Filed under: Failed management
When regulators g-n shut down this bank?
Excuse after excuse, delay after Daley.
The only thing Scharf was interested in was firing employees and using the savings to do stock buybacks. Regulatory issues were de-prioritized.
Heres the timeline - I think a MASSIVE fine for failure to fix OCC regulatory issues is inbound. This will likely have a profound impact to stock price.
9/9/2023 - Bill Daley "retires" from Wells Fargo
7/14/2023 - (earnings call) Scharf - But putting just the pure economics of the asset cap aside, it is something that when we look at the work we have to get done, the fact that it's there is a statement of the reality that we still have more work to do. And so, it's critical that we continue on our road to complete that work. And so, that's the way we're thinking about it today.
https://www.fool.com/earnings/call-transcripts/2023/07/14/wells-fargo-wfc-q2-2023-earnings-call-transcript/
1/13/2023 - (earnings call) Scharf - Yes. Well, let me just -- so, listen, we still have a series of consent orders, of which, and I always point this out, the asset cap is a piece of one of them. So, all roads don't lead to the asset cap. The roads in this respect lead to us building the proper control environment, which will satisfy ultimately all the consent orders.
And I've tried to be clear that we are making progress on that work. It is a lot to do. And our tone hasn't changed relative to the confidence in the progress that we're making there. So, we're going to continue doing it.
And hopefully, it's done to the satisfaction of the regulators, but they'll have to decide that. And as we continue to tick off the to-dos on that work, the control environment gets better and better. And we become a better run company that doesn't have those kinds of operating losses that you've both seen in the past.
https://www.fool.com/earnings/call-transcripts/2023/01/14/wells-fargo-wfc-q4-2022-earnings-call-transcript/
March 25, 2023 - the Office of the Comptroller of the Currency (“OCC”) issued a revised approach to enforcement actions:
"The OCC will be disposed to take additional and increasingly severe action when a bank has continuing, recurring, or increasing deficiencies for a prolonged period (>3 years), particularly when the bank has not made sufficient progress toward correcting deficiencies. If a bank exhibits persistent weaknesses, the OCC will consider additional actions, such as assessing civil monetary penalties or issuing other enforcement actions against the bank or institution-affiliated parties."
https://www.mayerbrown.com/en/perspectives-events/publications/2023/06/occ-sets-a-timer-for-larger-banks
7/15/2022 - (earnings call) Scharf - This is Charlie. Let me take a shot at this first. Listen, I think we have the work we're doing on all of the risk and infrastructure work, which supports the regulatory matters. It's our own headcount. It's professional. It's a bunch of technology work. It really cuts across a whole series of lines. And I just don't really think it's the right time for us to start even talking about where those saves could come from. And it's just genuinely not on a radar screen in terms of what we're thinking about where it's going to go or anything like that. So I'd rather just defer the question at this point.
https://seekingalpha.com/article/4523604-wells-fargo-and-company-wfc-ceo-charlie-scharf-on-q2-2022-results-earnings-call-transcript?utm_source=conferencecalltranscripts&utm_medium=referral
1/15/2021 - (earnings call) Scharf:
Yeah Mike, Listen. It’s a very tactful way of asking the question of when we think the asset capital will be lifted, which you know that I’m not in a position to answer. And so I think your sentiments are right about what it takes. It takes time, it takes a management team. What I’ll say, if you look at the remarks that we made in the prepared part of the call, the words are very carefully chosen. And so we do believe that we’re making progress. Even more broadly is I feel great about the team we have in place, our understanding of what has to get done for this consent order and for the others. As I said, I made the statement, I do believe that we’re making progress, but if you look at the words that are required in the consent order, they’re really clear, which is execute and implement that. We’ve got significant work to do. And I can’t share with you. I believe I understand why you’re asking. I said this last quarter too. I really do. I wish I could share with you the specifics of what the plan is. I can’t do that. And ultimately, it’s up to the FRP anyway. I’m just not in a position to put the timeframe around it, other than I feel very confident that we know what has to get done and we’re moving forward. And I wish I could be more specific than that.
https://www.rev.com/blog/transcripts/wells-fargo-co-wfc-q4-2020-earnings-call-transcript
3/1/2020 - Report on Wells Fargo to US Financial Services committee:
Wells Fargo’s Board Did Not Hold Senior Management Accountable for Repeatedly Failing to Meet Regulators’ Expectations. OCC staff also raised concerns about the board’s oversight of Wells Fargo’s management. According to the meeting minutes, a senior OCC official discussed “the importance of performance management, succession
planning, and holding senior management accountable” (emphasis added).278 This
point was echoed by another OCC official who stressed that “escalation, transparency,
and accountability remain critical areas of focus” (emphasis added).279 In discussing
the OCC’s concerns, Duke pointed to board initiatives focused on holding management
accountable, “including through the introduction of performance objectives relating to risk
management.”
Despite repeated regulatory failures, the Bank resisted holding senior management
accountable. In November 2017, the OCC downgraded the Bank’s management rating, a
relatively infrequent action.
https://www.congress.gov/116/meeting/house/110719/documents/HHRG-116-BA00-20200311-SD003.pdf
11/2019 - Bill Daley hired - former Barak Obama Chief of Staff
9/2019 - Scharf Hired to "fix the bank"
7/13/2018 - (earnings call) Sloan - Vivek, no change in the update from Investor Day and that we're working very constructively with the Fed. We've gotten some very thoughtful feedback from them. And our expectation is that sometime in the first half of next year, we'll be able to move through that. I think the point to emphasize there is that our goal is not to just meet expectations so we can get the asset cap lifted. Our goal is to make the fundamental investments and changes that we need to make in how we manage operational and compliance risk at the company. That's the goal, and that's where -- really where we're focused, but no update from a timing standpoint.
https://seekingalpha.com/article/4187223-wells-fargo-and-co-wfc-ceo-timothy-sloan-on-q2-2018-results-earnings-call-transcript