Two Wells Fargo board members who were scheduled to testify at a congressional hearing this week in the aftermath of the financial institution’s fake account scandal have resigned.
Wells Fargo announced Monday that Elizabeth “Betsy” Duke resigned as chairwoman and as a member of its board of directors, and James Quigley also resigned. Both Duke and Quigley were cited by name in a scathing report published last week by the House Financial Services Committee majority staff that, in part, took shots at Wells Fargo’s board of directors for “appear[ing] reluctant” to engage in oversight of the bank’s efforts to comply with its 2016 sales practices consent orders.
Duke became chair of Wells Fargo’s board in January 2018 and previously served as vice chair from October 2016 through December 2017. During her time on the board, she served on several committees, including the finance, governance and nominating, and risk committees.
Quigley had served on Wells Fargo’s board since October 2013. He is also director of Wells Fargo and chairman of Wells Fargo Bank.
“I am currently scheduled to be in the Galapagos Islands on these dates. I will do my best to participate, but I am not certain on the stability of communications in that part of the world. My strong preference is to do this the following week.”
Former Wells Fargo board member James Quigley, in response to then-CEO Tim Sloan telling him that the OCC wanted to meet with the bank’s independent directors to discuss “progress and accountability.”
Duke and Quigley were scheduled to testify Wednesday at a hearing before the House Financial Services Committee entitled “Holding Wells Fargo Accountable: Examining the Role of the Board of Directors in the Bank’s Egregious Pattern of Consumer Abuses.” In advance of that hearing, Congresswoman Maxine Waters (D-Calif.), chairwoman of the committee, released her staff’s report, and a day later she called on Duke and Quigley to resign.
Duke and Quigley were largely criticized in the report for their failed oversight of Wells Fargo’s compliance with five regulatory orders issued in response to the company’s widespread consumer abuses. In one instance cited in the report, notes from a November 2017 meeting between the Consumer Financial Protection Bureau (CFPB), Duke, then-Wells Fargo CEO Tim Sloan, and General Counsel Allen Parker “reflect that Duke questioned the CFPB’s practice of including her on letters requesting the bank take certain actions: ‘Why are you sending it to me, the board, rather than the department manager?’ ”
The report continued: “During an interview with committee staff, the CFPB’s Western regional director said that Duke’s email came as a surprise as, in the regional director’s view, a board member would not typically object to receiving communication from a regulator. Committee staff’s review of these documents revealed that Duke was not fulfilling her obligation to oversee management’s compliance with the 2016 sales practices consent orders.”
The report similarly criticized Quigley, claiming he showed a similar lack of urgency. On Feb. 22, 2019, Wells Fargo’s corporate secretary sent an e-mail to Quigley, Duke, and Sloan stating the Office of the Comptroller of the Currency (OCC) wanted to meet with the bank’s independent directors to discuss “progress and accountability.” The OCC proposed to schedule the meeting days before Sloan was scheduled to testify before the committee.
According to the report, Quigley requested to postpone this meeting. ”I am currently scheduled to be in the Galapagos Islands on these dates,” he responded. “I will do my best to participate, but I am not certain on the stability of communications in that part of the world. My strong preference is to do this the following week.”
The report further criticized key leaders, including Duke and Quigley, for being “more focused on financial considerations, rather than addressing the bank’s compliance failures identified by the OCC.” Additionally, the report continued, “despite repeated regulatory failures, the bank resisted holding senior management accountable.”
Duke and Quigley respond
In a joint statement regarding their resignations, Duke and Quigley said, “Since we were made aware of the egregious harms suffered by Wells Fargo’s customers, we were and remain fiercely determined to do right by them and to strengthen the bank’s culture and controls. We have made these our top priorities.”
Their statement continued: “As the markets face increasing volatility, a strong Wells Fargo is needed now more than ever. 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.”
Both resignations took effect March 8. Former Bank of America Chief Financial Officer Charles Noski, who joined Wells Fargo’s board in June 2019, will serve as the new chair.