Wells Fargo Vice Chairman Elizabeth Duke is expected to replace Stephen Sanger as chairman once he leaves the board, The Wall Street Journal reported Thursday, citing people familiar with the matter.

Sanger’s tenure on the board will end at Wells' annual meeting next spring, when he will have reached the mandatory retirement age of 72. Sanger will likely step down sometime before that meeting, though directors are supposed to make final decisions by Labor Day, the Journal story said.

Duke will probably replace Sanger atop the San Francisco company’s board, according to the story. Wells Fargo said last week that the board is reviewing its own “structure, composition and practices,” which will lead to actions to be announced later in the third quarter.

Elizabeth Duke, former governor of the Federal Reserve and current member of Wells Fargo’s board.
Elizabeth Duke was a community bank executive and Fed governor before joining the Wells board nearly three years ago. Bloomberg News

Duke, a Federal Reserve Board governor from 2008 to 2013, joined Wells’ board in November 2014, when she was a part-time faculty member and executive-in-residence at Old Dominion University in Norfolk, Va.

Duke was the first woman to serve as chair of the American Bankers Association, in 2004, and had been a member of the board of directors of the Federal Reserve Bank of Richmond.

She was chief operating officer of TowneBank from 2005 to 2008, and was an executive vice president at Wachovia Bank, from 2004 to 2005, and at SouthTrust Bank from 2001 to 2004. SouthTrust was acquired by Wachovia in 2004.

Duke also served as chief executive of Bank of Tidewater, which was acquired by SouthTrust, and chief financial officer of Bank of Virginia Beach.

Calls for changes on the Wells board intensified last month after the bank said 500,000 clients might have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own insurance policies. The disclosure follows a scandal last year in which the company acknowledged that it may have opened millions of unauthorized deposit and credit card accounts.

New York City Comptroller Scott Stringer, whose office oversees investments in city pension plans, called the new revelations about auto insurance a “full-blown scandal." He said the company should replace Sanger with a new independent chairman, and Wells Fargo’s directors should disclose “what the board knew and when it knew it, and how executives are being held accountable.”

Oscar Suris, a Wells Fargo spokesman, declined to comment about board member changes.

The bank said last week that the board’s review was in response to “feedback received at our annual stockholders’ meeting in April.”

Four Wells Fargo board members, including Sanger, received less than 60% of investors’ votes for re-election during the firm’s April shareholders’ meeting. Sanger got 56% and Enrique Hernandez Jr. and Federico Pena both received less. Cynthia Milligan got 57%.

Four other members got less than 70% of votes: John Baker II, Lloyd Dean, James Quigley and Susan Swenson.

American Banker staff writers Kate Berry and Kristin Broughton contributed to this article.

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