargo's investment of CPLC small business 12:01:50
3 incubator has started the opportunity for small 12:01:56
4 businesses in south central Phoenix to access 12:01:58
5 affordable work space. A second business incubator 12:02:02
6 in Phoenix is currently under construction, and a 12:02:04
7 rural, small business incubator will go to 12:02:06
8 construction in Nogales, Arizona, along the 12:02:10
9 Arizona/Mexican border in early 1999. 12:02:10
10 Other investments and grants that we have 12:02:14
11 worked with with both institutions have targeted our 12:02:14
12 special events and organizational capacity building 12:02:18
13 in Phoenix and Tucson and other rural communities 12:02:22
14 that we serve. Our affordable housing programs in 12:02:24
15 Somerton, Nogales, Tucson, South Tucson, Guadalupe,
16 and Phoenix have also benefited. We have mortgages, 12:02:30
17 mortgage write-downs for closing costs, funds to 12:02:34
18 make housing affordable, investments of Norwest 12:02:36
19 staff. As board member of the Latino community for 12:02:40
20 Norwest, our organization and our subsidiary, boards 12:02:44
21 also contribute to the sound managements of our 12:02:48
22 organization.
23 Our expanding partnership with Karen Wegman, 12:02:54
24 Alonzo Morale, Edmundo Givalgo, with Wells Fargo 12:02:58
25 Bank has also been rewarding, in many instances very 12:03:00
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1 creative and challenging, in that they have come to 12:03:02
2 us and asked us what kind of mortgage products do 12:03:04
3 our communities need, what kind of business 12:03:08
4 investments do we need to make our communities work? 12:03:10
5 Our purchase of a Wells Fargo Bank -- yes, we 12:03:14
6 purchased one of your banks in south central Phoenix 12:03:18
7 -- has enabled us to double the space of the Federal 12:03:22
8 Credit Union. We also maintain Wells Fargo as a 12:03:24
9 presence in this particular facility in the Grant 12:03:28
10 Park neighborhood, and it also provides incubator 12:03:30
11 space for small businesses and minority 12:03:34
12 entrepreneurs.
13 Wells Fargo's bank investment of $1,250,000 at 12:03:40
14 zero percent interest for five years with an 12:03:44
15 additional two percent over the next ten years, is 12:03:46
16 way beyond the cutting edge. These are the kind of 12:03:50
17 partnerships that we're interested in developing 12:03:54
18 with both institutions and continuing. This 12:03:56
19 investment expands our ability to lend to 12:03:58
20 micro-borrowers, create a venture capital pool, a 12:04:00
21 revolving line for new construction in Tucson for 12:04:06
22 our for-profit construction company, and it enables 12:04:10
23 us to leverage $600,000 to build a new office 12:04:14
24 building in Tucson and pay off an office complex 12:04:18
25 mortgage in a small rural town in southwestern 12:04:22
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1 Arizona that leases office space from the state of 12:04:24
2 Arizona. 12:04:28
3 Funding of special projects, community 12:04:28
4 celebrations has made Wells Fargo a new power in the 12:04:32
5 Arizona bank market. Grants to organizations has 12:04:34
6 involved small business lending, social work, arts, 12:04:38
7 that round out a true concept of partnering in our 12:04:40
8 community: not just taking our deposits but actually 12:04:44
9 putting something back. 12:04:48
10 We would point to the exemplary record of staff 12:04:48
11 involvement and outreach in how community 12:04:52
12 reinvestment is truly done in America. Management 12:04:54
13 of both institutions still needs to work on board 12:04:56
14 membership. Upper level executives are still 12:05:00
15 lacking, but through our ongoing efforts, these are 12:05:04
16 problems we can solve together. Branching 12:05:08
17 duplication can be solved through partnership with 12:05:10
18 nonprofits that benefits the total community as well 12:05:12
19 as my first example of the Wells Fargo branch in 12:05:14
20 south central Phoenix. 12:05:16
21 Our community meetings with citizens and 12:05:18
22 organizations, community leaders in the upcoming 12:05:20
23 follow-up meeting state-wide leaves us with a strong 12:05:24
24 indication that more progress will occur with the 12:05:26
25 merged institution, and we encourage your positive 12:05:28
131
1 confirmation of this merger and invite you to visit 12:05:32
2 and seek community reinvestment at work in Arizona. 12:05:34
3 Thank you. 12:05:36
4
5 CHAIRPERSON SMITH: Ms. Gold.
6
7 MS. GOLD: My name is Autumn Gold, and I'm 12:05:42
8 from Denver, Colorado. I work for Atlantis
9 Community. I'd just like to thank you for giving me 12:05:48
10 this opportunity to speak today. Atlantis 12:05:50
11 Community, Incorporated is a 23-year old Colorado 12:05:52
12 not-for-profit corporation providing services to 12:05:56
13 people with disabilities in metro Denver, and, when 12:05:58
14 necessary, throughout Colorado. Atlantis services 12:06:04
15 include home health, housing benefits advocacy, 12:06:06
16 independent living skills training, basic education 12:06:10
17 and home ownership counseling and education. 12:06:16
18 Atlantis is recognized nationally for its work in 12:06:16
19 disability rights and for creating new and 12:06:20
20 innovative programs. 12:06:22
21 In 1992, Atlantis Community, Incorporated 12:06:22
22 brought to Norwest Bank a unique concept that became 12:06:26
23 the first home ownership mortgage program for people 12:06:28
24 with disabilities in America. In conjunction with 12:06:32
25 Atlantis, Norwest created the Disability Community 12:06:34
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1 Home Mortgage Program, known as DCHOP. The DCHOP 12:06:38
2 home mortgage program for people with disabilities 12:06:44
3 was the first to offer an opportunity to participate 12:06:46
4 in the American dream of home ownership. 12:06:48
5 Norwest, at Atlantis's direction, developed a 12:06:50
6 program that accepts alternative income such as 12:06:54
7 social security, food stamps, tax credits, and much 12:06:56
8 more. High debt to income ratios play a large part 12:07:00
9 in success of the program as well as reduced closing 12:07:04
10 costs and only a two percent down payment. 12:07:08
11 The American dream of owning your own home was 12:07:10
12 just that, a dream for people with disabilities, 12:07:12
13 until Norwest introduced the DCHOP program in 1993. 12:07:14
14 Prior to the DCHOP program, people with disabilities 12:07:18
15 and their families' only choice was to rent an 12:07:20
16 apartment or someone else's home. That apartment or 12:07:24
17 home was most likely not accessible, either. With a 12:07:26
18 population that is 80 percent unemployed and living 12:07:30
19 on a fixed income from social security of $700 a 12:07:34
20 month or less, they had little chance to even dream 12:07:36
21 of home ownership. The DCHOP program offers more 12:07:40
22 than just a dream. It offers but does not guarantee 12:07:46
23 the reality of home ownership. People with 12:07:50
24 disabilities still must qualify for a home loan just 12:07:52
25 as everybody else. Norwest simply leveled the 12:07:54
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1 playing field. 12:07:58
2 Norwest was bold to move to create the 12:07:58
3 Disability Home Ownership Program when no other 12:08:04
4 lending institution had the courage to take the 12:08:06
5 first step. They must be applauded. Had not 12:08:10
6 Norwest taken that step, people with disabilities 12:08:14
7 still today would be excluded from the American 12:08:16
8 dream. Those first steps designed a program that 12:08:18
9 has proved that people with disabilities could be 12:08:22
10 homeowners without high foreclosure rates and 12:08:24
11 without high delinquency rates. The DCHOP program 12:08:28
12 encouraged US Banks to create their Disability 12:08:32
13 Advantage Program because another lending 12:08:36
14 institution, Norwest, had taken the initial risk. 12:08:38
15 Norwest's success with the DCHOP program 12:08:42
16 brought Fannie Mae to Denver to learn about and to 12:08:46
17 study its workings. From that visit came Fannie 12:08:48
18 Mae's home choice program: 16 states, $50 million 12:08:52
19 pilot project modeled after the DCHOP program. 12:08:58
20 Fannie Mae's pilot project and US Bank's Disability 12:09:00
21 Home Advantage Program validates Norwest's wisdom in 12:09:06
22 1992. 12:09:06
23 After five years of providing home ownership 12:09:08
24 counseling, there is no doubt that these potential 12:09:12
25 home buyers have the ability and the desire to own 12:09:14
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1 homes. Atlantis's home ownership program aspires to 12:09:16
2 increase awareness and availability of home 12:09:22
3 ownership opportunities for people with 12:09:26
4 disabilities. Atlantis's commitment is to assist 12:09:28
5 potential buyers in understanding the complex 12:09:32
6 process by providing them with the information that 12:09:34
7 along with their own determination will prepare them 12:09:38
8 to become homeowners and improve their quality of 12:09:42
9 life, like you said. 12:09:44
10 My goal is to see people feel confident about 12:09:46
11 the home buying process and comfortable with home 12:09:48
12 ownership, comfortable as homeowners armed with the 12:09:52
13 knowledge and empowered to make the important 12:09:54
14 decisions to undertake their responsibility of home 12:09:56
15 ownership. I personally and strongly believe in 12:10:00
16 home ownership counseling and education. And 12:10:02
17 partnered with the DCHOP program, Atlantis and 12:10:04
18 Norwest have pioneered home ownership for 12:10:08
19 individuals with disabilities. 12:10:12
20 It is Atlantis's hope that with the merger of 12:10:12
21 Norwest and Wells Fargo that the commitment to the 12:10:16
22 DCHOP not only continue but the size of the program 12:10:20
23 increase to reflect the size of the merger. To date 12:10:22
24 Norwest has provided 955 mortgages to people with 12:10:24
25 disabilities and families in Colorado, valued in 12:10:30
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1 excess of $64 million. Norwest has made it possible 12:10:34
2 for people with disabilities to dream the impossible 12:10:38
3 dream of home ownership. Thank you. 12:10:40
4
5 CHAIRPERSON SMITH: Thank you. 12:10:42
6 Mr. Jimenez. 12:10:42
7
8 MR. JIMENEZ: Thank you, Governor Smith, 12:10:46
9 Board of Governors, and Federal Reserve staff. My 12:10:50
10 name is Pierre Jimenez. I'm the director of Denver 12:10:52
11 Community Television, but that's not why I'm here 12:10:54
12 today. I was originally solicited to become a 12:10:56
13 member of the Norwest community forum because of my 12:11:00
14 community activism. And when we were coming up in 12:11:02
15 the shuttle today, I felt a sense of ambivalence 12:11:08
16 seeing the demonstrators sitting on the side of the 12:11:10
17 sidewalk, because I think after hearing a lot of the 12:11:14
18 testimony today, you have to give validity to many 12:11:16
19 of the comments that were made, and so I would ask 12:11:18
20 the executives of Norwest and Wells Fargo to please 12:11:22
21 keep in mind what these people are saying because 12:11:24
22 much of this testimony comes from the heart. It's 12:11:28
23 what they believe to be true. Now we can quarrel 12:11:30
24 about the degree and the magnitude, but we can't 12:11:32
25 quarrel about the fact that it exists. Because, for 12:11:36
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1 example, I can recall back in 1950, my father 12:11:40
2 returned from World War II and decided to become 12:11:44
3 part of the American dream as a Mexican American in 12:11:46
4 Denver, Colorado, first by becoming a licensed 12:11:50
5 electrician, the second one in the state, but more 12:11:54
6 importantly, trying to borrow $10,000 from a bank to 12:11:58
7 build a house, to begin building the foundation of 12:12:00
8 becoming part of the stakeholders in America. He 12:12:04
9 was denied that opportunity. Fortunately for him, 12:12:08
10 he had the opportunity to borrow from friends, and 12:12:10
11 they built this house. 12:12:14
12 In the same spirit that my father built that 12:12:16
13 house back 1950, 48 years ago, we are here today 12:12:20
14 discussing what CRA means to the American public. 12:12:24
15 And at the heart of that is loans to people to 12:12:28
16 become stakeholders in the American dream. 12:12:30
17 Now, it's been my experience with Norwest Banks 12:12:34
18 for the past several years that I've been on the 12:12:36
19 community forum that they have listened, often times 12:12:40
20 not very well, but they have changed their behavior, 12:12:42
21 sometimes reluctantly. And as one of them said, 12:12:46
22 well, if you drag us kicking and screaming into the 12:12:50
23 21st century, maybe it will do some good, and it 12:12:52
24 has, because what it's done, it's created an 12:12:56
25 opportunity for, one, more loans to low to moderate 12:13:00
137
1 income families seeking loans for mortgages since 12:13:04
2 I've been on the forum. 12:13:06
3 Secondly, what it's done is gone into other 12:13:08
4 areas where traditional banks have refused to go. 12:13:12
5 Several years ago we talked about a concept of urban 12:13:14
6 banking, which was creating branches, either loan 12:13:18
7 offices or full service branches, in inner city 12:13:22
8 neighborhoods. Some in the banking community said 12:13:28
9 it won't work. Poor people don't take advantage of 12:13:30
10 banking services or products. Well, today the 12:13:34
11 bottom line is -- and that's why we're here -- the 12:13:36
12 bottom line is banks are in the business to make 12:13:40
13 money. We know that, we're not going to argue that 12:13:42
14 point, but the fact of the matter is in Denver, 12:13:46
15 Colorado, they are making money in the inner city, 12:13:50
16 and they're meeting their bottom line. And when you 12:13:52
17 meet your bottom line that means then you can move 12:13:54
18 on to other areas. So they've expanded loans to 12:13:56
19 small businesses, and I speak specifically about 12:14:00
20 people of color. 12:14:02
21 Beyond that, they're taking a look now about 12:14:04
22 micro loans, smaller amounts to people who really 12:14:06
23 have an idea. The concept of entrepreneurship, 12:14:10
24 especially in the Latino community, is huge. What 12:14:16
25 they need is the opportunity to find a way to make 12:14:20
138
1 it happen. Norwest Banks in Denver is making that 12:14:22
2 happen. 12:14:26
3 Now you had an earlier speaker that talked 12:14:26
4 about how wonderful Wells Fargo was, and they may 12:14:28
5 be. You know, the agreements to provide billions of 12:14:34
6 dollars of loans to people of color I think is 12:14:34
7 important. At the same time, let's not forget that 12:14:38
8 banking is more about personal relationships than 12:14:40
9 products or services. It's about the one-to-one 12:14:44
10 personal contact. I really don't care if the bank 12:14:50
11 president comes down to greet me in the lobby. 12:14:52
12 However, I do care if somebody treats me with 12:14:54
13 dignity and respect as an individual, and I think 12:14:58
14 the people that I represent or that I consider to be 12:15:02
15 constituents are those type of individuals. 12:15:06
16 Otherwise, one fourth of the American public would 12:15:08
17 be taking advantage of banking services. 12:15:12
18 So I would say to you at the point in this 12:15:14
19 discussion that we asked about this merger, I would 12:15:16
20 have us keep in mind if we're providing a service to 12:15:20
21 the American public that will make us a stronger 12:15:24
22 country and still meet the bottom line, then let's 12:15:26
23 add that final bid of compassion that people talked 12:15:30
24 about earlier and will talk about this afternoon so 12:15:34
25 that we can become the country that we have always 12:15:38
139
1 been and can become even greater than we know. 12:15:40
2 Thank you. 12:15:44
3
4 CHAIRPERSON SMITH: Thank you. We'll go 12:15:46
5 to Ms. Tingerthal. 12:15:46
6
7 MS. TINGERTHAL: That's correct. Thank 12:15:50
8 you. 12:15:50
9 Good afternoon. My name is Mary Tingerthal, 12:15:50
10 and I'm the president and chief executive officer of 12:15:52
11 the National Equity Fund, commonly referred to as 12:15:56
12 NEF. I'm also here speaking on behalf of National 12:16:00
13 Equity Fund's parent organization, the Local 12:16:02
14 Initiatives Support Corporation, commonly referred 12:16:06
15 to as LISC. 12:16:08
16 To understand our long-term relationship with 12:16:10
17 Wells Fargo and Norwest, let me first explain who 12:16:14
18 LISC and NEF are. LISC is the nation's largest 12:16:18
19 community development intermediary and is a 12:16:22
20 certified community development financial 12:16:24
21 institution. In that role LISC often serves as an 12:16:26
22 intermediary for banks like Norwest and Wells Fargo 12:16:30
23 to invest in low income communities. 12:16:32
24 Since its founding 19 years ago, LISC has 12:16:36
25 helped nearly 18 hundred community development 12:16:38
140
1 corporations, like many of those that you've heard 12:16:42
2 from today, in more than a hundred cities and rural 12:16:44
3 areas across 39 states and Puerto Rico. In this 12:16:48
4 work, LISC has attracted the support of almost 2,000 12:16:50
5 donors and investors, including Norwest and Wells 12:16:56
6 Fargo. 12:17:00
7 Through that support, LISC has raised $3.1 12:17:00
8 billion in grants, loans, and equity investments, 12:17:06
9 and an additional $3.5 billion of public and private 12:17:08
10 support has been leveraged by those dollars. That's 12:17:12
11 meant 80,000 affordable homes and over 12 million 12:17:14
12 square feet of community facilities, commercial and 12:17:18
13 industrial space. 12:17:22
14 Both Norwest and Wells Fargo have been 12:17:24
15 instrumental in their support of LISC in bringing 12:17:26
16 about revitalized neighborhoods in the cities where 12:17:28
17 they operate by working with LISC and NEF. NEF is 12:17:32
18 the largest nonprofit syndicator of the federal 12:17:38
19 government's low income housing tax credits. 12:17:40
20 For 11 years now we've used that program to 12:17:44
21 stimulate investment in affordable housing built and 12:17:46
22 operated exclusively by nonprofit organizations that 12:17:50
23 work exclusively within their communities. 12:17:54
24 To date, we've raised nearly $2 1/2 billion 12:17:56
25 from 140 investors, which has resulted in over 12:18:00
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1 44,000 rental homes targeted to low income families. 12:18:04
2 LISC and NEF are national organizations, but we 12:18:10
3 operate very much on a local level, and we rely on 12:18:14
4 local decision-making and local leadership such as 12:18:18
5 that that's been provided by numerous individuals in 12:18:22
6 our local programs by executives from Wells Fargo 12:18:26
7 and Norwest. 12:18:30
8 I can point to Norwest and Wells Fargo being 12:18:32
9 instrumental in community development because of 12:18:34
10 their historical core contributions to LISC and 12:18:36
11 their continuing investments in NEF, as well as 12:18:40
12 their long-term active involvement in the local 12:18:44
13 communities on a first-hand basis. 12:18:48
14 From 1989 through today, Norwest has invested 12:18:52
15 almost $14 1/2 million in LISC and NEF, with $14 12:18:56
16 million of that being NEF investments since 1990, 12:19:00
17 and about 350,000 in grants to LISC since 1989, 12:19:04
18 which supports six of our local programs, in 12:19:10
19 Minneapolis, Duluth, Las Vegas, Milwaukee, Phoenix 12:19:14
20 and St. Paul. 12:19:18
21 From 1983 through today, Wells Fargo Bank has 12:19:20
22 invested over $120 million with LISC and NEF. This 12:19:24
23 total includes approximately $117 million in equity 12:19:30
24 investments in our national fund and our California 12:19:34
25 fund, with Wells Fargo serving as one of our very 12:19:38
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1 first investors when the low income housing tax 12:19:42
2 credit was created. It also includes almost $3 12:19:46
3 million in grants to LISC since 1983, which supports 12:19:48
4 seven local programs, which include the San 12:19:54
5 Francisco bay area, Houston, Las Vegas, Los Angeles, 12:19:56
6 again Phoenix, San Diego, and Puget Sound, as well 12:20:00
7 as LISC's national rural program. 12:20:06
8 The financial support from Norwest and Wells 12:20:10
9 Fargo over the years has been matched in many places 12:20:14
10 by the people leadership as bank executives serve on 12:20:16
11 our advisory committees in eight of our local 12:20:20
12 programs and also with our rural LISC program. 12:20:24
13 I heard a comment earlier today from someone 12:20:28
14 indicating that they were disappointed at the use of 12:20:30
15 intermediaries by these banks in providing services, 12:20:34
16 particularly in rural areas. I can understand that 12:20:36
17 there's some disappointment at the loss of banking 12:20:40
18 presence, but I do applaud these organizations for 12:20:44
19 reaching out in ways that may be unconventional to 12:20:46
20 continue to serve these important organizations. 12:20:50
21 We do urge that as the bank executives approach 12:20:54
22 the merger that they consider not stepping away from 12:20:58
23 the level of investment that they've shown to LISC 12:21:02
24 and NEF in the past, but to continue those levels 12:21:04
25 and to continue their support of community 12:21:08
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1 development. Thank you. 12:21:10
2
3 CHAIRPERSON SMITH: Thank you. Any 12:21:14
4 questions? Okay. If not, then we thank you very 12:21:14
5 much, and we were scheduled to reconvene at 1:30. 12:21:22
6 We are hoping to -- we were scheduled to reconvene 12:21:32
7 at 1:30. We would like to reconvene at 1:15. It 12:21:36
8 will depend on whether we can assemble the 1:30 12:21:42
9 panel to be here at that time. So you might try to 12:21:44
10 be back here by 1:15. 12:21:50
11
12 VOICE: We will be here at 1:15. 12:21:54
13
14 CHAIRPERSON SMITH: Great. Then we'll 12:21:56
15 start at 1:15 and see you then. 12:21:56
16
17 (Recess taken.)
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