U.S. Probes Wells Fargo’s Retention Of Employee Communications

Reuters, 21 February – According to the bank on Tuesday, US regulators are looking into Wells Fargo & Co.’s (WFC.N) use of “unapproved” messaging technologies to retain employee communications. This is the latest development in a campaign that has already resulted in billions of dollars in fines.

The fourth-largest U.S. bank revealed in a filing that the United States Securities and Exchange Commission and the United States Commodities Futures Trading Commission have launched the investigations.

The investigation sheds light on the difficulties Wall Street organizations have had controlling employee communications in the era of the work-from-home epidemic, particularly those sent over mobile devices and apps like WhatsApp.

Nowadays, most companies use hybrid work models, which let employees split their time between offices and remote locations.

The SEC fined 16 financial institutions, including large international banks, a total of $1.8 billion in September for staff members discussing transactions and deals on their personal devices and applications.

Societe Generale (SOGN.PA), the third-largest bank in France, was earlier this month included in a U.S. securities regulator investigation investigating potential employee usage of illicit messaging services.

Wells Fargo lays off mortgage bankers – CNBC

Reuters, 22 February – As part of its recent strategic shift, Wells Fargo & Co (WFC.N) lay off hundreds of mortgage bankers this week, according to CNBC’s story on Wednesday, which was based on sources with knowledge of the situation.

Top producers, including bankers who topped $100 million in loan volumes the previous year and some who went to an internal sales conference for high achievers, were hit by the layoffs, the paper said.

Wells Fargo stated there were “displacements” across its home lending division in line with previously announced strategic initiatives and a decline in mortgage volumes in an email response to Reuters.

The alleged job losses come on top of a wave of layoffs that have been reported at most major banks as they attempt to streamline operations in the wake of a slowdown in dealmaking, sluggish economic growth, and higher interest rates.

Mortgage bankers and home loan advisors, who work across the United States and are primarily compensated on sales volume, are among the affected employees this week, according to the article.
Wells Fargo fires mortgage bankers, according to CNBC
Reuters, 22 February – As part of its recent strategic shift, Wells Fargo & Co (WFC.N) lay off hundreds of mortgage bankers this week, according to CNBC’s story on Wednesday, which was based on sources with knowledge of the situation.

Top producers, including bankers who topped $100 million in loan volumes the previous year and some who went to an internal sales conference for high achievers, were hit by the layoffs, the paper said.

Wells Fargo stated there were “displacements” across its home lending division in line with previously announced strategic initiatives and a decline in mortgage volumes in an email response to Reuters.

The alleged job losses come on top of a wave of layoffs that have been reported at most major banks as they attempt to streamline operations in the wake of a slowdown in dealmaking, sluggish economic growth, and higher interest rates.

The affected workers this week include mortgage bankers and home loan consultants, who work across the United States and are compensated mostly on sales volume, the report said.

According to information obtained by CNBC, Wells Fargo fired hundreds of mortgage bankers this week as part of a massive round of layoffs brought on by the bank’s most recent strategic shift.

According to those with knowledge of the matter, the layoffs, which were announced on Tuesday, included a number of top producers, including a few bankers who exceeded $100 million in loan volumes the previous year and who just attended an internal sales conference for high achievers.

Wells Fargo, which formerly dominated the US mortgage market, is scaling back its involvement in certain segments of the business under CEO Charlie Scharf. The bank is primarily concentrating on providing services to current clients and underserved neighborhoods, rather than attempting to increase its proportion of American home loans. The change follows a slump in loan volumes caused by dramatically higher interest rates that forced Wells Fargo, JPMorgan Chase, and other companies to eliminate thousands of mortgage positions over the previous year.

According to the people, who asked to remain anonymous because they were discussing personnel issues, those laid off this week at Wells Fargo included mortgage bankers and home loan advisors. These employees are dispersed across the nation and are paid mostly based on sales volume.
According to the sources, the corporation fired bankers who worked in regions outside of its branch network because they didn’t fit in with the new approach of satisfying current clients. According to one of the persons, these cuts affect banking on the East Coast and the Midwest.

Palm Desert Resort

Last year, a few of those folks achieved sufficiently enough to be flown to a resort in Palm Desert, California, for a conference that the corporation sponsored earlier this month. A posh community famed for its warm climate, golf courses, and proximity to Palm Springs is called Palm Desert.

Top salespeople are frequently honored in the financial industry with multiday events hosted in posh resorts that mix recognition, entertainment, and educational sessions. For instance, a sales conference will be held in April by JPMorgan’s mortgage division.

According to a Wells Fargo spokesman, the bank has endeavored to retain as many people as possible by communicating with affected staff, offering severance and career assistance.

We announced strategic ambitions to develop a more concentrated home lending business in January,” she said. We have made relocations across our home lending business as part of these measures, in line with this strategy and in response to noticeably declining mortgage volume.

Via its centralized sales channel, the bank will continue to provide services to customers “in every market in the United States,” she noted.

Although the most recent round of layoffs wasn’t based on performance, Wells Fargo has also been firing mortgage employees who don’t achieve minimum productivity goals.

According to one of the sources, in locations with costly housing, it might have been at least $10 million in loans during the previous 12 months.

The bank reported last month that mortgage activity fell by 70% to $14.6 billion in the fourth quarter, continuing to decline. By the end of 2022, Wells Fargo expects to have roughly 11,000 fewer employees than it did in 2021.

According to one of the persons, recruiters swarmed high performers in an effort to poach them after the January mortgage announcement, which was first reported by CNBC.
In a town hall meeting on January 25, Scharf spoke to the workforce and reaffirmed his justification for the mortgage reduction.

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