Wells Fargo Chairman Elizabeth Duke Resigns -- 2nd Update
10 March 2020 - 12:51AM
Dow Jones News
By Ben Eisen
Elizabeth Duke has resigned as chairman of Wells Fargo &
Co.'s board of directors, days before she was set to testify at a
congressional hearing on the continuing fallout from the bank's
2016 fake-account scandal.
James Quigley also resigned from the board. Charles Noski, who
joined the board in June 2019, will serve as chairman. Mr. Noski is
a retired vice chairman and former chief financial officer of Bank
of America Corp.
Ms. Duke and Mr. Quigley were set to testify before the House
Financial Services Committee on Wednesday. Democrats and
Republicans on the committee last week each released lengthy
reports criticizing the bank's efforts to clean up after the sales
scandal. Maxine Waters, the California Democrat who chairs the
committee, called on them to step down.
Ms. Waters called out both directors for neglecting their duties
in dealing with regulators. In their report last week, the
Democrats presented emails they alleged to show a lack of urgency.
In one email, Ms. Duke asked why a regulatory request was being
sent to her rather than a department manager at the bank. In
another, Mr. Quigley asked to postpone a meeting because he was in
the Galápagos Islands.
"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," Ms. Duke
and Mr. Quigley said in a statement. "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."
Ms. Duke led the effort to find a new chief executive last year
after Timothy Sloan resigned. Charles Scharf, who took over as
chief executive officer in October, is scheduled to testify before
the Financial Services Committee on Tuesday.
Wells Fargo is on its third CEO since its fake-account scandal
burst into public view in September 2016. The debacle badly damaged
the bank's reputation and its relationship with regulators.
The Federal Reserve in early 2018 imposed an unprecedented cap
on Wells Fargo's growth, and Mr. Scharf told investors in January
that the bank still has 12 public enforcement actions. He said
these issues won't necessarily be resolved this year.
Ms. Duke joined Wells Fargo's board in 2015, and became vice
chairman in October 2016, shortly after the bank disclosed that
branch employees had opened perhaps millions of fake accounts
without customer consent. She replaced Stephen Sanger as chairman
at the start of 2018, becoming the first woman to lead the board of
one of the nation's largest banks.
A Federal Reserve governor during the financial crisis, Ms. Duke
also had served as an executive or CEO at a number of community
banks in Virginia.
Colin Kellaher contributed to this article.
Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
March 09, 2020 09:36 ET (13:36 GMT)
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