One thing GOP, Dems agree on: Wells Fargo needs a ‘change agent’

While board chairwoman Elizabeth Duke was circumspect about the qualities Wells Fargo seeks in its next CEO, who will be hired from outside the company, she said resolving regulatory problems that have led to billions of dollars in settlements and a cap on the bank’s growth will be a crucial part.

Since 2016, Wells Fargo has faced claims ranging from the creation of millions of phony accounts to mishandling some home and auto loans, prompting sometimes brutal congressional hearings.

“Somewhere, there is a highly accomplished leader out there who is going to look at the challenge and opportunity and say, ‘I’m a really good fit for Wells Fargo,’ and we’re going to say, ‘Yeah, we believe that,'” Duke told investors and analysts on Thursday evening. “And this person’s going to say, ‘I really want to do that, I want to sign up for that,’ and that’s the person we want as CEO of Wells Fargo.”

[Also read: Wells Fargo faces trouble on Capitol Hill]

Though Sloan emphasized that he decided to step down on his own, the move illustrates the pressure that Washington can bring to bear even without White House involvement, said Jaret Seiberg, an analyst with Cowen Washington Research Group, which has tracked federal policy for the past four decades.

“This does not end the Washington troubles for Wells Fargo,” he added. Appointing an outsider “is certainly a step that we believe can help mend fences in Washington. But it ultimately will depend upon whom the board picks as the next CEO. If it is someone with a history of working with Congress and the regulators, then the path out of this controversy might be easier.”

Sloan, who earned $18.4 million last year, stepped down just weeks after fending off repeated suggestions from Democrats during House Financial Services Committee testimony that Wells Fargo has become “too big to manage” and follows repeated calls from Sen. Elizabeth Warren, D-Mass., for his ouster.

“Tim Sloan was supposed to fix Wells Fargo’s problems,” said Warren, D-Mass, questioning how he could when he’d been at the bank for 31 years and was a top lieutenant for former CEO John Stumpf. Stumpf, who was running the bank when more than 3.5 million unauthorized accounts were created by employees struggling to meet a goal of selling as many as eight different products to each customer household, stepped down after a 2016 settlement in the matter.

“Wells Fargo kept getting caught cheating,” she said. “All the while, Tim Sloan kept trying to scam regulators into thinking the bank had reformed. But we weren’t fooled.”

The third-largest bank in the U.S., Wells Fargo’s fortunes have seen a dramatic decline since it reaped kudos in the aftermath of the financial crisis for sufficient strength that it didn’t require a bailout, unlike rivals Citigroup and Bank of America.

As recently as February, insurers for current and former Wells Fargo leadership, from Sloan himself to board members, agreed to pay $240 million to settle investor lawsuits claiming they didn’t live up to their responsibilities to prevent the fake-accounts scandal.

Before that, the bank shelled out $1 billion to settle government claims it sold some auto borrowers insurance they didn’t need under the pretense they might not qualify for their loans otherwise and charged fees to mortgage customers that it was supposed to be absorbing.

In August, Wells Fargo said it would pay $2.09 billion to settle Justice Department allegations that the bank packaged mortgages that were higher risk than they appeared into securities sold before the financial crisis.

“Tim Sloan needed to go, and he should not take a huge payout with him,” Sen. Sherrod Brown, the highest-ranking Democrat on the Senate Banking Committee, said in a statement on Thursday. “But Wells Fargo’s mismanagement is about more than one CEO — this bank needs a complete culture shift. Watchdogs cannot afford to let up on Wells Fargo and whoever is tapped as the new CEO must be ready to clean up the greed that has hurt millions of customers and workers.”