Wells Fargo on Monday announced that chairwoman Elizabeth Duke and another board member have resigned after House Democrats claimed the bank’s leaders didn’t react appropriately to its 2016 fake account scandal.
Both were scheduled to testify this week before the House Financial Services Committee.
The bank admitted in 2015 that thousands of its employees created millions of unauthorized customer accounts as a ploy to meet sales quotas and has since had to pay billions in fines to settle with authorities.
Duke and board member James Quigley, who also resigned, were both focal points in the 113-page report released by the committee last week that cited thousands of pages of emails, internal notes, and documents to conclude that the bank had not fully addressed its consumer abuse issues. The two board members resigned just days before they were scheduled to appear before the committee on Wednesday.
“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.
Maxine Waters, the chairwoman of the committee and a California Democrat, had called on the two board members to resign last week.
“Both of them had a clear dereliction of duty as board members,” Waters said last week.
“This Committee staff report shines a much-needed spotlight on ‘The Real Wells Fargo,’ a reckless megabank with an ineffective board and management that has exhibited an egregious pattern of consumer abuses,” Chairwoman Waters said in a statement.
Waters specifically called out Duke and Quigley for their negligence in dealing with regulators. The report highlighted emails that the committee alleged showed a lack of urgency. For example, Duke had complained in an email that a regulatory request was sent to her rather than to a department manager beneath her in the bank. Another email showed that Quigley had asked to postpone a relevant meeting because he was visiting the Galapagos Islands.
Earlier this year, the former CEO of Wells Fargo, John Stumpf, was banned from working in the banking industry again and paid $17.5 million for his role in the scandals related to the bank.
