(CNN) - Wells Fargo has hired an outsider to clean up its broken culture, three years after a reputation-tarnishing series of scandals erupted.
The bank announced Friday it has tapped Bank of New York Mellon CEO Charles Scharf as its new boss. Scharf, previously the CEO of Visa and a senior executive at JPMorgan Chase and Citigroup, is set to take the reins of Wells Fargo on October 21.
"Charlie has demonstrated a strong track record in initiating and leading change, driving results, strengthening operational risk and compliance, and innovating amid a rapidly evolving digital landscape," Wells Fargo Chair Betsy Duke said in a statement.
San Francisco-based Wells Fargo said that Scharf's primary residence will be in New York, where he has family. A Wells Fargo spokesperson told CNN Business that Scharf will be expected to travel extensively, not only to the bank's San Francisco headquarters but to other offices around the country.
"The opportunity to lead Wells Fargo, an institution that plays such an important role in the financial system, was one that I could not pass up," Scharf said during a conference call with analysts. Scharf pledged to spend time "wherever it's necessary for me to be," including in San Francisco, "which is obviously a very important place for us."
Making mends with Washington
Wall Street cheered the hire, sending Wells Fargo's sluggish shares 4% higher.
The new CEO will need to focus on convincing the Federal Reserve to lift unprecedented sanctions levied on the bank in early 2018 for "widespread consumer abuses." The Fed imposed an asset cap that prevents the bank from growing, a tough penalty that continues to hang over the bank.
"Scharf's first task will be appeasing regulators," Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods, wrote in a note to clients on Friday.
Wells Fargo is under so much pressure from Washington that even the hiring of the new CEO was subject to review from regulators at the Office of the Comptroller of the Currency.
"We see this as a relatively safe pick from a political perspective," Jaret Seiberg, analyst at Cowen Washington Research Group, wrote in a note to clients.
However, Seiberg noted that Scharf's stints at other big banks and close ties to JPMorgan Chase CEO Jamie Dimon probably won't make him friends with Congressional Democrats.
"What is more likely," Seiberg said, "is that they will define him as another Wall Street insider taking over another big bank."
Big bank, Visa experience
Warren Buffett, Wells Fargo's leading shareholder, also gave the bank hiring advice. The legendary investor urged Wells Fargo not to hire a typical Wall Street executive because it would "draw the ire" of lawmakers in Washington.
Scharf's last two employers, Bank of New York and Visa, are among the holdings in Buffett's Berkshire Hathaway. Berkshire did not immediately respond to a request for comment on the hiring.
Wells Fargo recruited Scharf away from Bank of New York Mellon, where he had been CEO since July 2017 and chairman since early 2018. Bank of New York named Todd Gibbons, a 30-year veteran of the firm, the company's interim CEO.
"We are taking a wait and see approach," Kleinhanzl said. "Scharf's legacy at Bank of New York Mellon was incomplete and his relatively short tenure there makes us cautious about how long he will stay" at Wells Fargo.
Prior to Bank of New York Mellon, Scharf served as the CEO of San Francisco-based Visa, where he is credited with transforming the company's technology and payments platforms. He served as Visa's CEO for four years until December 2016, when he resigned due to concerns about spending time away from his family in New York.
Scharf also had stints on Wall Street. He served as managing director at JPMorgan Chase's private investment arm and as a senior executive at Citigroup and Salomon Smith Barney.
Wells Fargo said that after Scharf takes over, Allen Parker, currently the interim CEO, will stay with the bank in a leadership role and as general counsel.
Duke defended the board's CEO search process, saying the six-month timeframe is about average.
"I know it was frustrating for all of our stakeholders," Duke said. "Everyone was going, 'When can you tell us something?' But the truth about this process is you can't tell them something until you're complete."
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