Two days before they were scheduled to appear before the House Financial Services Committee, Wells Fargo Chairwoman of the Board Elizabeth Duke and board member James Quigley announced their resignations.
“On behalf of Wells Fargo and all of its employees, I would like to thank Betsy and Jim for the contributions they have made over the past several years,” CEO Charlie Scharf said in a news release. “They have helped the board navigate significant challenges relating to the sales practices issues, and they began the hard work of instituting necessary changes in leadership, governance, compensation programs and our business model that form the foundation on which we are continuing to rebuild the trust we’ve lost. We wish them the best.”
The moves come on the heels of the release of a Financial Services Committee majority report on Wells Fargo’s conduct since the sales practices enforcement action of 2016. The report slammed the bank for its responses to regulators and the public since that time, and Chairwoman Maxine Waters told reporters that she would call for the resignation of Duke and Quigley in a hearing scheduled Wednesday titled, “Holding Wells Fargo Accountable: Examining the Role of the Board of Directors in the Bank’s Egregious Pattern of Consumer Abuses.”
“Wells Fargo has clearly demonstrated an unwillingness and inability to stop harming its customers, so this committee is working overtime to make sure consumers are never subjected to the types of abuses and failures committed by this megabank again,” Waters said in a statement accompanying the release of the report.
Duke joined the Wells Fargo board in 2015 and was elevated to chairwoman in August 2017 as the bank looked to move forward following the independent board investigation into the sales practices led by then-chairman Stephen Sanger.
Duke served on the Federal Reserve’s Board of Governors from 2008 to 2013 and her regulatory expertise was cited by then-CEO Timothy Sloan in her promotion to the chairwoman, given the expected work the bank was going to have with federal regulators in the wake of the enforcement action. Quigley, the CEO emeritus of Deloitte, joined the Wells Fargo board in 2013.
Charles Noski will take over as board chairman, Wells Fargo announced. The former chief financial officer of Bank of America has served on the Wells board since June 2019.
In the announcement of the resignations, Duke and Quigley issued joint comments on their departures.
“Since we were made aware of the egregious harms suffered by Wells Fargo’s customers, we were and remain fiercely determined to do right by them and to strengthen the bank’s culture and controls. We have made these our top priorities,” the pair said. “In addition, we hired new external leadership with the ability to be an effective change-agent, which we found with our CEO, Charlie Scharf.”
The pair said a strong Wells Fargo was more important than ever, as markets faced increasing volatility. The announcement of their resignation came as worldwide markets fell as much as 8 percent in heavily volatile activity.
“Out of continued loyalty to Wells Fargo and ongoing commitment to serve our customers and employees, we recommended to our colleagues on the board that we step down from our leadership roles, and they have accepted our resignation from the board,” their statement said. “We believe that our decision will facilitate the bank’s and the new CEO’s ability to turn the page and avoid distraction that could impede the bank’s future progress.”
In her statement Thursday, Waters made it clear the Democratic leadership of the committee would pursue information and accountability from Wells Fargo. Scharf is scheduled to appear before the committee Tuesday, while former employees are scheduled to provide testimony March 25 on how the sales practices affected them.
There is no word yet on whether the Wednesday hearing will go on without Duke and Quigley, or whether other board members will take their place.
“Last year, I made it clear that under my leadership, the committee is putting consumers first and holding financial institutions accountable,” Waters said in her statement. “The findings of our investigation detailed in today’s committee staff report have only deepened this commitment.”