In the dark days of the 2008-2009 financial crisis, only the strongest banks survived and thrived. Wells Fargo (NYSE:WFC) was one such bank.
But there was a cost. Wells Fargo had to fight lawsuits citing aggressive -- even predatory -- sales tactics. Yet it's managed to face these challenges effectively. Here are a few words on how it's been able to do that, while remaining very competitive in its industry.
Listen to the full podcast by clicking here. A full transcript follows the video.
This podcast was recorded on 11/30/15.
John Maxfield: But it's important still, particularly at this early stage in this whole process, that we keep in mind that these are stories that could be coming. ... And I don't doubt that Wells Fargo has a very aggressive sales culture, right? They're known for cross-selling. You've got to push your employees to sell if you want to cross-sell. That's just how it works, right? But whether or not it actually crossed the line and whether this is going to change the investment theory on Wells Fargo is something I really, really doubt. It's not going to cause, I would be surprised if this thing cost tens of billions of dollars for Wells Fargo.
Gaby Lapera: Right, and that is one place that Wells Fargo is ahead of a lot of the other big banks, is that they didn't have really any large settlements that they had to pay post-2008 financial crisis.
Maxfield: Yeah, and I mean, it made a huge difference. I think that Bank of America's tally, and this is from Bank of America itself, was $195 billion from the crisis -- $195 billion is what the crisis cost them. So the fact that Wells Fargo has largely avoided all that, yeah, it could have a few hundred million dollars here and there and it shouldn't be doing things that if they really are pressuring, I mean, I think we can all agree with that, that they shouldn't be doing those things. But as an investment this is still an incredibly solid bank.
Lapera: Yeah. I figure we should probably close with a quote from Wells Fargo, which is from Mary Eshet, which is their spokeswoman. "Wells Fargo's culture is focused on the best interest of its customers in creating a supportive, caring, and ethical environment for our team members." Which, that is what she is paid to say.
Maxfield: Yeah, you don't think that she wanted to come out and say, "We tell our customers there are employees to make sure the customers buy things whether they like it or not."