NEW YORK (AA) – The head of Wells Fargo, John Stumpf, is retiring effective immediately from the company and its board, the bank said in a statement Wednesday.
The decision comes before the bank releases its third quarter earnings Friday and amid the criticism of the company’s handling of illegal banking practices under Stumpf’s leadership.
“I am grateful for the opportunity to have led Wells Fargo,” Stumpf said in a statement. “While I have been deeply committed and focused on managing the company through this period, I have decided it is best for the company that I step aside.”
Stumpf joined the company 34 years ago and became the bank’s CEO in 2007 before taking the chairman’s seat in 2010.
He was strongly criticized by financial committee members in the House and Senate in recent weeks for his handling of a sales scam in which bank employees opened millions of accounts and applied for half a million credit card accounts that were not authorized by consumers, in order to boost sales figures and meet sales targets.
Lawmakers called for his resignation after the Consumer Financial Protection Bureau issued a $185 million fine for the practices that dated to 2011. It is the largest ever penalty from the agency.
At least one congresswoman demanded Wells Fargo be broken up because it had become too large to manage.
Stumpf agreed last month to forfeit his equity awards valued at $41 million.
Wells Fargo fired 5,300 of its employees involved in the scandal.
Tim Sloan, the Chief Administrative Officer at the bank has been elected new president and CEO of the company, the board said.