Wells Fargo directors resign under pressure from House Democrats

Two Wells Fargo directors have resigned three days before lawmakers were set to grill them over their conduct while leading the scandal-ridden company, the bank announced Monday morning.

Former Wells Fargo Chairwoman Elizabeth “Betsy” Duke and James Quigley resigned from the bank’s board, effective Sunday, to “avoid distraction that could impede the bank’s future progress,” according to a statement from the two released by the bank released Monday.

“As the markets face increasing volatility, a strong Wells Fargo is needed now more than ever,” Duke and Quigley said in the statement.

“We believe that our decision will facilitate the bank’s and the new CEO’s ability to turn the page,” they continued.

Duke and Quigley were set to face questions from the House Financial Services Committee on Wednesday after a report released by its Democratic members documented extensive missteps by senior Wells Fargo management. 

Rep. Maxine Waters (D-Calif.), chairwoman of the Financial Services panel, called on Duke and Quigley to resign Thursday, saying both “failed in their responsibilities” to overhaul the bank and abide by legal orders with the Consumer Financial Protection Bureau (CFPB), Federal Reserve Board and Office of the Comptroller of the Currency (OCC).

Wells Fargo has been subject to intense federal scrutiny since 2016 after the bank opened and charged fees on millions of accounts for customers without their consent or sold through misleading practices. The bank also faced legal penalties and a $1 billion fine for failing to make promised adjustments to home and auto loan interest rates and forced customers to buy unnecessary insurance products.

The Fed, CFPB and OCC ordered Wells Fargo between 2016 and 2018  to make sweeping internal changes to prevent future sales scandals and improve oversight in order to escape unprecedented federal penalties and federal monitoring. 

Democratic members of the Financial Services panel blasted Wells Fargo leadership, including Duke and Quigley, for repeatedly failing to comply with and take seriously the demands of federal bank regulators, citing emails between and among Wells officials and bank regulators.

Their report also blasts Duke for allowing Wells Fargo to repeatedly submit incomplete plans to bank regulators and dismissing urgent requests from regulators to meet and discuss the process.