Wells Fargo Family Ties Prompt Recusal by Fed Vice Chair Quarles
(Bloomberg) -- Federal Reserve Vice Chairman Randal Quarles, the central bank’s supervision chief, plans to step aside from any decisions involving Wells Fargo & Co. because of family ties to the embattled lender.
In a Friday recusal letter, Quarles said that despite a legal ability to participate in Wells Fargo matters, he decided to steer clear because of “my extended family’s history with Wells Fargo in connection with the prior sale of their interest in a bank.”
Quarles said he wanted to avoid “even the appearance of a conflict of interest.”
In his earlier financial disclosures, Quarles reported a number of ties to Wells Fargo, which has been plagued by scandals since last year. His connections included at least $1.3 million in stock that he pledged to sell and an “exercised line of credit” of more than $1 million. San Francisco-based Wells Fargo also held a $1 million to $5 million mortgage on Quarles’ personal residence and a mortgage of between $100,000 and $250,000 on an investment property.
In the Friday recusal letter, Quarles said he “sold all of my Wells Fargo stock, as did my spouse and various family trusts.” Quarles said he also repaid a business line of credit.
Members of his wife’s family have had ties to Wells Fargo, including her father, Spencer F. Eccles, who ran a bank that was sold to Wells Fargo in 2000 and was a member of Wells Fargo’s board. His wife’s brother, Spencer P. Eccles, was at Wells Capital Management before working alongside Quarles at a private-equity fund, Cynosure Group.
Democratic Senator Elizabeth Warren, a member of the Banking Committee from Massachusetts, has called on the Federal Reserve to remove board members of Wells Fargo after regulators fined it for opening up millions of accounts without customers’ approval.
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