Wells Fargo on Tuesday named longtime executive Derek Flowers as its new chief risk officer.
Flowers, a 24-year Wells Fargo veteran who has overseen numerous risk management responsibilities with the bank, will assume the position immediately. He will lead Wells Fargo’s independent risk management function, including compliance risk management, and continue to serve as a member of the bank’s operating committee.
“Derek is a proven leader with extensive experience managing risk. Over the last several years, he has played a critical role managing the buildout of the company’s risk and control frameworks,” said Wells Fargo Chief Executive Charlie Scharf in a press release.
Flowers succeeds Amanda “Mandy” Norton, who Scharf announced earlier this month will retire at the end of June.
Flowers most recently served Wells Fargo as head of strategic execution and operations, leading the bank’s efforts to “better execute against its risk, control, and regulatory priorities.” He has also worked as the bank’s chief market risk officer and chief credit officer. Other roles he has held as part of the bank’s wholesale business include credit manager, lending manager, and head of the corporate debt portfolio.
“Building a risk and control foundation appropriate for Wells Fargo’s size and complexity remains our top priority, and Derek’s background and familiarity with the company—built on a 24-year career at Wells Fargo—make him the ideal candidate to succeed Mandy Norton following her retirement,” Scharf added.
Wells Fargo’s risk management challenges are well-known, stemming primarily from its attempts to recover from its fake account scandal that surfaced in 2016. In February 2020, Wells Fargo agreed to pay $3 billion in civil and criminal penalties to the Department of Justice and Securities and Exchange Commission to resolve the issues.
The bank also entered into a three-year deferred prosecution agreement that ordered changes in Wells Fargo’s management and its board of directors, an enhanced compliance program, and significant work to identify and compensate customers who might have been victims of the fraudulent sales practices.
Since that settlement, Wells Fargo has had to address other deficiencies, including risk management failings in its home mortgage servicing division that led to a $250 million fine levied by the Office of the Comptroller of the Currency in September 2021. Sen. Elizabeth Warren (D-Mass.) asked federal banking regulators to break up Wells Fargo in the aftermath of the penalty, claiming the bank proved it is “ungovernable.”
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