Virus notes (2): March 22, 2020: Wells Fargo closes Merced branches
MERCED (BLJ) -- Friends reported Sunday evening that they had been unable to deposit a check that day in the downtown Merced Wells Fargo branch. We investigated and verified that it is no longer possible to make a deposit at that branch or at the branch in the Raley’s shopping center on Yosemite Ave. and G Street.
While the Raley's center Wells Fargo branch serves the well-to-do and our precious UC Merced campus, the downtown branch serves a large working-class clientele who deposit their earnings there weekly along with downtown merchants depositing checks daily. This closure is going to be a real hardship for a large number of our neighbors.
Posted on the door of the downtown branch was an address of a Wells Fargo branch on Bellevue Road in Atwater. Other signs posted on the glass at both branches state that they are “temporarily closed and will reopen as soon as possible.” But you will be able to make deposits through a mobile app and you can still make withdrawals through the ATM. Other business, for instance getting into your safe deposit box at the Raley’s center branch, requires making an appointment with bank personel..
These signs are surrounded by warnings, descriptions of symptoms, and advice concerning COVID-19. And the impression this array of messages leaves is that the branches are closed due to the virus and for no other reason. But a 30-second web search discovered the article below from January 2018 and others like it. Apparently, Wells Fargo, Chase, and Bank of America have all been closing branches for several years due to legal bills incurred to defend illegal practices.
The Bank of America branch on Main Street in Merced posted its intention of remaining open but for somewhat shorter hours.
Wells Fargo plans to close 800 more branches by 2020
by Matt Egan
Wells Fargo, scrambling to cut costs and offset soaring legal expenses, plans to pull the plug on 800 more bank branches by 2020.
The planned closings, announced on Friday, will leave Wells Fargo (WFC) with about 5,000 branches. The bank closed more than 200 branches last year, but still finished the year with more than 5,800, the most in the United States.
On a conference call with Wall Street analysts, Wells Fargo execs pinned the closings on Americans' increasing preference for online and mobile banking.
"We will have as many branches as our customers want for as long as they want them," said John Shrewsberry, the chief financial officer.
But analysts also see a link to Wells Fargo's infamous legal troubles. The bank's litigation expenses more than tripled to $3.3 billion last quarter. The legal costs stem from the bank's fake-account debacle, investigations into pre-crisis mortgages and "other consumer-related matters."
Those mounting expenses have unnerved Wall Street. The bank plans to cut $2 billion in expenses this year and another $2 billion in 2019.
Related: Wells Fargo's legal troubles down out huge tax windfall
Another problem: Wells Fargo's branches likely aren't the profit machines they were before the scandal. The bank abandoned its notoriously aggressive sales goals following the revelation of 3.5 million potentially fake bank and credit card accounts.
In a statement to CNNMoney, Wells Fargo said it evaluates its branch network "solely on customer trends, market factors and economic changes."
Wells Fargo did not release an estimate of how many employees will lose their jobs as a result of the planned branch closings. The bank pledged to help employees "identify opportunities within Wells Fargo, as well as within the community."
Last month, Wells Fargo announced plans to share its tax cut windfall with workers and customers by raising its minimum wage to $15 an hour and giving 40% more to charities.
Before the scandal, Wells Fargo had been much more reluctant than rivals to close branches. Between 2012 and 2016, Wells Fargo only shut about 2% of its branches, according to brokerage firm CLSA.
By comparison, JPMorgan Chase (JPM) closed 9% of its branches over that span, while Bank of America (BAC) shuttered 15%.
That trend has shifted. Wells Fargo close almost twice as many branches in 2017 as JPMorgan, according to figures released on Friday.
Wells Fargo plans to shut another 250 branches this year.