Banks Deserve Some of Consumers' Criticism: Wells Fargo CEO
The U.S. banking industry has a lot of work ahead of it to restore public trust following the financial crisis, Wells Fargo CEO John Stumpf said.
For its part, Wells has forgiven some $4 billion in mortgage principal for its customers and donated millions toward community programs aimed at facilitating home ownership, Stumpf said in a CNBC interview.
"We are clearly part of financial services, and some of what the people feel about Wall Street or banks in general is earned," he said. "Some of us did not do a good job as an industry. But I think we're going to rebuild our reputation one customer at a time, one community at a time."
Banks came under fire after shoddy lending practices and unbridled derivatives trading helped spark the crisis that exploded in 2008 and brought down some of the Street's biggest names.
Wells Fargo was able to avoid many of its peers' troubles. Stumpf pointed out that the bank did not issue the adjustable-rate mortgages with low teasers rates that led to the millions of foreclosuresover the past four years.
"Turns out it wasn't good for (customers) and it wasn't good for the banks who did that," he said.
Stumpf said his company is taking a community-based approach, including allocating $15 million in grant money to Los Angeles "to help families who cannot afford a home to buy a home."
"People want to see action and they want to see banks acting responsibly," he said. "It's the whole industry."