Another Wells Fargo CEO resigns over scandals

Credit: Reuters Studio
Published on March 28, 2019 - Duration: 01:58s

Another Wells Fargo CEO resigns over scandals

Wells Fargo said on Thursday Tim Sloan will resign immediately as its chief executive, becoming the second CEO to leave the bank in the fallout of a wide-ranging sales practices scandal.

Jane Lanhee Lee reports.

Another Wells Fargo CEO resigns over scandals

Following a grueling congressional hearing earlier this month over Wells Fargo's fraudulent banking practices... "We are dedicated to compensating every customer who suffered harm because of our mistakes." CEO Tim Sloan is stepping down immediately.

He's the second head of the bank to leave over the scandal.

He took over from John Stumpf who resigned in 2016 after Wells Fargo employees were found to have opened millions of bank accounts without the knowledge of the customers in order to meet unrealistic sales goals.

But the bank faced several more scandals under Sloan's leadership including problems with customers getting auto insurance they didn't need and getting overcharged for fixed-rate mortgages.

Sloan had become a target for regulators and politicians who repeatedly called for his removal.

Reuters Pete Schroeder is following the story.

(SOUNDBITE) (English) REUTERS CORRESPONDENT, PETE SCHROEDER, SAYING: "When Sloan testifed before Congress a few weeks ago he faced hours of probing questions from lawmakers in both parties who made it clear that they were not convinced that the bank had done enough to repair its culture from its previous scandals and needed to see more from the bank.

At the same time Wells Fargo's regulators continue to keep up pressure on the bank as well making clear that the bank had to take many more dramatic steps to overhaul its culture and operations before they were convinced that it was operating in good standing.

In particular the Federal Reserve which issued an unprecedented asset cap on Wells Fargo to grow several months ago has made clear that the bank had to pursue a wholesale series of changes at the bank in order for them to lift that cap which placed significant pressure on the bank and its investors who were eager to see it continue growing.

Now Sloan's exit gives the bank another chance to try to rebuild its reputation and convince policymakers that they've started on a fresh foot." In its statement, Wells Fargo's Board Chair said it was best to seek an outside candidate for the CEO position.

The bank's general counsel C.

Allen Parker will serve as interim chief executive.


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