Wells Fargo lending head fired

NEW YORK/WASHINGTON - Wells Fargo fired Franklin Codel, its head of consumer lending, over a conversation he had with a former employee about compensation in which he disparaged U.S. regulators, a person familiar with the matter said on Friday.

Codel's abrupt departure comes as the bank grapples with the fallout from a sales scandal in which thousands of employees enrolled perhaps millions of customers in products they did not want or need.

Wells Fargo is now subject to tighter regulatory oversight and faces ongoing probes and lawsuits due to the scandal. As a result, once top Wells Fargo executives became aware of Codel's comments, they believed they needed to take action, the source said

After being promoted as part of a broader management shake-up last year, Codel had become a key executive in the bank's effort to make things right with customers and fix operational flaws that led to a hard-charging sales culture.

In announcing the dismissal earlier on Friday, Wells Fargo said it expects to name a replacement by year-end.

As part of a $190 million settlement Wells Fargo reached with regulators in September 2016, payouts to departing employees must be cleared by the Comptroller of the Currency and the Federal Deposit Insurance Corp.

They have approved payouts for hundreds of former Wells Fargo employees since that time, but have disagreed on a handful of executives. The decision process can sometimes take months, frustrating former employees waiting for deferred stock or severance.

The conversation that led to Codel's departure was with a former employee about his payout that regulators had to approve, three people with the matter told Reuters. They requested anonymity to discuss sensitive non-public information.