In a sign of just how tense the culture at Wells Fargo has become, the bank fired Franklin Codel, head of the bank’s consumer lending for making disparaging comments about regulators to a subordinate.
Earlier this year, Mr. Codel terminated the employment of Greg Gwizdz, who worked in the mortgage lending operation of the bank as the head of the national sales team, overseeing nearly 8,000 loan officers. During the conversation, Codel disparaged regulators and told Gwizdz that his severance was not more generous because of regulators’ crackdown on so-called “golden parachutes,” generous packages guaranteed to senior executives should their employment ever be terminated. Gwizdz’s employment was terminated because of regulatory issues in the area he oversaw.
Codel’s comments were not a rarity in the financial world, but Gwizdz reported them to Wells Fargo, who in turn reported them to their regulators, which include the FDIC, the OCC, and the Federal Reserve.
“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 has been among the world’s most respected for years. Last year its’ reputation took a major hit when it was discovered that employees for years had created fake bank accounts in order to meet aggressive quotas and cross-selling targets set by the bank’s senior management. That affected about 3.5 million customers. In July of this year, Wells Fargo said that it would refund $80 million to customers who had incorrectly been billed for auto insurance that they did not wish to purchase. Finally, in October the bank said that it would return fees paid by 110,000 customers that it should not have charged for mortgage lock extension.
Codel’s firing will probably do little to placate regulators or the politicians that have targeted Wells Fargo as a symbol of greed and the excesses of the financial industry. It will also do little to make investors happier. In a year of a rising financial sector, Wells’ shares are essentially flat so far in 2017.