Wells Fargo fires head of consumer lending for misconduct
Wells Fargo has fired one of its most powerful executives for misconduct.
The scandal-ridden bank said Friday that it fired Franklin Codel, head of the consumer lending division, which churns out mortgages and auto loans. But Wells Fargo stressed it wasn’t related to sales tactics, nor to the performance of the division.
Instead, the bank said Codel violated company policy “during a communication he had with a former team member regarding that team member’s earlier termination.”
Wells Fargo declined to give further details or to say when the alleged misconduct took place. The bank said it plans to announce a successor by the end of the year. Codel, a 24-year veteran of the bank who was also on the operating committee, was unavailable for comment.
“Difficult as this situation is, the decision reflects our commitment to our values and culture and to executive accountability,” CEO Tim Sloan said in a statement.
Wells Fargo’s infamous fake-accounts scandal forced the ouster of longtime CEO John Stumpf last year as well as community banking boss Carrie Tolstedt. The bank has also terminated an unspecified number of bank managers over sales issues.
The division that Codel led is one of the biggest lenders in America. The business funds nearly one in every eight loans in the country and is a major servicer of loans. It employs about 45,000 people.
One of the division’s biggest departments is Wells Fargo Dealer Services, the bank’s troubled auto lending business.
Just this week, the Justice Department said Wells Fargo illegally repossessed the vehicles of 450 service members between January 2008 and July 2015. That’s on top of a settlement last year with the Justice Department for illegally seizing 413 vehicles owned by service members.
Wells Fargo’s auto business has also admitted charging as many as 570,000 customers since 2012 for car insurance they didn’t need. The bank estimates that about 20,000 of those customers may have had their cars repossessed because they couldn’t pay for the additional insurance.
Wells Fargo recently said one former employee has alleged “retaliation for raising concerns” about the bank’s auto lending tactics.
The mortgage business has also been in trouble. In October, Wells Fargo said it wrongly hit an unknown number of homebuyers with fees to lock in mortgage rates. Borrowers were charged for missing a deadline to lock in promised interest rates, even though the delay was the bank’s fault.
Despite all those problems, Wells Fargo said Codel’s firing “did not involve the business or operations of Consumer Lending, the servicing of its customers, or its performance or financial results.”