Wells Fargo has been struggling to get Americans to apply for credit cards in recent times.
In February, Wells Fargo experienced a sudden 55% drop in credit card applications. It was the steepest drop since the eruption of the fake account scandal last September.
The trouble doesn’t end there, Wells Fargo (WFC) announced that checking accounts opened by customers fell by 43% compared to the previous year at this time and there was a 21% drop in interactions with branch bankers for the same month.
Every month since the shocking settlement that rocked the country and the bank itself, Wells Fargo experienced double-digit drops in the opening of credit cards application and checking accounts.
February 2016 was a leap year and Wells Fargo blamed the shorter February this year for some of their recent struggles.
Shareholders didn’t seem happy with that explanation by Wells Fargo and it resulted in a 1% dip in their stock on Monday, however, they still have a record high even with all the commotion.
According to regulators, employees at Wells Fargo might have submitted up to 565,000 credit card applications unbeknownst to their customers. As a result of the fraudulent applications, there was a negative impact on the credit scores of some customers, while others were burdened with unnecessary fees. Wells Fargo has paid back the inappropriate fees and has promised to restore the credit ratings of customers who were dinged.
The settlements, allegations and employee mistreatment ultimately tarnished the reputation of Wells Fargo as well as some of the whistleblowers who were trying to stop the fraudulent activity.
In spite of this, customer loyalty scores for the bank rose in February for the fourth consecutive month.
But somehow, customers are not leaving Wells Fargo en masse, even the ones with other products at the bank. The primary checking customers at Wells Fargo actually increased by 2% in February to 23.5 million.
Current customers are still using the Wells Fargo credit cards and balances increased by 8% over the previous year.
According to John Shrewsberry, Chief Financial Officer at Wells Fargo, since the settlement, the trends have stabilized in general.
Shrewsberry did go on to say that the scandal negatively impacted Wells Fargo by increasing their expenses and every quarter they were spending $40 million to $50 million on consultants, lawyers and other external experts. In order to balance out the increased expenses as well as responding to the increase in online banking, Wells Fargo made an announcement earlier this year to permanently close over 400 branches by the conclusion of 2018.
Other steps taken by Wells Fargo to bounce back from the crisis include restructuring its senior management team and eliminating the infamous sales goals which led to their bankers opening so many unauthorized accounts, with many of them being fake.