Watch a reporter break down Wells Fargo’s mortgage modification error that affected over 600 people
Wells Fargo’s chief financial officer criticized the media on Friday, insinuating that journalists and news outlets are running negative headlines on the company because they are an “ad seller.”
“A lot of these negative headlines refer to things that have been previously really well aired and vetted. But it’s a very reliable ad seller, I think. And it’s a business model for some people,” John Shrewsberry said at a financial services conference in New York.
“We need to make sure that we strive for operational excellence,” he said. “We need to make sure that we don’t make big mistakes. We need to make sure that we’re super transparent, sometimes more transparent than others on common issues. But I don’t know when it’s going to stop being a reliable ad seller or business model for certain outlets or journalists.”
A Wells Fargo spokesman would not comment on Shrewsberry’s remarks. The San Francisco-based bank maintains its largest employment hub in Charlotte, where it has about 25,100 workers.
Consumer advocates blasted the executive for his comments.
“The press does not create Wells Fargo’s misdeeds, nor do they choose how Wells Fargo responds when its offenses are revealed,” said Linda Jun, senior policy counsel for Americans for Financial Reform.
“Wells Fargo’s alleged pledge to try to get things right is meaningless when their actions show exactly the opposite, with scandal after scandal, time and time again,” she said. “Blaming the press for shedding light on these scandals, the harm they cause, and what Wells Fargo has done about them is unfair and unwarranted.”
Shrewsberry’s remarks come amid a growing list of revelations about practices that have harmed consumers at the fourth-largest U.S. bank by assets.
Wells has been in the spotlight since a September 2016 scandal in which the bank’s employees were accused of creating millions in unauthorized customer accounts to meet aggressive sales goals. That scandal, which toppled Wells’ former chief executive, has been followed by findings of problems across other business lines at the bank.
Just last month, Wells Fargo apologized for an internal error that it said resulted in 625 customers being incorrectly denied or not offered mortgage modifications to make their loans more affordable. In about 400 of those cases, the homes were ultimately lost to foreclosure, Wells said.
The same day it made that disclosure, Wells also said federal agencies were probing how it purchased certain federal low-income housing tax credits in connection with the financing of low-income housing developments.
Also last month, the U.S. Justice Department said it was fining Wells Fargo more than $2 billion for mortgages it made and sold to investors in the run-up to the financial crisis. And in April, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency fined Wells $1 billion over claims of improper mortgage and auto-lending practices that harmed consumers.
In a report last week, S&P Global Market Intelligence said the Consumer Financial Protection Bureau, a regulator created in the aftermath of the financial crisis, has fined Wells Fargo more than any other company combined.
The bureau has levied $627.6 million in penalties against Wells Fargo, compared with $534.8 million in penalties issued to other companies, the report said.
Kelly Tornow, director of North Carolina policy for the Center for Responsible Lending, a consumer advocacy nonprofit, was also critical of Shrewsberry’s comment.
Her organization is still getting calls and emails at least weekly from consumers wondering whether they were improperly foreclosed upon as a result of Wells’ mortgage modification error, she said.
“To place any of the blame on either the media or on consumer advocates for drawing attention to these really important issues that affect American’s financial security every single day is really frankly ridiculous.”