Wells Fargo Chairwoman Resigns Ahead of Hearing -- WSJ
March 10 2020 - 3:02AM
Dow Jones News
By Ben Eisen
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 10, 2020).
Elizabeth Duke has resigned as chairman of Wells Fargo &
Co.'s board of directors, days ahead of a congressional hearing
during which she was expected to face calls to step down.
Charles Noski, who joined the board in June 2019 and played a
key role in hiring the bank's new chief executive, will serve as
chairman, the bank said Monday. Mr. Noski is a retired vice
chairman and former chief financial officer of Bank of America
Corp.
Ms. Duke was set to testify before the House Financial Services
Committee 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.
James Quigley, who was also set to testify Wednesday, also
resigned from the board. Maxine Waters, the California Democrat who
chairs the committee, called on both of them to step down.
Ms. Waters called out Ms. Duke and Mr. Quigley for neglecting
their duties in dealing with regulators. In a 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.
The two board members made the decision to step down on their
own, a person familiar with the matter said. They saw a difficult
path forward as politicians on both sides of the aisle turned up
the pressure on the board, and they didn't want to become the
center of attention, the person said.
"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 and Mr. Quigley said
in a statement.
The bank's two previous CEOs resigned shortly after tense
hearings before Congress during which they failed to convince
regulators that they had a grip on the scandal.
More recently, Wells Fargo, which is facing pressure to resolve
a lengthy regulatory checklist, has taken pains to convince
regulators and others that the worst is behind it. Last month, the
bank paid $3 billion to settle investigations by the Justice
Department and Securities and Exchange Commission.
Still, Wells Fargo has big hurdles to overcome. The Federal
Reserve in early 2018 imposed an unprecedented cap on Wells Fargo's
growth, and CEO Charles 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 led the effort to find a new chief executive last year
after Timothy Sloan stepped down. Mr. Scharf, who took over as CEO
in October, is scheduled to testify before the House Financial
Services Committee Tuesday. Wells Fargo now has its third CEO since
the bank's fake-account scandal burst into public view.
Ms. Duke joined Wells Fargo's board in 2015. She became vice
chair 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
had also served as an executive or CEO at a number of community
banks in Virginia.
Mr. Quigley, the retired CEO of accounting firm Deloitte, joined
the board in 2013.
Colin Kellaher contributed to this article.
Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
March 10, 2020 02:47 ET (06:47 GMT)
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