Wells Fargo's chief compliance officer quits as bank revamps risk team

Dive Brief:

Wells Fargo's chief compliance officer, Mike Roemer, is leaving the bank, the San Francisco-based lender announced Thursday in a press release. The release also noted several new hires in a restructuring of its risk management team.
Roemer, who joined Wells Fargo in January 2018 after serving Barclays in the same capacity for four years, will be replaced by Paula Dominick, who worked as chief compliance officer for Credit Suisse USA for more than four years, and previously held leadership posts at Bank of America, Goldman Sachs and Morgan Stanley.
Roemer's departure — and Dominick's hiring — mark the latest of several C-suite changes Wells Fargo has made since Charlie Scharf became CEO last October. The bank hired incoming CFO Mike Santomassimo last month to replace John Shrewsberry, who is retiring.

Dive Insight:

Wells Fargo's compliance function will be crucial as the bank tries to put behind it the 12 enforcement actions with which it began the year. Some stem from the 2016 fake accounts scandal that has cost the bank $3 billion in fines. But the bank's reputation has suffered upon allegations of other shady practices. Customers claimed last month the bank placed their mortgage accounts in forbearance without their knowledge. The bank has also been accused of "deceptively" collecting "hundreds of millions of dollars" in service fees. The Federal Reserve imposed a $1.95 trillion asset cap on the bank in 2018, which Bloomberg data estimates has cost the bank $220 billion in market value.

In addition to Dominick, the bank announced the hiring or promotion of four unit chief risk officers.

Brian King will join Wells Fargo in October as CRO for consumer and small-business banking. He most recently served as CRO and head of finance for the consumer business at Goldman Sachs.
Ellen Koebler will join the bank in September as CRO for commercial banking. She was deputy CRO at Truist and had served as CRO for SunTrust before its merger last year with BB&T.
Prasanna Someshwar will join the bank in October as CRO for wealth and investment management after serving in several risk management roles at JPMorgan Chase.
Jeff Colson will transition in September into the role of CRO for finance from his job as head of capital management at Wells Fargo.

The bank also named Patrick Dillon its enterprise testing and validation leader. His team will develop methodologies and standards for reviewing activities companywide.

Hiring unit-level CROs may appear a contradictory move for Scharf who, while outlining last month a desire to cut $10 billion in annual costs, said the bank has too many management layers. "This cannot continue," Scharf told analysts, according to Bloomberg. "There's no reason why, as a management team, we don't have the ability to be as efficient as the rest."

The bank defended its reorganization Thursday.

"Our new model will strengthen our centralized, independent risk management program, provide greater consistency in how we manage risk across our businesses, and better position us for the future," Wells Fargo's chief risk officer, Mandy Norton, said in the bank’s press release. She will oversee Dominick, Dillon and the four CROs.

Unlike at least six of the executives hired during Scharf's tenure, including Santomassimo and Wells Fargo Chief Operating Officer Scott Powell, it appears Dominick and Scharf have not previously served together as colleagues.

Dominick will join the bank in October. Roemer will leave after a transition period, the bank said.