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Saturday, September 17, 2016

Where art thou, First Union?

When it was clear in 1986 that Gail, Ryan and I would move from Atlanta to Raleigh, I wanted to open a bank account in Raleigh several months before the family would arrive. So, during a business trip I dropped by Crabtree Valley Mall and visited the branches of the "big three" banks in Raleigh at the time. Each heard the same story: I didn't have much time to talk, but I would leave my name and Atlanta home address so that they could send me a packet of available services and a fee list.

  • Nothing ever arrived from NCNB.
  • Wachovia sent something by first-class mail, and I received it five days later.
  • First Union sent me a package overnight.
I went with First Union and became a very happy customer. Ultimately First Union was acquired by Wachovia. I had misgivings about the takeover, but Wachovia turned out to be good, too.

But Wachovia got caught playing mortgage games in 2008-2009, and along came Wells Fargo.

Only two things good have happened since: on the rare occasions when I travel in the western U.S., there are more ATMs to use; and I prefer Wells Fargo's process for accessing a safe deposit box. Otherwise I've found Wells Fargo to be generally uncooperative compared to First Union or Wachovia, and I tired long ago of being upsold everytime I talked to a Wells Fargo person, used their ATM, or used their website. Look, if I want an additional service from Wells Fargo, I'll ask you about it!

But all that upselling was indicative of an underlying management problem, it turns out. I am not surprised by the disaster now revealed. I am surprised, however, that no head has rolled yet within the bank. Let's hope that the Federal Reserve, the Department of Justice, or the Congress plows into this situation. Civil litigation by customers of Wells Fargo is inevitable, but that's insufficient. Heads must roll, and the bank and relevant executives including the CEO and the president of the consumer banking division must be prosecuted, fined, and — in the case of the executives — jailed. That's the only way to prevent this from recurring.

As to whether Gail and I will take our banking business elsewhere, we haven't decided yet.