BofA and Wells Fargo are two banks that have both publicly taken issue with the news media’s spin on certain marketing initiatives.
FOX Business anchor Greta Van Susteren was just one voice among the angry hordes taking BofA to task over its $10 million Superbowl party. The bank blasted back, saying that this kind of marketing generates revenue, and ultimately will help the bank pay the federal government back.
They defended the event, saying it directly generated 14,000 checking and credit card applications. “For every dollar we spend in these business relationships, we generate more than $10 in revenue for our shareholders,” a BofA spokesman said. Besides, BofA taxpayer money wasn’t used; the bank had made contractual commitments for the event prior to accepting bailout money.
Then there’s Wells Fargo’s party.
Wells Fargo announced last week that it would cancel a four-day employee recognition event in Las Vegas after the media labeled it “a pricey Las Vegas casino junket.” The bank was forced to deny allegations that the bank “used the government’s investment to pay for these events.”
The bank may have capitulated, but it isn’t laying down without a fight. On its new blog, Wells Fargo chastised the media’s coverage as “misleading.” The blog post also makes an admirable attempt to justify the importance of the bank’s recognition events.
Wells Fargo went one step further. They took out a defensive two-page ad in yesterday’s New York Times. In the ad, CEO John Stumph said, “The problem is many media stories on this subject have been deliberately misleading. These one-sided stories lead you to believe every employee recognition event is a junket, a boondoggle, a waste, or that it’s for highly-paid executives. Nonsense!”
Key Question: Why didn’t bank parties and other luxuries bother anyone during the boom times?
Bottom Line:
- The media doesn’t seem to care if there’s any direct correlation between bank expenses and TARP money — and the general public cares even less. They’re going on the attack if they spot any financial institution spending money in a way they deem reckless.
- Under TARP, the rules of the game can change — without notice. In fact, the government can change the name of the game if it chooses.