Waters calls for resignation of two Wells Fargo directors, floats criminal referral for former CEO

Greg Nash

The chairwoman of a powerful House committee on Thursday called for two members of Wells Fargo’s board of directors to resign, and said she may refer its former chief executive to the Justice Department for lying under oath to Congress.

Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, said Wednesday that Wells Fargo directors Betsy Duke and James Quigley “failed in their responsibilities” to overhaul the scandal-ridden bank. Both are set to testify before the panel next week.

Waters’s call comes after her committee released a report Wednesday documenting how Duke, Quigley and senior Wells Fargo leadership repeatedly failed to comply with and take seriously the demands of federal bank regulators. 

Waters told reporters that Duke and Quigley’s failure to halt abusive and misleading sales practices and bring the bank into compliance with federal settlements was a “dereliction of their duty.”

The chairwoman also said she may refer former Wells Fargo chief executive Timothy Sloan to federal prosecutors for allegedly lying to her committee during a March 2019 hearing.

Sloan told the Financial Services panel in March that Wells Fargo was “in compliance” with orders from federal bank regulators — the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) — to detail how it would repay jilted customers and prevent further sales scandals.

Even so, officials at the Federal Reserve, CFPB and OCC repeatedly rejected Wells Fargo’s plans, according to emails cited in the report, finding them to be incomplete and insufficient to address the terms of the settlements.

Waters said Thursday she had additional evidence that Sloan may have lied before the Financial Services panel. Witnesses who testify before Congress swear an oath to tell the truth under the penalty of perjury charges.

Republicans on the Financial Services panel are also set to release a report in which they say Sloan “undermined the company’s efforts to comply with the terms of the consent orders by failing to create a culture of accountability, resisting recommendations from risk management experts, and focusing on the company’s growth and business reputation at the expense of regulatory compliance.

Between 2002 and 2016, Wells Fargo opened and charged customers fees on millions of accounts without their consent or by using misleading sales tactics. Senior Wells Fargo leadership ignored and failed to act on repeated warnings about illegal sales practices for several years, according to federal officials.

Wells Fargo admitted “that it collected millions of dollars in fees and interest to which the company was not entitled, harmed the credit ratings of certain customers, and unlawfully misused customers’ sensitive personal information,” and agreed to pay a $3 billion settlement.

Updated at 11:58 p.m.

Tags Finance Maxine Waters Wells Fargo Wells Fargo scandal
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