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.