As Wells Fargo Bank's regional president in Nevada, he's also bullish on the financial sector, despite its ongoing national and local consolidation and failings.

He sat down with In Business Las Vegas on Sept. 16, just as the national financial sector fell into crisis mode, but as bullish as he is, he won't call it a crisis.

And ever the competitor, a few moments into the meeting at his Las Vegas office, he wants to know if his visitors are banking at Wells Fargo. If not, why not? His aim: Switch to his bank.

Clausen talks with In Business about his views on the national and local banking market, Wells Fargo's role in Las Vegas, business loans and mortgages and the future of banking.

Kirk Clausen LEILA NAVIDI / STAFF PHOTOGRAPHER

Wells Fargo considers itself a community leader. We are really encouraged, as local managers, to make sure we're taking that role and taking it to the extreme if we can. It's not only about being a leader on the business side, but it's being a community leader in the sense of giving back to the community - helping build a stronger community. I would say there's ... a business aspect to it, there's definitely a charitable aspect to it as well.

Well, it's interesting you bring that up, because (of) Nevada's tax situation. You see a lot of banks consolidating some of their operations in Nevada, some of which don't even do business here, at least as intensely as we do. It is probably safe to say that the community bank side - meaning consumer and up to midmarket - it probably is a market share issue between us (and) B of A. U.S. Bank is certainly in there, and then, of course, collectively, the smaller banks make up a piece of it.

We have, probably, in Nevada approaching 500,000 households that bank with us. On a consumer level, we probably have the lion's share of the market share.

I have the greatest job in the world, and I mean that seriously. I've been with Wells Fargo since I was a teenager, actually. It was just this month I celebrated my 33rd year with it. What I've really learned with our company is - as I've grown up with it and the company's grown - today we're at $575 billion as a company in terms of footings (assets). When I first joined the company we were talking a lot about $500 million and how big that was back in '75. But, why I have the greatest job is I get to work with 3,000 to 3,500 of the most talented people in the state of Nevada who work with Wells Fargo. We go out and our job is to just absolutely win market share. We do that by giving knock-your-socks-off service. I think we have great products and services. In the end it all comes down to our people, and, again, that's my privilege to work with just a very talented, passionate, committed group of folks.

Oh, wow, there are so many things. You may be familiar with desktop deposit. We introduced a new product just recently called vSafe. This is an opportunity for our customers to save online - through our systems - important documents, that type of thing.

There's all types of things going on with checking accounts and savings accounts and personal access or self-access to safe deposit boxes. The technology is wonderful, but it still comes down to we'll never replace brick and mortar, right? When folks are at a point in their life when they are ready to do a complicated transaction, say a mortgage loan or car loan, even opening a checking account, it doesn't really matter which generation you are. Generally, people are coming in to sit down and talk to an expert and make sure they are getting into the very best product that makes sense for them. So, technology is a wonderful thing, but you are always going to see here at Wells Fargo we'll still be about brick-and-mortar branches.

We have 125 statewide. That 125th will open - I believe it's next month - at Green Valley and Horizon (Ridge Parkway). It'll be our newest office and, in fact, I believe it's a green office that we're opening up.

It's a broad range. We probably had volunteer hours last year - I couldn't even tell you the exact number - but I know it's probably well over half a million dollars in terms of contribution when you assign a value to their hours. In terms of organizations that we support, we give millions of dollars back to the community. But again, it gets back to what we talked about a little bit earlier. What we really like to see is our team personally get involved: Find a passion and then volunteer along those lines. Then we, as a company or as senior management, will support them in many ways around that.

I think you can talk about anything from the Three Square organization, if you're familiar with that and how that started up. That is an organization that is focused on wiping out hunger in the valley, and I think it's got a real shot at doing that. We're big supporters of that.

Generally you'll see us support kids. We like to keep kids off drugs, keep 'em in school. We just like kids, in general, so you'll find us supportive of organizations like that.

We like to do things along the lines of scholarships, particularly for first generation attendees. Again, it's pretty broad-based. There's a whole lot of it going on. UNLV, UNR, you just about name it and you'll find Wells Fargo behind it.

So, a little history here. Wells Fargo, as you probably well know, our mortgage group was not into the negative amortization loans. We really didn't offer those. We didn't offer option ARMs (adjustable rate mortgages), we didn't offer pickup payments. So, when you take a look at our mortgage portfolio, Wells is performing well above the national averages. We're not challenged in that area. One of things that we found is that some of the other mortgages that were generated by other companies, as they're coming to a certain point, we're having the opportunity to rewrite those into more traditional mortgages. So, our mortgage company, in the end, is probably as busy as it has ever been, both this year and last year.

I would say the same for any of the other areas that are related to mortgages. Our Wells Fargo financial group is out there doing pretty strong business, the bank side is doing a great business - very bullish in terms on the activity. I think the best way of saying how well we're doing today is, we're hiring. We're not consolidating. We're not doing anything along any of those lines. We're looking for good people and still adding to our business banking group. We're adding a new branch, as I mentioned earlier. So, we're hiring staff for that. I am very pleased with the market growth that we have going on right now.

The criteria are certainly stiffer. There's no question that we're taking deeper looks at everything. But it's not just for the bank's benefit. It's for the customer's benefit, as well. You know, oftentimes folks will jump at a conclusion that to fix a situation I need to go out and borrow a lot more money. And maybe, three out of five times, that's not necessarily the solution. But, all that said and done, we're still actively looking for qualified business banking customers. We're trying to make as many loans as we can. We have not pulled back. We've got money to lend. Our deposit growth is good. We're well-capitalized, so having said all that, if there's an opportunity out there, we'll continue to grow that market share.

It's about transparency, making sure that you put the true situation in front of the banker from the get-go. If there's anything that probably squirrels a deal quicker it's the banker having to dig and figure out and find additional facts that would have been best if they had been disclosed upfront. The other thing I would say: Whether it's a business customer or even a consumer (who) may be struggling with the mortgage, the sooner you contact the bank, the better. Earlier in the process, if there are issues, we can help. If it's later in the process, it becomes more of a challenge.

Unfortunately, I think the number's around 50 percent of those folks who we could help, they don't contact us at all, and by the time they do, or contact somebody else, it's too late to help.

Well, no. I'm not just saying that because I'm part of the industry in terms of panic. There's just so much solid infrastructure. I mean, look at Wells Fargo. Triple A rated by both (credit) rating agencies (Standard & Poor's and Moody's), we're well-capitalized, we still are growing market share. There are other institutions like us out there doing very, very well: companies that were smart enough to manage around the subprime issues and still be in the business, so on and so forth. No, I don't think there is any reason to panic. I'm reluctant to even refer to it as a crisis. You know, trying to make it something like what kicked off the Depression. They're just two different worlds. There's a lot more money involved now, a lot more competition, a lot more institutions. The government's certainly gone a long way in terms of putting in some of the regulations that prevent this type of thing.

On the other hand, I think it is a good time to take a look at your financial institution and ask the good, hard, tough questions. It is good to know how well-capitalized they are. How are they doing? One of the signs that is often being talked about now, of a financial institution that may be struggling a little bit, is a financial institution that is offering well-above market - and I'm talking significantly above market - rates out there on CDs (certificates of deposit) or savings accounts, or those types of things. It's not always a problem, but it probably is worth asking a good question or two.

But, no, there's no reason to panic. I'm in the market, and I'm banking with Wells Fargo and I'm sleeping pretty good at night.

Again, the Triple A rating says a lot, right? Whether its Standard & Poor's or Moody's. Our capitalization and the fact that we're still growing - $575 billion - just some of the different things we've mentioned before. I think one of the great strengths about Wells Fargo is we keep talking between us about this being a bank. It's really a financial-services company, with over 80 lines of businesses. So when certain aspects or areas of the economy are dominant or the market is down, it usually means there's something else going on out there for us that's up. It could be the insurance, it could be banking, it could be the large commercial division, it could be the gaming division, which we're very privileged to have right here in Nevada: It's headquartered and headed up by Jay Kornmayer. A lot of people don't realize that.

But, again, there are so many divisions in the company, so many business lines out there that we have, for a lot of years now, done a pretty good job of managing, so that we recognize that there are going to be downturns in certain areas, but we usually - actually we've almost always been able to make up for it - in other business lines.

I think, intuitively, there will probably be fewer players out there. I wouldn't be surprised if we would see some more consolidation going on in the industry and maybe even here in Nevada. You mentioned a couple of financial institutions that failed or were sold here. Hopefully, that's the end of that, because it's not good for us. Any bank that has a problem or fails, it's bad for the industry as a whole. We have a very strong bankers association here in Nevada, headed up by Bill Uffelman: Nevada Bankers Association. It does a great job out there trying to educate bankers, keep them current on what's going on in the market and allow for them to make decisions early on in the process that are good decisions for their banks.

You know, I love competition, but it is sad to see a financial institution go away the hard way like we've seen in a couple of cases here. These are all good people out there doing the best they can, competing against us, obviously. But I really wish the best for everybody, just not at my expense.

The mortgage situation, I would say, is arguably at the core of what's going on in the economy today, at least the way everybody talks about it. In terms of it being more difficult to get a mortgage, there are a lot of lessons that are going on right now for financial institutions in terms of what they would have liked to have done differently or better. I believe those are going to be applied as we go forward. Still, if somebody is qualified, if somebody has the income to carry a mortgage, they should not be denied that credit. I think the argument would be not that we, as an industry, expanded the availability of credit or mortgages to folks who shouldn't be in homes. I'm sure that somebody could argue that out there in some isolated cases.

But it's more about expanding credit or taking some shortcuts, if you will, in ways that put people in homes under circumstances that they weren't prepared for. Maybe in certain cases they could afford a home (but) we put them in more home than they could actually afford in the long run. So when these option ARMs reset or they realize the negative amortization that was taking place on their loan, coupled with the fact that there was a decrease in the value of their home, that kind of set the situation off a little bit. You add to that the speculators who were coming in, particularly in our market in Nevada: buying a home and then using the sudden appreciation to buy a second home and a third. It really wasn't good for the market. We actually had a period of time there that folks were basically auctioning homes for cash. I just don't think that's the way it should be.

So, what you're talking about in terms of changes in the future, I'm pretty sure it will be a long, long time, probably not in my lifetime, before you see no-doc (documents) or low-doc mortgages done again. It doesn't make sense. You're going to have to provide evidence of your income. It didn't make sense not to do that. Those lessons will be applied. Again, I'm very bullish on what it will look like going forward.

I'll make a couple of quick comments on that. I moved to Nevada in '96 from Iowa. When I moved here in 1996, I saw the stark contrast in what a healthy, vibrant economy looked like in Nevada. Iowa was a great place. I love it dearly and it's home. But I moved from a market where you went out and fought for the same customers all the time, because there's no organic growth going on in terms of the citizenry. As opposed to coming here where businesses are open, people are moving here five, six, seven thousand people a month. That market was incredible, but it was probably overbooked in a lot of ways, too. I think what we're seeing right now is a 15 to 20 percent reduction in the number of people moving to the state, but still you're seeing folks move here every month. I think that's going to fuel some of the economic turnaround in Southern Nevada.

Suffice it to put it this way: We saw Nevada probably plunge into this economic downturn well before a lot of other places, certainly before Arizona and certainly before Florida. Southern California may have been nip and tuck with us at the time. I think that by going into it sooner, and then given the structure of our economy, the healthy gaming industry, the greater diversity in our economy that we have today, in businesses, that type of thing, I really expect that we'll come out of it sooner than a lot of others and return to within a couple of years where we were post-9/11, not too long ago. Again, very bullish on the local economy. I keep telling my manager that we're going to surprise him, and I think we have surprised him even this year, and next year we'll even do better.

Well, credit unions certainly have a place in the community, and if you go back years and years ago in terms of how they were originally chartered, they made absolute sense in terms of what they do. But what we see today going on is really the creation of two banking systems, in a lot of ways. You have banks such as Wells Fargo that are out there and they're subject to taxes and they're subject to CRA (Community Reinvestment Act). And I take great pride in the fact that our company contributes to building roads and infrastructure within the community. That's a good thing.

Credit unions that are there for the common good of a particular company or, in some cases a little bit larger geography, I really don't have an issue with that. But as you see some of these credit unions expand their powers, get into commercial lending, mortgage lending, become more and more banklike, I believe Congress has to, at some point, take a look at it, from a tax situation, from a legislative situation and probably from a community involvement expectation, they're going to have to rethink what's going on there. But in terms of competition, I think it's great. It's not just credit unions. It's savings banks, it's banks, brokerage houses, all of those provide the right services to the community. And giving the customer the choices is probably the most empowering thing we can be doing from a competitor perspective.

I don't know that I look at it as Wells Fargo. I look at it as an industry - a lot of promises made by a lot of politicians that there would not be any industry-specific taxes. Whether it's the payroll tax, or you can also mention the branch tax that sometimes gets referred to as a franchise tax. I think payroll was a good solution in 2003, probably wasn't my favorite, but it was a good solution. And broad-based, I believe it is the right solution even going forward. It should be about all of us paying the same rate, solving the state's problems. I think there's a real debate that has to take place about increasing these taxes. I think the business community as a whole, if you walked up to them and visit with them and say yeah, they're very willing to do their fair share. I've heard my own customers say, "I just don't want to have happen to me what happened to the banks, to be singled out." And that's the fear I think that's out there.

Second, even though you didn't bring it up, the branch tax, it's just unfair. It doesn't make sense to me. Really what it contributes to the state coffers in total is minimal. What we should do is build upon the payroll tax that's already out there, eliminate the branch tax, and figure out how we need to equalize that so everybody is paying the same.

Well, my gut reaction to it would be, that Nevada has a tremendous reputation as being a business friendly state. And part of the reason that we're there is that we've managed to avoid kind of the pitfalls of states that surround us. And that is, over the years, building a very complex tax structure. In some cases it's referred to as - I don't know if this is fair completely - but California has its own California IRS, if you will, and volumes and volumes of tax code.

I'm not exactly sure what they may be referring to in terms of a broad-based tax. My contention would be: We've got one tax, it's easy to build upon that just by changing some basis points up or down, here and there, and we can probably solve a lot of the problems.

I would also add this: Some of the petitions that you see being created out there - I understand where people are coming from, where they may be frustrated and they want to solve the education issues, and so on and so forth - but legislation by petition is probably not the best way to go. And going out and focusing like a couple of the last ones did on the gaming industry is not a good strategy. This is a state that has no personal income tax, and probably never will, and so we just have to look at it in terms of it's going to fall on the shoulders of the business community. Let's collaborate as a business community with the elected officials and figure out how to make the payroll tax work and solve as much of the issue, if not all the issues, as we possibly can.

No question about it. I mentioned earlier I was born in Iowa, so that will always be home. Rhonda and I, my wife, we love this state. We just can't imagine ourselves anywhere else but Nevada. And I see my career finishing out right here in Nevada. There's certainly been other opportunities, but I prefer to stay right where I'm at. I would assign that to the fact that I'm just as bullish as I can be on Nevada.

We want to continue to get more than our fair share of the market. So, as households grow, as people move here, we just believe very much in our value proposition to the community. I mentioned it before. We've got great people, I think we've got the best people. We have extraordinary training that goes on for our folks. Our products and services are cutting edge. Our online banking system gets more complements. I mean, I have people stop me on the street, talk to me about how much they love banking with us online. I'm sure you bank online, too. There you go. Thumbs up. I just think we will just keep doing what we're doing. Going out, talking to folks about what we are about. What we're really about is talking to our customers, profiling them, finding out what their real needs are and then selling them products and services that fill those needs. We don't sell them anything they can't use, because will they ever buy from you again? Probably not. The other part is we believe so much in the communities that we serve that you'll continue to see our team members involved, you'll see myself and the rest of management involved, volunteering, being on boards, writing checks, those types of things. And helping hopefully overall to help build a strong community, which in the end helps Wells Fargo overall.

When we talk about what we do in the community to help educate the folks around financial and economic personal responsibility, we are the only company that I know of, maybe in the country, but certainly in Nevada, that offers free (services at) our financial education centers out there. So you can walk into our location here in Las Vegas or our location in Northern Nevada, and they will help you with so many services. Even basic computer services - how to operate a computer. But it's mostly about how to open a checking account, how to repair your credit. I mentioned earlier the (Hands on Banking) program, and then our credit repair program through the mortgage group. There's just a lot going on that we're trying to give back to the community and we're working very closely with the United Way, for example, on one of the three areas is economic stability and independence. So, we're out there doing those things, basically to help individuals in the community as a whole.