Page 8 The Skanner MINORITY BUSINESS ENTERPRISE EDITION September 21, 2016 MBE 2016 Special Business Edition Banks Focus More on New Accounts — and the Fees They Bring By KEN SWEET AP Business Writer NEW YORK — When Wells Fargo CEO John Stumpf testii es before a Senate committee hear- ing Tuesday, it won’t be just his bank under i re for turning friendly branches into high-pres- sure sales centers. It’ll be the entire industry. Wells Fargo is in the spotlight now at er its employees allegedly opened up to 2 million bank and credit card ac- counts, transferred cus- tomers’ money without telling them and even created fake email ad- dresses to sign people up for online banking in an “ dustry as a whole engag- es in high-pressure sales tactics. Once customers open a basic savings or checking account, banks give them the hard sell to sign up for even more, whether that’s a credit card or a mortgage or a retirement account. Overdrat protection was one common tactic, former Wells bankers said, telling customers to open an additional savings account to put aside money to cover overdrat s even though the customer didn’t have the resources to fund the account. Or getting the customer to open a new credit card just for over- drat protection. or want. But customers at other banks made similar complaints. Of Bank of America custom- ers, 31 percent said they felt overly pressured for products they didn’t want or need. At both Chase and Citigroup, that i gure was 27 percent. “Bank of America, Citi, Chase were all envious of Wells’ ability to cross-sell as well as they did,” said Steve Beck, a managing partner with cg42. While customers com- plained of overly aggres- sive sales tactics, none of the other banks have been accused of wrong- doing except Wells. The change in focus for retail banks had been Bank of America, Citi, Chase were all envious of Wells’ ability to cross-sell as well as they did ef ort to meet lot y sales goals. But cross-selling, as it is called, is the lifeblood of the entire retail banking industry. Other banks don’t face allegations of fraud, like Wells Fargo is, but experts say the in- Pierce County Washington Surveys done last year by consulting i rm cg42 showed that roughly 40 percent of Wells Fargo customers asked said their No. 1 complaint was employees’ constant pushing of products the customers did not need taking place slowly for years, but the i nancial crisis that began in 2007 and the impact on banks fueled faster change. The Federal Reserve’s cutting interest rates to nearly zero gave the economy a boost during the Great PUBLIC NOTICE It is the policy of Pierce County and the Contract Compliance Division to promote: An environment that culi vates economic growth and diversifi cai on, • Business development and compei i on, • Using local fi rms for goods and services through the compei i ve bidding process, • Businesses to employ local residents for public works projects. Pierce County gives public noi ce that the County assures full compliance with Title VI of the Civil Rights Act of 1964, the Civil Rights Restorai on Act of 1987, and related statutes and regulai ons in all programs and aci vii es. Title VI prohibits discriminai on based on gender, race, color or nai onal origin in programs and aci vii es which Pierce County receives federal fi nancial assistance. Pierce County Budget & Finance 615 S 9th Street, Suite 100 Tacoma WA, 98405 AP PHOTO/CX MATIASH, FILE Experts say the entire industry engages in high-pressure sales tactics similar to Wells Fargo’s In this May 6, 2012, i le photo, a Wells Fargo sign is displayed at a branch in New York. Wells Fargo is in the spotlight after its employees allegedly created up to 2 million bank and credit card accounts, transferred customers’ money without telling them and even created fake email addresses to sign people up for online banking in an ef ort to meet lofty sales goals. When Wells Fargo CEO John Stumpf testii es before a Senate committee hearing Tuesday, Sept. 20, 2016, it won’t be just his bank under i re for turning friendly branches into high-pressure sales centers. It’ll be the entire industry. Recession, but it also eviscerated the banks’ ability to earn interest income, spurring them to seek out new forms of revenue — ot en in the form of fees. And the more prod- ucts a customer has, the more potential there is for a bank to earn fees. Those could be the over- drat fees at a checking account or management fees of a retiree’s nest egg. Another benei t for the industry is that hav- ing several products with a bank makes it more dii cult for customers to leave and switch to a new one, said Bob Hedg- es, a banking industry consultant with A.T. Ke- arney. To adapt to their new business model, banks have been physical- ly transforming their branches. Chase, Citi, BofA and Wells have all opened smaller branch- es with few, if any, tell- er windows for routine transactions like depos- iting checks or account inquiries that are more See BANKS on page 10