WELLS FARGO CEO TELLS INVESTORS HE ‘CAN’T PROMISE’ BANK WON’T FIND MORE PROBLEMS
Wells Fargo & Co. may not be finished finding problems with its banking practices, its CEO told an investor conference in New York City this week.
CEO Tim Sloan said the company will be spending an “elevated” amount in the third quarter on outside consultants Wells Fargo hired to scrutinize its retail banking unit, where the company’s bogus accounts scandal was discovered and disclosed last September.
“We’ve been very focused on opening every drawer and turning over every rock in the company,” Sloan said Tuesday at the investor conference, Bloomberg reports.“I can’t promise you that it’s exactly over with.”
Wells Fargo said at the end of August that a new, independent investigation of the bank’s records over an eight-year period found that up to 3.5 million fake accounts were opened, a 70 percent increase from its previously reported total of 2.1 million unauthorized accounts just last year. The bank said in August that it would pay $10.7 million to customers who had accounts opened without their permission, on top of the $185 million settlement it made with federal and Los Angeles regulators the bank made last fall.
The continuing saga surrounding Wells Fargo’s retail banking practices have had Wall Street watchers worried for months, as both regulators and investors continue to brace for more bad news from the bank.
“The steady drip of revelations is concerning as it makes quantifying and qualifying the extent of the internal control failures difficult,” Isaac Boltansky, an analyst at Compass Point Research & Trading, told Bloomberg.“Which is worrisome for both Washington and Wall Street.”
Shares of Wells Fargo have declined 6.4 percent year to date compared to the S&P’s 500 13 percent advance in the same period.
Wells Fargo is also in hot water for not refunding insurance money to people who paid off their car loans early and for charging customers for auto insurance they didn’t need, with more than 500,000 consumers incorrectly charged. The bank said at the end of July that it would pay as much as $80 million affected by the practice, as well as additional money for as many as 22,000 customers who lost their cars as a result of the program.