Editor’s note: After The Des Moines Register published an editorial critical of Wells Fargo’s sales practices situation, CEO Tim Sloan asked the editors to consider his personal perspective. What follows is the CEO’s response, which the newspaper published on Sunday, May 14.
In a May 10 opinion piece, The Des Moines Register’s editorial board applied the metaphor of a “person” to sum up Wells Fargo. And in doing so, they revealed how little they know about the people who make up today’s Wells Fargo.
All they had to do was look around their community. Wells Fargo employs 16,000 Iowans. West Des Moines is the headquarters for Wells Fargo Home Mortgage, America’s largest mortgage lender. Last year, Wells Fargo team members in Iowa volunteered 178,000 hours with nonprofits, served on 351 nonprofit boards, and, along with our company’s foundation, donated more than $9.1 million to a host of state and local causes.
For these reasons and many others, I am proud my son, daughter-in-law and two grandchildren call Ames, Iowa, their home. In fact, last November, I chose Des Moines to be the location of one of my first town halls as the new CEO of Wells Fargo, because the community is so representative of Wells Fargo across the country: Our people who live there don’t just show up for work; they show up to make a difference in their communities.
I also used my Des Moines visit to announce my top priority as the new CEO — rebuilding trust with the American public. I shared that commitment with our team members, with local leaders, and during a visit with The Register’s editorial team.
It’s my top priority, because I know how committed our Wells Fargo team members are to our customers. We all want to restore the trust we lost because of a former high-pressure sales culture that led to unacceptable sales practices by some of our retail bankers. The result of that former sales pressure: some of our customers wound up with products and services they did not want or ask for.
At the time of my visit with The Register, our efforts to rebuild trust were in their early stages. However, Wells Fargo has made significant progress since then — progress largely ignored by The Register’s recent editorial.
We understand now — because of considerable root-cause analyses conducted by Wells Fargo’s board, management and external third parties — where things broke down, and where we failed as a culture, a company and as leaders. We have taken the accountability that has come with that, and have initiated many changes to build a better Wells Fargo for our team members, customers, investors and communities.
Our actions have included:
- Appointing a new executive to lead our Community Bank.
- Eliminating product sales goals and revamping compensation plans for our retail bankers so our focus is on serving customers, not merely selling products.
- Sending automatic email confirmations to our customers each time they open a personal or small business checking account, savings account, or credit card.
- Establishing a 24/7 hotline to address customer concerns.
- Expanding our account reviews and remediation efforts back to 2009 and forward to 2016 — going beyond the time period required by the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB).
- Developing a process to identify customers whose credit might have been affected by potentially unauthorized account openings and determining ways to make things right.
- Releasing the findings of our board’s independent investigation into our Community Bank’s retail sales practices, a comprehensive effort that led to several senior leaders being terminated for cause.
- Having more than $180 million of executive compensation forfeited by, or clawed back from, accountable executives, including Wells Fargo’s former CEO and the former head of our Community Bank — neither of whom left with golden parachutes.
- Eliminating cash bonuses for 2016 and reducing stock-based awards vesting this year by as much as half for eight of my direct reports, and me.
In addition, we reached a proposed $142 million class action settlement that will offer remediation to customers affected by the unacceptable sales practices, going as far back as 2002. But if any of our customers at any time believe they have been impacted by unacceptable sales practices, we want to hear from them. Customers with unresolved concerns also may opt to use mediation services we have offered across the country at no cost to them.
The Register’s editorial asked, “Who Will Hold Wells Fargo Accountable?” The simple answer: First, we hold ourselves accountable. We also expect you will. You, our customers. You, our team members. You, our shareholders. And you, the community we serve.