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Wells Fargo chief administrative officer, chief auditor to begin leaves of absence

Key Points
  • Wells Fargo says Chief Administrative Officer Hope Hardison and Chief Auditor David Julian are taking leaves of absence and will no longer be a part of the bank's operating committee.
  • The bank says the absences are related to its previously announced reviews of retail banking sales practices by regulatory agencies and are not related to the company's financial results or internal financial controls.
  • Wells Fargo has been look into its retail banking sales practices as it struggles to recover from multiple scandals across its business units.
A customer leaves an ATM at a Wells Fargo branch in Denver.
Rick Wilking | Reuters

Wells Fargo announced Wednesday that Chief Administrative Officer Hope Hardison and Chief Auditor David Julian are taking leaves of absence and will no longer be a part of the bank's operating committee.

The company said the absences are related to its previously announced reviews of retail banking sales practices by regulatory agencies. The bank said the absences are not related to the company's financial results or internal financial controls.

Wells Fargo also announced a number of leadership appointments to fulfill chief administrative office and audit functions, effective immediately.

David Galloreese, head of human resources, will join the operating committee and report directly to CEO Tim Sloan. Cara Peck, head of the culture and change management teams, will report to Galloreese.

Jim Rowe, the head of stakeholder relations, will also report directly to Sloan. Stakeholder relations will now include corporate philanthropy and community relations.

Kimberly Bordner will become acting chief auditor and report to the board's audit and examination committee. She currently serves as chief executive audit director. Wells Fargo said, however, it will look both internally and externally to fill the role.

Wells Fargo has been look into its retail banking sales practices as it struggles to recover from multiple scandals across its business units. In 2016, the bank fired 5,000 employees it blamed for opening millions of accounts for customers without their permission. But that revelation led to discoveries of other abuses.

In April, Wells Fargo paid regulators $1 billion to settle several allegations of lending abuses within its auto insurance and home loan businesses. As part of that deal, Wells Fargo is compelled to rework its compliance and risk-management processes and repay customers.

Shares of Wells Fargo rose slightly in after-hours trade Wednesday. The stock has fallen 17 percent so far in 2018.

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Adam Jeffery | CNBC
Key Points
  • Wells Fargo shares rise after the bank agrees to pay $1 billion to settle allegations from multiple regulators it engaged in lending abuses.
  • Wells says the settlement with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency shaves $800 million off its first-quarter profit.
  • The bank has been struggling to come back from a fake accounts scandal that surfaced in 2016 in which branch employees opened millions of fake accounts in customers' names without their knowledge.