Wells Fargo announced Monday two of its board members, including its chairwoman, Elizabeth A. Duke, resigned after a scathing House report found the bank’s leaders were slow to address consumer abuse scandals.
Duke had served on the board since 2016 and was elected chair in January 2018, making her among the highest ranking women in banking. Quigley had been a board member since 2013 and is CEO emeritus at consulting firm Deloitte.
Charles H. Noski, the former chief financial officer of Bank of America, will become chair of the company’s board.
In 2017, Duke, then vice chair of Wells Fargo’s board, questioned why the Consumer Financial Protection Bureau included her on communications about actions the bank needed to take, according to the report. “Why are you sending it to me, the board, rather than the department manager?” she asked, according to notes taken by a bureau official that were cited in the report.
A bureau official later said Duke’s response came as a “surprise,” given board members “would not typically object to receiving communication from a regulator,” according to the report.
In another exchange, Quigley resisted attending a meeting with one of the bank’s regulators because he would be overseas on vacation. “I am currently scheduled to be in the Galápagos Islands on these dates,” he said in a 2019 email, according to the report. “The sense of urgency is surprising, are they politically trying to put an enforcement action in place in front of the hearing? ”
Rep. Maxine Waters (D-Calif.), chair of the committee, called on Duke and Quigley to resign last week.
Duke and Quigley were scheduled to appear before Waters’s committee Wednesday. Their resignations were effective Sunday.
They said in a statement their resignations would allow the bank’s new CEO, Charles Scharf, to “turn the page” and “avoid distraction that could impede the bank’s future progress.”
“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,” the statement said.
Among the country’s largest and most profitable banks, Wells Fargo has struggled to overcome a fake-accounts scandal, which ballooned as the bank admitted to other consumer abuses, including mistakenly foreclosing on hundreds of clients and repossessing the cars of thousands of others.
Last month, the bank reached a $3 billion settlement with the Justice Department and the Securities and Exchange Commission, acknowledging that for more than a decade, thousands of employees falsified records, forged signatures and misused customers’ personal information to meet unrealistic sales goals, opening millions of accounts consumers didn’t want in the process.
The committee’s report threatens to deepen the bank’s problems. The report found the bank repeatedly failed to live up to regulators’ demands that it repay consumers and weren’t aggressive about addressing its cultural problems, despite public promises.
Scharf, the new CEO, is scheduled to appear before the Financial Services Committee Tuesday, a potential turning point in the bank’s efforts to repair its relationship with lawmakers and regulators.
Duke’s and Quigley’s quick resignations are surprising, Ian Katz, a financial policy analyst with the research firm Capital Alpha Partners, said in a research note. “Apparently Wells figured that offering the heads of Duke and Quigley was the only thing that would satisfy Waters,” he said. “This does help Wells’ case that it’s trying to get its house in order.”