Thread regarding Wells Fargo & Co. layoffs

They've been reviewing the mortgage exit for probably 10 years. Charlie just had the ba--s to do it.

Time to reinstate the provisions of the Depression-era Glass-Steagall Act separating commercial and investment banking which was repealed back in 1999.

Let's face it....these are all examples of consumer lending. Not only are they more costly to service, but they are subject to much more regulatory oversight and laws. Previously (aka Norwest) the bank wanted smaller accounts; more opportunity for selling additional products, referrals for more business and the like. Charlie would much rather have a single $500 million commercial loan syndication vs hundreds or thousands of small consumer loans equal to the same amount.

Ironically Chase is opening up branches right and left in low growth or no growth areas of the country, i.e. Omaha, Des Moines, etc.

We'll know the transformation is complete when they move the HQ to New York.

Post ID: @uxg+1kKU1Ecd

Your comments are fair. However, if WFC backs away from products and businesses where there is a “competitor who does it better”, then that is not a promising long-term business plan. Because Wells Fargo doesn’t do anything better than anyone else.

We need a C-Suite who wants to take us in to the 2000s, not leaders who say “we can’t do it, let’s retreat.” Our business is to provide financial services to customers. Sending new customers away is a terrible plan. And it won’t take long for “existing customers” to figure out that it’s all being done much better elsewhere and leave.

All of these moves has their reasons which is why we are doing what other banks have done.

1. May 2020, Wells Fargo stops offering new personal lines of credit - The loan totals were small in this category so why not focus capital elsewhere. Also, unspent open lines of credit count against the asset cap even though the money is not earning us anything.
2. June 2020, Wells Fargo cuts off lending to independent car dealers - If the dealer wants to floor plan with us then fine, we would lend. Too many of these situations we were giving away the store on the promise from sales that the floor plan business was coming. Taking on more risky auto loans without the lucrative commercial loan is not a good deal.
3. July 2020, Charlie er…Wells Fargo shuts down all existing personal lines of credit (but is forced to reverse the decision one month later after criticism from Consumer Advocate groups and customer backlash.) - See 1 above plus this was handled very poorly. Should have announced freezing existing lines then later freezing any new advances. Customers would have had more time to find a new bank for this.
4. January 2021, Wells Fargo stopped accepting applications for new student loans. At that time no bank had a lot of student loans. - In such a confounded regulatory and political lending area this move makes sense to me. High default rates like credit cards without the high interest rates. Re-focus capital on credit cards which is what we did.
5. January 2023, Wells Fargo scales back mortgage lending, a market we once - This area is always understaffed when there is high volume and overstaffed when lower volumes prevail. This product takes a large number of staff and if you compare portfolios with the other big banks you can see our higher staff ratios overall are partly related to supporting this product. My last mortgage with a smaller lender was completed without a single visit to the home, meeting with a mortgage rep even online, mailing of papers, etc. Online, all electronic docs, step by step, clear instructions and only one visit by a notary to my home which the bank arranged and paid for. From application to close in 19 days. Oh, and closing was on Zoom. Can WF do that? Thats the competition.

And JPM and BAC are struggling as well because they're doing the same

Definitely a destructive trend. He must be against making money and came up with his own unique strategy no other ceo discovered. Total destruction of a company from the inside out!

@olh+1kKU1Ecd Except he apparently started "tightening up" years before the recession

Post ID: @olh+1kKU1Ecd

Continuing Billion dollar settlements for gross mismanagement, and the inability to get us out from under the Federal Asset Cap is what hurts banks.

In other news, Taco Bell is stepping back from the taco business.

“We are making the decision to continue to reduce risk in our food business by no longer selling Mexican-inspired food”, said the new heady CEO. He plans to narrow the focus to selling only napkins forks and straws to existing customers.

Going into a recession you tighten up. The more loans you make, the more opportunities there are for charge offs. Charge offs are what hurt banks during an economic downturn.

WF gives plenty of loans, you're just not paying attention.

Post ID: @dcu+1kKU1Ecd

My writing style and “take” on Wells Fargo is completely different from that post, so: no.

Is this @OP+1kKffK5a ?