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Wells Fargo’s chief compliance officer quits in risk overhaul

Wells Fargo

Wells Fargo’s chief compliance officer quits in risk overhaul

Mike Roemer leaves after two years trying to fix the bank’s oversight functions

Wells Fargo was caught in a mis-selling scandal that has cost it more than $3bn in penalties © REUTERS

Wells Fargo’s chief compliance officer, Mike Roemer, is leaving after two years of attempting to turn round the troubled bank’s internal oversight and risk management functions, said people familiar with the decision.

The departure of Mr Roemer, who joined in January 2018 after performing the same role at Barclays for four years, comes shortly after chief executive Charlie Scharf appointed several divisional risk officers, a move some at the bank viewed as undermining a previous decision to centralise risk and compliance functions, the people said.

Mr Roemer will leave the bank after a transition period. He will be replaced by Paula Dominick, who has been chief compliance officer for Credit Suisse Americas for more than four years and previously worked for Bank of America.

Mandy Norton, Wells’ chief risk officer, said the bank was implementing a new organisational structure that would “further strengthen risk management”. 

Each of the bank’s divisions will now have its own chief risk officer. The divisional CROs will look at all risk types — credit, operational, and compliance — and report directly to Ms Norton, so that risk management “is still centralised and independent”.

The new chief compliance officer “will have the same scope and responsibility for driving compliance risk management” across Wells, she said, noting that the new organisational structure matched that of most other large banks.

Credit Suisse declined to comment.

The executive role is one of the most vital at the US’s third-largest bank considering its chequered recent history. For the past two years, Wells has tried and failed to lift an asset cap imposed by the Federal Reserve and other US regulators in the wake of a vast mis-selling scandal, when it was found to have encouraged fraudulent sales practices, including opening millions of sham deposit and credit card accounts.

The wrongdoing has so far cost Wells more than $3bn in penalties and the bank still needs to demonstrate radical improvements to risk and compliance procedures for the cap to be lifted, allowing the lender to grow again.

After joining from BNY Mellon in October last year, Mr Scharf embarked on another reorganisation of the bank’s chief risk office, deciding to reinstall dedicated chief risk officers in each of its key divisions.

People said some at Wells believed the new structure marked a partial reversal of the bank’s earlier ambition to have risk management fully centralised. They felt the scope and role of the chief compliance officer had become diminished, which played a role in Mr Roemer’s departure, the people said.

The bank is also targeting dramatic cuts to its spending on consultants advising on various projects, including the compliance overhaul, the Financial Times reported last week. There has been an internal backlash against the bank’s outlay on firms including McKinsey, PwC and Oliver Wyman, which has surged to $1bn-$1.5bn a year.

“Hiring a leader with Mike’s credentials is an important step in our commitment to building a stronger compliance function and a better Wells Fargo,” ex-Wells Fargo chief executive Tim Sloan said at the time Mr Roemer joined from Barclays in 2018. Previously he spent 23 years at JPMorgan.

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