Wells Fargo commits to loans in California, but not Nevada

Thursday, Aug. 27, 1998 | 11:09 a.m.

Wells Fargo & Co. and merger partner Norwest Corp. are evaluating increased loan commitments to low-income and minority borrowers as federal regulators weigh their merger application.

Wells Fargo promised Wednesday to make $15 billion in loans available to low-income and minority borrowers in California over the next three years if the government approves the merger.

No specific commitment for Nevada was announced Wednesday.

But the combined company plans to make similar promises for the other 20 states that would be served by the combined bank, said Wells Fargo spokeswoman Marilyn Taylor in Phoenix.

"We'll be looking at all the states in our territory, but we don't have figures for the other states," Taylor said.

Wells Fargo, in a letter to Federal Reserve Chairman Alan Greenspan, also said it would try to open more branches and ATMs in low-income areas and have its officers and managers reflect the diversity of the areas it serves. California consumer advocates praised the proposal.

In reviewing the $28 billion deal, the Federal Reserve will look at how it might hurt consumers and whether the banks are living up to their obligations under the Community Reinvestment Act, which requires them to lend money in all neighborhoods from which they take deposits.

Consumer advocates often urge regulators to reject bank mergers if they feel the merging banks have not done enough business in minority communities and low- and moderate-income areas. They have rarely, if ever blocked a merger, but have won commitments of billions of dollars in contributions to community programs.

In a merger already approved by the federal government, BankAmerica and NationsBank promised $350 billion in community redevelopment investments over 10 years, spread over the combined 22-state territory. When Travelers and Citicorp announced plans to merge in April, they promised to jointly contribute a total of $115 billion over 10 years to community lending.

Likewise, Wells Fargo committed to a $45 billion program over 10 years when it merged with First Interstate Bank in 1996. In Nevada, that has thus far amounted to $613.4 million in community reinvestment lending and $1.3 million in contributions to various causes, Taylor said.