Scan­dal

Daily Local News (West Chester, PA) - - MARKETPLACE - Ken Sweet cov­ers banks and con­sumer fi­nan­cial is­sues for The As­so­ci­ated Press. Fol­low him on Twit­ter at @kensweet.

bil­lion, down from $5.8 bil­lion a year ear­lier. That is not a good mea­sure of the ef­fects of the scan­dal, which didn’t break un­til the quar­ter was nearly over.

But at Wells’ 6,000 U.S. branches, there are signs that cus­tomers are back­ing away, even though the

bank says it clamped down on the abuses over a year ago.

Wells re­ported a drop in what it calls banker and teller “in­ter­ac­tions” in Septem­ber from both a year ago and from Au­gust. Also, con­sumer check­ing ac­count open­ings dropped 25 per­cent in Septem­ber from a year ear­lier and 30 per­cent from Au­gust. Con­sumer ap­pli­ca­tions for Wells credit cards also fell

sharply in Septem­ber.

In ad­di­tion, re­fer­rals for mort­gages from Wells’ re­tail branches were down 24 per­cent from Au­gust. Wells is the na­tion’s big­gest mort­gage lender.

What all of this could mean for Wells’ bal­ance sheet is dif­fi­cult to quan­tify. Not ev­ery credit card ap­pli­ca­tion will re­sult in an opened credit card ac­count. Not ev­ery ac­count opened will get used, carry

a bal­ance, and get charged in­ter­est.

“We are be­gin­ning to try to cal­cu­late whether there will be a trend at all,” Wells Fargo CFO John Shrews­berry said in an in­ter­view. “The in­come im­pli­ca­tions for us, if at all, are down the road.”

To help re­cover from the scan­dal, Wells has an­nounced a se­ries of changes in how it deals with cus­tomers. Ev­ery cus­tomer

will get an email af­ter an ac­count is opened to con­firm the per­son opened it, and elec­tronic sig­na­tures will be re­quired on all new check­ing, sav­ings and credit card ac­count ap­pli­ca­tions.

The bank is also elim­i­nat­ing sales goals for its em­ploy­ees and an­nounced a new “mys­tery shop­per” pro­gram in which peo­ple will go un­der­cover as cus­tomers to make sure em­ploy­ees

are do­ing their jobs right.

Wells is also tak­ing steps to en­sure that em­ploy­ees who call the bank’s ethics hot­line to re­port abuses are not re­tal­i­ated against, some­thing that is said to have hap­pened in the past.

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