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Wells Fargo head resigns ahead of House hearings

Wells Fargo chairwoman Elizabeth A. Duke (pictured) has resigned following a scathing House of Representatives report that criticized the bank for being too slow to reform itself in the wake of a series of consumer banking scandals.

Duke, a former Federal Reserve regulator. joined Wells Fargo’s board in 2015. Audit committee head James Quigley also resigned. He is a former Deloitte executive, who joined the board in 2013.

Both Quigley and Duke were scheduled to appear before the House Financial Services Committee on Wednesday. 

The pair said in a joint statement:  “As the markets face increasing volatility, a strong Wells Fargo is needed now more than ever. 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.”

The two were featured in a harsh report that is over 100-pages long and issued by the House Financial Services Committee, which castigated the bank for widespread fraud in its consumer business tied to overly aggressive sales goals to sign new customers.

Last month Wells Fargo, the fourth-biggest bank in the US by assets, agreed to pay $3bn in criminal and civil penalties related to the scandal, which federal authorities said reflected a “complete failure of leadership” at the US bank.

In 2016, investigators found Wells Fargo staff, working under an aggressive incentive pay scheme, opened as many as 2 million customer accounts without client consent.

Shares in Wells Fargo have fallen 30 per cent in the past 12 months, almost double the decline in the wider banking sector.

Charles Noski, the former chief financial officer of Bank of America, will serve as the new chairman. He will work with chief executive Charlie Scharf, who joined the bank in October from Bank of New York Mellon to take on the biggest clean-up in US banking.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.