Every business line at Wells is under investigation by the Justice Department, the Securities Exchange Commission, and/or the Comptroller of the Currency (OCC). Here’s how bad things are: The OCC has spent so much time at Wells Fargo that it is considering two unusual actions: (1). Charging Wells for its time there; and (2) Imposing mandatory changes in the executive line-up.
There are risk management issues, issues with required refunds to customers, delays in communicating with mortgage customers who had experienced improper charges, and mandatory insurance requirements for customers who already had insurance.
There comes a point where board members should have a few questions because Wells is now 2.5 years out from the discovery of the millions of fake accounts created by bank employees in order to meet performance and incentive goals. The issues are management issues, ergo, one turns to management. But, CEO Tim Sloan came from Wells. There have been changes, but, so far the feet don’t seem close to the fire.
If federal government regulators are not happy with the pace of change, the pace may be a tad slow because these folks are happy with slow. It took the Department of Health and Human Services six months to get a Social Security card to the Barometer, despite calls and letters. Eventually, the Barometer received 3 cards. In other words, when a non-crackerjack operation tells you that you are not running a crackajack operation, there may be some problems with management. This is the fifth or sixth wake-up call.