A massive scandal at Wells Fargo was revealed in 2016 by the Los Angeles Times, which completely destroyed the reputation of the Wild West institution and resulted in a $3.7 billion fine for the bank.
There is no ‘mission accomplished’ with regaining trust, according to Bill Daley, vice chair of public affairs at Wells Fargo. (Photo: iStock)
According to the article published by Fortune, Wells Fargo had forced sales agents across the bank’s numerous business lines to open accounts for millions of customers fraudulently and without their consent, pocketing a few million dollars in associated fees while also greatly boosting the size of its business.
There was significant fallout from the scandal. More than 5,000 bankers were fired for misconduct; the Federal Reserve took the unprecedented action of capping the bank’s assets; and the board recouped $69 million in compensation from former CEO John Stumpf after he resigned in the wake of the scandal.
However, the drama persisted. In March 2019, Timothy Sloan, who had taken over for Stumpf, resigned due to mounting pressure on the bank to make amends. In order to restructure the bank’s management, Sloan’s successor, current CEO Charles Scharf, fired veteran executives and hired fresh talent, like vice chairman of public affairs Bill Daley.
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I spoke with Daley this week about Wells Fargo’s response to the financial crisis and how the storied bank is still working to repair its reputation and win back stakeholder trust.
For the sake of clarity, this conversation has been edited and condensed.
According the the Yahoo News, it was clear that no significant steps had been taken to alter the dynamic [that had caused the scandal] when [new leadership] took over. They didn’t be honest about what the actual issues were. They weren’t upfront about how long it would take to resolve. It was basically like starting over when we arrived because very little had been done to restore the bank’s trust and reputation.
Following the scandal, Wells Fargo launched two significant marketing campaigns, one in 2018 and the other in early 2019. Re-Established, the bank’s 2018 campaign, focused on how the bank was restoring trust while also acknowledging the bank’s wrongdoings. A similar campaign ran in 2019. However, based on what you said, Wells Fargo hadn’t really taken any concrete steps to restore trust at that point.
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