Wells Fargo cleared its twelfth consent order since 2019 and moved closer to fixing longstanding regulatory issues that have kept the bank under an asset cap of $1.95 trillion.
The Consumer Financial Protection Bureau, the top U.S. consumer watchdog, has lifted a 2018 consent order related to the lender’s compliance risk management, Wells Fargo said on Monday.
A similar consent order that the bank had entered into with the Office of the Comptroller of the Currency, another top regulator, was lifted in February.
“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’s shares rose nearly 1% to $70.29.
Consent orders are enforcement actions involving a fine or specific directive to address an issue.
Wells Fargo says tech banking team grew by 20% over past year
Wells Fargo’s regulatory issues came under the spotlight after a fake accounts scandal that erupted in 2016, leading to intense scrutiny and billions in fines.
Since 2018, the bank has also operated under a U.S. Federal Reserve-imposed asset cap, one of the most severe penalties available to regulators, which bars it from growing its balance sheet beyond $1.95 trillion until its problems are fixed.
The asset cap could be lifted as soon as the second quarter, given the pace of progress this year and the U.S. administration’s push for looser banking regulation, RBC Capital Markets analyst Gerard Cassidy said.
Efforts to regain compliance have sparked recent optimism among investors. The bank has resolved six consent orders this year, and two are pending.
“With both the OCC and the CFPB now apparently comfortable with Wells Fargo’s compliance risk management, we view the forward progress as a good sign,” Piper Sandler analysts said.
Comments
Comments are closed for this article.