Today, Republican leader of the House Financial Services Committee, Patrick McHenry (NC-10), released the following statement in response to the resignation of Wells Fargo Board Chair Elizabeth Duke and Board Member James Quigley:
“Fresh perspectives on the Board will help move Wells Fargo forward. The Republican report shows, time and time again, the Bank’s reliance on the status quo has consistently failed. From the Board’s decision to tap a 30-year company insider to lead the Bank in 2016 to its failure to recognize that management was not fixing any of the company’s pervasive problems, it’s no secret that changes needed to be made. I expect that these changes to Board and management leadership—and the Trump Administration’s renewed focus on oversight—signal a new day for Wells Fargo.”
The Republican staff report, entitled: Uniquely Flawed: An Overview of Failures and Structural Deficiencies at Wells Fargo, found:
- Duke and Quigley did not ensure the company was making progress under the consent orders. Under the terms of Wells Fargo’s consent orders, the Board of Directors is responsible for reviewing all the company’s remediation and reorganization plans before they are submitted to the regulators. Republicans found Duke and Quigley authorized plans that were shoddy, incomplete, and in some cases, late. For instance, the documents show the CFPB described the company’s compliance plan under the 2018 consent order as “a plan for a plan.”
- Duke and Quigley failed to hold Tim Sloan’s management team accountable. The documents show the Board continued to support the company’s management despite overwhelming evidence that the consent order compliance program was inadequate. In an internal email, an official from the OCC stated “the Board, headed by Betsy Duke, has made clear their emphatic support for Tim.” Despite a series of setbacks, the “board remains behind him.” The email also states, “The only way in which the Board will act is if 1) financial performance significantly falters, including the stock price (which will spur investors to pressure the Board) or 2) the regulators (us or the Fed) make it clear Sloan needs to go.”
- Duke was not sufficiently available to the company’s regulators. Republicans found evidence that the company’s regulators were “disappointed” that Duke was not available for a crucial meeting. A letter from CFPB officials to Duke stated, “We were disappointed to hear from our designated Wells Fargo Bank, N.A. . . . points of contact that the two of you did not have the flexibility to meet with us in connection with your July 2017 or August 2017 Wells Fargo Board of Directors meetings.”
Read the report’s Executive Summary.
Read the report’s Key Findings.
Read the full report.