- Wells Fargo’s consumer banking business has created a new “chief accountability officer” role and shifted a wealth management leader over to that post.
- Kathy Barney, who was formerly the finance head of Wells Fargo Advisors, will now report to David Kowach, the head of Community Banking, the scandal-ridden unit re-named Branch Banking.
- The new role comes as chief executive Charlie Scharf and bank officials Elizabeth Duke and James Quigley are set to testify before the House Financial Services Committee next week.
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Wells Fargo’s consumer bank has created a new “chief accountability officer” role and shifted a wealth management official into that post as it tries to recover from the fake-account scandal that has plagued that area of the bank.
The San Francisco firm’s Branch Banking business named Kathy Barney, formerly the finance chief of Wells Fargo Advisors, as its first chief accountability officer, a company spokesperson confirmed to Business Insider.
“She will be responsible for the ownership and resolution of key issues identified and leading business performance accountability,” the spokesperson said in a statement.
Wells Fargo Advisors, which falls under the bank’s Wealth and Investment Management division along with other businesses like the private bank and asset management, will begin searching for Barney’s replacement.
With her seat open, the firm’s wealth operations are now looking to fill at least two senior leadership roles. It’s also looking for a new CEO of wealth and investment management after last month moving former chief Jon Weiss into the new role of CEO of Corporate & Investment Banking.
Barney will report to David Kowach, the head of Community Banking, which the firm has renamed Branch Banking. Kowach was the head of Wells Fargo Advisors until July 2019.
The community bank unit was at the heart of Wells Fargo‘s wide-reaching sales practice scandal that first came to light four years and two chief executives ago.
The firm last month paid $3 billion in a settlement with the Department of Justice and the Securities and Exchange Commission over consumer abuses including opening millions of unauthorized or fraudulent accounts as bank employees tried to meet unrealistic sales goals.
“Despite knowledge of the illegal sales practices, Community Bank senior leadership failed to take sufficient action to prevent and reduce the incidence of such practices,” the Department of Justice said in a Feb. 21 statement.
The new role comes as chief executive Charlie Scharf and bank officials Elizabeth Duke and James Quigley are set to testify before the House Financial Services Committee next week over these issues and a year-long investigation Congresswoman Maxine Waters’ committee has conducted.
Investigators have also fined Wells Fargo Advisors, a subsidiary of the bank and one of the largest US wealth managers with $1.6 trillion in assets under management, for a lack of employee oversight.
Last week the SEC announced settled charges with the business for failing to supervise financial advisers and other employees who made unsuitable recommendations to clients, and ordered Wells Fargo to pay a $35 million penalty.
The SEC said representatives recommended complex exchange-traded funds to retail investors, some of whom were senior citizens and retirees with “limited incomes and net worth,” without fully understanding those risky products.
Wells Fargo Advisors has lost around 1,500 financial advisers since the third quarter of 2016, when the phony account scandal first erupted. The business employed some 13,500 advisers at the end of 2019.
Barney joined Wells Fargo Advisors in 2013 from H&R Block Bank, where she was president and chief executive.
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