q

I-

~

n

<

j<n

",/
I,
if>

'V
<

';«

A
if

h

tV

'tl/>1

1'1/

/11

/'<'''

i

NATIONAL PEOPLE'S ACTION
In Collaboration W ith The

National Prison Divestment Campaign

O

public
accountability
initiative

	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  

National People's Action (NPA) is a network of community power organizations from across
the country that work to advance a national economic and racial justice agenda. NPA has over
200 organizers working to unite everyday people in cities, towns, and rural communities
throughout the United States. For 38 years NPA has been a leader in the fight to hold banks
accountable to the communities in which they serve and profit.

Public Accountability Initiative (PAI) is a non-profit, non-partisan watchdog organization
focused on corporate and government accountability. PAI’s mission is to facilitate and produce
investigative research that supports citizen-led accountability efforts. PAI's hard-hitting research
reports on topics such as wasteful government subsidies, corporate lobbying efforts, conflicts of
interest, and Wall Street fraud have been cited by the New York Times, the Wall Street Journal,
and numerous other media outlets.

Introduction: A Tale of Two Banks
Wells Fargo sees the Latino market as a key growth segment and has worked aggressively to
market and tailor financial services to Latinos. It has pioneered services, such as accepting
matriculas as identification to open banking accounts, and has donated millions of dollars to
organizations that serve the Latino community. As a result, the Latino market is delivering
significant fee income for Wells Fargo.
At the same time, though, Wells Fargo provides critical financial support to the private prison
industry, lending to and investing in companies that profit by locking up immigrants, most of
them Latino, and lobby aggressively for immigration policies that result in higher levels of
detention – and profit.
Our last report, “Banking on Immigrant Detention,” reviewed the ways in which Wells Fargo
provided this support, lending to two private prison companies, Corrections Corporation of
America (CCA) and Management & Training Corporation (MTC), and financing and investing
heavily in a third, Geo Group. Wells Fargo provides more financial support to the industry than
any other big bank.
Since the release of this report in September 2012, Wells Fargo has reported a significant
decrease in its investments in Geo Group. Wells Fargo now owns 4.92% of Geo’s common
stock (3.06 million shares or $82.5 million), down from 6.84% of its common stock as of June
30, 2012 (4.2 million shares). Its current Geo investments represent a nearly 75% decrease
since the end of 2011, when it reported owning 19.56% of Geo’s common stock. While Wells
Fargo is headed in the right direction, the bank is still a significant investor in and lender to
private prison companies and should sever its ties to the industry.
This report identifies the ways in which Wells Fargo has sought to position itself as the Latino
community’s bank of choice, including offering remittance services, designing stores in ways
that are supposed to appeal to Latinos, establishing a “Wells Fargo Amigos” outreach team, and
partnering with Latino community groups.
Wells Fargo’s acceptance of matricula cards is laudable. But considering Wells Fargo’s support
for immigration detention, as well as its recent settlement for discrimination against Latinos in its
lending practices, these efforts appear to be deeply duplicitous and hypocritical. If Latinos are
so important to Wells Fargo, why does it invest in immigrant detention?
This is the second in a series of reports on Wells Fargo and the private prison industry, issued
by National People’s Action and the Public Accountability Initiative. The first report, “Banking on
Immigrant Detention,” detailed Wells Fargo’s financial support for the private prison industry
through investments and lending, and is available at www.jailsfargo.com.

1

I. The Latino Market: A Key Part of Wells Fargo’s
Growth Strategy
The Latino market figures heavily in Wells Fargo’s growth strategy, and it has for much of the
last decade. The importance of the Latino market to Wells Fargo has been stressed in various
articles on the bank, and Wells Fargo executives, including CEO John Stumpf, have repeatedly
pointed to the Latino market as one of the bank’s biggest customer segments.
In 2004, an article in Businessweek noted that “One of [Wells Fargo’s] fastest growing markets
is the population of Mexican-Americans and Mexican nationals along the border and in
California and other border states.”1 The article discussed
various ways in which the bank was seeking to bring in
more of this business.
In 2006, Wells Fargo CEO John Stumpf told investors that
the Latino segment is one of the bank’s “biggest
opportunities,” that 70 percent of Latinos in America live in
the bank’s geography, and that “Latino growth is
disproportionate as far as percentage, and so it's been a
big deal for us.”
More recently, Stumpf claimed that 95 percent of Latinos in
America live in the bank’s geography, again emphasizing
the Latino market’s importance to the bank.2 The increased reach may be due to Wells Fargo’s
merger with Wachovia, which occurred in 2008.
Wells Fargo marketing executives have also stressed the importance of reaching the Latino
community. Chief Marketing Officer Sylvia Reynolds said, “The Hispanic segment is a very
important part of our growth today. Hispanic customers have un-tapped credit needs that WellsFargo is well positioned to serve, and we can help them strengthen their financial identities.”3

	
  

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
1

Louise Lee and Shelley Freeman, “Online Extra: How Wells Fargo Banks on Hispanics”, Bloomberg
Businessweek, March 14, 2004. Accessed at: http://www.businessweek.com/stories/2004-03-14/onlineextra-how-wells-fargo-banks-on-hispanics
2
Luke Visconti and John Stumpf, “Wells Fargo CEO John Stumpf on Leadership, Corporate Citizenship,
Sustainable Business & Accountability”, DiversityInc. Accessed at:
http://diversityincbestpractices.com/ceo-commitment/wells-fargo-ceo-john-stumpf-on-leadershipcorporate-citizenship-sustainable-business-and-accountability/
3
Roberto Orci, “What do CMO’s say about the Hispanic Market?”, Insights by Acento, October 24, 2011.
Accessed at: http://acento.com/insights/what-do-cmo%E2%80%99s-say-about-the-hispanic-market/

2

II. Wells Fargo’s Efforts to Market to Latinos
Wells Fargo has gone to great lengths to appeal to the Latino market and establish itself as the
bank of choice for the Latino community. These efforts range from design aesthetics to targeted
ad placements to policies that allow foreign nationals from countries including Mexico to set up
bank accounts.
Many of these efforts, particularly Wells Fargo’s acceptance of matriculas, are laudable, in that
they give undocumented immigrants access to banking services that might otherwise be denied
to them. But against the backdrop of Wells Fargo’s private prison investments, as detailed in our
report “Banking on Immigrant Detention,” they also appear duplicitous.

Matriculas
Wells Fargo accepts matriculas, identification cards issued to foreign nationals by consulates,
as valid forms of identification, allowing undocumented immigrants from Argentina, Guatemala
and Mexico to open bank accounts. Wells Fargo began accepting the cards in 2001, and has
identified it as a key form of outreach and marketing to the community.
Wells Fargo press releases and marketing materials frequently point to the bank’s early
acceptance of Mexican matricula cards as a major point of pride. In 2006, when the bank began
accepting Colombian matricula cards, CEO John Stumpf said “We want Latinos to know Wells
Fargo welcomes their business and wants to be the financial services company of choice for all
communities…Like the Mexican, Guatemalan and Argentinean consular cards, the Colombian
Consular Registry Card meets all of the U.S. government’s and Wells Fargo’s requirements as a
valid form of primary identification.”4
In 2003, Wells Fargo put out a press release saying that over 250,000 Wells Fargo accounts
had been opened using Mexican matricula cards.5

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
4

“Wells Fargo First U.S. Financial Institution to Accept Colombian Consular I.D. Card To Open Bank
Accounts”, Wells Fargo, March 29, 2006. Accessed at:
https://www.wellsfargo.com/press/20060329_colombianconsular?year=2006
5
“Las nuevas cuentas en Wells Fargo abierta con la matrícula
consular sobrepasan el cuarto de millón”, Wells Fargo, October 24, 2003. Accessed at:
http://www.hispanicprwire.com/News/es/1595/0/wells-fargo-matricula-account-openings-surpass-quartermillion-mark

3

Wells Fargo’s checking account signup page.

Store design
Wells Fargo designs its stores to appeal to particular racial
demographics, including Latinos. CEO John Stumpf has
stressed these design initiatives on several occasions. In
2006, he told investors that the bank’s store redesign
efforts involved transitioning to “ethnic design.” In a recent
interview with DiversityInc, he described it as one of the
main ways the bank markets to the Latino community: “if
you’re in a largely Latino/Hispanic community, build stores
that remind customers that you are in tune with their
culture.”6

Latino group partnerships
Wells Fargo has entered into partnerships with a number of Latino groups on the local and
national level. Wells Fargo and SABEResPODER, a former non-profit now organized as a Bcorporation, have also partnered “to provide financial education to the underbanked.” The
campaign includes printed guides, videos, and community events on banking with Wells Fargo
branding to “create generational brand loyalty.”7 The bank is also a sponsor of the Hispanic
Public Relations Association’s “PRemio Awards” ceremony.8

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
6

Luke Viconti and John Stumpf, “Wells Fargo CEO John Stumpf on Leadership, Corporate Citizenship,
Sustainable Business & Accountability”, DiversityInc.
7
“SABEResPODER, Wells Fargo Join Forces to Provide Financial Education to Underbanked”, Wells
Fargo. Accessed at: https://www.wellsfargo.com/press/2011/20110419_FinEd and Tim Fitzsimmons,
“Wells Fargo is not your amigo”, Salon, October 28, 2011. Accessed at:
http://www.salon.com/2011/10/28/wells_fargo_is_not_your_amigo/
8
“Hispanic Public Relations Association® Honors Industry’s Best and Awards Scholarships at 28th
Annual PRemio Awards & Scholarship Gala”, Hispanic Public Relations Association, October 5, 2012.
Accessed at: http://www.prnewswire.com/news-releases/hispanic-public-relations-association-honors-

4

Ancelma’s Story
The story of Ancelma, a member of Iowa Citizens for Community Improvement, illustrates the
ways in which Wells Fargo’s duplicitous business practices – marketing to Latinos while
funneling financial support to a private prison industry that lobbies vigorously for harsh,
exploitative immigration laws – have difficult real life consequences for Latinos in the United
States.
Ancelma opened an account with her husband for their daughter. The small bank account had
just $100, but Wells Fargo began charging fees on the account, to the point that the child’s
account was drained, and the account was overdrafted. Ancelma wants to close the account, but
her husband was recently deported to Mexico. Since he was the primary person on her
daughter’s account, Ancelma has not been able to close the account. She obtained legal
authorization from her husband to close the account. Wells Fargo did not accept the
authorization because it is written in Spanish, despite the fact that Wells Fargo has Spanishspeaking staff and sends its clients information in Spanish. Apparently, at Wells Fargo, the
marketing department speaks Spanish, but the legal department does not.
Ancelma says, “It’s important to put pressure on Wells Fargo because they try to steal as much
money as they can from as many people as possible, even if it’s a child and their parents. A lot
of people in the community are starting to talk about Wells Fargo’s negative influence in the
Latino community.”

	
  

Wells Fargo Amigos
The bank has a number of groups of employees in various locations that work to reach out to
and build stronger ties with the Latino community. The Latino-focused “Team Member Resource
Groups” (TMRGs) typically have “Amigos” somewhere in their names. For example, Amigos
Bay Area is one of the bank’s largest TMRGs, with over 100 employees, and its mission is to
“facilitate awareness of the value of Latinos to Wells Fargo- as team members, customers,
individuals and a diverse culture.”9

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
industrys-best-and-awards-scholarships-at-28th-annual-premio-awards--scholarship-gala172872141.html
9

“Amigos Bay Area: About Us”, Wells Fargo. Accessed at:
https://csc.wellsfargo.com/docs/tmrg/about.cgi?group=Amigos%20Bay%20Area

5

Screen capture from “Amigos Bay Area” website.

Charitable donations and Scholarships
Wells Fargo’s press page announces many contributions to Latino groups, with grants to the
United States Hispanic Chamber of Commerce Foundation and sponsorships of the Hispanic
Scholarship Fund and the Latin Scholarship Fund. The bank also makes state-level grants for
community development, education, and human services organizations that target low- and
moderate-income communities. After the earthquake in Haiti, Wells Fargo made a donation of
$350,000 to victims, but drew criticism for exacting transaction fees from people making
individual donations.10
A 2011 McKinsey report on corporate charitable giving touted Wells Fargo’s charitable
contributions as an integral component of its business:
“Wells Fargo is an example of a company that
consciously links social and business goals. While
supporting ethnic communities, Wells also seeks to
develop insights into new markets. President and
CEO John Stumpf believes the bank’s charitable
giving program significantly accelerated its learning
curve on branch design in ethnic neighborhoods.
“When we build in ethnic communities, we build
ethnic stores. Might we have gotten that concept
without our community outreach? Maybe,” says
Stumpf. “But we wouldn’t have gotten there as
fast.””11

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
10

Laura Bassett, “Facebook Page Pressures Wells Fargo to Waive Fees for Haiti”, Huffington Post, April
4, 2010. Accessed at: http://www.huffingtonpost.com/2010/02/02/facebook-page-pressuresw_n_446677.html
11
“Charitable Giving in the Property-Casualty Insurance Industry”, McKinsey & Company, 8. Accessed at:
http://www.mckinsey.com/clientservice/Financial_Services/~/media/Reports/Financial_Services/Charitabl
eGiving_AW2.ashx

6

Remittances
One major way in which Wells Fargo attracts and serves Latino customers is through its offering
of remittance services that can then translate into other forms of business. Wells Fargo’s
remittance business has seen substantial growth in recent years, outperforming other banks. It
processed $1.4 billion in remittances in 2010, with over 400,000 transactions a month.12 In
2011, this figure grew to $1.8 billion. A 2012 press release announced “record growth” of close
to 30% in 2011 in terms of both cash remitted and number of transactions.13
Wells Fargo’s ExpressSend service allows customers to remit money from account to account,
from cash to account and vice versa, and from cash to cash. However, by encouraging
customers to use account to cash services, the bank hopes to steer customers to other bank
services. The bank’s average customer uses five products or services.

Ilumina
In 2007, Wells Fargo partnered with the Hispanic National Mortgage Association to create
Ilumina, a mortgage origination company with a “Hispanic-centric approach to mortgage
lending.” The press release announcing the partnership said that “ILUMINA will offer Hispanics
as well as other immigrant borrowers a broad range of mortgage lending products and services
in a culturally appropriate environment and with a culturally sensitive experience.”14

Advertising
Wells Fargo runs Spanish-language print and television ads in order to reach Latino audiences
in the US. The Spanish-language daily La Opinión has run numerous Wells Fargo ads, which
typically tout what the bank does for Latino families and communities:

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
12

Manuel Orozco, “Future Trends in Remittances to Latin America and the Carribean”, Inter-American
Dialogue, May 2012. Accessed at:
http://www.thedialogue.org/PublicationFiles/IAD8642_Remittance_0424enFINAL.pdf
13
“Wells Fargo Reports Record Growth for its ExpressSend® Service; Customers Remitted More Than
$1.8 Billion to 15 Countries in 2011”, Wells Fargo, February 16, 2012. Accessed at:
https://www.wellsfargo.com/press/2012/20120216_WFReportsRecordGrowth
14

“Hispanic National Mortgage Association and Wells Fargo Home Mortgage Form Joint Partnership”,
The Hispanic National Mortgage Association, February 17, 2006. Accessed at:
http://www.prnewswire.com/news-releases/hispanic-national-mortgage-association-and-wells-fargohome-mortgage-form-joint-venture-53371462.html

7

Two ads that recently ran in Spanish language daily La Opinión.

8

III. Wells Fargo’s “Racial Surtax”
A recent mortgage lending scandal exposed the degree to which Wells Fargo’s Latino marketing
strategy disguises the bank’s exploitative relationship with the Latino community.
In July 2012, Wells Fargo paid $175 million to settle charges that it engaged in systemic
discrimination against Latino, black, and other minority borrowers between 2004 and 2009. The
Justice Department charged that the bank levied higher fees on thousands of such borrowers,
despite having the same credit scores and other characteristics as white counterparts.
The assistant attorney general assigned to the case, Thomas Perez, slammed Wells Fargo for
levying the equivalent of a "racial surtax:”
The complaint also alleges that, between 2004 and 2009, Wells Fargo discriminated by
charging approximately 30,000 African-American
and Hispanic wholesale borrowers higher fees and
rates than non-Hispanic white borrowers because
of their race or national origin rather than the
borrowers’ credit worthiness or other objective
criteria related to borrower risk. What did this mean
in reality? It meant that an African-American
wholesale customer in the Chicago area in 2007
seeking a $300,000 loan paid on average $2,937
more in fees than a similarly qualified white
applicant. And these fees were not based on any
objective factors relating to credit risk. These fees
amounted to a racial surtax. A Latino borrower in
the Miami area in 2007 seeking a $300,000 paid on average $2,538 more than a
similarly qualified white applicant. The racial surtax for African Americans in Miami in
2007 was $3,657.15
Perez also noted that “People with similar qualifications should be treated similarly; they should
be judged by the content of their creditworthiness and not the color of their skin.”
At the same time Wells Fargo was positioning itself aggressively to attract more Latino
business, it was apparently engaging in blatantly discriminatory behavior towards Latinos who
chose to do business with the bank. While devoting significant resources to initiatives such as
store design, the bank apparently did not see fit to implement adequate oversight and controls
that would ensure that discrimination did not take place.

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
15

Thomas Perez, “Assistant Attorney General Thomas E. Perez Speaks at the Wells Fargo Press
Conference”, United States Department of Justice, July 12, 2012. Accessed at:
http://www.justice.gov/crt/opa/pr/speeches/2012/crt-speech-120712.html

9

The episode illustrates how Wells Fargo’s marketing practices disguise a strategy of profit
through exploitation. The company’s private prison investments may simply be a major
manifestation of what appears to be its only guiding principle: a thirst for profit at all costs.

10

IV. Conclusion
The contradictions embedded in Wells Fargo’s business model ultimately betray a deep
hypocrisy at the core of the bank’s corporate culture. As our first report, “Banking on Immigrant
Detention,” illustrated, the bank provides critical financial backing to the private prison industry,
in turn fueling the vicious cycle of lobbying, increased detention, and profit that helps drive the
country’s nightmarish immigration crisis.
This report shows that Wells Fargo has pursued a multi-faceted marketing strategy in order to
attract Latino customers, which it sees as one of its most important growth segments.
Advertising, community partnerships, service offerings, and charitable contributions all help
attract Latino business to the bank. In some cases, such as Wells Fargo’s acceptance of
matricula cards, these efforts are laudable. But stories like Ancelma’s and the bank’s recent
mortgage fraud settlement expose the degree to which these efforts disguise a corporate culture
premised on profit through exploitation.
Wells Fargo’s executives and investors must confront these contradictions. Have Wells Fargo’s
various “Amigos” teams considered the damage that the bank’s private prison ties will do to the
bank’s relationship with the Latino community? Has CEO John Stumpf, who is so quick to tout
the bank’s Latino marketing initiatives and product offerings, considered that his bank’s private
prison investments and lending could ultimately alienate the very customers the bank is seeking
to attract? Have the bank’s major investors, such as Berkshire Hathaway CEO Warren Buffett,
considered this reality?
And will Wells Fargo continue to attempt to profit from this deception?

11