Wells Fargo chairman and CEO John Stumpf has resigned, effective immediately, amid a scandal involving fraudulent sales tactics.

He will be replaced as CEO by the bank’s president and COO Timothy Sloan.

Stumpf, who joined Wells Fargo in 1982, was appointed as CEO in June 2007 and its chairman in January 2010. His departure comes weeks after he was grilled by two congressional panels over the bank’s abusive sales practices.

Last month, the bank was ordered to pay a $185m fine for the illegal sales practice of secretly opening unauthorised deposit and credit card accounts. Following this scandal, the bank decided to eliminate all product sales goals in retail banking and dismissed 5,300 employees involved in the illegal sales practices.

Sloan, who will continue to serve as the company’s president, joined Wells Fargo 29 years back, holding various leadership roles in the company’s wholesale and commercial banking unit such as head of commercial banking, real estate and specialised financial services.

Sloan was appointed as the president and COO in November 2015. At Wells Fargo, he also led the wholesale banking group, served as CFO, and served as the company’s chief administrative officer.

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Further, lead director Stephen Sanger will now take over as chairman and independent director Elizabeth Duke will become vice chairman.  

Sanger has been a member of the Wells Fargo board since 2003, and its lead director since 2012, while Duke has been a member of the company’s board since 2015.

“John Stumpf has dedicated his professional life to banking, successfully leading Wells Fargo through the financial crisis and the largest merger in banking history, and helping to create one of the strongest and most well-known financial services companies in the world. However, he believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward,” Sanger said.