Wells Fargo Urged to Serve S.D. Economy

A cross-section of San Diegans urged Wells Fargo Bank Wednesday to build upon Great American Bank’s community involvement if Wells Fargo completes its proposed acquisition of 64 branches from the savings and loan.

Representatives of local charitable and civic groups, redevelopment organizations, minority groups and government agencies who spoke during a San Diego City Council committee hearing pressed San Francisco-based Wells Fargo to fill the void that would be created by Great American’s departure.

San Diego-based Great American plans to raise much-needed capital by selling its California branch system to Wells Fargo for $491 million. Great American executives believe that the sale will help the thrift reach capital levels required by federal regulators, who must approve the deal.

Council members are expected to make recommendations about the proposed branch acquisition to the U.S. Comptroller of the Currency, one of several federal agencies reviewing the proposed deal. The council and the County Board of Supervisors will concentrate on Wells Fargo’s record of lending in low- and moderate-income neighborhoods.

Councilman Wes Pratt said the city’s involvement in the regulatory review is unprecedented. He directed the city manager’s office to prepare a report on the branch sale for review by the full council.

Wells Fargo drew both praise and complaints during Wednesday’s meeting.

A local school system representative described Wells Fargo as a “model corporate citizen.” The chairwoman of the AIDS Foundation of San Diego praised Wells Fargo for making a recent $25,000 contribution that was “the largest (AIDS-related) corporate contribution” that the organization has ever received.

Tom Fox, executive director of the Normal Heights Community Development Corp., asked Wells Fargo to forgo glamorous but risky lending practices and instead concentrate on loans to local small businesses and members of the minority community.

Harold Brown, president of the Black Economic Development Task Force, who described Great American as “a friend to the Afro-American community,” asked that Wells Fargo help to remedy a “lack of access to capital” that has hindered the economic development of San Diego’s minority communities.

Jack Walsh, a former San Diego City Councilman, cautioned council members against trying to derail Wells Fargo’s bid for Great American because Great American would probably be seized by federal regulators if the deal falls through: “When was the last time you heard of . . . (thrift industry regulators) making donations to the zoo?”

Wells Fargo has operated in San Diego for more than 100 years but has played a relatively minor role in the county’s lucrative banking industry. But Wells Fargo now has 25 branch offices and a large corporate presence in the county, largely because of its recent acquisitions of Crocker National Bank and Torrey Pines Bank. The Great American branch acquisition would make Wells Fargo one of the county’s best-represented financial institutions.

Board of Supervisors Chairman Leon Williams, co-chairman of the City-County Reinvestment Task Force, urged Wells Fargo to “be a very good corporate citizen in San Diego.”

Williams, who met with Wells Fargo executives during a luncheon, asked the bank to establish community reinvestment guidelines that would bolster lending in San Diego’s low- and moderate-income neighborhoods, a practice that is mandated by the federal Community Reinvestment Act of 1977.

The task force is pressing Wells Fargo to establish a small-business lending pool, an economic development plan for depressed communities in East San Diego and a San Diego-based staff person who would help implement local lending programs. The task force also has asked Wells Fargo to expand the banking services that Great American offers to residents in Southeast San Diego.

“We’re not trying to be harsh with Wells Fargo,” Williams said. “But we are very concerned about maintaining the level of community involvement . . . when Wells Fargo takes over Great American’s interests here in San Diego.

“We will have follow-up meetings to help determine the extent to which they’re willing to participate with us. They’re not at this point willing to make the commitment.”

According to figures supplied by Great American, the S&L; lent $67.8 million in low- and moderate-income neighborhoods during 1988, the most recent year for which statistics are available. Statewide, the S&L; made $675.1 million in loans in low- and moderate-income neighborhoods.

During the past 10 years, Great American has provided $10 million in low-cost loans to the San Diego Housing Commission for use in a program that has rehabilitated 2,500 homes. Wells Fargo on Wednesday agreed “in principle” to continue that loan program.

After Wednesday’s committee hearing, Jim Bliesner of the reinvestment task force urged Wells Fargo to follow Community Reinvestment Act guidelines and bolster the number of loans it makes in low- and moderate-income neighborhoods.

Great American, Bliesner said, has been “one of the top” lending institutions in San Diego when measured by CRA guidelines.

In 1988, the most recent year for which figures are available, 13.5% of Great American’s home loans were made on properties in low- and moderate-income neighborhoods, Bliesner said. In contrast, just 5.5% of Wells Fargo’s loans are in low- or moderate-income neighborhoods, according to figures supplied by Bliesner.

“The bottom line is the red line,” Bliesner said. “Wells Fargo made zero loans in (San Diego’s) minority neighborhoods . . . and their record in previous years is as weak.”

“It’s clear to me from testimony (on Wednesday) that Wells Fargo is doing all right by the (donations to) arts and the upper-end kind of charitable organizations,” Bliesner said. “But they’re not doing all right in terms of minority or low income neighborhoods . . . and the thrust of the CRA is that they lend to all segments” of the community, Bliesner said.

Wells Fargo Vice President Steven C. Hall said that he was uncertain whether figures provided by Bliesner gave an accurate comparison of loan activity required by CRA.

However, Hall said that Wells Fargo would provide “appropriate support” for required community lending and that the bank might add a full- or part-time staff person who would monitor the bank’s lending in San Diego’s low- and moderate-income neighborhoods.

Wells Fargo recently announced that it intends to make at least $1 billion in community and economic development loans in areas where it does business. That total would triple its previous goals, a spokesman said.