Following Wells Fargo CEO Tim Sloan’s announcement of his retirement, Wells Fargo will be in need of a new CEO. In a recent interview with the Financial Times, Berkshire Hathaway CEO Warren Buffett stated that Wells Fargo should look outward in their search.
“They just have to come from someplace (outside Wells) and they shouldn’t come from Wall Street. They probably shouldn’t come from JPMorgan or Goldman Sachs,” Buffett told the Financial Times.
“There are plenty of good people to run it (from the Wall Street banks), but they are automatically going to draw the ire of a significant percentage of the Senate and the U.S. House of Representatives, and that’s just not smart,” Buffett stated.
Allen Parker, Wells Fargo's General Counsel, will serve as interim CEO and President while the bank searches for a long-term replacement.
“In my time as CEO, I have focused on leading a process to address past issues and to rebuild trust for the future," Sloan said in a statement. "We have made progress in many areas and, while there remains more work to be done, I am confident in our leadership team and optimistic about the future of Wells Fargo." He added that his resignation came in part because "our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives. For this reason, I have decided it is best for the Company that I step aside and devote my efforts to supporting an effective transition."
Sloan had recently appeared before Congress himself, addressing the House Financial Services Committee to discuss the bank’s progress in providing reparations related to past scandals and how the bank is working to improve its culture and better serve its customers.
The hearing stemmed back to 2016, when the Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency (OCC), and Los Angeles City Attorney fined Wells Fargo Bank collective penalties of $185 million for opening millions of deposit and credit-card accounts in customers’ names without their consent or knowledge. The CFPB and OCC imposed the bank with civil money penalties and demanded restitution to harmed customers.
In this month's hearing, Sloan claimed the bank has worked toward a change in leadership, culture, and practices. He pointed out that Wells Fargo has created the required ethics training for all team members titled “Change for the Better.” He also added that he “cannot promise perfection” but suggested that the changes implemented will act as a deterrent to further issues. "We’ve made fundamental changes," Sloan said. "I can give personal assurance the bank will comply with consent decrees.”