Wells Fargo has cleared a significant regulatory hurdle as the Consumer Financial Protection Bureau (CFPB) lifted a 2018 consent order related to the bank’s compliance risk management. This marks the twelfth consent order resolved by the bank since 2019, signaling progress in addressing ongoing regulatory concerns.
The lift of this order follows a similar action by the Office of the Comptroller of the Currency (OCC) in February, both of which were part of the bank’s broader efforts to resolve issues that have kept it under an asset cap imposed by the Federal Reserve. The asset cap, which restricts Wells Fargo from growing its balance sheet beyond $1.95 trillion, has been in place since 2018.
Wells Fargo CEO Charlie Scharf welcomed the latest development, noting that the termination of the CFPB consent order, along with other recent closures, reflects the completion of much of the bank’s work on risk and control infrastructure. The bank’s stock rose nearly 1% to $70.29 following the announcement.
The lifting of these consent orders comes after a series of regulatory challenges, including the fallout from a 2016 fake accounts scandal. The bank has since faced significant scrutiny and fines, as well as regulatory penalties. The asset cap imposed by the Federal Reserve remains one of the most severe measures taken against the bank.
RBC Capital Markets analyst Gerard Cassidy noted that the asset cap could potentially be lifted as early as the second quarter of 2025, based on the bank’s progress and broader regulatory trends. Investor sentiment has recently improved, with analysts from Piper Sandler pointing to the successful resolution of multiple consent orders as a positive indicator of the bank’s ongoing efforts to regain compliance.
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