Wells Fargo CEO visits Charlotte
Wells Fargo continues to grow in Charlotte, even as the San Francisco-based bank scales back its mortgage business, CEO John Stumpf said in an interview Tuesday.
“We have a big commitment here, and we love it here,” said Stumpf, who spoke to the Observer during a trip to Charlotte to meet with employees and customers.
Wells Fargo says it employs about 23,600 in the Charlotte metropolitan area, making it the bank’s biggest employment hub. That’s more than the roughly 20,000 employees Wachovia had in the Charlotte area around the time of its sale to Wells Fargo in 2008.
As it adds employees in Charlotte in some lines of business, Wells Fargo also continues to trim its mortgage operation here and in other parts of the country.
Just last month, the bank announced the layoff of 132 mortgage employees in the Charlotte area. In making those cuts, Wells Fargo cited improvements in home-loan delinquency and foreclosure rates, as well as falling consumer demand to refinance mortgages.
Stumpf, 62, said the bank has been reducing its mortgage staffing levels, as it has worked through a backlog of problematic home loans, many of which are mortgages that went bad in the housing crisis. He also noted the cyclical nature of the mortgage business, which can see rising or falling demand as interest rates change.
Stumpf declined to predict what the bank’s future employment levels in Charlotte might be.
“The more customers we have, the more people we need,” he said. “And there’s growth in lots of places, including Charlotte.”
In a 30-minute interview with the Observer after a town hall meeting with about 1,100 employees, Stumpf addresed a wide range of topics:
▪ Sales tactics: Wells Fargo continues to face criticism for its sales tactics. Earlier this year, it was sued by the city of Los Angeles over claims the bank’s high-pressure sales culture led to workers committing fraud to increase the company’s profits and keep their jobs.
Stumpf defended the bank, saying he disagrees with the accusations made in the suit. “We have a culture here where we put customers first, and their success becomes our success,” he said.
The bank has “zero interest” in giving customers products or services that they don’t want or that don’t help them, he said. “If we ever find those situations, we try to make it right with the customer, and it gives us an opportunity to coach a team member,” he said. “And sometimes that coaching means they can’t work for Wells Fargo anymore.”
▪ Interest rates: Wells Fargo and other big banks have been finding it difficult to boost revenue in recent quarters because the margins they make from lending have been squeezed by interest rates that the Federal Reserve has kept at record lows since the financial crisis.
After declining to raise rates earlier this year, the Fed indicated that the issue will be on the agenda again in December. “I would encourage the Fed to do it,” Stumpf said. “Today the debate has become bigger than the rate.”
Stumpf said a rate hike, which has caused nervousness among stock market investors, could actually be an economic stimulus. “It would say to people, ‘Yeah, the economy is better,’” he said.
Raising rates would benefit banks because they could charge more for loans, but financial institutions also could start paying higher interest rates on deposits, Stumpf said. “Savers have paid a huge price in this recovery,” he said.
▪ General Electric: Last month, the bank said it planned to take on $32 billion in assets and 3,000 employees from GE, which is divesting most of its financial services unit to focus on its industrial businesses. “It will be hard for me to predict the impact on Charlotte, but we are thrilled how that all turned out,” he said.
▪ Wachovia merger: Stumpf recalled being in Charlotte seven years ago last month to speak to Wachovia workers worried about what Wells Fargo’s purchase of their company would mean for their jobs.
At the time, many in the city wondered how deeply the bank would cut jobs, he said, and he offered no promises. “There was never a design, or a master plan, to have a certain goal” for the number of Wells Fargo employees in Charlotte, he said.
The city is now home to two of Stumpf’s direct reports, and last month the bank named a new treasurer, Neal Blinde, based in Charlotte.