Is Wells Fargo a Gift for Community Banks?


Wells Fargo Just Gave Small Banks a Big Gift (American Banker, September 15, 2016)

After reading the American Banker article the week after the Wells Fargo news hit I polled about 20 community bankers on the subject. Here are a number of the replies, some from banks that complete with Wells, some that don’t. These were initial reactions, before (now retired Wells CEO) John Stumpf made his visits to Washington to appear before Congressional committees and editorial writers and news anchors across the country opined on the bank’s high-pressure sales practices.


The Wells Fargo news is so disturbing. We have and will continue with our message and have a big business campaign getting ready to launch soon.  It was already in the planning before the Wells news broke…We are more subtle in our approach. As an example, our COO did a beautiful job at a networking event sharing the bank’s culture, emphasizing family ownership and that “We are different.” I felt it really hit home. 
–EVP, Head of Retail, $3BN bank

I think it is bad for everyone, so not much of an opportunity. By the facts, it is overdone. So less than one percent of your people annually were doing something against your values and YOU FIRED THEM? This is presented as evil banks, slimy, and worse? Called before Congress for something that harmed consumers at most (as I expect this number was inflated) by $500,000 annually? Hatred of the bankers is truly unbelievable, which again, helps no one in the industry. And continuing the story that the big banks ruined the economy, with no recognition that the lack of regulation of the CDS market was the single largest contributor to the crash.
 –President & CEO, $10BN Bank

I agree it is an opportunity but have not had a chance to discuss with the team how to capitalize. We don’t do a lot of advertising and any message would need to be positive. It could be challenging to create a good buzz that is any louder or more effective than the media itself.

I sure wish we could turn this into a VW moment but am just not sure the public impression of big banks was high enough for the disappointment to be noticed.
 –President & CEO, $1BN bank

Definitely good for community banks, but gives more power and authority to CFPB.
 –President & CEO, $700MM bank

Unfortunately I am afraid this is bad for all of us, whether small or large. The after affect is going to be interesting–yet another hurdle for those of us in the banking industry.
—EVP, Head of Retail, $3BN bank

In my opinion, yes, it is an opportunity that we are currently trying to capitalize on. If you are familiar with “big” bank cultures, this comes as no surprise. Any of the larger, high pressure banks could be hit with similar suits. Quality of accounts does not matter at all. It is hit your targets any way possible. Many times incentive systems are not aligned with the best interests of the customer, and incentives drive behavior in that environment. 

I am not sure what overall impact this will have, but I am sure many Wells Fargo customers are checking their accounts more frequently. Overall, it does not look good for the industry, but it puts community banks in a more positive position than larger institutions.
–SVP, Head of Retail $1.8BN bank

We’ll stick to touting our model, instead of assessing others. We have always been a needs-based selling organization and non-commissioned shop on the retail sales platform. That never made a difference to customers in the past, but maybe it will now. We expect increased regulatory inspection and cost as a result of Wells’ actions. 
–EVP, Head of Retail $18BN bank

Wells Fargo is not in our market so we see no clear opportunity. On the other hand, we see additional regulatory scrutiny as another “Big Bank” exercises poor judgment. We fear we all will feel the impact.
 –EVP/ COO, $800MM bank

While the issue will not represent an opportunity for us because Wells Fargo has very little overlap with our market, Community Banks with overlap will harvest new customers. The marketing approach should focus on small businesses first, then consumer mass market. The real differentiation between large banks and community banks occurs with excellent service, access to key decision makers and our ability to be nimble when tailoring loan/deposit solutions.
–Director of Sales, $1BN Community Bank

We will continue to build relationships just like you all helped us with. I would rather talk about our bank with clients than discuss Wells Fargo. They know the reputation that we have built and they also read the news. I may be old school, but that’s more my style. Wells Fargo can dig their own grave without us helping them.
–President, $1.5BN bank

Have I dropped everything and embarked on a strategy to seize this moment? No. There are plenty of rolled eyes when the subject comes up though.
–Market President and Commercial Banking Head, $9BN regional bank

This is an interesting situation and once again underscores why I have never been in favor of widget sales goals, but rather, for net deposit and/or loan growth of a given group, portfolio, office etc.
—Head of Retail, $3BN bank

This has potential to brush all banks with the same broad brush and can’t we all see Congressional finger pointing in the direction of Dodd-Frank hasn’t gone far enough. Good grief. We all knew this was happening – employees coming to us and others from Wells have spoken of that culture. As Wells was held up as a “model” retail bank, others have tried to emulate that model and actually have sought talent from Wells to assist so the model/thinking permeates the industry. I remember one our senior managers holding up the Wells annual report some years back barking the mantra “8 is GREAT” and pushing that we needed to be like that. We all have examples of unmonitored/managed bad behavior with some who behaved badly being held up as positive examples because of their “numbers”.

I agree with the notion of not throwing spears but promoting our strengths and let the market decide. Since the news, we have taken the opportunity to talk with our commercial and retail teams to:

–Reinforce that we are not Wells;
–Assure everyone we are focused on customer needs….not ours;
–Make sure we are all developing deep relationships and know our customers well.

It’s been a good opportunity to be uplifting about who we are.

–SVP/ COO at $800MM bank

It is an embarrassment to the industry. If done right, I think you could gently use it to advantage. As a local community bank, our goal is to support the communities where we work and live. We have the luxury of looking our customers in the eye, not only at work but at the grocery store, church and on the ball field. Doing the right thing is a cultural standard we live by.
—SVP, Head of Retail $1BN bank

Not really. My personal feeling is that the big banks can survive a lot of things. As long as customers can bank easily (through technology) they don’t seem to be too sensitive to this bad press. I could be wrong; this could be the issue that drives people to make a change. Thus far it just hasn’t happened.
-–Director of Sales Performance Management at $6BN bank

It would be a good opportunity it we competed against Wells–we don’t. We can try to link Wells to other similar-sized banks we compete with, but this news probably isn’t enough to move their clients. I’m glad the ICBA will continue to distinguish Community Banks from banks, so we don’t get punished due to Wells egregious actions!
–President & CEO, President of $300MM bank

We had a similar much smaller scale issue like this at my former employer. It’s the widget mentality that puts a lot of pressure on front-line sales folks. Community banks are less apt to do this. So on the margin it’s a plus for us.
—Senior Lending Officer, $700MM bank

I don’t think we’ve seen any opportunities from this fallout, but as a whole folks are getting tired of the “big bank” mentality and looking at community banks as a way to get away from the nickel and diming, and the forced sales mentality.
 –COO, $700MM bank

What do you think? Feel free to share your comments in the space below or email

Webinar Alert: We will be hosting a complimentary webinar on “Cross-Selling Post Wells Fargo: A Roadmap for Bank Management” on November 16 at 1 PM Eastern. Joining us will be Charles Wendel, the President of Financial Institutions Consulting. Go to and register. For more information call Susan Lersch at 610-296-4773 or email her at


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