After weathering years of scandal, Wells Fargo CEO Timothy Sloan is finally stepping down, according to The Hill. The bank announced today that Sloan will resign immediately from his positions as CEO, president, and board member, and will leave the company entirely on June 30th.
Sloan said in a statement that he would “step aside and devote my efforts to supporting an effective transition” at the company.
“We have made progress in many areas and, while there remains more work to be done, I am confident in our leadership team and optimistic about the future of Wells Fargo,” he continued. “However, it has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives.”
Wells Fargos’s interim CEO will be C. Allen Parker, the bank’s former general counsel.
Since 2016, a series of scandals has brought the major bank near the breaking point, as they’ve been saddled with over $1 billion in fines and legal settlements.
The most prominent of these scandals emerged in September 2016, when the Consumer Financial Protection Bureau levied $100 million in fines on the bank for opening accounts for customers and charging them fees without their knowledge.
But that’s hardly the only problem the bank has faced.
From The Hill:
The Federal Reserve in January 2018 banned Wells Fargo from growingbeyond its current $1.87 trillion in assets until the bank could prove and document ways to prevent similar scandals.
Wells also paid $1 billion in April 2018 to settle charges alleged by the CFPB and Office of the Comptroller of the Currency (OCC) that the bank failed to make promised interest rate adjustments on mortgages and auto loans, which led to hundreds of foreclosures and car repossessions.
Sloan was ripped to shreds by Democrats at a House Financial Services Committee hearing earlier this month, where he testified that the bank was working to improve oversight, compensate customers they’d wronged, and change their management.
But lawmakers weren’t buying it.
“All the changes that you said you have made are not evident,” Rep. Maxine Waters said at the hearing. “Why should the bank continue to be the size that it is?”
“Your bank foreclosed on 545 customers because of that error,” Rep. Rashida Tlaib said. “They didn’t lose a boat. They lost their home. What are you doing to help them?”
“If I were you and I really wanted to do the right thing, put this bank on the right path: Break it up,” Rep. Stephen Lynch told Sloan.
The firing squad continued after the hearing.
“What happened at Wells Fargo was really a remarkable widespread series of breakdowns in their risk management apparatus that resulted in significant consumer abuses,” Fed Chairman Jerome Powell said in a press conference last week.
“We will not lift [the asset cap] until Wells Fargo gets their arms around this, comes forward with plans, implements those plans and we’re satisfied with what they’ve done, and that’s not where we are right now.”
In response to Sloans resignation, politicians on both sides of the aisle expressed relief and vindication.
Warren was one of the politicians who wrote to federal regulators last week to demand Sloan’s removal.
Republicans weighed in as well.
“The bottom line is that we’ve not seen the type of cultural or institutional change so desperately needed at Wells Fargo,” Rep. Patrick McHenry said in a statement. “I will be watching closely to ensure the next leader of this organization shows commitment to rebuilding trust.”