Wells Fargo & Co. said Scott Powell will become its COO, the second external recruit to join the top ranks since CEO Charles Scharf took over six weeks ago.
Powell most recently was CEO of Santander Holdings USA Inc., as well as of Santander Consumer USA Holdings Inc. He also worked with Scharf at Bank One and then JPMorgan Chase & Co. Santander Consumer USA has backed a large share of Fiat Chrysler Automobile's auto loans under the private-label Chrysler Capital brand since 2013.
Starting Dec. 9, Powell will focus on Wells Fargo’s relationships with regulators, which have been strained since the bank became tangled in a wide-ranging sales practices scandal in 2016.
Wells Fargo is one of the largest auto lenders in the U.S., with an automotive portfolio of $46.7 billion as of the third quarter.
The San Francisco-based bank is currently operating under more than a dozen regulatory consent orders, including an unprecedented growth restriction on its balance sheet from the Federal Reserve until the bank proves it has fixed its risk controls. Additionally, Wells Fargo faces federal probes by the Department of Justice, the Securities and Exchange Commission and the Department of Labor.
Wells Fargo's auto business fell under federal scrutiny as well. The lender paid $1 billion — the largest fine ever levied by the Consumer Financial Protection Bureau — after the bureau found the mandatory insurance program attached to the lender's auto loans to be a violation of the Consumer Financial Protection Act. Wells Fargo also admitted that it had charged some customers improper fees to lock in an interest rate for a mortgage.
“I wouldn’t count on any quick wins,” Powell told Reuters by telephone. “This is tough stuff, but it’s all very doable over time.”
During his tenure at Santander US, Powell was credited with turning around the bank’s financials and fixing regulatory issues, experience he said will help him in his new role.
Last month the bank hired another former JP Morgan executive and previous White House official, William Daley, to head public affairs.
Wells Fargo’s board set a goal of hiring an outsider to lead the company following former CEO Tim Sloan’s retirement to satisfy critics who claimed an insider could not transform the bank’s culture.
Scharf, who joined in October from Bank of New York Mellon Corp., is known to shake up leadership. Since he took over, general counsel and former interim CEO Allen Parker, and company veteran Avid Modjtabai have made plans to leave.
The chief operating officer position has been vacant since October 2016, when Sloan was promoted as CEO.
Powell, like Scharf, will be based in New York. He will earn an annual base salary of $1.75 million and get a $3.2 million signing bonus, according to filings.
Jackie Charniga of Automotive News contributed to this report.
