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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S MARY THOMPSON SPEAKS WITH WELLS FARGO CEO JOHN STUMPF TODAY ON CNBC'S "POWER LUNCH"

WHEN: TODAY, THURSDAY, DECEMBER 1ST AT 1:40PM ET

WHERE: CNBC'S "POWER LUNCH"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Wells Fargo CEO John Stumpf today on CNBC's "Power Lunch." Excerpts of the interview will run throughout CNBC's Business Day programming. All references must be sourced to CNBC.

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THOMPSON: WE'RE HERE WITH JOHN STUMPF WHO'S HERE IN CHARLOTTE TO TALK TO SOME OF THE WACHOVIA EMPLOYEES HERE. YOU FINISHED THAT INTEGRATION. CONGRATULATIONS ON THAT. I WANT TO ASK YOU ABOUT THE NEWS OF THE DAY. WELLS FARGO IS ONE OF FIVE BANKS BEING SUED BY THE MASSACHUSETTS ATTORNEY GENERAL FOR ILLEGAL AND DECEPTIVE PRACTICES CONCERNING FORECLOSURES. HOW DO YOU RESPOND TO THAT?

MR. STUMPF: I'VE NOT SEEN THE COMPLAINT BUT I AM DISAPPOINTED. WE'VE WORKED HARD TO COME TO AN AGREEMENT WHICH I THINK WOULD BE GOOD FOR THE COUNTRY AND GOOD FOR HOUSING. AND I THINK WE DO THAT BETTER THROUGH WORKING THROUGH TOGETHER OPPOSED TO SETTLING OUT DIFFERENCES IN COURT. BUT IT IS WHAT IT IS

THOMPSON: NOW THE IOWA ATTORNEY GENERAL STILL BELIEVES THAT MASSACHUSETTS COULD PARTICIPATE IN A GLOBALSETTLEMENT IF THAT HAPPENS. IF IT DOESN'T HAPPEN, HOW MUCH WOULD IT COST YOUR BANK IF YOU HAD TO SETTLE WITH EACH ONE OF THESE ATTORNEYS GENERAL?

MR. STUMPF: I REALLY DON'T KNOW. IT'S HARD TO ANTICIPATE WHAT THAT MIGHT LOOK LIKE. BUT, AGAIN, OUR FOCUS IS ONCOMING TO AN ARRANGEMENT, IF IT MAKES SENSE FOR BOTH PARTIES. AGAIN, I THINK THAT WOULD BE THE RIGHT THING FOR HOUSING AND THE COUNTRY.

THOMPSON: CAN YOU TELL US AT ALL ABOUT THE SETTLEMENT TALKS THAT ARE CURRENTLY OCCURRING? EVEN IF MASSACHUSETTS DOESN'T AGREE OR STEP IN WITH THE REST OF THE ATTORNEYS GENERAL, WHEN WE MIGHT ACCEPT A SETTLEMENT BETWEEN THE TWO SIDES?

MR. STUMPF:I CAN'T SAY.

THOMPSON: STILL A WAIT AND SEE. IT'S BEEN A LONG TIME.

MR. STUMPF: YES.

THOMPSON: TALK ABOUT THE HOUSING MARKET RIGHT NOW AND WHERE YOU SEE IT AS FAR AS GETTING BETTER, STAYING THE SAME IN 2012.

MR. STUMPF: I THINK THE BIG THING FOR HOUSING IS FINDING STABILITY. AND ONE OF THE OPPORTUNITIES, I THINK, WE HAVE -- FIRST OF ALL, THE REFINANCING PROGRAM, FOR THOSE UNDER WATER FOR A LOAN TO VALUE BUT HAVE MADE THEIR PAYMENTS IS A VERY GOOD THING.WE'RE WORKING OUT, RULES ARE COMING OUT. SECONDLY, IF WE COULD FIND A WAY TO TAKE FORECLOSED HOUSING AND HAVE THAT BECOME NOT PART OF THE SALES PROCESS BUT MAYBE A RENTAL POOL, I THINK THAT ALSO WOULD PROVIDE A GOOD STABILITY IN HOUSING. HOUSING STILL IS CHALLENGED. IT'S NOT GOING TO BE FIXED NEXT YEAR. IT'S STILL GOING TO TAKE SOME TIME. BUT I'M OPTIMISTIC IN THE LONG RUN IN HOUSING.

THOMPSON: HOW ABOUT THE MORTGAGEN BUSINESS? YOU'RE THE LARGEST MORTGAGE SERVICER IN THE COUNTRY. SOME OF YOUR BIGGER RIVALS, B OF A AND JPM SAYING MAYBE WE'LL WIND DOWN THAT BUSINESS OR THE ORIGINATION BUSINESS. IT'S NOT SOMETHING -- WELL, THEY'RE TAKING A SECOND LOOK AT IT GIVEN THE NEW REGULATIONS. IS THAT AN OPPORTUNITY FOR YOU?

MR. STUMPF: IT IS, BUT SELECTIVELY SO. WE LIKE THE MORTGAGE BUSINESS. WE LIKE SERVING CUSTOMERS. THE FINANCIAL TRANSACTION THE SIZE OF A HOUSE IS PROBABLY THE BIGGEST FINANCIAL TRANSACTION MOST CONSUMERS WILL EVER HAVE. IF IT'S IMPORTANT TO THEM, IT'S IMPORTANT TO US. THAT'S SOMETHING WE'RE GOING TO WANT TO FOCUS ON. WHAT THEIR EXITING IS A CORRESPONDENT BUSINESS. WE'RE BEING VERY THOUGHTFUL AND CAREFUL TO MAKE SURE WE DO THAT BUSINESS WITH THE RIGHT CORRESPONDENT PARTNERS.

THOMPSON: AND WHO WOULD THOSE BE WHEN YOU SAY THE RIGHT CORRESPONDENT PARTNERS?

MR. STUMPF: THOSE ARE PEOPLE WHO ORIGINATE FOR THEIR OWN AND BUY IT FROM THEM. WE WANT TO MAKE SURE WE DO BUSINESS WITH THE RIGHT PEOPLE DOING THE RIGHT KIND OF UNDERWRITING PUTTING PEOPLE IN THE RIGHT PRODUCTS AND SERVICES AND SO FORTH.

THOMPSON: THE OTHER ISSUE OF COURSE IN THE HEADLINES EFFECTING THE BANKS ARE THE PROBLEMS IN THE EURO ZONE. IN THE THIRD QUARTER WELLS HAD $14 BILLION IN GROSS EXPOSURE TO EURO ZONE COUNTRIES. HAVE YOU BROUGHT THAT EXPOSURE DOWN AT ALL SINCE THEN? AND WHAT ARE THE RISKS TO YOUR BANK IN THE EVENT THERE IS A DEEP RECESSION IN THE EURO ZONE OR A BREAKUP OF THE EURO ZONE?

MR. STUMPF: THE $14 BILLION IS FOR ALL EURO ZONE COUNTRIES. YOU REALLY NEED TO FOCUS ON THE TROUBLED ONES. THE SO-CALLED FIVE.

THOMPSON: THE GIPS OR THE PIGS DEPENDING HOW YOU WANT TO PUT IT.

MR. STUMPF: WE'LL CALL IT THE FIVE. AND OUR SOVEREIGN EXPOSURE IN OTHER WORDS THE RISK TO COUNTRY RISK IS NEXT TO NOTHING IT IS LESS THAN AROUND A YEAR. IN THE OTHER CREDIT WE HAVE OUT IS TRADE FINANCE. SOME OF IT'S SECURED BY U.S. TREASURIES. WE'RE COMFORTABLE WITH THAT. THE BIGGER RISK FOR US IS THE SECONDARY OR TERCIARY EXPOSURE WHAT HAPPENS TO THE U.S. ECONOMY AND CLEARLY WE PLAY AN ACTIVE ROLE IN THE U.S. ECONOMY WITH OUR BORROWERS. BUT IT'S NOT DIRECT EXPOSURE.

THOMPSON: YOU HAVE ACTUALLY TAKEN ADVANTAGE OF THE PROBLEMS THAT SOME OF THE EURO ZONE BANKS ARE HAVING. THEY'RE DELEVERAGING, SELLING SOME ASSETS, YOU'VE BOUGHT LOANS FROM AN IRISH BANK. YOU'RE SAID TO BE A BIDDER FORAN AVIATION BUSINESS FOR RBS. WHAT ARE THEY LOOKING FOR WHEN THEY SELL THESE ASSETS? WHAT DO YOU WANT TO BUY FROM THEM?

MR. STUMPF: WE WANT VALUE. WE WANT THINGS THAT MAKE SENSE FOR US. WE'RE NOT LOOKING TO TRADE THEIR PROBLEMS TO BECOME OUR PROBLEMS, BUT AS THEY LOOK TO SELL THEIR U.S. DENOMINATED ASSETS OR DOLLAR-DENOMINATED ASSETS TO OTHER BANKS, WE ARE CLEARLY A BUYER. BUT WE'RE VERY SELECTIVE. JUST THINK OF HOW WE WENT ABOUT THE PURCHASE ON WACHOVIA. IT HAS TO MAKE SENSE FINANCIALLY. WE'LL LOOK AT A LOT OF THINGS, KICK A LOT OF TIRES AND SEE HOW IT ALL TURNS OUT. WE'RE THRILLED WITH THE ASSETS WE'VE HAD SO FAR. IF WE GET NO MORE, THAT'S FINE. IF WE GET A SUBSTANTIAL AMOUNT, THAT'S ALSO FINE.

THOMPSON: I WANT TO STICK WITH THE EURO ZONE THEME IN LARGE PART BECAUSE S&P RECENTLY DOWNGRADED YOUR BANK AS WELL AS A NUMBER OF OTHER U.S. BANKS IN PART BECAUSE OF THE NEGATIVE OUTLOOK THAT THEY HAVE FOR THE U.S. AS A WHOLE.

MR. STUMPF: UH-HUH.

THOMPSON: THIS PUT YOUR RATING BELOW SOME OF THE BANKS IN EUROPE, WHICH U.S. BANKS WOULD ARGUE ARE NOT AS WELL CAPITALIZED. WHAT'S YOUR RESPONSE TO THAT RATING CUT AND DO YOU THINK S&P HAS IT WRONG?

MR. STUMPF: WELL, I WOULD LOOK AT THE RATINGS AS A, YOU KNOW, A BAROMETER AND ONE ORGANIZATION'S VIEW OF VALUE AND OF RISK. I KNOW THIS COMPANY AS WELL OR PROBABLY BETTER THAN THE RATING AGENCIES DO. I'VE SPENT MY WHOLE CAREER HERE. WE'VE NEVER HAD STRONGER CAPITAL, OUR LIQUIDITY HAS NEVER BEEN BETTER. I LIKE OUR--THE WAY WE ARE IN THE MARKET. SO, TO CALIBRATE IT AGAINST COMPANIES AND OTHER BUSINESSES IN EUROPE THAT I DON'T UNDERSTAND AS WELL, IT'S HARD FOR ME TO UNDERSTAND. BUT I DO KNOW THIS, ONE OF THE REAL BENEFITS IN THE US TODAY IS WE HAVE A STRONG BANKING COMMUNITY AND GROUP OF BANKS. THAT'S IMPORTANT FOR THE COUNTRY. IT'S IMPORTANT FOR OUR RECOVERY. LOOK IN EUROPE TODAY. THAT'S NOT THE CASE AND IT'S VERY DIFFICULT FOR THEM. SO AS WE GO UPON THIS RECOVERY AND PARTICIPATE IN IT, STRONG BANKS ARE A CRITICAL ELEMENT TO THAT.

THOMPSON: ONE QUESTION, HOW MUCH MORE IS THIS GOING TO COST YOU, THE RATING CUT? IS IT GOING TO COST YOU ANY MORE?

MR. STUMPF: OUR SPREAD'S--ALMOST NOT AT ALL. SO IT REALLY DOESN'T HAVE A BIG IMPACT THERE.

THOMPSON: I WANT TO GO BACK TO ONE OF THE ISSUES THAT WAS A FOCUS OF THE BANKS JUST THIS LAST FALL ON THE ISSUE OF THE DEBIT CARD FEE. WHAT DID YOU LEARN FROM BANK OF AMERICA'S DECISION TO GO OUT THERE WITH THAT FEE IMMEDIATELY?

MR. STUMPF: WELL, WE PLANNED EARLY ON TO DO SOME TESTS. WE'RE ALWAYS TESTING THINGS, MARY, AND THAT'S WHAT'S INTERESTING AND UNIQUE ABOUT US. WE DON'T EVER MAKE A BIG MOVE ONE WAY OR ANOTHER. WE WERE TESTING, AND WE LEARNED FROM OUR CUSTOMERS THEY DON'T WANT THAT. THEY WANT TO DO IT ANOTHER WAY. SO, AT THE END OF THE DAY, IT'S ABOUT VALUE, ABOUT CONVENIENCE, ABOUT HELPING CUSTOMERS SUCCEED FINANCIALLY. AND WE'LL DO IT IN A DIFFERENT WAY. THERE ARE OTHER WAYS TO ADD VALUE.

THOMPSON: ONE LAST QUESTION. I KNOW A NUMBER OF OUR VIEWERS WOULD BE CURIOUS ABOUT THIS. WHAT IS THE SITUATION AS FAR AS LOAN GROWTH? WELLS HAS ACTUALLY SEEN SOME LOAN GROWTH IN THE LAST COUPLE OF QUARTERS. WHAT DOES THE FOURTH QUARTER LOOK LIKE? WHAT DO YOU ANTICIPATE FOR 2012?

MR. STUMPF: WE HAD, ACTUALLY, $13 AND A HALF BILLION OF GROWTH IN OUR CORE PORTFOLIO IN THE THIRD QUARTER. IT'S THE MOST GROWTH WE'VE SEEN SINCE THE MERGER WITH WACHOVIA. WE DON'T GIVE GUIDANCE, BUT WE HAVE BOOTS ON THE STREETS, WE ARE HUNGRY TO MAKE LOANS, WE HAVE LOTS OF LIQUIDITY, AND ARE FINDING OPPORTUNITIES.

THOMPSON: OK. JOHN, I WANT TO THANK YOU FOR SPENDING TIME WITH US. TYLER, I'M GOING TO TOSS IT BACK TO YOU. BUT WE WANT OUR VIEWERS TO KNOW THAT WE WILL CONTINUE OUR CONVERSATION WITH JOHN STUMPF, CEO OF WELLS FARGO, AND THAT WILL BE AVAILABLE ON THE WEB LATER TODAY. BACK TO YOU.

TYLER MATHISEN, CO-ANCHOR: TERRIFIC. MARY, THANK YOU. AND MR. STUMPF, THANK YOU FOR JOINING MARY AND US TODAY ON POWER LUNCH.

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MARY THOMPSON, HOST: WE'RE SPEAKING WITH JOHN STUMPF WHO'S THE CEO OF WELLS FARGO. AND THE FIRST QUESTION I WANT TO ASK YOU IS THE FED'S LATEST STRESS TEST. THESE ARE PRETTY ONEROUS METRICS THAT THEY'RE USING FOR THE NEW STRESS TEST. DO YOU THINK THEY'RE--DO YOU THINK IT'S TOO MUCH, WHAT THEY'RE ASKING YOU TO MEASURE AGAINST AT THIS TIME WITH THE 8 PERCENT CONTRACTION IN THE--IN THE ECONOMY, AND I BELIEVE IT'S 13 PERCENT GDP? AND CAN YOUR BANK PASS THIS TEST?

MR. JOHN STUMPF: WELL, IT'S STRESSFUL IN ITS SUGGESTION. SO--AND IT'S, ACTUALLY, THE INPUT NUMBERS ARE NOT THAT DIFFERENT FROM WHAT WE ACTUALLY PUT IN OUR STRESS SCENARIO. SO, NO, I THINK IT'S A VERY NEGATIVE VIEW, AND IT SHOULD BE.

THOMPSON: YOU ALSO WILL BE SUBMITTING THE CAPITAL PLAN TO THE FED IN JANUARY. WHAT KIND OF A DIVIDEND INCREASE ARE YOU GOING TO ASK THEM FOR? AND HOW ABOUT STOCK BUYBACKS, CAN WE EXPECT THAT AS WELL?

MR. STUMPF: THEY'LL BOTH BE PART OF THE PLAN.

THOMPSON: CAN YOU GIVE US A SENSE OF...

MR. STUMPF: NO. ALTHOUGH I WOULD SAY THIS, WE WANT TO RETURN MORE CAPITAL TO OUR SHAREHOLDERS. OUR COMPANY'S NEVER HAD AS MUCH CAPITAL AS WE HAVE TODAY. THE LIQUIDITY HAS NEVER BEEN BETTER. AND OUR SHAREHOLDERS HAVE BEEN VERY PATIENT. SO GETTING CAPITAL BACK TO THEM IS HIGH ON MY LIST OF THINGS TO DO.

THOMPSON: ON THE REGULATORY FRONT, OF COURSE, DURBIN IS NOW IN FULL EFFECT.

MR. STUMPF: MM-HMM.

THOMPSON: IT'S SUPPOSED TO IMPACT, BY SOME ANALYSTS' ESTIMATES OR EARNINGS, BY ABOUT 5 CENTS A QUARTER, GIVEN THAT YOU DON'T HAVE THE REVENUE FROM THOSE FEES ANYMORE. WHAT WAYS ARE YOU LOOKING TO MAKE UP THOSE FEES?

MR. STUMPF: THE BIGGEST WAY WE MAKE UP IS THROUGH DEEPER RELATIONSHIPS WITH OUR CUSTOMERS. OUR CUSTOMERS BUYING MORE FROM US, WE GIVE THEM A BETTER DEAL AND WE GET A BETTER DEAL. SO THAT'S REALLY THE--THAT AND GROWING THE NUMBER OF RELATIONSHIPS THAT WE HAVE WILL HELP, YOU KNOW, MAKE THE FIXED INFRASTRUCTURE WORK BETTER. SO THAT'S ALL PART OF IT.

THOMPSON: ON THAT NOTE, YOU RECENTLY COMPLETED THE INTEGRATION OF YOUR WACHOVIA BRANCHES, AND ONE OF THE THINGS THAT WALL STREET IS LOOKING FOR YOU FOR--FROM YOU IS TO GET THE LEVEL OF PRODUCTS OR THE NUMBER OF PRODUCTS THAT YOU SELL TO A WACHOVIA CUSTOMER UP TO WHAT YOU SELL TO A WELLS CUSTOMER. WHAT LEVELS ARE YOU LOOKING FOR AND WHEN CAN YOU GET THERE, DO YOU THINK?

MR. STUMPF: THE DELTA RIGHT NOW IS ABOUT ONE PRODUCT. SO IF YOU LOOK AT LEGACY WEST, IT'S ABOUT ONE--6.2 PRODUCTS PER HOUSEHOLD; IN LEGACY EAST IT'S ABOUT 5.2. SOME AREAS THAT WE HAVE AN OPPORTUNITY, CREDIT CARD, FOR EXAMPLE, A THIRD OF LEGACY WELLS FARGO CUSTOMERS CARRY OUR CREDIT CARD ONLY ABOUT 12 OR 13 PERCENT ON THE EAST. WE HAVE OPPORTUNITIES IN WEALTH MANAGEMENT, OPPORTUNITIES IN MORTGAGE, SO THERE'S A VARIETY OF THINGS. BUT I AM FULLY CONFIDENT WE'LL BE ABLE TO GET THERE BECAUSE WHERE WACHOVIA STARTED FROM THREE YEARS AGO, THEY'VE ALREADY MADE GREAT PROGRESS.

THOMPSON: OK. WE WANT TO THANK YOU. WE'VE BEEN SPEAKING WITH JOHN STUMPF, WHO IS THE CEO OF WELLS FARGO.

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MARY THOMPSON, HOST: WELCOME. WE'RE SPEAKING TODAY WITH JOHN STUMPF, WHO IS THE CEO OF WELLS FARGO. YOU KNOW, I WANT TO PICK UP ON SOMETHING THAT YOU WERE TALKING ABOUT EARLIER, AND YOU WERE SAYING THAT ONE WAY TO FIX THE HOUSING MARKET IS TO TAKE A NUMBER OF THESE FORECLOSED PROPERTIES AND ACTUALLY RENT THEM OUT. HOW WOULD YOU SEE THIS HAPPENING?

MR. STUMPF: WELL, IT'S, FRANKLY, VERY SIMPLE. WHAT YOU DO IS, WHEN A HOUSE GOES INTO FORECLOSURE, IT GETS--IT'S OWNED, AND MOST OF THESE ARE OWNED BY FREDDIE AND FANNIE. IF WE COULD FIGURE OUT A WAY TO THEN RENT THEM, THE OWNER RENT THEM, FANNIE AND FREDDIE OR OTHER HOLDERS OF THESE MORTGAGES WHO OWN THESE, PUT THEM IN A RENTAL POOL, THE BENEFIT IS PEOPLE NEED TO LIVE SOMEPLACE ANYHOW, AND IF YOU COULD RENT TO OWN OR RENT IT AND KEEP IT OFF THE MARKET, THEY'VE HAD A VERY NEGATIVE IMPACT ON THE HOUSING VALUES OF EXISTING HOMES. IF YOU HAVE TWO HOMES IN THE SAME NEIGHBORHOOD, THEY LOOK THE SAME, ONE IS FORECLOSED AND ONE IS NOT, IT BRINGS DOWN THE VALUE OF ALL HOMES. WE'VE GOT TO FIND A BOTTOM IN HOUSING. I THINK THIS WOULD BE A GOOD WAY TO DO THAT.

THOMPSON: HAVE YOU MADE THIS PROPOSAL? HAS ANYONE BEEN RECEPTIVE TO IT?

MR. STUMPF: IN FACT, IT'S BEEN TALKED ABOUT. I WAS--I'VE TALKED TO PEOPLE, LEGISLATORS. I'VE TALKED TO MEMBERS IN THE WHITE HOUSE, I'VE TALKED TO OTHERS, AND IT'S BEING DISCUSSED. AGAIN, NOT EASY TO DO, BUT I THINK IT WOULD BE VERY EFFECTIVE.

THOMPSON: WHAT--I MEAN, WHAT'S THE RECEPTION? IT'S BEING DISCUSSED. WE'VE HEARD A LOT OF SOLUTIONS OUT THERE, A LOT OF SOLUTIONS DISCUSSED, BUT DO YOU THINK THIS ONE HAS TRACTION? AND IF SO, WHY?

MR. STUMPF: WELL, I THINK IT MAKES A LOT OF SENSE. I THINK IT DOES HAVE TRACTION. BUT, AGAIN, YOU HAVE TO GET THE OWNERS WILLING TO PARTICIPATE IN THE PROGRAM. AND THERE HAS TO BE A PROGRAM. BUT I THINK IT HAS--IT BENEFITS EVERYONE. IT BENEFITS THOSE WHO NEED A PLACE TO LIVE, IT ULTIMATELY BENEFITS PEOPLE WHO OWN THE HOMES, WHO HAVE FORECLOSED THEM BECAUSE THEY'LL GO UP IN VALUE OVER TIME. AND, MOST IMPORTANTLY, IT'LL KEEP THE INVENTORY OF FORECLOSED HOMES, WHICH IS ABOUT A THIRD OF ALL SALES--THERE'S ABOUT 4 MILLION SALES A YEAR AND ABOUT 30 PERCENT ARE FORECLOSED. SO THEY HAVE A BIG NEGATIVE IMPACT ON HOUSING VALUES.

THOMPSON: THANK YOU.

MR. STUMPF: YOU'RE WELCOME.

THOMPSON: WE'VE BEEN SPEAKING WITH JOHN STUMPF, CEO OF WELLS FARGO.

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MARY THOMPSON, HOST: WELCOME. WE'RE SPEAKING TODAY WITH JOHN STUMPF, WHO IS THE CEO OF WELLS FARGO. YOU KNOW, I WANT TO TALK A LITTLE BIT ABOUT THE FUTURE OF YOUR BUSINESS BECAUSE RIGHT NOW IT'S VERY--IT DOESN'T HAVE A BIG CAPITAL MARKETS POSITION. YOU HAVE A LARGE RETAIL BROKERAGE ARM...

MR. JOHN STUMPF: CORRECT.

THOMPSON: ...WE KNOW THAT. YOU'VE TALKED ABOUT EXPANDING YOUR INVESTMENT BANK AT A TIME WHEN THE MARKETS ARE VERY VOLATILE. DO YOU PLAN TO CONTINUE WITH THAT? OR HAVE YOU THOUGHT ABOUT DIALING IT BACK?

MR. STUMPF: OH, WE THINK OF INVESTMENT BANKING PROBABLY DIFFERENT FROM A LOT OF OUR CUSTOMER--OR A LOT OF OUR COMPETITORS. WE THINK OF IT AS A PRODUCT, SOMETHING THAT WE CAN ADD TO THE SUITE OF COMMERCIAL PRODUCTS THAT WE HAVE TO HELP CUSTOMERS. SO IF WE'RE ISSUING SOMEONE'S--OR MAKING THEM A LOAN ANYHOW, TO ISSUE THEIR DEBT IS A VERY NATURAL EXTENSION. SO WE'RE NOT LOOKING TO COMPETE WITH A BIG INVESTMENT BANK IN NEW YORK, THAT WE HAVE TO BE NUMBER ONE IN THE LEAGUE TABLES. I COULD CARE LESS ABOUT THE LEAGUE TABLES. WHAT I CARE ABOUT IS HOW DO WE SERVE CUSTOMERS, MIDDLE MARKET CUSTOMERS, LARGE CORPORATE CUSTOMERS COMPLETELY. SOMETIMES WE GET PAID FOR MAKING A LOAN THROUGH TREASURY MANAGEMENT, SOMETIMES WE GET PAID FOR IT BY DOING A CORPORATE OR YOU KNOW, A CORPORATE MARKETS KIND OF THING. AND I DON'T CARE. BUT, SO THAT'S REALLY IN THE INTEREST OF US, NOT ABOUT WE HAVE TO BE BIG IN THE BUSINESS.

THOMPSON: I WANT TO ASK YOU ABOUT A COUPLE OF REPORTS THAT HAVE SUGGESTED YOU'RE GETTING INTO A BUSINESS THAT YOU HAVE NOT BEEN IN BEFORE, AND THAT'S PRIVATE LABEL CREDIT CARDS. YOU SIT ON THE BOARD OF TARGET. TARGET HAS A RATHER LARGE CREDIT CARD PORTFOLIO THAT THEY'VE LOOKED AT, THAT IT'S BEEN TALKED ABOUT THAT IT COULD POSSIBLY SELL. WOULD THIS BE SOMETHING YOU'D BE INTERESTED IN?

MR. STUMPF: WELL, AGAIN, I DON'T COMMENT ON ANY OF THOSE THINGS. BUT, AGAIN, IT STARTS WITH CUSTOMERS. IF WE CAN HELP CUSTOMERS SUCCEED FINANCIALLY AND IT MAKES SENSE, THAT IS THE THING WE LIKE TO DO. BUT I WOULD SAY FOR THE MOST PART, WE HAVE THE PRODUCTS AND SERVICES AND THE BUSINESSES THAT WE LIKE. WE DON'T NEED A LOT OF EXTRA THINGS, WE JUST NEED TO DO MORE THINGS WITH OUR CUSTOMERS.

THOMPSON: BUT ARE YOU LOOKING AT PRIVATE--LET'S FORGET ABOUT TARGET.

MR. STUMPF: YEAH.

THOMPSON: BUT ARE YOU LOOKING AT PRIVATE LABEL CREDIT CARDS AS A WAY--AS A BUSINESS THAT WOULD BE A HIGHER YIELDING BUSINESS IN THIS VERY LOW-RATE ENVIRONMENT THAT YOU'RE OPERATING IN RIGHT NOW?

MR. STUMPF: I WOULDN'T--I WOULDN'T EXCLUDE ANY BUSINESS, BUT I CAN'T SAY THAT'S THE FIRST ONE ON MY LIST.

THOMPSON: OK. PROJECT COMPASS, YOUR EXPENSE REDUCTION PROGRAM IS WELL UNDER WAY. YOU'RE LOOKING TO CUT ABOUT 1.4 BILLION IN COSTS. WHERE DO YOU STAND RIGHT NOW WITH THIS PROGRAM?

MR. STUMPF: WELL, AT THE END OF THE THIRD QUARTER, WE WERE, YOU KNOW, 1.7 OR 1.6 BILLION ON OUR WAY TO SOMEWHERE BETWEEN 10.8 AND 11.2 BY THE FOURTH QUARTER OF 2012. WE'RE WELL ON OUR WAY. IT'LL BE LUMPY BETWEEN HOW WE GET FROM WHERE WE ARE TODAY TO GET THERE. THERE'LL BE SOME QUARTERS UP AND OTHER QUARTERS DOWN, BUT I'M CONFIDENT WE'LL GET THERE. AND THIS IS NOT ABOUT SAVING MONEY PER SE. THIS IS ABOUT MAKING SURE WE SPEND MONEY ON THE THINGS OUR CUSTOMERS WANT US TO SPEND MONEY ON SO WE CAN GIVE THEM A BETTER DEAL, WE CAN COMPETE MORE AGGRESSIVELY FOR REVENUE.

THOMPSON: OK. THANK YOU VERY MUCH.

MR. STUMPF: THANK YOU.

THOMPSON: WE'VE BEEN SPEAKING WITH JOHN STUMPF, WHO'S THE CEO OF WELLS FARGO.

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MARY THOMPSON, HOST: WELCOME. WE'RE SPEAKING WITH JOHN STUMPF, WHO IS THE CEO OF WELLS FARGO. YOU KNOW, I WANT TO ASK YOU ABOUT WHAT'S HAPPENING IN WASHINGTON. LEON COOPERMAN, WHO'S A WELL-KNOWN HEDGE FUND MANAGER, RECENTLY WROTE A LETTER TO PRESIDENT OBAMA SAYING HE'S CONTRIBUTING TO THIS VERY DIVISIVE ATTITUDE THAT BASICALLY IS LEADING TO NOTHING GETTING DONE IN THE COUNTRY, AS FAR AS THE ECONOMY GOES, AT A TIME WHEN WE REALLY NEED LEADERSHIP. WHEN YOU HEAR SOMETHING LIKE THAT, WHAT DO YOU THINK? DO YOU AGREE WITH HIM?

MR. JOHN STUMPF: WELL, I HAVEN'T READ HIS PIECE, BUT I DO KNOW THIS, WE NEED TO WORK TOGETHER. THIS COUNTRY'S ALWAYS DONE BETTER WHEN WE'RE TOGETHER—THE RIGHT AND THE LEFT, LABOR AND MANAGEMENT, PUBLIC SECTOR, PRIVATE SECTOR—AND WE NEED TO COME TOGETHER, AND WE CAN'T COME TOGETHER UNLESS WE HAVE STRONG LEADERSHIP AND A WILL TO DO THE WORK OF THE AMERICAN PEOPLE. SO I'M ALL IN FAVOR OF TOGETHERNESS.

THOMPSON: IT DOESN'T SEEM TO BE HAPPENING, THOUGH, IN ANY WAY, SHAPE, OR FORM. I MEAN, LOOK AT THE SUPERCOMMITTEE.

MR. STUMPF: MM-HMM.

THOMPSON: YOU KNOW, THEY WERE GIVEN A TASK, THEY WERE UNABLE TO COMPLETE THAT TASK. WHEN YOU SEE THAT, WHAT, YOU KNOW, WHEN YOUR CUSTOMERS SEE THAT, HOW DOES THAT IMPACT THEIR BUSINESSES AND THEIR DECISIONS?

MR. STUMPF: THAT'S A GREAT QUESTION. IT HAS A DIRECT IMPACT. I RECALL THINGS GOING QUITE WELL. WE WERE RECOVERING A LITTLE FASTER IN THE SPRING, AND THEN CAME THE FIRST REAL GRIDLOCK ABOUT THE DEBT CEILING. IT HAD A NEGATIVE IMPACT ON CUSTOMERS. CUSTOMERS HAD LESS CONFIDENCE IN THEIR COUNTRY, LESS CONFIDENCE IN THEIR GOVERNMENT. THAT DOES HAVE A REAL IMPACT.

THOMPSON: IF YOU WERE GOING TO MEET WITH PRESIDENT OBAMA TOMORROW, AND HE SAID `I NEED TO HEAR FROM YOU THREE THINGS THAT I SHOULD DO IN THE NEXT THREE MONTHS TO IMPROVE THE ECONOMY,' DO YOU HAVE THREE SUGGESTIONS FOR HIM?

MR. STUMPF: I DON'T KNOW THAT I HAVE THREE OFF THE TOP OF MY HEAD, BUT CLEARLY LEADERSHIP, ENGAGEMENT, INVOLVEMENT ARE ALL CRITICAL ELEMENTS OF BRINGING THIS THING TOGETHER. WE SIMPLY HAVE GOT TO COME TOGETHER. WE HAVE FACED TOUGHER THINGS THAN THIS IN OUR PAST. NOW, THIS MIGHT BE THE TOUGHEST OF THIS GENERATION, BUT WE CAN GET THROUGH THIS. THIS CAN BE AMERICA'S NEXT GREATEST GENERATION.

THOMPSON: TALK ABOUT BEING A BANKER IN AN ENVIRONMENT WHERE BANKS CONTINUE TO BE PAINTED WITH A VERY NEGATIVE BRUSH STROKE.

MR. STUMPF: MM-HMM.

THOMPSON: YOU KNOW, YOU WILL GO OUT AND SAY THAT YOUR BANK IS VERY STRONG, IT HAS ADEQUATE CAPITAL, IT'S HELPING CUSTOMERS, ETC., AND YET, THERE'S STILL PEOPLE WHO SAY, `YOU KNOW WHAT, YOU'RE STILL THE EVIL EMPIRE.'

MR. STUMPF: I DON'T THINK WE WIN OR WE CONVINCE PEOPLE BY MARKETING CAMPAIGNS. I THINK IT'S ONE CUSTOMER AT A TIME, ONE INITIATIVE, BEING INVOLVED IN THE COMMUNITY LIKE WE ARE, GRASS ROOTS, HELPING PEOPLE STAY IN THEIR HOMES--716,000 FAMILIES ARE IN THEIR HOMES TODAY. WE'VE FORGIVEN 4 BILLION OF OUR PRINCIPAL TO HELP THEM. I THINK IT'S THOSE KINDS OF THINGS, INVOLVING ALL STAKEHOLDERS. AND IT'LL TAKE SOME TIME. AND PEOPLE WANT SUCCESSFUL BUSINESSES. I REALLY BELIEVE THEY DO, BUT THEY ALSO WANT SHARED OPPORTUNITY.

THOMPSON: OK. THANK YOU AGAIN.

MR. STUMPF: THANK YOU.

THOMPSON: WE'VE BEEN SPEAKING WITH JOHN STUMPF WHO IS THE CEO OF WELLS FARGO.

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