Wells Fargo CEO John Stumpf: Higher customer costs on the way
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O-ho, the Wells Fargo wagon is a-comin’ down the street, to bring us a box of new fees!
It wasn’t River City, Iowans, singing that familiar tune -- it was John G. Stumpf, from a dairy farm near Pierz, Minn., during the bank’s latest conference call for securities analysts.
Stumpf, Wells Fargo’s chairman and chief executive, was discussing the fallout from a new era of tighter financial regulation, and calling for the Federal Reserve to scale back a proposed rule that would sharply restrict the ‘swipe fees’ banks charge retailers for accepting debit cards.
‘We have always been supportive of changes designed to better protect and serve consumers, businesses and the financial system,’ Stumpf said Wednesday as his San Francisco-based bank announced record earnings.
But he added: ‘In some cases, however, such as the currently proposed control of debit interchange fees, suggested changes may have unintended consequences for the U.S. consumer.’
Translation: new fees to replace the banished old ones. Wells Fargo is trying to operate more efficiently and find new customers to offset the price tag for new regulation, he said, but ‘there will be some costs that will be passed along to customers.’
‘We’ve begun to implement some changes,’ Stumpf said, apparently referring to a $5 monthly checking fee, imposed last July on new customers. ‘And there are more to come.’
Wells Fargo has moved more slowly than some other big banks in raising checking fees to consumers. Some of the louder screams are coming from JPMorgan Chase customers who once banked with Washington Mutual, the giant Seattle thrift known for its widely advertised free checking. WaMu failed as the financial crisis set in -- from high-risk loans, not no-fee checking -- and was taken over by Chase, which imposed some new fees last month.
Noting that Wells Fargo has a history of scoring higher than other big banks in customer-satisfaction surveys, Stumpf said he would try to keep things that way.
‘As we work through these changes,’ he said, ‘we will focus on three things -- providing our customers with choices and education about their options, rewarding our customers for doing more business with us, and finally offering meaningful value at fair prices.’
His remarks followed Wells Fargo’s report that it had earned $3.4 billion during the fourth quarter, up 21% from a year earlier, and $12.4 billion for all of 2010. Both profits set records for the bank.
Wells Fargo’s recording of the conference call can be accessed here -- the remarks about consumer costs are near the beginning of the lengthy conversation -- and Seeking Alpha has a transcription here.
-- E. Scott Reckard
Upper photo: Wells Fargo CEO John Stumpf. Credit: Wells Fargo
Lower photo: Wells Fargo’s emblematic stagecoach. Credit: Wells Fargo
