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Shocker: Wells Fargo fires head of consumer lending for misconduct

Franklin Codel terminated for inappropriate communications with former employee

It appears that Wells Fargo’s season on the brink is far from over.

The bank has been on unstable footing ever since the revelation of the bank’s fake account scandal, which saw the company fined $185 million for more than 5,000 of the bank’s former employees opening more than 2 million potentially unauthorized accounts to get sales bonuses.

Wells Fargo announced Friday that it fired Franklin Codel, a senior executive vice president and head of the bank’s consumer lending division, for misconduct.

Codel, the former head of mortgage production, took over the consumer lending division in 2015 when Michael Heid retired. As head of consumer lending, Codel oversaw all of the bank’s lending to consumers, including Wells Fargo’s mortgage lending operation. Codel also served as the public face of the lending division.

Prior to taking over for Heid, Codel led Wells Fargo’s mortgage production team since 2011, including sales, operations, quality, compliance, underwriting, and support functions for both consumer and correspondent lending.

But now, Codel has been fired, effective immediately, for inappropriately communicating with a former Wells Fargo employee.

This is how the bank described the reasoning for Codel’s dismissal: “The dismissal was the result of Codel’s acting in a manner that was contrary to the company’s policies and expectations of its senior leaders during a communication he had with a former team member regarding that team member’s earlier termination.”

According to the company, Codel’s termination did not involved the business or operations of the consumer lending division, the servicing of the bank’s customers, or the bank’s performance or financial results.

Additionally, the bank said that Codel’s dismissal was not due to sales practices that led to the fake account scandal.

According to Emily Glazer and Allison Prang, writing for the Wall Street Journal, Codel’s communications with the former employee involved “disparaging remarks” about the regulatory system and discussed the payouts to former employees made when they left the bank.

From the WSJ:

Mr. Codel was fired because of disparaging remarks he made about the regulatory system to a previously terminated senior employee, a person familiar with the matter said. The remarks related to how so-called golden parachute payments work, which impacted that employee, the person added.

The former employee reported Mr. Codel’s comments to the bank, which then reported them to its regulators.

And now, Codel is out at Wells Fargo. The bank said that it is immediately launching a search for a permanent successor.

In the meantime, Michael DeVito, the current head of mortgage production, will serve as the interim head of consumer lending.

Additionally, the heads of the consumer lending group’s four main lines of business, which includes DeVito; Laura Schupbach, head of Wells Fargo dealer services; John Rasmussen, head of personal lending; and Laurie Nordquist, head of personal and small business insurance, will all report directly to President and CEO Tim Sloan.

“Difficult as this situation is, the decision reflects our commitment to our values and culture and to executive accountability,” Sloan said in a statement. “We have a strong team in Consumer Lending and I am fully confident that the transition will be smooth and that its businesses will continue to operate normally in serving our customers.”

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