The US Federal Reserve has lifted two consent orders imposed on Wells Fargo in 2011 in response to deficiencies in its mortgage servicing, foreclosures, and lending practices, as reported by Reuters.
"Wells Fargo is a different company today, and the resolution of these two longstanding Federal Reserve consent orders is another indication that our team is establishing the right processes and controls to meet our regulators' and our own expectations," said CEO Charles Scharf, adding that the move reflects “clear, meaningful progress."
However, Wells Fargo's $1.95 trillion asset cap, which was put in place in 2018 following the bank's fake accounts scandal, remains in place. In total, the asset cap has cost the bank more than $36 billion in profits by some estimates, making it one of the most costly regulatory sanctions in history. Lifting the cap would require a vote from the Fed's Board of Governors. Reuters previously reported that it could be removed by mid-2025.
In our 2022 Deeper Dive, "The Costs of Misconduct," we discuss the massive financial and non-financial impacts of misconduct, and whether they can be treated even tacitly as "costs of doing business."
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