Fed removes Wells Fargo’s ‘asset cap’ restriction

ISTANBUL

The US Federal Reserve said Tuesday that it has removed the asset cap that was placed on one of the country’s largest banks, Wells Fargo, back in 2018, allowing it to resume growth, Bloomberg reported.

It said Wells Fargo has met all the requirements set out in the 2018 enforcement action, leading to the elimination of the restriction on the bank’s balance sheet size.

The statement also highlighted that the Fed has finished reviewing the bank’s progress, including third-party assessments, along with its own evaluation of Wells Fargo’s corporate governance and risk management practices.

“Removal of the asset cap represents successful remediation to the required standard based on focused management leadership, strong board oversight, and strict supervision holding the firm accountable,” it said in the statement.

Wells Fargo had faced a public and regulatory backlash following a fake account scandal that emerged in 2016 which involved employees secretly opening millions of unauthorized checking and savings accounts and credit card accounts without customer knowledge or consent.

The bank was subjected to an asset growth restriction imposed by then Fed Chair Janet Yellen in 2018. The penalty limited the size of the bank’s balance sheet, hindering its growth.