Wells Fargo has tapped the Federal Reserve Bank of New York's former head of supervision to oversee regulatory relations for the company.
Sarah Dahlgren, who had spent 25 years at the New York Fed before stepping down in 2015, will join Wells on March 12, the company said in a press release Tuesday. She will coordinate relations with supervisory staffs as the megabank continues to try to remove the regulatory cloud from its phony-accounts scandal.
Dahlgren was most recently a partner in the risk practice of McKinsey & Co., which she joined in 2016. At the New York Fed, she was executive vice president and head of the Financial Institution Supervisory Group. Her responsibilities included managing the central bank's $182 billion bailout of American International Group. She also served as a senior adviser to New York Fed President William Dudley.
Dahlgren will report to the bank's chief risk officer, who is currently Mike Loughlin.
Before the phony-accounts scandal, Wells' former chief compliance officer, Yvette Hollingsworth, oversaw regulatory relations. Hollingsworth was given a new role last year as regulatory innovation officer, said Richele Messick, a Wells spokeswoman.
Loughlin, who announced his retirement Jan. 17 but is still at Wells until a successor is named, was leading the bank's risk operations at the time of the phony-accounts scandal, in which employees opened up to 3.5 million bank accounts that were not authorized by customers.
Wells said Dahlgren will be instrumental "in leading the company's efforts to have a sustained, proactive dialogue around risk, controls and compliance."
Dahlgren will be responsible for oversight of regulatory relations at Wells' corporate risk organization. According to a report last year by Wells' independent board of directors, the corporate risk group was limited in its ability to oversee Wells' sales practices due to "the absence of a formal governance structure for exercising oversight."
In the press release, Wells CEO Tim Sloan said the company is determined to improve its risk management operation.
“Wells Fargo is focused on transforming our risk management practices and we are committed to being very engaged and completely transparent with our regulators so they have a full understanding of the progress we are making in building a stronger organization,” Sloan said. “With Sarah’s leadership, I am confident we will strengthen our ability to communicate with our regulators about our progress, solicit their feedback and input and consistently meet our regulatory obligations.”