Wells Fargo & Co.'s Chief Risk Officer Michael Loughlin is retiring as the bank continues to face heightened regulatory scrutiny, especially over its risk- management practices.
The San Francisco-based bank said Wednesday it will name a successor to Mr. Loughlin in "the next few months," and he will remain in his role through the transition.
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The Wall Street Journal reported earlier in January that banking regulators downgraded one part of a secret assessment of banks' health and strength that focuses on Wells Fargo's management and its ability to manage risk.
The downgrade of the assessment, known as a CAMELS score, occurred over the summer of 2017, as Wells Fargo continued to grapple with issues related to how it treats customers. In September 2016, the bank settled allegations that it had years of improper sales practices that resulted in potentially 3.5 million accounts opened without customers' knowledge.
Elsewhere in the bank, more than 550,000 auto-loan and mortgage customers were potentially overcharged for products for years as well. Regulators' most recent concerns focus on the bank's overall approach to catching and preventing problems that can harm customers, known as risk management.
The Office of the Comptroller of the Currency has been weighing a new enforcement action against the bank related to such risk controls, The Wall Street Journal reported earlier in January.
A Wells Fargo spokeswoman at the time declined to comment on the bank's CAMELS rating or any potential OCC actions. The spokeswoman then said the bank is "very focused on prudent and effective risk management" and continues to enhance those matters.
Mr. Loughlin has been with the bank or its predecessors for 36 years and has served as chief risk officer since 2008, a period in which the chief risk that bank officials worried about was a repeat of the lax lending practices that led to the housing crisis.
Mr. Loughlin has overseen risk matters related to credit, markets, operations, compliance and cybersecurity, according to the bank. Over the past two years, the bank said Mr. Loughlin also has led efforts to centralize many of the company's risk functions.
Mr. Loughlin reports directly to Wells Fargo Chief Executive Timothy Sloan and has served on the bank's operating committee of its top executives. Mr. Sloan said in a statement that Mr. Loughlin has served during "some of the most critical times in our company's history" including the financial crisis and the bank's merger with Wachovia.
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(END) Dow Jones Newswires
January 17, 2018 14:20 ET (19:20 GMT)
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