By Niket Nishant (Reuters) -Wells Fargo has cleared its twelfth consent order since 2019, the lender said on Monday, moving closer to fixing longstanding regulatory issues that have kept the bank under strict oversight and an asset cap of $1.95 trillion. The Consumer Financial Protection Bureau, the top consumer watchdog in the United States, lifted […]
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Wells Fargo nears full regulatory relief as CFPB lifts consent order
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By Niket Nishant
(Reuters) -Wells Fargo has cleared its twelfth consent order since 2019, the lender said on Monday, moving closer to fixing longstanding regulatory issues that have kept the bank under strict oversight and an asset cap of $1.95 trillion.
The Consumer Financial Protection Bureau, the top consumer watchdog in the United States, lifted a 2018 consent order related to the lender’s compliance risk management, the bank added.
“Today’s termination, along with the recent closure of other consent orders, demonstrates that we have completed much of our common risk and control infrastructure work,” Wells CEO Charlie Scharf said.
The bank had entered into consent orders with the CFPB and the Office of the Comptroller of the Currency to address issues in its compliance risk management program in 2018. OCC terminated its consent order in February.
The latest move marks the sixth consent order resolved this year and the twelfth since 2019, when Scharf took the helm and set out to address the bank’s regulatory challenges.
Wells Fargo’s issues came under the spotlight after a fake accounts scandal that erupted in 2016. Since then, it has faced intense scrutiny and paid billions in fines.
In 2018, the U.S. Federal Reserve also imposed an asset cap, one of the most severe penalties available to regulators, on the bank, preventing it from growing its balance sheet beyond $1.95 trillion until regulators deem it has fixed its problems.
Recent efforts by the bank to regain compliance have sparked hope that the asset cap could soon be removed.
“The news will likely reinforce investors’ belief that the asset cap could be lifted sooner rather than later,” Piper Sandler analysts said.
The bank has two remaining consent orders.
The most recent termination of the consent order demonstrates progress in working with the company’s regulators and reinforces the bank’s risk and control framework, RBC Capital Markets analyst Gerard Cassidy said.
(Reporting by Niket Nishant and Arasu Kannagi Basil in Bengaluru and Nupur Anand in New York; Editing by Shounak Dasgupta)