Wells Fargo Loses Second CEO In 29 Months As CEO Tim Sloan Resigns

Tim Sloan has resigned with immediate effect as CEO of scandal-wracked Wells Fargo & Co after a tumultuous tenure lasting only 29 months. C. Allen Parker, the bank’s general counsel, will serve as interim chief executive.

Oddly, it was only last week the bank’s board of directors reiterated their support for Sloan, who has been the target of incessant calls for his resignation coming from Congress. The board is now looking for an outside candidate to replace Sloan.

“The board has concluded that seeking someone from the outside is the most effective way to complete the transformation at Wells Fargo,” said Board Chair Betsy Duke.

Earlier this month, Sloan received a 5 percent pay hike for 2018. He had a base salary of $2.4 million, $14 million in stock awards and a $2 million bonus based on the bank’s financial performance.

Sloan’s sudden departure comes two weeks before Wells Fargo was to report on its first-quarter results and a month before its annual shareholder meeting.

As with his predecessor, John Stumpf, who resigned in October 2016, Sloan fell victim to the bank’s wide-ranging sales practices scandal. Wells Fargo was fined over $1 billion in 2018 by the government for forcing customers to buy car insurance they didn’t want and charging mortgage borrowers unfair and higher fees.

The Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency said Wells Fargo charged more than 570,000 clients for car insurance they didn’t need. The bank later admitted 20,000 of these customers defaulted on their car loans because of this move, and had their vehicles repossessed.

Wells Fargo’s customer mishandling hit a peak in September 2016 when the CFPB revealed the bank opened accounts and new credit cards in customers’ names without their permission. The bank paid $185 million to settle that abuse, the largest fine of its kind until that time.

In February 2018, the Federal Reserve handed down an unprecedented punishment on Wells Fargo for what it called “widespread consumer abuses,” including the bank’s creation of as many as 3.5 million fake customer accounts.

From 2016 to 2018, state and federal regulators and the Justice Department have levied almost $1.5 billion in fines and penalties against Wells Fargo for offenses ranging from punishing whistle-blowers to unlawfully repossessing the cars of military service members.

In 2018, Sloan said he couldn’t promise new scandals at the bank won’t emerge.

“We’ve certainly had a thorough look in every nook and cranny in the company, and we’re continuing on that process,” he said. “(But) in terms of declaring victory and walking ahead, we’re not at that spot right now.”