Daily Archives: April 6, 2017

Wells Fargo’s aggressive sales tactics hit small firms: WSJ

Wells Fargo has restructured its credit card processing business after an internal probe found some employees had falsely reported customer sales numbers, the Wall Street Journal reported on Wednesday.

This raises questions about the scope of the sales scandal that hit the lender’s retail banking business last year and cost Chief Executive John Stumpf his job.

The probe also found that employees had pushed small firms toward more expensive contracts as part of aggressive sales tactics, the Journal reported.

Wells Fargo was not immediately available for comment.

The company had said on a conference call in January that it had made progress on evaluating potentially unauthorized credit card accounts, including any impact to customers’ credit scores and analysis of credit signatures to verify authorization.

Read on.

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Minority Neighborhoods Pay Higher Car Insurance Premiums Than White Areas With the Same Risk

Our analysis of premiums and payouts in California, Illinois, Texas and Missouri shows that some major insurers charge minority neighborhoods as much as 30 percent more than other areas with similar accident costs.

OTIS NASH WORKS SIX DAYS A WEEK AT TWO JOBS, as a security guard and a pest control technician, but still struggles to make the $190.69 monthly Geico car insurance payment for his 2012 Honda Civic LX.

“I’m on the edge of homelessness,” said Nash, a 26-year-old Chicagoan who supports his wife and 7-year-old daughter. But “without a car, I can’t get to work, and then I can’t pay my rent.”

Across town, Ryan Hedges has a similar insurance policy with Geico. Both drivers receive a good driver discount from the company.

Yet Hedges, who is a 34-year-old advertising executive, pays only $54.67 a month to insure his 2015 Audi Q5 Quattro sports utility vehicle. Nash pays almost four times as much as Hedges even though his run-down neighborhood, East Garfield Park, with its vacant lots and high crime rate, is actually safer from an auto insurance perspective than Hedges’ fancier Lake View neighborhood near Wrigley Field.

Read on.

Housing advocate groups create website to track Ben Carson

Housingwire:

Guillermo Mayer, president and CEO of the San Francisco nonprofit and legal advocacy group Public Advocates, along with the Poverty & Race Research Action Council, the Lawyers’ Committee for Civil Rights Under Law, and PolicyLink, collaborated together to create CarsonWatch to document the secretary’s public statements and appearances, the article explained.

From the piece in CNBC:

The founders of CarsonWatch hope to broaden to coalition to include housing advocates in cities across the country, to both increase on-the-ground coverage of Carson and widen the discussion on housing policy. They also hope to engage lawyers, to see when and if legal actions may be warranted.

After launching in mid-March, CarsonWatch and its allies have attended Carson’s poorly promoted listening tour, and plan to continue to report on his statements and public events. The upcoming budget deliberations offer an important opportunity to track how different HUD programs fare and keep the agency’s leaders, as well as the administration and Congress, accountable.

Here is a screen grab of the website.

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New Wells Fargo CEO pens open letter thanking customers for their loyalty

lol!

Housingwire:

This week, Tim Sloan, who took over as CEO when John Stumpf stepped down, penned an open letter to the bank’s customers, thanking them for their loyalty.

“Thank you,” Sloan’s letter opens. “To all who have stood by us as we have worked to make things right at Wells Fargo, we thank you. We know you have many choices when it comes to banking, which is why we feel it’s our privilege to serve you.”

In the letter, Sloan says that his first action as CEO was apologizing to the bank’s employees, its customers, and the public for “our company’s mistakes.

“At that time, I made a commitment to build a better bank, and to earn back your trust,” Sloan says.

Sloan writes in the letter that there is still work to be done, but notes the steps the bank has taken so far, including reaching that $110 million settlement and refunding approximately $3.2 million to approximately 130,000 retail and small business accounts.

And to any other customers who were victims of the fake account scandal, Sloan pledges to take care of them.

“To any customer whose credit might have been affected by unauthorized account openings, we commit to you that we will make things right,” Sloan writes.

Sloan also notes the changes to the bank’s compensation plan, which eliminated product sales goals.

“Building a better bank is about fixing what went wrong and committing to find new and better ways to serve our customers,” Sloan writes.

“Even as I write this, we continue to introduce new ways to deliver services, develop our people, and manage risks,” Sloan concludes. “All that said, I want to assure you that regaining your trust remains our top priority. Again, thank you for standing by Wells Fargo as we build a better bank.”

Citi Has an Alternative ‘Big Short’ on Retail

Wall Street’s bet against empty malls is getting too crowded, according to Citigroup Inc. analysts, who instead recommend wagering against individual retailers as the “next big short.”

Investors should consider buying default protection through the derivatives market on a basket of bonds from retailers that include Target Corp., Gap Inc., Nordstrom Inc. and Macy’s Inc., according to Citi’s Anindya Basu and Calvin Vinitwatanakhun.

The strategy differs from the one pursued by a growing number of hedge funds, which have wagered against mall properties through CMBX derivatives indexes that tracks commercial mortgage-backed securities. The prevailing theory is that failing brick-and-mortar retailers will mean higher vacancies and bankruptcies for mall operators, with losses inflicted on CMBS holders.

Read on.