A Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith
May 15, 2019
By Pete Schroeder and Michelle Price
WASHINGTON (Reuters) – A top U.S. bank regulator said on Wednesday it will vet Wells Fargo & Co’s pick for its next chief executive, a development that could complicate the scandal-hit lender’s efforts to find a permanent replacement for CEO Tim Sloan.
Joseph Otting, the Comptroller of the Currency (OCC), told Congress he would use special legal powers that the regulator typically reserves for overseeing financially troubled lenders to review any proposed candidate.
But Otting said he does not plan to make findings from the review public, despite pressure from U.S. Senator Elizabeth Warren who pressed him on the issue during a hearing before the Senate Banking Committee.
“At this point in time I do not have plans to release that information,” Otting told Warren in a heated exchange.
Warren and other Democratic lawmakers have accused the OCC of being too soft on Wells Fargo, a claim Otting disputed on Wednesday.
Otting said the OCC remains disappointed by the bank’s progress on fixing risk management and governance problems that led to a number of customer abuse scandals, including in its mortgage and auto lending businesses.
A spokeswoman for Wells Fargo declined to comment.
Sloan abruptly departed in late March, making him the second CEO to leave Wells Fargo following its sales practice scandal. He has said he stepped down because the external attention on him had become a distraction.
Wells Fargo general counsel C. Allen Parker, one of the few newcomers in the bank’s top ranks, is serving as interim CEO.
Intense congressional and regulatory scrutiny is likely to narrow the field of CEO candidates. Wells Fargo’s board is looking for an outsider following criticism that company veterans are incapable of turning things around.
The bank’s CEO search is also being hampered by limits on how much it can pay, Reuters reported this month.
Wells Fargo’s woes began in September 2016 when the bank admitted it had potentially opened millions of unauthorized accounts. Internal and regulatory probes have discovered other issues in the bank’s businesses, resulting in billions of dollars in fines and penalties.
The Federal Reserve has also placed an unprecedented restriction on Wells Fargo to keep it from growing its balance sheet until it proves risk management controls are improved.
(Reporting by Pete Schroeder; Editing by Bill Berkrot and Meredith Mazzilli)