Bank Regulation

Wells Fargo Chair Quits Before Testimony

Wells Fargo

Wells Fargo Board of Directors Chair Elizabeth Duke has resigned days before she was scheduled to testify at a congressional hearing about the bank, according to reports on Monday (March 9).

Board member James Quigley also resigned. Charles Noski, a board member since June, will take over as chairman. Noski is a retired vice-chairman and former chief financial officer of Bank of America Corp.

Duke and Quigley resigned from the bank’s board, effective Sunday (March 8), to “avoid distraction that could impede the bank’s future progress,” according to a joint statement released by the bank, The Hill reported. 

“As the markets face increasing volatility, a strong Wells Fargo is needed now more than ever,” Duke and Quigley said in the statement. “We believe that our decision will facilitate the bank’s and the new CEO’s ability to turn the page.”

Duke and Quigley were supposed to testify before the House Financial Services Committee on Wednesday (March 11) after a report outlined extensive lapses by Wells Fargo’s upper management. 

Committee Chair Maxine Waters (D-Calif.) called on Duke and Quigley to step down saying both “failed in their responsibilities” to fix the bank’s issues. Waters said the two also did not follow legal orders with the Consumer Financial Protection Bureau (CFPB), Federal Reserve Board and Office of the Comptroller of the Currency (OCC).

Between 2016 and 2018, the Fed, CFPB and OCC petitioned Wells Fargo to institute internal changes to head off future problems. They said improved oversight was necessary in order to avoid penalties and federal monitoring. 

The 2016 scandal centered on exorbitant fees charged without customers’ permission or sold through misleading practices. Wells Fargo “also faced legal penalties and a $1 billion fine for failing to make promised adjustments to home and auto loan interest rates and forced customers to buy unnecessary insurance products.”

Duke joined Wells Fargo’s board in 2015 and became vice chairman in October 2016. She became the first woman to lead the board of one of the nation’s largest banks in 2018.

Wells Fargo agreed in February to pay $3 billion as a settlement with regulators over a scandal involving the creation of fake accounts.

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