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| Wells Fargo new account creation is down 44% since last year. |
New account creation fell by 27% since the bank's $185 million fine was announced
Consumers might still be wary of Wells Fargo in the wake of its fake account scandal.The bank said that customers opened 44% fewer new accounts this October than they did at the same time last year, Bloomberg reported. Since the scandal became public in early September, new account creation has dropped by 27%.
“It takes time to rebuilt trust,” Mary Mack, Wells Fargo’s head of community banking, told Bloomberg. She added that new account creation showed signs of stabilizing this month.
Wells Fargo agreed to pay $185 million in fines after employees were found to have created more than 2 million secret accounts in customers’ names. More than 5,000 Wells Fargo workers were fired for creating the accounts and funding them from consumers’ other accounts without their knowledge—allegedly in an effort to meet the company’s aggressive sales targets.
If you’re an investor in Wells Fargo—which you might be through your 401(k) or other holdings—you might also be in for some bad news. If the scandal and associated fine continue to affect the bank’s bottom line, its stock price—which has rebounded to pre-scandal levels—might take a hit down the road.
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