WFC Wells Fargo and Company

By Emily Glazer 

This isn't the first banking crisis Elizabeth Duke has faced.

Ms. Duke, who was named incoming independent chairman of Wells Fargo & Co. on Tuesday, will help oversee the bank it is struggling with several scandals across its businesses. She will start her new job Jan. 1.

She had a similar start to her role as Federal Reserve governor in August 2008, as the financial crisis was enveloping the country. She served in the role at the central bank through August 2013.

"There was no way that I, or anyone else, could have foreseen the tumultuous events that were about to unfold," she said in a February 2011 speech. About a year later, during another speech she said: "I witnessed firsthand the damage that can result from reckless lending and weak risk-management practices."

That echoes some of the problems facing Wells Fargo, about a year after its sales-practices scandal emerged and weeks after reports of new problems in its consumer-lending unit around auto-related products.

Ms. Duke will lead the board even as Wells Fargo shareholders have said they are wary of directors' role, with nine directors receiving less than 75% approval for reelection at the bank's annual meeting in April. Ms. Duke received 75%. Generally, directors receive support of 95% or more.

The onetime Fed governor first made a name for herself as a community banker, then as a lobbyist -- the first female to run the American Bankers Association. She also served on the board of directors of the Federal Reserve Bank of Richmond.

At the Fed, she was known for acknowledging the regulatory burden for smaller banks and speaking publicly that they shouldn't be treated equal to larger firms, said Peter Conti-Brown, a Fed historian and assistant professor at The Wharton School of the University of Pennsylvania.

Ms. Duke once said in a speech that she "chose a career in banking for one simple reason: I needed a job." Ms. Duke began as a part-time drive-through teller. She later got a full-time job at a startup bank with 11 employees whose president became her mentor. After he died suddenly of a heart attack, Ms. Duke took his place as chief executive of Virginia-based Bank of Tidewater. That bank was ultimately acquired by Wachovia Corp., where she worked briefly prior to its merger with Wells Fargo during the financial crisis.

Much of her focus as a community banker was lending to small businesses, something Ms. Duke has reiterated throughout her career as a lobbyist and later as a Fed governor. "I fully expected to complete my career working as a community banker in my hometown," she said in the February 2011 speech.

Write to Emily Glazer at emily.glazer@wsj.com

(END) Dow Jones Newswires

August 15, 2017 16:47 ET (20:47 GMT)

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