Wells Fargo Risk Chief to Retire as Scrutiny of the Bank Continues
January 17 2018 - 2:38PM
Dow Jones News
By Emily Glazer
Wells Fargo & Co.'s Chief Risk Officer Michael Loughlin is
retiring as the bank continues to face heightened regulatory
scrutiny, especially over its risk- management practices.
The San Francisco-based bank said Wednesday it will name a
successor to Mr. Loughlin in "the next few months," and he will
remain in his role through the transition.
The Wall Street Journal reported earlier in January that banking
regulators downgraded one part of a secret assessment of banks'
health and strength that focuses on Wells Fargo's management and
its ability to manage risk.
The downgrade of the assessment, known as a CAMELS score,
occurred over the summer of 2017, as Wells Fargo continued to
grapple with issues related to how it treats customers. In
September 2016, the bank settled allegations that it had years of
improper sales practices that resulted in potentially 3.5 million
accounts opened without customers' knowledge.
Elsewhere in the bank, more than 550,000 auto-loan and mortgage
customers were potentially overcharged for products for years as
well. Regulators' most recent concerns focus on the bank's overall
approach to catching and preventing problems that can harm
customers, known as risk management.
The Office of the Comptroller of the Currency has been weighing
a new enforcement action against the bank related to such risk
controls, The Wall Street Journal reported earlier in January.
A Wells Fargo spokeswoman at the time declined to comment on the
bank's CAMELS rating or any potential OCC actions. The spokeswoman
then said the bank is "very focused on prudent and effective risk
management" and continues to enhance those matters.
Mr. Loughlin has been with the bank or its predecessors for 36
years and has served as chief risk officer since 2008, a period in
which the chief risk that bank officials worried about was a repeat
of the lax lending practices that led to the housing crisis.
Mr. Loughlin has overseen risk matters related to credit,
markets, operations, compliance and cybersecurity, according to the
bank. Over the past two years, the bank said Mr. Loughlin also has
led efforts to centralize many of the company's risk functions.
Mr. Loughlin reports directly to Wells Fargo Chief Executive
Timothy Sloan and has served on the bank's operating committee of
its top executives. Mr. Sloan said in a statement that Mr. Loughlin
has served during "some of the most critical times in our company's
history" including the financial crisis and the bank's merger with
Wachovia.
Write to Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
January 17, 2018 14:20 ET (19:20 GMT)
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