Wells Fargo board chairwoman Elizabeth Duke and board member James Quigley have resigned their posts three days before they were to appear before the House Financial Services Committee, according to news reports.
Meanwhile, Charles Scharf, who took over as CEO and president of Wells Fargo in September 2019, told the committee Tuesday the bank has yet to address its shortcomings.
On Monday, the company announced Duke and Quigley’s resignations, which were effective Sunday, NPR reports. The two board members were scheduled to testify before the committee on Wednesday and it remains unclear if that will still take place, according to the broadcast service. Duke and Quigley are still scheduled to appear, Bloomberg writes.
"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. 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," Duke and Quigley said in a statement cited by NPR.
Duke had been chair of Wells Fargo’s board since 2018, after having served as vice chair from October 2016 to December 2017, NPR writes. Her resignation comes on the heels of a new investigative report released by Democrats on the House Financial Services Committee accusing the firm and its senior officials of being slow to address issues that led Wells Fargo’s customers to be “exposed to countless abuses, including racial discrimination, wrongful foreclosure, illegal vehicle repossession, and fraudulently opened accounts,” according to the radio channel.
Last week, House Financial Services Chairwoman Rep. Maxine Waters (D-CA), called for Duke and Quigley’s resignations, the Hill reported at the time.
Wells Fargo has been plagued by regulatory scrutiny and investor complaints ever since the 2016 revelations that thousands of employees in its retail bank opened millions of customer accounts without authorization. Last month, Wells Fargo reached a $3 billion settlement with the U.S. Justice Department and the SEC to resolve criminal and civil investigations into its sales practices.
Scharf appeared before the committee Tuesday, telling lawmakers the firm has "not yet done what is necessary to address our shortcomings,” according to Bloomberg, which cites Scharf's prepared remarks. The CEO also said the firm had a “flawed business model” and the “culture was broken,” according to the news service.
Nonetheless, Scharf said the firm has made headway and that he continues spending 75% of his time focused on regulatory issues, Bloomberg writes.
“The sense of urgency within the company is very different today than it was four months ago,” Scharf told the committee, according to the news service.
Do you have a news tip you’d like to share with FA-IQ? Email us at firstname.lastname@example.org.