When a company does something really naughty, crisis management experts tend to recommend extreme transparency. Since the media is a pack of snarling hyenas that won't stop rooting around for flesh until the whole thing is picked bare, it's best to just lay it all out from the outset and begin the recovery process immediately.
Wells Fargo's attempt at transparency hasn't quite worked out that way. After its sham account scandal blew wide open last fall, the bank promised to keep investors updated with monthly tallies of its retail banking activity, so everyone would know just how much the company's shift from quota-driven boiler-room consumer banking hit its performance metrics.
As it turns out, those updates – “our ongoing commitment to transparency,” according to CEO Tim Sloan – have painted a pretty harrowing picture of Wells Fargo's retail banking business. The effect of the regular dispatches isn't the one-and-done atonement favored by PR types, but a slow-motion implosion rendered painfully visible to the outside world. The report from last month is no exception.
New checking accounts fell 43 percent year-over-year in February, while credit card applications plunged 55 percent – the worst drop since the practices came to light, Bloomberg reported. In other words, more than half of Wells Fargo's credit card applications back in February 2016 would not have occurred if it weren't for the stratospheric cross-selling quotas. Half!
Here's Mary Mack, head of community banking, in a statement:
It will take time for us to work through the changes we are making in our business, but we remain focused on strengthening our relationships with existing customers and building new ones with potential customers.
Given the fact that each update since October 2016 has shown vertiginous double-digit declines, we can expect these updates to continue along this bleak course until October, at which time we at Dealbreaker will almost certainly have run out of anything new or interesting to say about the whole mess. Which might be the worst thing Wells Fargo has done yet.