Risk Management

Management Shakeup Continues at Wells Fargo

Four risk management executives are retiring as part of the bank's reorganization in the wake of its fake-accounts scandal.
Matthew HellerMarch 23, 2018

In more fallout from the fake-accounts scandal at Wells Fargo, four executives are retiring as part of the bank’s reorganization of its risk management functions.

The retirees include Vic Albrecht, who replaced Claudia Russ Anderson as head of Wells Fargo’s retail banking risk group last year. It was during Russ Anderson’s tenure that regulators accused Wells Fargo of creating more than two million fake bank and credit accounts.

The management changes follow a recent enforcement action by the Federal Reserve, which restricted the bank’s growth and replaced four board members.

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According to The Wall Street Journal, another banking regulator, the Office of the Comptroller of the Currency, is getting close to finalizing its own enforcement action and civil penalty related to Wells Fargo’s risk controls.

“Strengthening and transforming how we manage risk is a top priority for Wells Fargo,” the company said in a statement on Friday. “While more work is under way, we’re making meaningful progress that is allowing us to better serve our customers and enable our team members to more effectively manage risk across the company. ”

The other executives who are retiring executives are Jim Richards, the head of financial crimes risk management; Kevin Oden, the head of operational risk and compliance; and Keb Byers, the head of enterprise risk. In January, the bank said Mike Loughlin, its chief risk officer, would retire.

There has been a slew of executive changes at Wells Fargo as the bank has sought to restructure its leadership in the wake of the fake-accounts scandal. CEO John Stumpf resigned in October 2016 and was replaced by Tim Sloan.

Wells Fargo has attributed the scandal to an overzealous sales program at the retail level but others have said it reflects a failure in risk management, questioning why, for example, risk assessments didn’t reveal that sales goals were unrealistic.

Under a consent order with the Fed, Wells Fargo’s total assets were capped at about $1.95 trillion until certain risk-management requirements are met and deemed satisfactory.

The bank has also admitted that it charged 800,000 customers for insurance they did not need.