(Reuters) -The U.S. Federal Reserve announced on Tuesday that Wells Fargo will no longer have to operate under a $1.95 trillion asset cap the regulator imposed on the bank in 2018 following its long-running sales practices scandal.
The Fed said in a statement that the bank had made “substantial progress” in addressing its deficiencies, including improving governance and risk management programs, clearing the way for the central bank to remove the unprecedented growth restriction.
Here is an overview of the bank’s years-long effort to address its regulatory woes:
Date Development
September The bank agreed to pay $185 million in penalties
2016 and $5 million to customers that regulators said
were pushed into fee-generating accounts they never
requested
The Consumer Financial Protection Bureau received
$100 million of the total penalties – the largest
fine ever levied by the federal agency at the time.
Los Angeles officials and the Office of the
Comptroller of the Currency were also party to the
settlement.
CEO John Stumpf appeared before the Senate Banking
Committee for his oversight. Later that month, the
bank said it would eliminate sales goals for its
retail banking business sooner than planned
Wells Fargo said Stumpf would forfeit equity awards
worth about $41 million and not get a salary while
the company’s board investigates its sales
practices
October Veteran chairman and CEO Stumpf left. Tim Sloan
2016 took over the top job
February The lender said it fired four mid-level executives
2017 and stripped them of bonuses and stock awards as a
result of an investigation into improper sales
practices in its retail bank
March Wells Fargo said eight senior executives, including
2017 CEO Sloan and finance chief John Shrewsberry, would
not receive cash bonuses for 2016
July 2017 Federal Reserve Chair Janet Yellen said the central
bank was prepared to act against the directors of
Wells Fargo if an investigation deemed it
appropriate
August Wells Fargo hiked the tally of accounts that were
2017 potentially opened without customers’ knowledge by
over a million after an expanded review of improper
sales practices
February The Fed imposed an asset cap of $1.95 trillion on
2018 the bank “until it sufficiently improves its
governance and controls”
May 2019 CEO Tim Sloan resigned, becoming the second CEO to
leave the bank in the fallout of the sales
practices scandal
September After a difficult, months-long search for a new
2019 CEO, the bank named Charles Scharf as its next
leader
The OCC announced civil charges against five former
senior bank executives and settlements of charges
January with three other senior bank officials, including
2020 former CEO John Stumpf
He agreed to pay a $17.5 million penalty and a
prohibition from the banking industry, while Carrie
Tolstedt, the former community banking head, faced
a fine of $25 million and an industry ban
February The lender agreed to pay $3 billion to resolve
2020 criminal and civil probes into fraudulent sales
practices and admitted to pressuring employees in a
fake-accounts scandal
April The Fed said it would “temporarily and narrowly”
2020 modify the growth restriction, allowing the bank to
offer more loans under government assistance
programs for small businesses hurt in the pandemic
July 2020 Wells Fargo said Mike Santomassimo would replace
John Shrewsberry as chief financial officer
February Fed officials privately signaled that they had
2021 accepted the bank’s proposal for overhauling risk
management and governance, Bloomberg News reported
September Fed Chair Jerome Powell said the central bank was
2021 closely monitoring efforts to fix Wells Fargo’s
“widespread and pervasive” problems, and would take
appropriate actions if the bank failed to do so
December The U.S. Consumer Financial Protection Bureau hit
2022 Wells Fargo with the regulator’s largest ever civil
penalty as part of a $3.7 billion agreement to
settle charges over widespread mismanagement of car
loans, mortgages and bank accounts
Carrie Tolstedt, former head of Wells Fargo’s
retail bank avoided prison time after pleading
September guilty to an obstruction charge related to the
2023 fake-accounts scandal
February U.S. Office of the Comptroller of the Currency
2024 terminated a 2016 punishment over sales practices
May 2024 Wells Fargo CEO said the asset cap imposed on the
bank by regulators was curtailing its ability to
take in more corporate deposits and expand its
trading business
September A U.S. banking regulator found Wells Fargo’s
2024 safeguards against money laundering and other
illegal transactions were too lax and restricted
its ability to expand in risky businesses
The bank sent a third-party review of its risk and
control overhauls to the Federal Reserve as it
looked to remove an asset cap imposed by the
regulator, Bloomberg News reported, citing sources
November Wells Fargo was in the last stages of regulatory
2024 tests to lift the asset cap in 2025, Reuters
reported
The Fed must not remove Wells Fargo’s asset cap
until the bank has fixed its risk management and
compliance issues, top Democratic Senator Elizabeth
Warren told the U.S. central bank
December CEO Scharf expressed more confidence in the bank’s
2024 progress to fix compliance problems, detailing its
efforts to implement risk controls
January A top U.S. consumer watchdog terminated a 2022
2025 order punishing the lender for allegedly
mishandling auto loans and mortgages
February The Fed terminated a pair of enforcement actions
2025 imposed in 2011, but said the bank’s asset cap
remained in place
February The OCC ended a 2018 consent order related to the
2025 bank’s compliance risk management program
March The OCC terminated a 2021 consent order against the
2025 lender for deficiencies in its home lending loss
mitigation practices
April The CFPB lifted a 2018 consent order related to the
2025 lender’s compliance risk management
May 2025 The OCC terminated a 2015 consent order related to
the lender’s previously held financial subsidiaries
May 2025 The U.S. Federal Reserve announced that Wells Fargo
will no longer have to operate under a $1.95
trillion asset cap
Sources: Company statements, Reuters and media reports, regulatory filings
(Reporting by Manya Saini in Bengaluru; Editing by Lananh Nguyen and Shinjini Ganguli)
