One of my favorite reads of all time is “All I Really Need to Know I Learned in Kindergarten: Uncommon Thoughts on Common Things”; it is short book and follows the title. The basics apply to many facets of life; Not every “to do “ or “not to do” is covered but you can certainly read into the lines and know where process integrity and pursuing the truth fall.
The 2016 Wells Fargo issue comes to mind. Imagine rogue credit card and checking accounts and the unthinkable situation of “cross-selling”. Similar issues arose, such as fining another 1.4 million accounts in 2017. And, now investigations expanding into wealth management and residential lending.
Today’s story comes from Bloomberg Businessweek and analyzes how Wells Fargo reacts to not only the scandal but the limitation by the Federal Reserve that the assets of this $1.95 trillion bank are restricted from growing.
A year and a half after the bogus-accounts scandal that brought down Sloan’s predecessor, John Stumpf, it’s clear the 31-year company veteran wants the bank—and everyone else—to move on.
About a year ago, the bank added “rebuilding trust” to a list of priorities. In the newest version of the handout, those words are gone.
Sloan insists there’s not much left to fix—it’s a matter of executing well from here. “I don’t think we have a culture problem,” he says. “When you look at the mistakes we made, we had an incentive plan in our retail banking business that drove inappropriate behavior.
Issues continue to arise from the original claim. It will likely take a decade to flush out.
Even if those problems are in the past, the Federal Reserve has ensured that their legacy will remain the No. 1 problem on Sloan’s desk.
Fed officials said the lender’s pattern of lapses demanded an unprecedented sanction. First there were the unauthorized accounts. Employees pressured to meet aggressive sales goals set by Wells Fargo executives may have opened millions of them in customers’ names without permission; thousands of workers were fired. After that revelation, the bank disclosed it had overcharged some auto-loan and mortgage
As the say in the South, this will be a “tough row to hoe”. Even with the numerous terminations, earning trust back is hard, wherever you sit.
Overview by Brian Riley, Director, Credit Advisory Group at Mercator Advisory Group
Read the quoted story here