Wells Fargo is America's most hated bank.
And I'm going to explain why
this is actually a good thing.
But first, Wells Fargo wasn't always hated.
- We were founded in 1852 by Henry Wells and
William Fargo to offer banking and and express services.
It's an exciting story.
And the most exciting part is
we're still making history today.
Wells Fargo used to be cool.
Like, really cool.
They started as this gunslinger courier company
delivering money and goods across the frontier.
Basically like the OG Red Dead Redemption.
There seems to be an intense desire on the part of Wells
Fargo to hold on to its heritage and for good reason.
I mean, it's a compelling pitch.
They can basically say we protected your
valuables back when no one else could.
Obviously, you can trust us today.
We take on a consignment.
We promise to deliver it all the way.
Bank had its own series, books,
and even this weird horse collection.
Kind of like selling NFTs before it was cool.
Known as the golden child of banking, Wells Fargo was
one of the few surviving banks of the Great Depression.
They had the PR.
They were known for quality.
They regularly hired immigrants and minorities.
I was hoping to start over and achieve what I thought
to be the American dream, which is stability, something I lacked
for most of my life, living in a war zone.
But could a bank like
Wells Fargo really provide stability?
Is there a better alternative?
In the early 2000s, there wasn't.
- Dow Jones industrial average
now crossing 500 points on the decline.
- The Bull market that ran from
2002 to 2007 has been erased.
- The market is not functioning properly.
There has been a widespread loss of confidence.
And major sectors of America's financial system
are at risk of shutting down.
During the 2008 financial crisis, Wells Fargo
stayed true to its reputation as the
golden child of American banking.
You are why I think you're the best bank in America.
Thank you for joining us, John Stumpf.
Meanwhile, a new technology was being developed
in frustration with the current system.
We opened 3 million accounts, so
Stumpf's is looking pretty good.
He gets really big bonuses, and
the shareholders are loving -
drumroll, please
There we go. All right.
And the winner is John Stumpf.
John Stumpf of Wells Fargo.
Our number one goal we get up in
the morning is not about making money.
Our whole business model and reason to get
up in the morning and go to work
is to serve customers, help them succeed financially.
The result is you'll make money.
Never put the stage coach in front of the horses.
Stumpf's a hard guy not to like it.
I vote him the CEO I would most
likely to knock down a fine pilsner with.
Wells Fargo seemed to be at the top of the world.
Mysteriously, the stock just kept rising
in price, far outpacing its competitors.
But then Wells Fargo employees
began to notice something strange.
We used to start early with a morning huddle.
The manager would tell you, how many
accounts do you commit to opening today?
And so what they wanted to hear
was eight, because that was their mojo: eight makes great.
See, I'm a numbers person.
And I started thinking, Wait, this is not possible.
St. Helena is a town of 5000 residents.
There are five bankers.
That means we have to open 40 accounts every day.
5000 divided by 40.
The once modest wagon wheel started
spinning faster than ever before.
Wells Fargo answered to shareholders, and
shareholders needed to see growth.
One after another.
Accounts just kept popping up.
This whole town needs bank accounts
like you, sir, and you, mam.
And this skinny gentleman over here,
That's a mailbox.
By pursuing growth above all else, Wells
Fargo had forgotten the most important thing -
The customer.
They had just violated their very own commandment.
Putting the stagecoach in front of the horses.
Your most important job is not to make money.
Our number one goal, we get up in
the morning, is not about making money.
Our whole business model and reason to get up in the
morning and go to work is to serve customers.
By demanding unrealistic sales figures and using
high pressure to overwork employees, branch managers
had to make a choice.
Their job or their moral code
for people who in many cases, were terrorized.
They were afraid that they get fired from these $12- $15
an hour jobs and they didn't know where else to go.
They thought they were going to step into
a world of American success and be bankers.
And it turned out frequently to be
something more like a boiler room.
Little by little, the truth was unraveling.
The critics had to be silenced.
It was known that if you made a call to
human resources complaining about ethics, that you would get fired.
Once they terminated you from Wells,
you'd never worked in banking again.
They will block your licenses
and you'd never work again.
But this couldn't go on forever.
Over a million bank accounts
opened without customer knowledge.
Fake email addresses, phony pin numbers and were
encouraged to prey on people who spoke little
english, College students and the elderly.
New Yorker says 2 million customers
are known to be explicitly defrauded. True or false?
That is absolutely false.
Cross Selling is all about pumping
up Wells stock price, isn't it?
No, Cross selling is shorthand for deepening relationships.
A million more fake accounts.
The total now three and a half million.
Wells Fargo said we fired her because
she didn't meet her quotas.
Senator, I am very sorry that that happened.
That was not what we wanted to have happen.
As a result, something unprecedented happened.
The Federal Reserve imposed harsh
sanctions on Wells Fargo.
Wells Fargo won't be allowed to get any bigger
than it was at the end of last year.
$2 trillion in assets.
Until the Fed is satisfied that
it has cleaned up its act.
As for CEO John Stumpf, well, he stepped up
and took personal responsibility by firing 5300 employees.
See, Wells Fargo is a company that prides itself
in its deeply rooted, good ol boy persona.
But the reality is far from that.
Throughout history, mankind has needed to transfer money
and goods from one place to another.
That's not going to stop anytime soon.
But there's an issue.
Wherever there's value, security will
be a massive challenge.
Until recently, we had no option but to
trust banks and other third party institutions.
We get a nice little insurance policy, and
in return, they get to use our money
to invest and fund their operations.
And that kind of works.
But in many cases, we don't
need middlemen like Wells Fargo anymore.
Thanks to new technology.
Anything you would go to a
traditional financial institution for like high
yield savings, borrowing, lending, trading, investing.
Those are all things that can be found in DeFi.
Web 3 represents kind of a new
philosophy about how to realize these technologies
in a more distributed and democratic way.
With DeFi, you're the bank customer and the
bank profiting on both sides of the transaction.
See, with DeFi, the list of ways that you
can earn money on your money is nearly limitless.
Staking, lending and arbitrage are just the tip of
the spear because it's more than just earning.
You really can be your own bank.
I mean, let's look at what a
bank can do with our money.
So imagine that you found
$1,000 in an envelope outside.
You look over your shoulder, no one's looking at you.
You take it.
This isn't ethics class.
This is banking class.
So you go and deposit that
money into a bank savings account.
That money doesn't just sit there with a
sticky note of your name on it.
Banks take that and lend it out for profit.
You deposit $1,000, the bank will then
lend out a portion of that, let's
say 90% $900, keeping 10% in reserves.
Because banks are actually creating new money by
lending out your $900 to someone else.
The bank now has $1,900 in
deposits because of your original $1,000.
But it doesn't stop there.
They can keep doing this, looping the money
through, eventually increasing their deposits by ten times.
This means when you deposited $1,000, your bank
is actually now earning money on $10,000.
You're doing them a huge favor
by giving them your money.
What's even crazier is you can
actually do this yourself with DeFi.
So let's take the Anchor protocol.
You can deposit a stablecoin, pegged to the US
dollar and earn it near 20% APY.
But there's no central authority in crypto.
There's no bank holding your deposit.
So after making a deposit, you receive aUST.
This is essentially a receipt showing
that you made that deposit.
However, in DeFi, the receipt
is actually what's worth money.
It's weird you make a deposit to earn interest but
then you're still holding the value of that deposit.
It's kind of like a cashier's check but not exactly and
here's where you get to be the bank if you want to,
you can actually take that receipt and borrow against it
to earn even more money. You deposit $1,000, you
get that receipt worth $1,000 that's still earning 20%
interest you borrow 50% against that receipt paying a
small interest rate and getting $500 in cash.
You then redeposit that $500 and now your
total deposit is $1,500 and still earning interest.
It seems like it shouldn't be possible but
that's what banks have been doing all along.
But in the wild world of crypto where the
robbers and crooks wear this and not cowboy hats,
you have to control your own stagecoach.
Unlike any other time in history we can truly
say that money belongs to the people and I
have to thank banks like Wells Fargo for being
greedy because if the system was even somewhat fair
I'd like to thank you so much for watching.
I'm Max Maher and I hope you have a profitable day!