Wells Fargo & Co. chief Timothy Sloan received a terse call last Tuesday from the Federal Reserve and Federal Deposit Insurance Corp.: That afternoon the regulators would publicly announce the bank had flunked a vital test and would be slapped with first-of-their-kind penalties.
The failure of the bank’s so-called living will test, even as four other big banks passed, kicked off the latest crisis for Wells Fargo, which is still reeling from its sales-tactics scandal. And it poses yet another challenge for Mr. Sloan, who only took the bank’s helm in October after the abrupt retirement of former CEO John Stumpf.
Within hours of the call, Wells Fargo finance chief John Shrewsberry was on a plane to Washington, D.C. to meet with regulators, according to people familiar with the matter. Mr. Sloan jetted across the country the next day, the people added.