Dive Brief:

• Wells Fargo on Monday appointed Kleber Santos, a former Capital One executive, as head of the bank's newly created group overseeing diverse segments, representation and inclusion. 

• Santos, a native of Brazil, will start Nov. 9 and be in charge of the company's internal and external diversity efforts. Wells Fargo's existing diversity and inclusion-focused human resources team will fall under Santos's purview. Santos will report to CEO Charlie Scharf and serve on the bank's operating committee.

• Santos's appointment comes as the bank's diversity initiatives have been questioned by the Labor Department, and follows a September apology from Scharf over comments he made in June citing a shortage of diverse talent.

Dive Insight:

"Kleber brings a unique set of leadership and business skills that, combined with his experiences driving diversity and inclusion outcomes, will enable us to drive meaningful change throughout the organization and better serve our diverse customer base and underserved communities," Scharf said in a statement.

Santos, who spent 15 years in a number of senior roles at Capital One, most recently served as president of retail and direct banking. In that role, he was accountable for the division's revenue, product development and marketing, branches and ATMs, and operations.

As a member of Capital One's executive team, Santos was engaged in diversity efforts, including in the development of products and services and in partnering with community and consumer advocacy groups, Wells Fargo said. 

"He will be focused on creating a more diverse and inclusive working environment and partnering with Wells Fargo's business leaders to deliver products and services specifically designed to meet the needs of diverse customer segments," the bank said in a statement.

The appointment comes as the San Francisco-based bank has attracted scrutiny from the Labor Department over a June pledge to double Black leadership by 2025. 

The Office of Federal Contract Compliance Programs (OFCCP), a Labor Department arm, reminded the bank last month that federal law prohibits race-based quotas and hiring based on race, according to The Wall Street Journal and Bloomberg.

Scharf's comments in launching the bank's diversity goal have also come under fire in recent months. 

"While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from with this specific experience as our industry does not have enough diversity in most senior roles," Scharf said in a June memo, seen by Reuters and Bloomberg.

Scharf reportedly reiterated the "very limited pool" statement in a Zoom meeting in which he discussed the bank's difficulty reaching its diversity goal, two participants told Reuters.

Scharf apologized for the remark following widespread blowback, first in a company tweet, then in a separate statement.

"I apologize for making an insensitive comment reflecting my own unconscious bias," Scharf said. "There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise."