Wells Fargo CEO Tim Sloan is stepping down as CEO of the country's fourth-largest bank and will retire at the end of June, the bank said Tuesday. He is 58.
Allen Parker, Wells Fargo's general counsel, is taking over as interim CEO and president. The bank is searching externally for a new permanent CEO, it said in a statement.
Wells Fargo has been roiled by a series of scandals since revelations in 2016 that its employees created thousands of fake accounts without customers' knowledge. That scandal pushed out then-CEO John Stumpf and elevated Sloan, a near-30-year veteran of the bank at the time, to the top leadership job in October 2016.
But further issues also came to light on Sloan's watch. The bank revealed that it had charged tens of thousands of customers for auto insurance that they did not want or need and wrongly foreclosed on more than 500 homeowners. The scandals have cost Wells Fargo around $4 billion in consumer settlements and fines.
As a result of Wells Fargo's misdeeds, the Federal Reserve forbade the bank to grow its assets above its 2017 levels until it showed it had resolved its problems. Earlier this month, Sloan defended his bank's record during a grilling by members of the House Financial Services Committee, where Chairwoman Maxine Waters called for his ouster over the bank's "continuing failures."
Sen. Elizabeth Warren, a vocal critic of the financial industry, called out Sloan in January over what she called the high fees the bank charges college students. The next month, she said that Wells should not be allowed to expand until Sloane leaves. Warren welcomed Sloan's exit announcement Thursday, tweeting that he "should have been fired a long time ago" and calling for him to be investigated by the SEC.
Allied Progress, a consumer advocacy group, called out the steady pay increases Sloan received at the bank despite the scandals during his tenure.
"[T]he culture of greed at Wells Fargo and other major banks goes far beyond one CEO... The fact that Sloan was rewarded with a $2 million bonus last year despite the growing list of scandals tells you all everything you need to know about how serious Wells Fargo's leadership is about cleaning up its act," the group said in a statement.
Wells Fargo's board of directors seems to have concluded the company needs outside leadership to improve. "Although we have many talented executives within the Company, the Board has concluded that seeking someone from the outside is the most effective way to complete the transformation at Wells Fargo," it said in a statement.
The bank's stock rose 2.6 percent in after-hours trading. It has lagged the broader market this year.