Quarles steps out of matters related to Wells Fargo, citing ‘even appearance of conflict of interest’ due to past family transactions

The newest member of the Federal Reserve Board won’t participate in matters before the central bank’s governing board that are specific to one of the largest banks the agency regulates, primarily because of past family transactions with the bank, the Fed said Friday.

Vice Chairman for Supervision Randal Quarles – who was sworn into office in November – said he was voluntarily recusing himself from matters specific to Wells Fargo & Co., the nation’s third largest bank. “While this action is voluntary and is not legally required, it is being taken to avoid even the potential appearance of a conflict of interest,” the Fed said in a release.

The agency said that when Quarles joined the board, he divested all “applicable stock holdings” related to the banking company. However, it added, “in light of his extended family’s prior sale of their interest in a bank to Wells Fargo, he has chosen to recuse himself from matters specifically involving the firm.”

Consequently, the Fed said, Quarles will not vote on, or participate by decision or recommendation in, matters specifically involving Wells Fargo. The central bank said he will, however, continue to oversee Fed supervision and regulation responsibilities in his role as as vice chairman for supervision, “including the development of supervisory policies and rules applicable to banking organizations generally.”

Vice Chairman Quarles will voluntarily recuse himself from participating in matters specific to Wells Fargo to avoid even the potential appearance of a conflict of interest