The abrupt resignation of Wells Fargo CEO Tim Sloan helps the bank to go on

In a surprise move Thursday, Wells Fargo (NYSE: WFC) CEO Tim Sloan announced his immediate resignation. Sloan, who was originally brought into the CEO role to help the bank overcome its numerous scandals, will be replaced by an external candidate yet to be named.

Here's an overview of the events leading up to Sloan's departure, and what investors should know going forward.

Image Source: Wells Fargo.

Sloan's retirement: here's how

Tim Sloan, 58, is stepping down as CEO of Wells Fargo immediately. In fact, by the time you read this, he will no longer be in the role. He will receive some benefits worth about 400 for the next two years.000 US dollars as long as he remains available to the company for consulting services and supports the company during this time with customers and employees. He is still eligible for his pension and deferred compensation.

Wells Fargo will be led for now by interim CEO Allen Parker, who will serve as the bank's general counsel. As for a permanent CEO, Wells Fargo announced it will be looking for a new CEO, but the bank will only consider external candidates.

Sloan's departure comes just weeks after it was announced that he would get a 5% raise in 2018, despite the fact that a Federal Reserve penalty preventing the bank from increasing its assets remains in place.

Check out the latest transcript of phone calls for Wells Fargo.

Wells Fargo has changed under Sloan's leadership

Sloan was named CEO in October 2016 after then-CEO John Stumpf resigned in the wake of the fake accounts scandal revelations, and his main goal was to clean up the mess.

To be fair, there is a solid argument that he has done a good job. The bank's sales culture, which was at the root of the major scandals, was completely overhauled. Retail bankers at Wells Fargo branches no longer have product sales targets, and new incentives have been put in place to encourage customer-centric behavior. And the bank has done a good job of making restitution to customers who were affected by their failures.

The bank could not Yes really continue with Sloan at the helm

Indeed, Sloan has focused on changing Wells Fargo's culture and working to restore its public image. However, in the eyes of many investors, regulators and politicians, no matter what Sloan did with Wells Fargo, it would not be enough to. And there's a big reason for that.

As the fake accounts scandal, the auto insurance scandal, the mortgage rate freeze scandal and numerous other problems were unfolding, Sloan was a part of Wells Fargo's leadership . Sloan had been with the bank since 1987 and held the roles of COO and president as of 2015. In other words, Sloan has been tasked with cleaning up a mess he had a hand in creating.

This could be great news for investors

The biggest complaint among regulators and politicians as Wells Fargo's drama continued was that Sloan should not have been put in the CEO role at all, given his role at the bank while the unethical actions were ongoing. In fact, Wells Fargo's outspoken critic, Senator Elizabeth Warren, D-Massachusetts, even sent a letter to the Federal Reserve demanding that last year's unprecedented penalty remain on the bank until Sloan is replaced.

It's hard to overstate how important it is to investors that the Fed lift its penalty. Until that happens, Wells Fargo essentially may not grow in arguably the best growth environment for banks in decades. As long as the bank follows through on its plan to bring in a well-qualified outside CEO candidate, investors may finally be getting some good news in this space.

Wells Fargo shares were trading down about 2% Friday morning.