“I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public,” said John Stumpf, Wells Fargo’s Chairman and CEO, on September 20th in a prepared statement to the Senate Banking Committee. “I want to apologize for violating the trust our customers have invested in Wells Fargo. And I want to apologize for not doing more sooner to address the causes of this unacceptable activity.”
Earlier that month, the Consumer Financial Protection Bureau (CFPB), the Office of the Comptroller of the Currency (OCC), and the Los Angeles City Attorney’s Office fined Wells Fargo a combined total of $185 million for opening approximately 2 million unauthorized accounts without consumers’ knowledge.
During his testimony, Stumpf did not attempt to pass the buck. But the overwhelming wave of criticism from the public to politicians seemed to wash away Stumpf’s sincere apologies.
On October 12, Stumpf abruptly announced his retirement from Wells Fargo and made the following statement:
“I am grateful for the opportunity to have led Wells Fargo. I am also very optimistic about its future, because of our talented and caring team members and the goodwill the stagecoach continues to enjoy with tens of millions of customers. While I have been deeply committed and focused on managing the Company through this period, I have decided it is best for the Company that I step aside.”
Enter Timothy J. Sloan. Taking on the role of President and CEO, the 29-year corporate veteran is seen by many as the right choice to restore lost confidence in the 160-year-old staple of the financial industry.
Who is Tim Sloan?
Some were skeptical of the leadership changes. Upon hearing news, U.S. Representative Keith Ellison (D-Minnesota) tweeted, “Ok, but does this ensure real reform?” Senator Sherrod Brown (D-Ohio) released a statement saying “There must be accountability to fix the culture within Wells Fargo that encouraged cheating and left senior executives either unwilling or unable to stop it for far too long. Unfortunately, Mr. Stumpf’s retirement does nothing to answer the many questions that remain.”
“I don’t think an insider is the right guy to do it,” analyst Dick Bove said in an interview with CNBC. “The culture needs to be adjusted. The fat has got to come out of this company. There’s a whole lot of things that need to be done that Mr. Sloan is not going to do.”
But Sloan doesn’t shy away from admitting that there is major work to be done within the bank to regain the trust of its consumer base.
“We fell short of the expectations we have of ourselves and the expectations our customers have of us,” said Sloan in an exclusive interview with DS News. “The challenges we face are real and essential to fix. It will take time to repair mistakes and lead the company forward. We intend to strengthen our culture throughout our organization and ensure we are always doing the right thing for our customers. While there is much more still to be done, we have already begun a series of changes that will help to rebuild trust.”
It remains to be seen how greatly these leadership changes will impact Wells Fargo’s business, but Sloan has the credentials and experience to back his bold words.
Born and raised in Detroit, Sloan received his undergraduate and graduate degrees at the University of Michigan. With his M.B.A. being in finance, Sloan’s passion for financial services was sparked. After spending about three years with Illinois Continental Bank in Chicago, Sloan joined the Wells Fargo team, where he has served in a variety of roles throughout the years.
Committed to Homeownership
Though Sloan’s primary focus during his tenure has been in the bank’s commercial and wholesale banking businesses, he is no stranger to Wells Fargo’s Home Mortgage division, the largest retail mortgage lender in the United States. And he is bullish to the future.
“We are innovating – through both technology and the trusted personal guidance that has been our hallmark through the years – the customer experience as well as our underwriting and servicing processes,” says Sloan. “We are using the power of technology – now and for the future – to enhance the experience on behalf of our customers and clients, vendors, settlement agents, and partners. Our team is aligned and energetic, and we are optimistic about the future.”
Despite a period of transition within Wells Fargo’s mortgage banking division following last year’s retirement of Michael J. Heid and installation of Franklin Codel as head of home lending, Sloan insists that his team is stable and has a central focus on promoting the opportunity for homeownership throughout the nation.
“The United States is in the midst of an historic demographic shift. Millions of Millennials will enter the home buying market in the next decade, representing the largest generational wave of new homebuyers since the Baby Boomers came of age in the 60s, 70s, and 80s. The group of emerging first time homebuyers will also be “majority minority” led by the Hispanic and African American communities,” says Sloan. “These consumers want a lender that is going to help them understand their options, answer their questions, and chart a path toward sustainable homeownership. We want Wells Fargo to be viewed as the lender of choice for first-time homebuyers, diverse communities, and low- to moderate-income communities. These are markets where homeownership rates currently lag behind the national average, but opportunities for mortgage and homeownership growth – and the benefits they bring to consumers and communities – are prevalent.”
Sloan says that Wells Fargo is committed to providing sustainable solutions for homeownership. He praises Codel and his team for working to act on and advance a strategic vision centered on serving customers through excellence in their process, products and programs, service, and execution.
“The team has rallied around an organization-wide commitment to enabling sustainable homeownership announced this past spring,” says Sloan. “Flexible new programs like your First Mortgage – a 3-percent down home loan paired with optional financial education and launched in May – illustrate the focus on providing customers with the tools, trusted guidance, and credit they need to achieve financial success. We believe that, as the nation’s largest mortgage lender and servicer, we can help more Americans realize the benefits of homeownership.”
Committed to Culture
As he takes charge during the metamorphosis of an institution he has been a part of for nearly three decades, Sloan believes that now more than ever, the company’s values call the institution as a whole to be centered on doing what is right for the customer because a better served customer means a stronger, better Wells Fargo.
“I know no better individual to lead this company forward than Tim Sloan,” John Stumpf said in his statement announcing his exit.
But why? What makes Tim Sloan the man for the moment? Sloan says that his leadership style is a combination of approaches that can be best used at different times depending upon the situation.
“There have been a few lessons I have embraced and try to pass along to others, including: hire people who are smarter than you; take care of those people, treat them fairly and challenge them; never ask them to do something you would not do; admit when you are wrong, but never, ever waiver when you believe you are right; and be a role model for honest and ethical behavior,” says Sloan.
“Clearly, right now at Wells Fargo, my job is to ensure we are all applying tremendous focus on making the changes necessary to help rebuild trust and always doing what is right for our customers,” he continued. “This is foundational to who we are and how we operate. And, at the same time, I want to remind our 265,000 team members around the world that while we have a lot of work to do, Wells Fargo has been successfully operating for 164 years, and we look forward to being there for our customers for another 164 years and beyond. We have an incredible legacy and a bright future.”
Though Wells Fargo has a long way to go in terms of recovering the confidence and trust of their customers, one thing seems certain: Tim Sloan is committed to ensuring that the reputation of the nation’s largest mortgage lender remains in-tact for years to come. “These recent weeks have not been easy, but I could not be more proud to lead a company with such an outstanding history and with so many dedicated team members in all of our businesses.”