Wells Fargo, You Sneaky Jerks!

We have an update on the billions and billions that Wells Fargo has been spending to rectify its many compliance woes — that, sadly, the bank has adjusted its line-item reporting so we can’t get a good estimate on its spending any more. 

You might recall that earlier this summer, CEO Charlie Scharf lamented that the bank was spending money on outside compliance consulting “beyond anything I’ve ever seen.” Radical Compliance then waded through several years’ worth of financial disclosures, to calculate that Wells Fargo had spent $11.8 billion on outside consulting services since the start of 2017. See Figure 1, below.

Not every dollar of that money went specifically to compliance consultants, but much of it did. So I had visions of following this spending quarter to quarter, akin to how people used to follow Walmart’s disclosure of FCPA spending back in the 2010s. 

Then Wells Fargo filed its Q3 quarterly report last night — without that line item!

Instead, Wells Fargo consolidated its expenses for outside professional services, contract services, and outside data processing into a single line item. So we no longer know precisely how much the bank was spending on professional services, as we had for quarters and years prior. Figure 2, below, shows what we have now, with the relevant line item shaded blue.

Source: Wells Fargo

So we know that Wells Fargo spent $1.76 billion on outside services in Q3 2020, which was 23 percent more than what the bank spent in the same period one year ago. But we don’t know how much within that $1.76 billion went to outside consulting services. 

Which means, alas, that this noble experiment of tracking Wells Fargo’s spending on outside compliance consultants can no longer continue. We’ll just have to keep picking on Wells one scandal at a time, I guess.