Wells Fargo Works to Regain Trust as Bogus Accounts Curb Growth
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Version 0 of 1. The number of new checking accounts and credit card applications at Wells Fargo (WFC) is down more than 40% from a year ago, showing the bank still needs significant work to regain customer trust lost during a scandal over the opening of bogus accounts. The San Francisco-based bank saw new consumer checking accounts fall 9% from October and 41% from last November, which perpetuated a 3% drop in branch banker interactions, the company said Thursday in its monthly retail banking customer activity report. New credit card applications, meanwhile, fell 45% from last year, which costs the bank revenue from the Federal Reserve's 25 basis-point increase in interest rates on Wednesday. Shortly after the decision, Wells Fargo said it was raising its prime rate from 3.5% to 3.75%, affecting cards that have variable annual rates. "My No. 1 priority remains rebuilding trust," Mary Mack, Wells Fargo's community banking senior executive vice president, said on a conference call Friday. "We're beginning to slowly reintroduce marketing and in select markets throughout the country, we've reintroduced some product offers." The company is working on a new compensation plan for its retail banking team members, which will be rolled out in January and replace the sales-based incentive targets linked to the opening of more than 2 million unauthorized customer accounts by workers trying to meet sales goals. More than 5,300 were fired over a five-year period for their involvement, and the resulting scandal prompted Congressional hearings and the abrupt retirement of former chairman and CEO John Stumpf. |