Wells Fargo border chief ready for challenges

Ramos succeeded Hector Retta, who became regional president for Wells Fargo in Orange County, Calif.

Wells Fargo's Border Region covers cities within 60 miles of the U.S.-Mexico border from Brownsville, Texas, to Yuma, Ariz.

Ramos, a 19-year veteran of the financial services industry, is responsible for 1,100 employees, $4.6 billion in deposits, 44 banking stores, and the region's retail, business banking and international banking groups.

QUESTION: After five months on the job, what are some of the challenges you've found for banks in the border market.

ANSWER: It's interesting because the challenges are different along different parts of the border. I have the stores all along the Mexico-Arizona border from Yuma all the way of the Texas border and then all of the Texas-Mexico border market.

For example, the Arizona markets have been significantly more impacted by the downturn in the economy than our Texas border markets, and specifically as it relates to housing. Arizona has had a much more challenging time because of housing decreases, especially in Yuma, and in Nogales and Douglas, but especially in Yuma due to its proximity to California and to Phoenix.

People outside the border, I think, sometimes tend to view "the border," as one very homogeneous culture. But the border interaction here in El Paso is very different than it is in Brownsville, or McAllen, or Nogales, or Yuma, so it's quite heterogeneous, which I'm not sure anybody outside the border would really understand. So that's probably been one of the bigger surprises.

Q: There are a number of banks along the border that also have ties with banks in Mexico. Has Wells Fargo considered a merger or alliance with a Mexican bank.

A: We actually have correspondent banks in Mexico, corresponding banking relationships in Mexico, so between those relationships as well as the services we have for the cross-border business. We have a really good remittance product that allows people to very easily send money back and forth, not just to Mexico, but to a variety of countries. But because of the correspondent relationships we have, as well as our products and services, we are able to very effectively meet the needs of the customers here as well as a significant customer base that uses us in Mexico.

Q: El Paso hasn't seen the kinds of foreclosure rates and other difficulties that many lending institutions have experienced in a lot of markets during the housing market decline in this recession. Why?

A: I think a number of things contributed to it. One is that Texas state laws surrounding home equity and some of the other credit products blunted a lot of that. There were some things that were done in some other geographic markets, outside of Texas, that frankly just weren't allowed here.

That, certainly, has played a significant role, in our estimation, that (economically, El Paso) doesn't have the huge high, you don't have the huge low, it's really helped to moderate that.

I think, secondly, and specifically here to El Paso and not just to Texas, the job growth e I don't know if you got a chance to read the Wall Street Journal story (on Monday) about El Paso (about many Juarez business owners relocating to El Paso because of the violence in Juarez).

Certainly the jobs that are coming in from Fort Bliss, the medical expansion and, frankly, some of the expansion of some restaurants in Juarez that are opening here, some of that migration because of the change in the situation in Juarez, we haven't had the kind of job loss here.

So, I think El Paso's strong economy is helping as well. And, then I do believe e ourselves and some of our competitors have been here a long time and are multi-line financial organizations that aren't just providing mortgages or some other product. So, I think the lending appears to have been reasonably responsible here.

And historically, at least from the numbers I've seen, El Paso has seen steady growth, so some of the speculation in the market from huge run-ups in home prices hasn't happened.

Q: The FDIC recently asked banks to prepay $45 billion in FDIC insurance payments (the money that insures individual accounts). How would that impact customers?

A: Well, the goal is that it wouldn't, right? The goal is to avoid any customer impact and we, as well as other financial institutions, that participate in the FDIC have had special assessments this year, being asked to prepay.

So, the goal is that those of us that are strong, healthy financial institutions are continuing to contribute to the fund so that customers have no impact and they know, absolutely, that their money is safe in the banking system and, should their bank fail, they would not lose their money.

Q: Many nationwide banks, including Wells Fargo, recently announced they were making changes to checking accounts that would make it easier for customers to opt out of certain features, such as automatic overdraft, that generate a lot of fees for banks.

Do you see that as something that banks nationally will continue to do with the approach of new banking laws that go into effect in early 2010?

A: You know, it's hard to tell what the laws will come out as. I'm certainly not going to comment on politics; that would be a conversation for a different day when we're not being recorded.

I think it's about balance. Some of the sentiment from politicians is to go more plain vanilla (on banking services) to make sure that customers understand exactly what they're getting, which we absolutely want and support.

We want every customer to know exactly what product and service they're purchasing, how much it's going to cost them, how much it's going to cost later, what might trigger it to change in cost, exactly what features and benefits they get.

But there has to be a balance between some of the political sentiment to make things very plain vanilla, almost fool-proof, with what customers want.

I might be Customer A and I do everything on the computer so I want free online banking and free bill pay (and) I'm never going to come into one of your stores.

Meanwhile, we have other customers who love to come visit us almost every day (and) either can't or don't want to use the computer. We've worked very hard to tailor our services to what our customers tell us they want.

So, there's a balance between you absolutely want at all times for your customers to understand exactly what they're getting and what it costs but, depending on how the legislation comes out, you don't want it to be so plain vanilla that it underestimates the intelligence of the customer or doesn't allow us to provide them what they want. So, we're going to have to see how that comes out.

Q: In this period before the new banking laws go into effect in February 2010, many banks and other financial institutions that issue credit cards, are raising interest rates on cards. Is that a reaction from banks that know they're not going to generate as much revenue on the checking account fees, so they are raising rates to make up for that revenue they are expecting to lose?

A: I don't think so. There are sweeping changes coming through credit legislation, including how you can provide credit to young consumers.

There are a whole bunch of legislative changes happening that are coming down the road and -- you probably know from the changes in your own business -- it's not as easy as just seeing the change, it takes months to interpret what it means.

Legislation these days isn't just a two-paragraph thing. So, I don't think it's a reaction to, oh, we can't charge this fee so let's hit somebody somewhere else. My understanding is ... there are legislative changes coming that will significantly impact what banks can do and not do as it relates to credit.

I think it's just preparing for that loss of flexibility but I think we're still trying to dig through all of the legislation. It's kind of coming fast and furious, so we're trying to make sure we're complying and make sure we know what it means for us and for our customers.

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