Wells Fargo's Scandals Finally Hurt Its Bottom Line (cnn.com) 113
An anonymous reader quotes CNN:
Wells Fargo said operating losses surged 77% last quarter because of various problems in its auto lending, wealth management, mortgage and currency businesses. Overall expenses rose by 3%. Meanwhile, Wells Fargo said profit declined by 12% during the second quarter, missing Wall Street's expectations. The bank's stock, which has lagged behind the rest of the market, dropped 3% on Friday... Wells Fargo was also hurt by a $481 million income tax bill linked to a recent Supreme Court ruling that allows states to force online retailers to collect sales taxes...
Even though the economy is strong, several crucial metrics at Wells Fargo are shrinking. For instance, average deposits dropped by 2% to $1.3 trillion, led by a drop-off in business from financial institutions. Wells Fargo blamed the decline on actions it had to take due to penalties imposed by the Federal Reserve that prohibit the bank from growing its balance sheet. Lending, the primary way that banks make money, also dipped by 1% from the first quarter at Wells Fargo. It cited declines for commercial real estate and consumer loans, including auto lending. Mortgage banking profits also declined sharply.
If average deposits dropped by 2% to $1.3 trillion -- that looks like a drop of over $26 billion.
CNN reports that an analyst at CFRA Research has downgraded his rating on Wells Fargo -- to "sell."
Even though the economy is strong, several crucial metrics at Wells Fargo are shrinking. For instance, average deposits dropped by 2% to $1.3 trillion, led by a drop-off in business from financial institutions. Wells Fargo blamed the decline on actions it had to take due to penalties imposed by the Federal Reserve that prohibit the bank from growing its balance sheet. Lending, the primary way that banks make money, also dipped by 1% from the first quarter at Wells Fargo. It cited declines for commercial real estate and consumer loans, including auto lending. Mortgage banking profits also declined sharply.
If average deposits dropped by 2% to $1.3 trillion -- that looks like a drop of over $26 billion.
CNN reports that an analyst at CFRA Research has downgraded his rating on Wells Fargo -- to "sell."
It's all about that business model (Score:5, Insightful)
If your business model is to screw the customer, then don't be surprised when your customers find different banks.
Re: It's all about that business model (Score:1)
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BoA probably doesn't own your mortgage. More likely the government does. BoA is just processing the payments.
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Even after they've had accounts for decades! I opened my first account with them (well, a bank they bought-out) 47 years ago, but even I'm considering moving to a new bank. In the their branch a block from my office, they treat me like a king since I have a portfolio-level account (their highest level, used to be called Premier). They've even sent someone twice to my home on a Saturday to help with an issue. I get tons of free stuff including a large safe deposit box for work that they don't charge me f
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> all banks but USAA.
They're great at reimbursing ATM fees, but their insurance is just garbage. I ran a redlight accidentally since there was only one light above the road here in Seattle and typically you look for a pair of red lights. I hit a scooter and sent the rider to Harborview Medical Center. USAA refused to pay the rider of the scooter so she filed six small claims court claims against me. IIRC each claim has to be for $5,000 or less which is why she divided it up. USAA didn't help me in
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They treat you like a king.
Unless you have a claim. I hit someone that was completely my fault, and they refused to pay them. USAA kept lying to them for three years that they would pay, but here in Seattle if an insurance company stalls for three years, they don't have to pay a single penny. The guy I hit had a 1986 Camry and about $8k of medical bills. I paid for a newer Camry out of my pocket and $2k that he negotiated his bill down to. USAA didn't pay anything. What in the hell is the point of having insurance if they won't
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I too have the highest level account with Wells Fargo. It's nice that I can walk into any branch and get the manager to immediately talk to me even if they're with another customer. But they just don't seem to get that I would rather not have to go into their branch to fix problems in the first place. I manage my own checking account, my work checking account, and checking accounts for six charities. Almost every month there's a problem. I don't think their problems are malicious since around a third o
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. I don't think their problems are malicious since around a third of the time it's not in their favor.
Which means two-thirds of the time it is in their favor.
A casino would love odds like that.
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I opened my first account with them (well, a bank they bought-out) 47 years ago, but even I'm considering moving to a new bank.
Why do you say it like this -- as if you owe a corporation some kind of loyalty? This quirk of psychology ("I've been with X for so long, I need to stick with them") is something that companies know about and take advantage of.
You don't owe Wells Fargo anything at all. Trust me, they certainly won't do anything special for you. As they've proven repeatedly over the last couple of years, you're just an account number and someone to take advantage of. I would strongly suggest looking for a local credit un
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Well apparently the individual does, owes them comments and they Wells Fargo owes them money. How much do they have deposited with Wells Fargo, probably nothing, why would any smart business trust Wells Fargo after what they did. Public relations agencies are pretty smart, well, rampant liars and not worth much beyond being skilled manipulative liars.
Lesson of the story if the comment sounds like an ad then it probably is one.
Wells Fargo as corrupt as fuck and well, they only reason none of them was sent
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I don't know who CFRA Research are, but if a bank does this, the rating ought to be shoot to kill.
This is clear proof they are unfit to be a bank.
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True. I really cannot understand the GP commenter - "well, they committed a bunch of fraud on my account, but I've been with them for so *long*".
WTF? I tolerate 0 fraud... from my BANK... EVER. I have not banked with a bank that has made a mistake. Banking must be *perfect* or I am going to leave. Intentional and deliberate fraud? Are you kidding me? I'm suing for all of my time and may well brick the nearest window after hours.
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I switched my personal banking to a credit union and my employers been shifting business to a local state bank. I wish I'd moved much sooner. I'd have saved so much troub
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Chase will give you the same perks. I don’t use them for investment or insurance, but we have a line of credit for the company with them and they do right by us.
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I normally don't rejoice when someone's business is failing, but--fuck that--this is Wells Fargo and I'm ready to join the conga line.
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If your business model is to screw the customer, then don't be surprised when your customers find different banks.
Well then you are talking about all big banks!
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Jews don't charge usury, as the Torah forbids it. Neither do Muslims. WF is not even Jewish. Typcial anti-Semitic behaviour.
Re: It's all about that business model (Score:1)
Forbids it against other Jews. It's fine to charge interest to Gentiles. How do you think Jews came to become prominent in Medieval European banking?
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Because they made sure their kids studied math rather than going out for football?
Re: It's all about that business model (Score:2)
Don't think there was Medieval football, and I'm positive if there were, it would not have had an affect on the ethnic makeup of Medieval European banking.
Medieval Europeans were largely Catholic, and so could not engage in usury. Jews - who could engage in usury with gentiles - were able to set up Western style banking due to this loophole.
European Christians apparently weren't smart enough to come up Islamic-style banking (today ofter referred to as Sharia banking). In Islamic banking, they work around th
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Forbids it against other Jews. It's fine to charge interest to Gentiles.
The reason for that had nothing to do with greed or hatred of non-Jews. There's an unwritten assumption about society in Israel at the time - if you were loaning money to a Jew (i.e. a fellow citizen of your town or region), it was because they needed it to survive; if you were loaning money to a non-Jew (i.e. a foreign merchant), it was as a business investment.
Re: It's all about that business model (Score:2)
Usury is an unfair or punitively high rate of interest. Interest is just the time value of money. Pretending it doesn't exist or forbidding it fir nysterious reasons is willful ignorance.
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Re:It's all about that business model (Score:5, Informative)
Finally... (Score:2, Insightful)
Some GOOD news for once. I wonâ(TM)t start actually celebrating until they start closing locations or their leadership start getting thrown in jail. THEN it will be time to throw a party.
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Re:Finally... (Score:4, Insightful)
They had 3 options:
1. Close their retail business and pivot to working only with high-value clients, drastically reducing their public image.
2. Do everything they can to ensure that every single employee that opened an account fraudulently, and their managers, are prosecuted to the fullest extent. At minimum every single one of them should have received lifetime bans from the financial industry. Instead of just firing some executives, they should have acted as if Wells Fargo was a victim of these criminals, and done whatever they could prosecute and recover damages from the criminals (including turning evidence over to AGs). It's worth noting that WF also filed fraudulent U5 documents against former employees who objected or refused to participate in the fraud. The people who wrote and signed off on those documents should have likewise been terminated for cause, and the "new" WF should have helped those affected file defamation suits.
3. Clean out the executives, send everyone to "training", and wait for people to forget that they're basically still a criminal organization.
If WF is/was really 95% good with 5% of the employees being bad apples, they would have gone with option 2. Going with option 3 means that, as a corporation, they don't see that what they did was wrong.
Personally, I'm still hoping that Wells Fargo gets caught violating their deferred prosecution agreement (I guarantee you they're already violating it), and ends up getting dismantled by the courts.
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I wonâ(TM)t start actually celebrating until they start closing locations or their leadership start getting thrown in jail.
Closing locations would just inconvenience certain customers and suck for lower paid unimportant/uncared about employees. The only one you should truly get excited over should be the higher ups.
Personally, I'm ignoring their want ads (Score:5, Insightful)
For months Wells Fargo has been trying to hire security professionals in my area. No thanks, I'm not interested in working in that environment. I certainly wouldn't be a customer either.
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For months Wells Fargo has been trying to hire security professionals in my area. No thanks, I'm not interested in working in that environment. I certainly wouldn't be a customer either.
Smart move - I suspect they would demand you commit criminal acts. Or at least blame you for them when one of the suits gets caught. Again.
I can't steal a pencil (Score:5, Insightful)
I don't know if they would expect me to be complicit in criminal acts, but it's clear their corporate culture doesn't have ethics as a top priority.
I'm kind of in an interesting situation. We provide security services to banks and other large businesses. When you see in the news that someone stole $x million from banks, or read about credit card skimmers or whatever, it's my *job* to know how the bad guys do that. In effect, it's my job to know how to steal millions.
One thing I've learned is that crooks don't normally get caught the first time. Or the second or third time. They keep doing it until they eventually get caught. So I've learned that to avoid getting caught, a criminal should do one big theft, once - at most two or three the same day, then stop. Don't keep stealing $12,000 at a time until you get caught. Someone or two big ones and retire.
So here I know *how* to commit crime electronically. I know better than to commit small crimes. So why haven't I stolen $10 million and retired? Only because I'm not a thief. For that reason, I have to make sure I never become a thief. Once, I accidentally took a 25 cent clove of garlic home from the grocery store without paying for it. I had to drive back to the store and pay the 25 cents, because I have to know I'm not a thief, I stick strictly to my moral principles (the best I can). If not, I'm all too likely to try stealing $10 million.
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But then you need to do CxO work, which doesn't leave much time for Slashdot.
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Sorry, but that's wrong. They probably work a bit harder than the average programmer, though a lot less than a guy on an assembly line.
The thing is, a lot of their work is "social engineering". And setting up the mark, etc.
Memorizing is fine. When they internalize it (Score:3)
> the CEO ultimately resigned.
That's all well and good, but the CEO sets a certain culture for the company. That culture effects everyone, especially management. If ALL the managers who ever talked to the CEO were replaced, you might be able to change the culture fairly quickly.
> round after round of additional ethics training to the point we can all quote it by heart.
Again that's probably not a bad thing. In some companies, the reaction to ethics training is "yada yada yada yeah whatever". In other
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For months Wells Fargo has been trying to hire security professionals in my area. No thanks, I'm not interested in working in that environment. I certainly wouldn't be a customer either.
Yeah, Nazis were just following orders for a paycheck, right? Same story there. My former local Wells Fargo branch (I just moved) often has a line of customers just standing around waiting to bank because they don't hire enough tellers. So what did they do to remedy the situation? They hired a PR flack in a suit to stand around and bullshit people. So I made it my hobby to shut him the fuck up. He'd ask "how are you doing" and I'd say "I'd be doing a lot better if I didn't have to do business with you crimi
Wacovia was bankrupt and hours from receivership (Score:2)
> Wacovia basically took over Wells Fargo.
Not quite. Wacovia didn't have enough cash or borrowing ability to be able to allow customer withdrawals. The FDIC decided on a Saturday that they would seize Wacovia, taking the assets into receivership, if they didn't have a buyer by 8AM Monday morning. So Wacovia was essentially dead before Wells got involved.
In the second quarter of 2008, Wacovia reported a $8.9 billion loss. Shortly after, the day after WAMU, there was a run on Wacovia, with customers withdr
I don't think the scandals hurt them (Score:5, Insightful)
Re:I don't think the scandals hurt them (Score:4, Interesting)
The funny thing is that their "Reestablished 2018" AKA the "Please don't leave, we're not going to open dummy accounts in your name anymore! Promise!" campaign probably did more to remind users of their past issues than it did to improve customer relations.
On the other hand, offering me $200 to open a new credit account works wonders. If they want to win back my business, they need more promotions like that one.
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That's why we need laws to force companies to be good.
"Good" as defined by the state? Seems like we should do the least of that we can to keep a functioning society. Otherwise, to pick a random example, we'd have the president insisting news companies only report "real news" and forcing companies to stop reporting "fake news".
How about his instead: we need laws to prevent fraud and enforce contracts. Gets the job done, doesn't get into whether the state believes abortions are "good" or need to be banned this year.
Just like VW.. (Score:5, Insightful)
you're going to have to convince me that this kind of behavior isn't widespread.
Instead of punishing a bank here and there, we should have sent executives to prison for the highway-robbery committed for the subprime scandals and general knavery of '03-'08.
Otherwise they'll just keep doing it and chalk any losses up as a cost of doing business. How much did they make over the years - was it more than they're suffering now? If so I'd say the bean-counters would call it a win and do it again.
WF's only problem is they got caught (like VW). The rest are busy increasing their bribes to the regulators.
skip banks; go credit unions (Score:4, Informative)
With credit unions, they invest into local businesses.
And CUs are not only not raping people over profits, but are fully separate from FDIC, so they can NOT afford to lose money the way that banks do.
Re:skip banks; go credit unions (Score:5, Informative)
I don't really understand why anyone still uses big banks instead of credit unions for their everyday banking needs. Better customer service, FAR fewer fees, almost all the same options.
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BECU survives because of so many uneducated people that bank with them. I have five friends from high school that didn't go to college that make over $150k a year working for Boeing that I still help with their taxes after well over thirty years of doing so. They don't balance their checkbooks so they don't see problems. I've seen I think five times where Boeing didn't do a direct deposit for their paycheck. They don't really care since they're making so much more than they expected to ever make and muc
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Beyond that and a few other
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I have a credit union account as my primary checking and savings, but it isn’t really tailored to my needs very well. A credit card from them maximum is around $10-15k, maximum daily ETF limit is $5k, they don’t do business banking, and their loans aren’t really a very good deal, beyond potentially auto loans. Large sums of cash or cashiers checks surprise them. (Had enough cash for a home down payment in checking for a year while I was looking.)
Ironically, I switched to them 17 years ago
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I belong to a credit union but not for long. Their mortgage rates are higher than the banks and they don't pay as much interest as the banks. The fees are higher, too. Other credit unions I looked at are just as bad. Tell me again how great credit unions are.
My CU has no fees and better mortgage rates than the banks. I've been a member of two other CUs which were the same. Credit unions are great, and you aren't; especially at choosing a CU.
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This has been threatened for decades. I'll be only slightly surprised if this occurs now. The larger credit unions have been approaching the size, and behavior, of the increasingly rare midsize banks.
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Like BECU and First Tech. I have accounts with both, and the past five or so years they've just become terrible. They're taking away services, like bill pay directly to an account, if you don't have a credit card with them. Ten years ago with Bank of America I setup bill pay directly to my landlord that had an account with BoA. Now, that is no longer allowed since you must have a credit card with a CCV number to set that up. BoA's SafePass is just terrible. I can't even pay my Seattle City Light bill
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We'
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Google Translate (Score:2)
"Sell" >> "Git Outta Dodge!!!"
Go bankrupt you rats (Score:5, Informative)
Fuck that company, go die. Currently trying to get rid of a lien on my house from WF. I have NEVER had a loan from WF. Yet there's a lien for non-payment of some bullshit loan. And when I call them to ask about it, they say I cannot discuss it with them because my phone number is not the one they have on file. Well of course it's not, you fuckers, it was never my loan. My lawyer is spinning in circles trying to get rid of this damn thing.
Fuck you Wells Fargo. Go bankrupt already, you fucking scammers.
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Is your lawyer an idiot? The lien has to reference a recorded judgement, signed by a judge. This isn't that difficult to fix, especially if the paperwork between the court documents doesn't match the lien. Should take a day to fix at the courthouse unless your lawyer is taking advantage of you.
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.... they say I cannot discuss it with them because my phone number is not the one they have on file. Well of course it's not, you fuckers, it was never my loan.
Fuck you Wells Fargo. Go bankrupt already, you fucking scammers.
Even if it was your loan haven't they ever heard of people changing their phone number ????, I have dealt with that crap before!!!
Thank God for Scandals (Score:1)
kpdkbuildtech (Score:1)