Bank Regulation

Congress Blasts Former Wells Fargo Bosses Over Resignations

House Financial Services Committee

The recent resignations of Wells Fargo board Chairman Elizabeth Duke and board member James Quigley drew criticism by Congress during the first hearing on Capitol Hill on Wednesday (March 11)  about the bank’s fake accounts scandal, Bloomberg reported

“While Ms. Duke and Mr. Quigley have resigned, they must be held accountable for the dereliction of their duties as members of Wells Fargo’s board,” Rep. Maxine Waters, chairwoman of the House Financial Services Committee, said in a statement

Duke and Quigley, who both resigned their board positions on Sunday (March 8), will appear for another congressional hearing before the House Financial Services Committee on March 25. Charles Scharf, chief executive officer and president of Wells Fargo, appeared before the committee on Tuesday (March 10).

“I believe that today the company has the right team and path forward,” Duke told lawmakers during the hearing. “This company must move forward.”

The Majority Staff report investigated Wells Fargo’s compliance with five consent orders that directed the board and management “to clean up the systemic weaknesses that led to widespread consumer abuses and compliance breakdowns.” 

As board members, Duke and Quigley were tasked with making sure a plan was adequately implemented to handle risks. The report found that Wells Fargo’s board failed at that oversight and prioritized money over correcting the problems.

As a result of the bank’s failure to “correct deficiencies,” its customers were subjected to “racial discrimination, wrongful foreclosure, illegal vehicle repossession, and fraudulently opened accounts,” the report said. 

The report also said investigations showed that the “attitudes and failures on the part of Ms. Duke and Mr. Quigley” were alarming. 

Officials at the Consumer Financial Protection Bureau (CFPB) included Duke on letters about things the bank needed to address. She reportedly responded, “Why are you sending it to me, the board, rather than the department manager?” Officials took issue with her “see-no-evil mentality” and her neglect in providing oversight.

The report said Quigley “did not appear to understand the gravity of his board responsibilities.” When the Office of the Comptroller of the Currency sought a meeting with the bank’s directors to discuss “progress and accountability,” Quigley said he was “currently scheduled to be in the Galapagos Islands on these dates,” and that “the sense of urgency is surprising …”

Scharf took the helm of Wells Fargo in October and faced pointed questioning from lawmakers on Capitol Hill about past scandals, the roadmap forward and whether the bank is too big to fail — or even manage.

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