(Updates with Moynihan comment in the fourth paragraph)
July 8 (Bloomberg) -- Bank of America Corp. named Terry Laughlin, currently the top manager for soured loans and foreclosures, as the firm’s next chief risk officer after it earmarked another $20.4 billion to cover bad mortgages.
Laughlin, head of Legacy Asset Servicing, will take the new post late in the third quarter, according to an internal memo obtained today by Bloomberg News. The move fills a vacancy created after former risk chief Bruce Thompson was picked to succeed Chief Financial Officer Charles Noski, 58, who said in April he was stepping aside because of an illness in his family.
Laughlin’s job includes helping Chief Executive Officer Brian T. Moynihan avoid the kinds of mistakes that led to billions of dollars in losses after the 2008 acquisition of Countrywide Financial Corp. The lender has dropped 28 percent in the past year of New York trading on concern that costs tied to lax home lending and faulty foreclosures will cut into profits.
“Terry is steeped in the issues which represent the most significant risk we face, and his ultimate transition into the chief risk officer position reflects that and his deep industry expertise,” Moynihan said in the memo. “While there is more work ahead, in a relatively short period of time, Terry has helped us make significant progress on our legacy issues.”
Paula Dominick, global compliance executive, will serve as interim chief risk officer until Laughlin begins, the firm said. Gary Lynch, a former Securities and Exchange Commission enforcement director, will begin as head of legal, compliance and regulatory relations on July 11, the memo said.
Bank of America said June 29 it will report its sixth quarterly loss since the middle of 2008, citing a $8.5 billion settlement with investors who bought bonds including Countrywide loans that later went sour. That followed accords with Fannie Mae, Freddie Mac and bond insurer Assured Guaranty Ltd.
“It’s our job, management’s job, to eliminate risks that we can to allow this company to go forward,” Moynihan, 51, told analysts the same day during a conference call.
As chief risk officer, Thompson has had to deal with the consequences of defective loans inherited in the Countrywide takeover. Thompson had several management roles at the firm’s investment bank, including head of global capital markets, before starting as chief risk officer in January 2010.
--Editors: Rick Green, Dan Kraut
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