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Wells Fargo creates new unit focused on regulatory compliance
[NEW YORK] Wells Fargo & Co is creating a new unit tasked with satisfying US regulatory requirements, according to an internal memo seen by Reuters.
Derek Flowers, who has been with the San Francisco-based bank for more than two decades, will become head of strategic execution and operations and will focus on the bank's regulatory priorities, said the memo, sent by interim chief executive Allen Parker on Wednesday.
In his current role as chief credit and market risk officer, Mr Flowers would have had frequent contact with regulators.
The new unit, whose creation was reported earlier on Wednesday by the Financial Times, will be charged with working through the more than a dozen regulatory consent orders the bank is operating under - agreements between regulators and the bank that it will work to satisfy certain requirements. It will also implement new business and risk-management processes.
Mr Parker has said he wants to "redouble" the bank's efforts to satisfy and exceed regulatory expectations.
Regulators have demanded change from Wells Fargo after employee whistleblowers revealed it had opened potentially millions of unauthorised accounts in 2016. Internal and regulatory probes have since discovered other issues in each of the bank's primary segments, resulting in billions of dollars in fines, penalties and an unprecedented cap on its balance sheet by the Federal Reserve.
The bank has said it is committed to compensating all customers affected by its actions and has so far payed out tens of millions of dollars.
However, regulators including the Federal Reserve, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau have publicly criticized the bank's progress within the past month.
Wells Fargo has added more than 1,000 jobs to its risk management team and plans to add an additional 1,300 employees this year to help strengthen its compliance efforts, it has said.