×

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO SPEAKS WITH JOHN STUMPF, WELLS FARGO CHAIRMAN & CEO TODAY

WHEN: TODAY, FRIDAY, OCTOBER 21ST

WHERE: CNBC'S "CLOSING BELL WITH MARIA BARTIROMO"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Wells Fargo Chairman & CEO John Stumpf today on CNBC's "Closing Bell with Maria Bartiromo." All references must be sourced to CNBC.

Wells Fargo CEO Speaks Out

BARTIROMO: JOINING ME NOW IN A CNBC EXCLUSIVE IS CHAIRMAN & CEO JOHN STUMPF. MR STUMPF GOOD TO HAVE YOU ON THE PROGRAM. WELL LETS GET RIGHT DOWN TO THOSE TWO ISSUES I REALLY WANT TO GET YOUR TAKE ON HOW WE'RE GOING TO DECLOG THE HOUSING MARKET GIVEN YOUR LEADERSHIP IN THAT AREA BUT LET'S STICK ON THESE THINGS THAT ARE HAPPENING IN WASHINGTON RICH DURBIN IS SENDING YOU A SECOND LETTER HOW HAVE YOU RESPONDED TO THAT CRITICISM OF THE THREE DOLLAR MONTHLY FEE FOR DEBIT CARD USERS.

STUMPF: MARIA WE ARE REALLY FOCUSED ON OUR CUSTOMERS YOU KNOW OUR ECONOMICS HAVE CHANGED IN THAT BUSINESS BECAUSE OF REGULATORY AND LEGISLATIVE REFORM BUT WE REALLY WANT TO HAVE LONG-TERM SUCCESSFUL RELATIONSHIPS WITH OUR CUSTOMERS WE OFFER A LOT OF CONVENIENCE WE OFFER VALUE THEY CAN GO TO ANY STORE OF OUR 6500 STORES AND NOT GET CHARGED BY A TELLER WE HAVE FREE ONLINE FREE ONLINE BILL PAY AND A LOT OF THINGS SO WHAT WE ARE DOING IS A TEST TO UNDERSTAND HOW WE BEST DEAL WITH THESE CHANGES AND WE WILL FIND THAT RIGHT BALANCE IT WILL BE GREAT FOR THE CONSUMERS AND GREAT FOR OUR SHAREHOLDERS

BARTIROMO: YOU KNOW I HAD A LITTLE BIT OF A TANGO YESTERDAY WITH THE DEPUTY TREASURY SECRETARY ABOUT THIS CAUSE IT DOESN'T MAKE A LOT OF SENSE TO ME I DON'T UNDERSTAND WHAT THE GOVERNMENT GOT OUT PUTTING THAT FEE TO THE MERCHANT WITH THE DURBIN AMENDMENT HE REALLY DIDN'T HAVE A CLEAR ANSWER FOR IT BUT YOU KNOW YOU JUST SAID SOMETHING TO ME THAT STRUCK ME AND I HAVE TO PUSH BACK ON IT YOU SAID WE ARE REALLY FOCUSED ON OUR CUSTOMERS THEN WHY ARE YOU CHARGING THREE DOLLARS A MONTH FOR USING THEIR DEBIT CARDS

STUMPF: WELL MARIA FIRST OF ALL THINK OF THE VALUE HERE YOU CAN TALK TO A TELLER YOU CAN GET 7/24 SUPPORT FROM PHONE BANKERS THERE IS ZERO LIABILITY IF SOMEONE HAS AN UNAUTHORIZED CHARGE THERE'S TERRIFIC VALUE HERE AND OVER A LONG PERIOD OF TIME MOST OF OUR CUSTOMERS PAY FOR AND THE SERVICES BY DOING MORE BUSINESS WITH US WE HAVE BEEN KIND OF THE CROSS-SALE CHAMPIONS FOR A LOT OF YEARS AND IN SOME PLACES THAT IS NOT THE CASE SO WE DO TESTS. WE TEST ALL THE TIME AND WE WILL FIND OUT THE RIGHT BALANCE HERE AND WILL COME TO THE RIGHT CONCLUSION AND AT THE CORE OF THIS IS TRUST AND THAT IS HOW WE HAVE BEEN GROWING OUR BANK FOR SO MANY YEARS IN FACT WE ARE GROWING FASTER NOW THAN WE HAVE IN MY HISTORY WITH THE COMPANY

BARTIROMO: RIGHT AND OF COURSE YOU'VE GOT A REAL LOYAL INVESTOR BASE OUT THERE. YOU'VE BEEN SUED ALONG WITH BOFA AND JPMORGAN FOR ALLEGEDLY COLLUDING TO FIX THE FEES PAID BY CUSTOMERS FOR ACCESS TO ATMS ARE YOU COLLUDING?

STUMPF: WELL MARIA I HAVEN'T EVEN SEEN THE COMPLAINT I SAW IT IN THE PAPER AND BASED ON WHAT I SAW THERE THERE IS NO MERIT TO IT AT ALL

BARTIROMO: THERE'S NO MERIT TO IT WHY CAN YOU EXPLAIN THAT A BIT SO THAT OUR VIEWERS HAVE A CLEAR UNDERSTANDING ON WHY YOU SAY THERE IS NO MERIT TO COLLUDING IF YOU BOFA AND JPMORGAN HAVE ALL BEEN SUED THAT YOU'RE FIXING THE FEES TO ATMS PEOPLE WANT TO GET TO THEIR MONEY RIGHT WHY IS IT NO COLLUDING?

STUMPF: WELL FIRST OF ALL PEOPLE CAN GET THEIR MONEY FROM OUR ATMS FOR FREE THAT'S ONE OF THE BENEFITS AND WE HAVE 12,000 ATMS AROUND THE COUNTRY AND MOST OF THEM ARE ENVELOPE FREE AND ADVANCE FUNCTIONING AND SO FORTH SO AGAIN I JUST READ WHAT PROBABLY YOU READ AND BASED ON WHAT I READ THERE THERE IS ABSOLUTELY NO MERIT TO THAT AT ALL

BARTIROMO: THAT IS A GREAT POINT IF YOU ARE A CUSTOMER YOU GET IT FREE YOU NEEDED TO POINT THAT OUT I AM GLAD THAT YOU DO LET ME ASK YOU ABOUT THE HOUSING MARKET SOMEONE MADE AN INTERESTING TO ME THE OTHER DAY OFF THE RECORD ACTUALLY HE SAID TO ME YOU KNOW WE CAN TALK ABOUT RECOVERY IN THE HOUSING MARKET ALL WE WANT BUT THE BOTTOM LINE IS WITH ALL OF THESE MODIFICATIONS GOING ON ALL OF THE BANKS ARE TRYING TO MODIFY THINGS THERE IS ONE THING DIFFERENT THIS TIME AROUND THAN IN 2006, 2007 YOU BULL OR READY TO BUST PERIOD AND THAT IS YOU CAN'T LIE THIS TIME SO YOU CAN'T REALLY MODIFY A HOUSING AGREEMENT A MORTGAGE WHEN THE BLACK AND WHITE TELLS THE STORY YOU CAN'T LIE IF YOU DON'T HAVE THE WHEREWITHAL FOR THE HOUSE YOU DON'T HAVE THE WHEREWITHAL FOR THE HOUSE IS THAT THE ISSUE?

STUMPF: WELL I REALLY THINK THAT IS ALL ON THE ORIGINATION SIDE ON THE MODIFICATION THE BIGGEST CHALLENGE IN MODIFYING A LOAN IS LACK OF INCOME MANY BORROWERS SIMPLY DON'T HAVE A JOB IF WE COULD FIX THE JOBS PROBLEM WE'D FIX THE HOUSING PROBLEM BUT THAT BEING SAID AS A LARGE SERVICER WE TAKE THIS VERY SERIOUSLY A CUSTOMER THAT'S PASSED IS STILL A VERY IMPORTANT CUSTOMER OF OUR COMPANY AND WE HAVE MODIFIED OVER 716,000 MORTGAGES SINCE 2009 AND WE HAVE FORGIVEN 4 BILLION OF PRINCIPAL ON ALL OUR MORTGAGES THAT WE OWN AS ONE OF THE TOOLS TO HELP PEOPLE STAY IN THEIR HOMES.

BARTIROMO: SO WHAT ELSE NEEDS TO BE DONE TO CLEAR THE LOGJAM OF HOMES ON THE MARKET AND STOP PRICES FROM FALLING LET ME YOUR A GUY WHO HAS BEEN STUDYING THIS FOR MANY MANY YEARS YOU ARE THE LARGEST LENDER OUT THERE WHAT DO YOU THINK NEEDS TO BE DONE SIR HOW DO YOU FIX HOUSING?

STUMPF: THERE ARE IDEAS THERE ARE 70 MILLION HOMES IN AMERICA 50 MILLION HAVE A MORTGAGE ON THEM AND THE AVERAGE MORTGAGE IS 200,000 DOLLARS YOU HAVE A 10 TRILLION DOLLARS WORTH OF DEBT FIVE MILLION OF THOSE 50 WITH MORTGAGES ON ARE PASSED DUE THAT'S ON AVERAGE NOW ON OUR PORTFOLIO ITS QUITE A BIT LESS IT IS 7.6% AND IF YOU DON'T INCLUDE US IN THE AVERAGE THE AVERAGE IS ABOUT 11% SO ANYWAY ONE IDEA ABOUT A THIRD OF ALL HOMES SOLD TODAY ARE DISTRESSED PROPERTY SALES THOSE SELL AT VERY STEEP DISCOUNTS TO THEIR NEIGHBORS WHO ARE NOT SELLING AS DISTRESSED IF WE COULD PUT THOSE INTO A RENTAL POOL OF SOME TYPE THAT WOULD HAVE AN IMMEDIATE IMPORTANT IMPACT ON THE VALUE OF HOUSING

BARTIROMO: DO YOU THINK THAT COULD BE DONE IS THIS AN IDEA YOU SEE MATERIALIZING IF YOU HAD TO TAKE A GUESS IN TERMS OF WHEN THIS ALL TAKES PLACE WHAT'S THE TIMING BECAUSE THIS IS ONE AREA OF THE MARKET THAT HAS BEEN STUCK IN THE MUD FOR SEVERAL YEARS

STUMPF: THERE IS A LOT OF DISCUSSION ABOUT THIS I KNOW THE INDUSTRY SUPPORTS THIS AND THERE'S A LOT OF DISCUSSION IN WASHINGTON WHEN I AM BACK THERE TALKING TO FOLKS I AM PUSHING THIS IDEA THERE ARE OTHER IDEAS BUT I THINK THIS IS ONE OF THE MOST IMMEDIATE ONES THAT HAS LEGS AND COULD MAKE A DIFFERENCE BUT LET'S BE VERY CAREFUL 45 MILLION PEOPLE ARE MAKING THEIR PAYMENT THEY ARE ON TIME THEY ARE NOT DELINQUENT EVEN THOUGH SOME OF THOSE ARE UNDER WATER SO THIS IS REALLY A DEBT TO INCOME NOT A LOAN TO VALUE SO WHATEVER YOU DO FOR THE 5 MILLION MAKE SURE YOU DON'T PUNISH THOSE WHO ARE PART OF THE 45 MILLION THAT IS WHERE THE BALANCE COMES IN

BARTIROMO: YEAH THAT IS A GREAT POINT AND I KNOW WHEN YOU STRIP AWAY SOME OF THESE NEGATIVES WHETHER ITS HOUSING OR THE EUROPE PROBLEM CREDIT IS ACTUALLY PRETTY GOOD BUT I WANT TO GO BACK TO SOMETHING THAT YOU SAID ON YOUR CONFERENCE CALL CAUSE YOU TALKED ABOUT AN UPTICK IN MORTGAGES WITH PAYMENTS THAT ARE OVER 90 DAYS OVERDUE SIMILAR COMMENTARY CAME OUT OF JPMORGAN AND THE CITI CONFERENCE CALL AS WELL SO DOES THIS CONCERN YOU ARE YOU PREPARING FOR A DOWNTURN IN CREDIT

STUMPF: NO IN FACT CREDIT IS GETTING BETTER ACROSS THE BOARD IT IS AT DECREASING RATES BECAUSE WE ARE IN SOME OF OUR PORTFOLIOS TODAY WE ARE AT PRE-RECESSION DELINQUENCY RATES BUT THIS IS MORE SEASONAL THAN ANYTHING ELSE

BARTIROMO: I SEE WHAT ABOUT THE UNCERTAINTY AND VOLATILITY IN THESE MARKETS MR STUMPF CLEARLY THE UNCERTAINTY OVER EUROPE CAUSING PEOPLE TO PUT MORE MONEY IN CASH CAUSING THE DEPOSITS TO BALLOON BANK OF NY SAYING THEY MIGHT CHARGE PEOPLE FOR DEPOSITS ARE YOU GOING TO DO THE SAME IF THAT BECOMES AN ISSUE

STUMPF: NO IN FACT WE LOVE DEPOSITS BECAUSE DEPOSITS THERE ARE TWO PRODUCTS ON THE CONSUMER SIDE THAT ARE FOUNDATIONAL PRODUCTS THE CHECKING ACCOUNT AND THE HOME MORTGAGE THOSE ARE CRITICALLY IMPORTANT AND WE LOVE DEPOSITS IN FACT WE GREW DEPOSITS THIS LAST QUARTER BY OVER 40 BILLION DOLLARS IT WAS PROBABLY OUR STRONGEST QUARTER GROWTH EVER AND EVEN THOUGH WE CAN'T EMPLOY THOSE TODAY AT GREAT MARGINS WE LOVE IT BECAUSE IT MOVES RELATIONSHIPS WE ARE IN THE RELATIONSHIPS BUSINESS

BARTIROMO: BUT CAN YOU MAKE MONEY AT IT WHEN LONG TERM RATES ARE SO LOW AND THE YIELD CURVE ARE SO FLAT I MEAN GOING FORWARD WHERE DOES THE GROWTH COME FROM AT WELLS

STUMPF: WE ARE IN 84 DIFFERENT BUSINESS SOME BUSINESSES HAVE TAILWINDS AND SOME HAVE HEADWINDS TODAY ON A DEPOSIT WE CAN'T MAKE A LOT OF MONEY BUT YOU KNOW SOMETHING WE SELL ON AVERAGE 3-4 PRODUCTS TO A NEW CUSTOMERS OUR AVERAGE CONSUMER CUSTOMER HAS OVER 6 PRODUCTS WE LOVE THEM WE ARE IN THE RELATIONSHIP BUSINESS IF YOU CAN'T GET PAID FOR IT THIS QUARTER THAT'S FINE THE COMPANY IS 160 YEARS OLD I AM WORRIED ABOUT THE NEXT 160 YEARS NOT THE NEXT 160 DAYS

BARTIROMO: YEAH YOU ARE REALLY A LONG TERM THINK AND OF COURSE THAT'S WHAT OUR VIEWERSHIP LOVES TO SEE MR STUMPF GREAT TO HAVE YOU ON THE PROGRAM DON'T BE A STRANGER WILL YOU COME BACK SOON.

STUMPF: FOR YOU MARIA ALWAYS.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD+, CNBC is the recognized world leader in business news providing real-time data, analysis and information to more than 390 million homes worldwide. The network's 16 live hours a day of business programming in North America (weekdays from 4:00 a.m.- 8:00 p.m.) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC.com and CNBC Mobile Web (mobile.cnbc.com) offer real-time stock quotes, charts, analysis and both on-demand and live streaming video.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/