Minor updates on Wells Fargo fiasco
Not a lot of news in the last few days about the Wells Fargo new account fiasco, but there are a few pieces of information.
12/12 – Reuters – Prudential stops distribution of policies sold through Wells Fargo – With the increased attention on the low-cost life insurance product from Prudential, called MyTerm, which was sold by Wells Fargo, the insurance company suspended sales of the product through the bank.
Article says that separately Wells Fargo suspended sales of renters insurance that goes through a different insurance company.
The California Insurance Commission has opened an investigation of the product sales.
Article says the California regulators says the New Jersey insurance regulator has also opened an investigation. Reporter cannot get confirmation from the New Jersey regulator.
12/16 – Francine McKenna at MarketWatch – Prudential allegations complicate Wells Fargo’s work with new partners – Wells Fargo is planning to roll out a robo-advisor in January to guide depositors in their investment decisions. The robo-advisor is the product of a third-party. Allegations that Wells was opening insurance accounts on behalf of depositors without permission could make this roll-out more complicated.
Article refers to the California insurance commission opening an investigation and Prudential suspending sales of their MyTerm policy through Wells Fargo.
Other new information in the article is a representative and senator asking Prudential for more information.
12/16 – Tomi Kilgore at MarketWatch – Wells Fargo Bank branch visits declined in November – Article says Wells announced that in November new consumer checking accounts were down 9%. Branch transactions were down 5% in November compared to October and down 3% from prior year.
In my previous post, A few more updates on the ongoing banking fiascos: Wells Fargo and J.P. Morgan, I mentioned:
… new accounts opened in October are down 27% from the previous month and down 44% from October 2015.
So for consumer checking accounts that’s a drop of 27% in October and another 9% in November. Seems to me that is an expected reaction. I guess the good news for Wells is the November drop wasn’t a lot more severe.