Wells Fargo CEO Out At Company Effective Immediately

John Stumpf, the embattled chairman and chief executive of scandal-plagued Wells Fargo, is relinquishing his position amid a fake account scandal.

His departure is effective immediately, reported The Wall Street Journal. President and Chief Operating Officer Timothy Sloan will replace Stumpf. Sloan was expected to be Stumpf’s replacement when he retired down the road. Stephen Sanger, independent director of Wells Fargo, will become board chairman, while Elizabeth Duke, a current director and former Federal Reserve governor, is being named vice chairman, the paper reported.

The news comes just days after Stumpf and Sloan hosted a conference call with 500 Wells Fargo executives to discuss the future of the company in the wake of revelations employees created millions of fake accounts to meet sales targets. During that call, which was also covered by WSJ, the executives warned the woes at the bank would get worse before business improved. Stumpf noted he visited a number of Wells Fargo branches last week, but that has not helped, noting that net new business in the retail bank “will be down for a while; there’s just no question about that,” reported the paper.

Chief Financial Officer John Shrewsberry, who was on the call, said the bank’s third-quarter earnings won’t see much of a difference due to some states halting business with the bank, adding that the state’s announcements aren’t “really amounting to much in terms of dollars yet.” The CFO did note that he wouldn’t likely say that to the public. “We probably won’t broadcast that because it might incentivize people to do more, to make it tougher on Wells Fargo, but the storyline is worse than the economics at this point.”

Last month, the Consumer Financial Protection Bureau fined Wells Fargo $185 million, the largest fine levied from the government agency. It also ordered Wells Fargo to refund $5 million in fees that the bank wrongly charged customers. According to an investigation by the CFPB, Wells Fargo employees not only made fake deposit accounts but also submitted 565,443 unauthorized credit card account applications on behalf of unknowing customers. It’s estimated that 14,000 of those accounts accrued $403,145 in fees. Through its own independent investigation, the bank discovered a total of $2.6 million in unauthorized fees.