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Federal Reserve Removes Wells Fargo’s $1.95 Trillion Growth Cap

Regulators have deemed Wells Fargo’s governance and risk controls sufficiently improved following its 2016 fake-accounts scandal.

Charlie Scharf, CEO, Wells Fargo, speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, U.S., May 2, 2023. REUTERS/Mike Blake/File Photo
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Photo: Smith Collection/Gado/Getty Images
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Overview

  • The Fed’s unanimous board vote ends a seven-year $1.95 trillion cap, restoring Wells Fargo’s ability to grow beyond its 2018 asset levels.
  • Regulators cited “substantial progress” in overhauls to governance, risk management and compliance, including a third-party review of the bank’s reforms.
  • Removal of the cap paves the way for Wells Fargo to seek additional commercial deposits, expand trading activities and bolster its lending business.
  • Despite lifting the growth restriction, Wells Fargo remains under enhanced Federal Reserve scrutiny and must sustain its board oversight and risk-control improvements.
  • Wells Fargo shares rose over 3 percent in premarket trading and CEO Charlie Scharf is granting each of the bank’s 215,000 employees a $2,000 award.