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Wells Fargo’s Chair, Betsy Duke, Resigns After Critical Report Wells Fargo’s Chairwoman, Betsy Duke, Resigns After Critical Report
(about 2 hours later)
Wells Fargo’s chairwoman, Elizabeth A. Duke, has resigned, the bank announced on Monday, bowing to pressure from Washington ahead of what is likely to be another round of grilling from Congress over its history of deceptive consumer practices.Wells Fargo’s chairwoman, Elizabeth A. Duke, has resigned, the bank announced on Monday, bowing to pressure from Washington ahead of what is likely to be another round of grilling from Congress over its history of deceptive consumer practices.
Ms. Duke, who is known as Betsy, resigned on Sunday. She had been the bank’s chairwoman since January 2018, and a director since 2015. James H. Quigley, a director since 2013, also quit the board. Ms. Duke, who is known as Betsy, resigned on Sunday. She had been the bank’s chairwoman since January 2018, and a director since 2015. James H. Quigley, a director since 2013, also stepped down from the board, the bank said.
Both had been focuses of a recent report by the House Financial Services Committee that faulted Wells Fargo directors and executives over their interactions with regulators. The report highlighted a complaint by Ms. Duke that she had been included on messages with regulators about how to improve the bank’s operations. A report issued last week by the House Financial Services Committee was deeply critical of both board members.
And the report said that Mr. Quigley had been apprised of communications between a former Wells Fargo chief executive, C. Allen Parker, and Eric Blankenstein, then an official at the Consumer Financial Protection Bureau. Mr. Blankestein had promised “political oversight” of any enforcement actions against the bank. According to the report, Ms. Duke and other board members were reluctant to meet with regulators about fixing the bank’s problems, and she complained about being included on letters that regulators were sending to Wells Fargo with directions. And Mr. Quigley, the report said, sought a light touch from a political appointee at the federal consumer protection agency.
After the release of the report, the head of the House committee, Representative Maxine Waters, Democrat of California, called on Ms. Duke and Mr. Quigley to resign. After the report was issued, Representative Maxine Waters, Democrat of California and the chairwoman of the committee, called for both to step down.
Charles H. Noski will take over as chairman. Mr. Noski joined the board in June 2019. The committee examined the bank’s interactions with regulators after it revealed a series of consumer abuses starting in late 2016, including employees opening fake bank accounts and charging unwarranted fees. The bad behavior stretched back to at least 2002.
Wells Fargo’s current chief executive, Charles W. Scharf, is scheduled to testify before the same House committee on Tuesday. The practices, which underscored a toxic sales culture at Wells Fargo, led to the ouster of several leaders of the bank, including a former chief executive, John Stumpf. His replacement, Timothy J. Sloan, resigned last year after taking heat for not cleaning up the lender fast enough.
The report from House Democrats also faulted Mr. Sloan and his interim successor, C. Allen Parker.
According to the report, Mr. Sloan gave inaccurate testimony during a hearing before the committee about the bank’s compliance with orders from its main regulator, the Office of the Comptroller of the Currency. The report also said that Mr. Parker had had communications with an official at the Consumer Financial Protection Bureau who had promised “political oversight” of any enforcement actions against the bank. The report said Mr. Parker kept Mr. Quigley apprised of those communications.
Charles H. Noski, who joined the board last June, will take over as chairman. Nine of the board’s remaining 12 members joined in 2017 or later, after the end of the period when the bank opened fake and unauthorized accounts.
Ms. Duke had been scheduled to appear before the House committee at a hearing this week. Wells Fargo’s current chief executive, Charles W. Scharf, is scheduled to testify before the same House committee on Tuesday.
The subject of the hearing, the committee said, is the “next steps for the bank that broke America’s trust.”The subject of the hearing, the committee said, is the “next steps for the bank that broke America’s trust.”
This is a developing story. Check back for updates.This is a developing story. Check back for updates.