Two recent news items about Wells Fargo caught my attention this week. The first was an article reporting that Wells’ shareholders elected all of the 12 current board members to serve another term. Since last year, the board of 15 has replaced its chairman, appointed three new directors, and had four long-standing directors choose not to stand for re-election, thus shrinking the board from 15 to 12.
All these signals seemingly put Wells on a better path toward having the world agree with its newly-found principles. The second article that attracted my attention, however, has me wondering if, somewhere along the way, the Wells corporation had simply annoyed (that is, got on the bad side of) the wrong people-in-high-places. (Lest it seems that I am disparaging any one federal administration, remember that, even though a number of Wells’ transgressions are being investigated by the current administration, the Wells’ saga, and the charges therein, began during the previous administration.) This second piece is an article in the WSJ citing the fact that the Federal Labor Department is examining whether Wells Fargo has been following the practice of pushing holders of low-cost corporate 401K plans to roll their holdings into more expensive individual retirement accounts at the bank. The Labor Department is also interested in whether Wells’ retirement plan services unit pressured account holders to buy in-house funds, generating more revenue for the bank. Doesn’t that sound awfully familiar – and doesn’t it sound a lot like the “selling-up” practices currently carried out by a number of banks and other financial institutions? It would be hard to know where the supposed Wells’ transgressions end and other companies’ begin – those who, for the most part, carry out the same practices. Hard to see the fine distinctions that are being made. Thus, it’s something to ponder as we observe the continuing chapters of the Wells’ saga unfold.
SOME REVELATIONS ABOUT WELLS (WELLS FARGO & CO)