The executive responsible for making sure Wells Fargo follows laws and regulations is departing after two and half years in the post.
Michael Roemer, head of compliance, is leaving following what the bank says is a change in its risk management program that will “provide greater consistency” in how it manages risk across all its businesses. His departure was first reported by the Financial Times.
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Last month, NBC News reported that Wells Fargo, the nation’s fourth largest bank, had placed home mortgage customers into a program, without their permission, that suspended payments on their federally backed loans. Known as forbearance, it is a CARES Act program that aims to help borrowers who are having trouble making their payments because they’ve been hurt by COVID-19.
July 22, 202002:22
Putting customers into forbearance without their knowledge can harm borrowers’ credit reports by showing that they are not making payments even when they are. The practice can also bar them from refinancing their home loans to take advantage of low interest rates.
In recent years, Wells Fargo has struggled to overhaul a culture that generated several major scandals. In 2016, the bank was found to have opened millions of unrequested bank and credit card accounts for clients; a year later, the bank confirmed it had forced customers to buy auto insurance they didn’t need and, in some cases, weren’t told about.
Wells Fargo hired Roemer in January 2018. He oversaw all regulatory compliance risks for the bank and was a member of the bank’s management committee. He was among a group of outsiders Wells Fargo recently brought into its top ranks to focus on risk management and compliance, its financial filings show. Last October, the bank hired a new chief executive, Charles W. Scharf.
But late Thursday, the bank detailed a new management structure with five executives overseeing risk-taking activities in each of the bank’s main businesses and reporting to the bank’s chief risk officer. Paula Dominick, a former chief compliance officer at Credit Suisse USA, will take over from Roemer at Wells Fargo in October, the bank said.
Earlier this year, the bank paid $3 billion to settle a civil lawsuit over the fake accounts. Since 2018, it has been operating under a restriction imposed by the Federal Reserve Board that caps its growth until Wells Fargo “sufficiently improves its governance and controls.”
Regarding the bank’s mortgage forbearance actions, Mary Eshet, a Wells Fargo spokeswoman, provided this statement to NBC News: “In the spirit of providing assistance, we may have misinterpreted customers’ intentions in a small number of cases. In those limited cases, we are working directly with customers to ensure they were not harmed in any way.”
Gretchen Morgenson is the senior financial reporter for the NBC News Investigative Unit.
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