Wells Fargo submits vital review in process to end asset cap – report

Wells Fargo (NYSE:WFC) stock jumped 3.4% in Thursday morning trading after a media report that the bank has submitted a review of its risk and control overhauls to the Federal Reserve in an effort to remove the asset cap that’s been in place for almost seven year.

The company submitted a third-party review in hopes of obtaining the Fed’s sign-off on the plan, Bloomberg News reported, citing people familiar with the process. The asset cap was placed on Wells Fargo (WFC) in 2018 as punishment for the company staff opening bogus accounts so they could meet sales quotas.

The bank’s executives still expect the asset limit to remain in place at least into 2025 as the Federal Reserve reviews and analyzes the submission, Bloomberg said.

The cap requires Wells Fargo (WFC) to limit its assets to $1.95T, the same level as at the end of 2017.

Charlie Scharf, who became CEO in 2019, has spent his tenure trying to resolve the regulatory issues.

Initially, Wells Fargo (WFC) executives had expected to get the restriction lifted within a year or two, but for years have been extending the timeline as they sought to gain the Fed’s approval for their remediation efforts.

Last month in a separate matter, Wells Fargo (WFC) stock dipped after the Office of the Comptroller of the Currency issued an enforcement action against the bank due to deficiencies tied to its financial crimes risk management practices and anti-money laundering internal controls.