Wells Fargo, under fire from all sides because of a scandal in which employees set up illegal accounts to meet sales quotas, announced a restructuring of its top management yesterday, solidifying the leadership structure beneath Timothy J. Sloan, who is widely expected to succeed John G. Stumpf, the bank’s embattled chairman and chief executive, the New York Times reported today. The changes, to take effect on Nov. 1, will place a number of top executives directly under the purview of Sloan, a 29-year company veteran who was promoted last November to Wells Fargo’s No. 2 spot, becoming the bank’s president and chief operating officer. Sloan, who has been head of Wells Fargo’s wholesale banking division — which does business with companies and organizations, not personal account holders — has been largely insulated from the scandal engulfing the company’s retail banking group. That division has been in crisis mode since Wells Fargo agreed last month to pay $185 million in penalties for fraudulently opening as many as two million bank and credit card accounts that may not have been authorized by customers. Read more.
In related news, Wells Fargo & Co. managers pushed bankers to sign up customers for potentially costly overdraft protection that they didn’t always need or realize they were getting, according to current and former bankers and managers, the Wall Street Journal reported today. Members of Congress expressed concern about potential overdraft problems at the bank during two hearings last month with Wells Fargo Chief Executive John Stumpf. He was called to Capitol Hill after the bank in September agreed to a $185 million fine and enforcement action over what the Consumer Financial Protection Bureau called the “widespread illegal practice” of opening unauthorized accounts. The CFPB is also reviewing overdraft-fee practices broadly at banks, the agency has said. Read more. (Subscription required.)
