Let’s recap the problems at Wells: The fake accounts debacle, the fake auto loan insurance mandates, the mortgage changes without authorization (fake again), and the sacking of four foreign-exchange bankers along with the transfer of an executive from that area of operations. Now add a new development. The Comptroller of the Currency has issued a confidential report on Wells Fargo, which, naturally, was leaked to the New York Times. The report discusses the failure of the bank to respond to consumer complaints about the issues listed in the recap. Also, the report concludes that Wells failed to supervise what its contractors (i.e., insurance companies benefiting from the Wells mandate) were doing. Wow — the hits keep on coming at this bank.
The report does praise the bank’s hiring of consultants and launching of investigations. The question the gaggles of specialists are not answering is obvious except to anyone at Wells or the Office of the Comptroller: What is it about the culture of Wells that causes this type of conduct? The conduct is not isolated to the consumer division now. Until Wells gets at that question, the clean-up will continue. Clean-up does not solve culture problems. Clean-up is checklist. Clean -up is full-page ads pledging to do better. Clean-up is spending money. Clean-up is an expensive process for the privilege of moving on, but it is not a solution to the cultural problems that fueled all of the list. The Comptroller is praising clean-up. Think about this: In the midst if trying to clean up one of the most embarrassing and blatant abuses of customer trust, Wells had ongoing behaviors among employees in various divisions to whom it did not register that something was awry with their conduct, i.e., fake stuff. Causation here is deep in a culture that needs some work.
Ms. Jennings, I have been doing a lot of reading of your past blogs this evening after discovering you are still in action. A comment to the above question as to what is wrong at Wells Fargo (and I am sure this is at the bottom of almost everything you observe) is that the tone of every organization is set by the person at the top. Someone who will tolerate or encourage ethical slack will eventually have an organization full of that type of people, and vice versa. This was pointed out to me early on by the disabled veteran city manager of the metropolis of Somerton, Arizona, little more than a wide spot on the road between Yuma and San Luis, Arizona.
The puzzling thing about Wells is that he Board is practically 100% new, along with the CEO, and, of course, many of the divisions also have new leaders. Still, the behavior continues, so what is wrong with the replacements? I am wondering if they really have the visions because I see the ad campaign for Wells and it is about their investments in solar and neighborhood redevelopment, i.e., social programs. You can’t work your way out of ethical issues through social programs. So, tone at the top is critical, but I am wondering whether Wells’ top management is really taking the missteps seriously — they just keep coming and that tells me that despite all that has happened there may not be acceptance of the reality of their conduct and current situation.