U.S. Bank plays Minnesota nice while Wells Fargo struggles
Friday, September 16, 2016
Minnesota Public Radio News (September 16, 2016) - U.S. Bank says it'll fire employees who try to woo customers away from Wells Fargo by trash- talking the rival megabank.
Wells Fargo is facing congressional investigations after regulators revealed sales employees created more than 2 million bank and credit card accounts that customers may not have authorized. California and U.S. regulators have hit Wells Fargo with $185 million in fines.
At an investor conference Thursday, U.S. Bank CEO Richard Davis said he doesn't want his employees dissing Wells Fargo to win business.
"We went out on Monday morning and asked everyone in the company to take no advantage of the Wells' circumstance," he said. "None."
Davis said he won't tolerate any effort to woo customers by pointing out Wells Fargo's woes.
"It's not our job to go out there and call that out," he said. "It would be inappropriate. And I don't think it would be the right way to do business. I've said if I find a branch in one market with an orange flyer that says, 'If you bank at Wells, come to U.S. Bank,' they are going to be let go. Because that's not the way we do business."
Davis says U.S. Bank will gain customers if the company earns their business.
Wells Fargo CEO John Stumpf, a Minnesota native, is expected to testify before a U.S. Senate committee next week.
The House Financial Services Committee on Friday announced an investigation of the allegedly illegal activity by Wells Fargo employees to meet aggressive sales goals as well as the role of federal regulators in the debacle.
California-based Wells Fargo says it has refunded to customers $2.6 million in fees charged for products that were sold without authorization.
The House panel also is requesting internal documents from Wells Fargo and from the Consumer Financial Protection Board related to the timing and discovery of the sales practices.
The consumer banking giant, which is the biggest U.S. mortgage lender, says it has fired about 5,300 employees over the sales practices.
Wells Fargo issued a statement saying "We regret and take responsibility for any instances where customers may have received a product that they did not request."
In a letter Thursday to Stumpf, several Democratic members of the Senate Banking Committee asked whether Wells Fargo's board will exercise its power to take back compensation paid to senior executives responsible for the sales program.
A top executive, Carrie Tolstedt, who ran the consumer banking division, in July announced her retirement from the bank. Tolstedt, 56, is expected to leave this year with as much as $125 million in salary, stock options and other compensation.
Minnesota credit unions, which have conducted ditch-your-bank campaigns in the past, are not making much of a fuss about Wells' troubles.
"Ever since the economic crisis, consumers have been moving to credit unions because they trust the values of credit unions," Andrea Molnau, communications director of the Minnesota Credit Union Network, said in a statement. "Credit unions are not-for-profit, member-owned and local. It is not our nature to criticize corporations, however, consumers definitely have shifted which institutions they trust in to be their personal financial partner."
This report contains material from the Associated Press.