The em­bar­rass­ment that is Wells Fargo

The Charlotte Observer (Sunday) - - Opinion - BY THE OB­SERVER ED­I­TO­RIAL BOARD

Ed­i­to­rial boards pre­fer to be pre­scrip­tive with the opin­ions we of­fer. A good gripe might be sat­is­fy­ing, but it’s more pro­duc­tive when that comes with sug­ges­tions on how things might get bet­ter.

Some­times, though, you just need to say when some­thing is aw­ful.

In Char­lotte, a city that has long touted it­self as a bank­ing cen­ter, Wells Fargo has be­come an em­bar­rass­ment.

It’s em­bar­rass­ing to the many em­ploy­ees who do good and hon­est work there. It’s em­bar­rass­ing to the cities, in­clud­ing ours, in which it has a sig­nif­i­cant cor­po­rate pres­ence. It has be­come, sim­ply, a stain on the bank­ing sec­tor.

The most re­cent bad head­line? This week, Wells Fargo agreed to pay $5 mil­lion to California and re­lin­quish its in­surance li­cense to set­tle al­le­ga­tions that it opened in­surance poli­cies for cus­tomers and charged them with­out their con­sent. A week be­fore, the com­pany agreed to pay $575 mil­lion to re­solve in­ves­ti­ga­tions by all 50 states into a range of ac­tiv­i­ties, in­clud­ing im­proper auto loan and mort­gage charges.

The news is the lat­est in a spec­tac­u­lar drum­beat of bank­ing malfea­sance. This in­cludes big items, such as open­ing mil­lions of unau­tho­rized bank ac­counts in cus­tomers’ names. It in­cludes small items, such as nickel-and-dim­ing col­lege stu­dents with un­usu­ally high bank­ing fees. Add it all up and you have a por­trait of a cor­po­rate grifter, a com­pany per­pet­u­ally on the look­out for new ways, le­gal or not, to empty the pock­ets of peo­ple who trusted it with their money. An em­bar­rass­ment.

We don’t say this lightly. Char­lotte is home to Wells Fargo’s East Coast head­quar­ters, and its em­ploy­ees are your neigh­bors, mem­bers of your con­gre­ga­tions, peo­ple who give their time and money to make our com­mu­nity bet­ter. Many are peo­ple who were proud to work for Wa­chovia, a bank Char­lotte was proud to call its own be­fore it was sold to Wells Fargo at the peak of the 2008 bank­ing cri­sis.

And now? The bank has been sanc­tioned re­peat­edly by fed­eral and state reg­u­la­tors (want a few days of read­ing ma­te­rial? Do an in­ter­net search for “Wells Fargo fined” and take a tour of trans­gres­sions). Each time, the com­pany and CEO Tim Sloan nod at the penalty and say all the right words about “trans­for­ma­tion” and want­ing to “make things right.” Each time, some­thing new comes along to make us shake our heads again.

To be sure, it’s not un­usual for wrong­do­ers to ad­mit and apol­o­gize only for the wrong­do­ing that oth­ers have made pub­lic. What’s un­usual is that there’s so much of it, seep­ing from ev­ery cor­ner of the com­pany, at Wells Fargo.

So what’s the pre­scrip­tion? It isn’t a com­mer­cial declar­ing that ev­ery­thing has changed. It surely isn’t rolling back bank­ing reg­u­la­tions and weak­en­ing the Con­sumer Fi­nan­cial Pro­tec­tion Bureau, as the Trump ad­min­is­tra­tion has done. Real change has to come from the in­side, from a board that needs to take a hard look at whether much has re­ally changed since Sloan took over in 2016, or whether his 30-plus years at the com­pany might in fact sig­nal that he’s not the per­son to change its cul­ture.

Un­til then, we wait for the next em­bar­rass­ment.


The new year brought a new bad head­line for Wells Fargo, same as 2018 and be­fore.

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