Wells Fargo Auto Division Adopts New Name to Reflect Changes
Wells Fargo Dealer Services is changing its name to Wells Fargo Auto in order to reflect the changes the company has made to its operations in the past year as well as open it up to more “creative” products, head of the division Laura Schupbach said in a press release.
The biggest change the company has implemented is an effort to consolidate it’s regional service centers into three locations in Irving, Texas; Chandler, Ariz.; and Raleigh, N.C. Additionally, funding operations will be consolidated into two of those centers in Irving and Chandler.
The consolidation is expected to be completed sometime this quarter, according to a previous statement from the company. Operationally, Wells Fargo & Co. also combined its community banking and consumer lending divisions under the leadership of Mary Mack.
Wells Fargo Auto also continues its strategy of lowering its portfolio balances in order to originate more profitable loans. The policy has pushed Wells Fargo to No. 4 among the top banks, below Chase Auto Finance, Ally Financial Inc., and Capital One Auto Finance, respectively.
“Our auto business has evolved significantly over the past year,” Schupbach said. “We felt the business deserved a new name that clearly reflects the full scope of our promise to the dealer and consumer customers we serve.”
The name change is expected to take several months to integrate across systems. While the name change does apply to Wells Fargo’s auto floorplan lending business, it does not apply to Wells Fargo Commercial Distribution Finance or Wells Fargo Preferred Captial, a spokeswoman confirmed to Auto Finance News.
The rebranding also comes after a fraught year of regulatory turmoil.
In November 2017 Wells Fargo paid an additional $5.4 million in remediation to military servicemembers after it was discovered that the lender underestimated the number of affected borrowers from a previous consent order issued by the Department of Justice. The company improperly repossessed vehicles from 863 servicemembers, which cost the company $29.4 million.
Prior to that, Wells Fargo proactively made an $80 million payment to 500,000 consumers who were wrongly charged for an insurance product they didn’t need. However, that matter is still under investigation by several regulatory agencies, including the Office of the Comptroller of the Currency that said the $80 million payment was “insufficient” to cover the full breadth of the affected consumers, according to a leaked document sent to The New York Times.
The new name also opens the company up to new innovations taking place across the auto finance space, Schupbach said.
“[The name change] is also simple and straightforward enough to support our desire to be more creative in how we deliver our products and services to the marketplace to ensure we can continue to be a leading financial provider,” she said in the press release.
