Wells Fargo Banned From Growing in Fed Crackdown After Scandals
The San Francisco-based lender’s regulator also said four members of the board of directors are to be replaced by the end of the year, according to a statement. Until it fixes the shortcomings outlined by the Fed, the bank can’t exceed its total asset size at the end of 2017.
“The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers,” said Fed Chair Janet L. Yellen in a statement. She said the regulator can’t allow “pervasive and persistent misconduct at any bank.”
Wells Fargo had suffered a series of scandals that included its employees opening millions of accounts without customers giving approval.
“The firm’s lack of effective oversight and control of compliance and operational risks contributed in material ways to the substantial harm suffered by WFC’s customers,” the Fed’s supervision director, Michael Gibson, said in a separate letter to the board of directors.
February 3, 2018 at 01:10PM