The embarrassment that is Wells Fargo
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.