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Wells Fargo Boss Talks Bank Fees, Economy, Taxes

By CHRISTINA REXRODE

John Stumpf is a survivor.

He's a CEO who kept his job as peers fell after the 2008 financial crisis, a strategist who expanded his company while others shrank theirs, a personable banker at a time of great anger toward his industry.

Stumpf is the boss of Wells Fargo, the nation's fourth-largest bank by assets â¿¿ and one of the few that emerged from the financial crisis with a reputation for responsible banking.

The bank likes to say its vanilla business model of making loans and taking deposits has kept it above the fray while exotic derivatives and other risky practices have bludgeoned rivals. Today, Wells controls a third of the U.S. mortgage market, giving it by far the biggest share of any bank.

The mortgage strategy has its own problems, though, including lawsuits over questionable lending. In October, for example, the Justice Department sued Wells, accusing it of misrepresenting the quality of thousands of mortgage loans that the Federal Housing Administration insured and that later defaulted.

San Francisco-based Wells was one of the largest banks in the country but relatively unknown outside the Western U.S. before 2008, when it scooped up teetering Wachovia in the depths of the financial crisis.

The bank has turned a profit every quarter since 2009, when the purchase was complete. Earnings have expanded while revenue has stayed steady.

Like other big banks, Wells Fargo's stock has had an impressive year, gaining about 20 percent. But unlike the others, it's close to its pre-crisis heights. The stock was around $35 when Stumpf took over in the summer of 2007. At $33 on Thursday morning, it was about 7 percent off that price.

Most of the other megabanks are trading at small fractions of where they were in that period. Wells Fargo is also the only one trading above its book value, essentially the underlying value of all its parts.

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