Wells Promises Funds for Minorities if Merger OKd

Wells Fargo & Co. confirmed Wednesday that it would earmark $15 billion for loans to California low-income and minority communities over three years if federal regulators approve its merger with Norwest Corp., creating the seventh-largest U.S. bank.

San Francisco-based Wells drew up the lending plan after negotiations with community groups in the state.

The announcement of big low-income lending pledges has become a standard feature of bank mergers as institutions seek to line up local support for transactions. Several community groups have asked the Federal Reserve Board to postpone approval of the Wells-Norwest combination until public hearings are held.

Regulators must take into account banks’ community lending records when reviewing merger applications, though they have rarely blocked transactions on those grounds.

Wells Fargo said it would set aside $8 billion for small-business loans, $3.5 billion for community development loans, $2.5 billion for mortgages and $1 billion for consumer loans in low-income and minority neighborhoods, spokeswoman Kathleen Shilkret said. Wells would continue to honor its 10-year, $45-billion multi-state community lending promise made in 1996 in connection with its takeover of First Interstate Bancorp, she said.

Minneapolis-based Norwest in June agreed to buy Wells Fargo in a transaction valued at about $30 billion.

In New York Stock Exchange trading, Wells shares fell 69 cents to close at $311.56, and Norwest rose 13 cents to $31.88.