Des Moines Register
01-14-07
The faces of Iowa's finance giant
By BONNIE HARRIS
REGISTER BUSINESS WRITER
If you live in Iowa, Wells Fargo & Co. is involved in your life one way or another,
whether you know it or not.
The financial services giant is the Des Moines metro area’s largest private
employer, with more workers per capita — one in every 45 residents — than any
of its other locations in the world.
Wells Fargo employees are so commonplace in Polk and Dallas counties, in fact,
that some joke about neighborhood block parties feeling more like company
picnics.
But its presence here has a power that extends well beyond the 12,900 jobs it
provides statewide. Without Wells Fargo, things would be a lot different for Iowa.
Charities in the state would receive about $5 million less a year in giving.
Governments and schools in the Des Moines area would lose more than $13
million in property taxes a year.
And state and local taxpayers would have back the roughly $70 million they’ve
spent in incentives to get, and keep, Wells Fargo here. In exchange for that
public investment, the company has created 3,138 new jobs — more than the
2,000 required to get the taxpayer money — and has built two new office
complexes to the tune of $340 million.
“You don’t spend that kind of money without a commitment to being here,” said
Mark Oman, who runs a third of the company’s operations — the Home and
Consumer Finance Group — from West Des Moines. “When it comes to our
growth, a lot of states would love to have Wells Fargo. We chose Iowa.”
Economists say Iowa has been good to Wells Fargo, too. They acknowledge that
the company’s concentration here has helped create even more jobs throughout
the state, benefited local suppliers and pushed up wages in the financial services
sector.
“But Wells Fargo is able to do business profitably in Iowa, so Wells Fargo being
in Iowa is beneficial to Wells Fargo,” said David Swenson, an Iowa State
University economist who has studied the financial services industry. “Let’s not
forget that bottom line. They are making money here.”
Wells Fargo does not break out revenues or profits for all of the businesses that
Oman runs, just for Wells Fargo Financial. Through the third quarter of 2006,
however, the Des Moines-based division did well, with revenues of $4 billion and
profits of $704 million. That’s up 17 percent in revenue from 2005.
Few dispute that Wells Fargo’s growth has spurred development of all kinds,
particularly in West Des Moines, where the company’s newest and largest office
building has changed the suburban landscape. Commercial and residential
development hinges largely on the sprawling, resort-like Wells Fargo campus,
which plays no small role in the way city officials plan for growth — from speed
limits and traffic patterns to intersections and street names.
And through its philosophy of “relationship banking,” Wells Fargo has managed
to work its way into our schools, our churches and our workplaces. It helps
sponsor town festivals and attract big-name shows to Des Moines, thanks to a
$99 million arena emblazoned with its name.
It has become a master in the craft of finding customers on all financial levels,
whether they’re buying a house or bunk beds, saving for a first car or retirement
— using methods that at times have been sharply criticized by consumer groups.
“There have been serious concerns that Wells Fargo is lagging behind in best
lending practices,” said Debbie Goldstein, executive vice president of the Center
for Responsible Lending. “They’ve made some steps to catch up and improve, so
they are not the worst. But they aren’t the best, either.”
Reporter Bonnie Harris can be reached at (515) 284-8247 or
boharris@dmreg.com