Mar 9, 2020 - Economy & Business

Two Wells Fargo board members resign

Elizabeth Duke, shown in Senate testimony in 2008. Photo by Joshua Roberts/Getty Images

The chair of Wells Fargo's board of directors, Elizabeth Duke, resigned under pressure Sunday, days before she was scheduled to testify on Capitol Hill about the bank's fake accounts scandal — as did a second board member, James Quigley, who was also going to be grilled by lawmakers.

Why it matters: Wells Fargo is attempting to close the chapter on the systemic frauds that were exposed in 2016, when 5,200 employees were fired over 2 million fake accounts that were created. Evidence shows the bank did not satisfactorily clean up its act in the ensuing years, leaving Democratic lawmakers furious.

Where it stands: The bank's new CEO, Charlie Scharf — a former CEO of Visa and BNY Mellon — took over late last year and is trying to clean house. He is scheduled to testify Tuesday in front of the House Financial Services Committee, and Duke and Quigley are scheduled to testify Wednesday.

  • In a damning report released last week, the majority staff of the committee presented extensive evidence that problems lingered and senior executives seemed unconcerned.
  • The report included emails from Duke in which she seemed to try to deflect queries about the situation, plus "a similar lack of urgency" from Quigley.
  • The report called Wells Fargo "a reckless megabank with an ineffective board and management that has exhibited an egregious pattern of consumer abuses.”
  • Wells Fargo would not comment on whether the two directors who resigned will still testify Wednesday.

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Wells Fargo CEO pitches new beginning for the bank

Wells Fargo CEO Charlie Scharf. Photo: Win McNamee/Getty Images

Charlie Scharf is the third CEO in three years to try to wrangle Wells Fargo out of the bad graces of regulators, lawmakers and consumers.

The big picture: Wells Fargo is facing bipartisan anger over its fake accounts scandal. Scharf spent four hours in front of Congress on Tuesday pitching a new vision of the bank, with the worst behind it.

The banking industry's fake account scheme may have been widespread

Photo: Robert Alexander/Getty Images

The latest bank in the crosshairs of the Consumer Financial Protection Bureau is Fifth Third Bancorp, which disclosed in a securities filing this week that the CFPB is targeting the bank for “alleged unauthorized account openings,” American Banker's Kate Berry reported.

Why it matters: Wells Fargo has faced billions in fines and penalties and had been held up as a singular example of corporate wrongdoing for its account fraud scandal, but the disclosure of the complaint against Fifth Third could mean that there are one or many other shoes to drop.

Ken Chenault to depart Facebook board of directors

Photo: Jakub Porzycki/NurPhoto via Getty Images

Former American Express CEO Ken Chenault will not run for re-election on Facebook's board of directors following disagreements with CEO Mark Zuckerberg over governance and political policies, according to the Wall Street Journal.

Why it matters: Facebook's board of directors has seen significantly changes in a short period of time, with some departing who are not fully in agreement with Zuckerberg. Last month the board added Drew Houston, CEO of Dropbox, and a friend of Zuckerberg's.