Wells Fargo announced Wednesday that its chief executive and chairman, John Stumpf, is retiring in the wake of a scandal in which bank employees opened credit cards and deposit accounts without customers’ permission.
Tim Sloan, a longtime veteran of the bank, was appointed as the new chief executive. (Stephen Sanger, a board member, will now serve as chairman, dividing up the two roles that had been held by Stumpf.)
The change, which is effective immediately, raises questions from lawmakers and investors about Sloan’s history and whether his appointment is enough to move the bank in a new direction.
“The selection of Tim Sloan as the new CEO, who as a 25 year veteran at the bank occupied senior leadership positions, raises questions,” said Rep. Gregory W. Meeks (D-N.Y.). “These announcement made today do not nearly go far enough given the many urgent reforms needed.”
Here’s a look at what we know about Sloan so far:
Was this a surprise?
It was widely expected that Sloan would take the helm at Wells Fargo after Stumpf eventually retired. Still, Stumpf’s retirement came sooner than expected, with previous timelines calling for him to retire within two years.
How long has Sloan been at Wells Fargo?
Sloan has been at the bank since 1987, when he joined as part of the loan adjustment group. He held various positions during his time at Wells Fargo, including senior executive vice president, chief financial officer and head of the wholesale banking group. He takes on the role of CEO less than a year after he was named chief operating officer in November 2015.
What did he do before joining the bank?
According to his company profile, he spent three years working at Continental Illinois Bank in Chicago. He earned his bachelor’s degree in economics and his MBA from the University of Michigan in Ann Arbor.
Was he involved with the part of the bank that made the fake accounts?
Sloan said Tuesday on CNBC that Carrie Tolstedt, who led the bank’s community banking unit where the misconduct occurred, reported directly to him when he became the chief operating officer late last year. But he spent most of his career at Wells Fargo working for a different side of the bank that focused more on serving corporations or professional investors, which is separate from the retail side of the bank that got in trouble for making the fraudulent accounts. Some analysts say that gives him some distance from the scandal, which could come in handy as lawmakers and investors look for reassurance that the bank is heading in a new direction.
Is he linked to any other controversies?
Not directly, but he has had to step forward to help handle some of the other problems at the bank. Bloomberg reported that he helped defend the bank and “quiet concerns” after the former chief financial officer resigned for personal reasons in 2011. And anti-bank protesters picketed in front of his home in 2011 and 2012 as a part of the Occupy Wall Street movement.
So does this mean the drama is over at Wells Fargo?
Far from it. Sen. Elizabeth Warren (D-Mass.), who called on Stumpf to resign when he was grilled by the Senate last month, said the bank should be investigated by the Justice Department and the Securities and Exchange Commission. She also said Stumpf should “return every nickel he made” while the fraud was going on. Federal prosecutors launched an investigation of the bank last month, which could lead to civil or criminal charges. The Labor Department is looking into whether the bank fired employees who reported the unethical behavior.
Plus Sloan’s long history with Wells Fargo still leaves him open to criticism from people who want to see more drastic changes at Wells Fargo.
Does this change anything for customers?
Not right away. Sloan may eventually have some new ideas for how the bank should handle customers’ accounts. But as he pointed out after the announcement, the bank has already made a series of changes. For instance, customers are now notified within an hour when an account has been opened in their name and bank employees must take additional steps to confirm someone’s authorization before they can open another account. The bank sent a note to customers Wednesday afternoon that summed up some of those steps.
What does Sloan have to say about his new job?
In an interview with The Washington Post, Sloan said he wished the transition was happening under different circumstances. When asked what his biggest challenge will be, Sloan said: “While I am confident in my ability to be successful in the role, it is a new role.” But he said the “good news” is that he will be surrounded by a team that can help him as he moves the company forward. “We have a reputation we need to repair,” he said.