Wells Fargo needs to appoint a new CEO immediately

Joseph Holt

Wells Fargo CEO Tim Sloan appeared before the Senate Banking Committee Tuesday a year after his predecessor was in the same hot seat. Sloan was elected CEO after his predecessor, John Stumpf, was ousted in the wake of the fake accounts scandal at Wells.

Sloan is the wrong person to right the ship at Wells Fargo. That job requires a level of recognition, competence, and credibility that he lacks.

A leader will not be able to fix a problem without first recognizing how extensive and serious the problem is. Sloan is on record as saying of Wells Fargo, "I don't think we need to fundamentally change the core culture but we need to massage it a fair amount."

That suggests a state of denial. It is as if the mayor of San Juan, Puerto Rico, in the wake of the recent devastation of Hurricane Maria there, said "I don't think that we need to do a lot of rebuilding but some refurbishing may be in order."

Fixing a serious problem also requires a high level of competence. Senator Elizabeth Warren directly questioned Sloan's competence at the Senate Banking Committee hearing Tuesday saying, "At best you were incompetent, at worst you were complicit."

Sloan has worked at the bank for 29 years and was chief financial officer while millions of fake accounts were created and hundreds of thousands of auto loan customers were signed up for auto insurance that they did not request, approve or need.

Read Holt's entire op-ed on the CNBC website.