The Fed lifts Wells Fargo asset cap signaling bank’s transformation progress nearly ten years after the fake accounts scandal. The Federal Reserve has removed a major restriction that limited Wells Fargo’s growth. This asset cap was in place since 2018, capping the bank’s assets at $1.95 trillion.
CEO Charles Scharf welcomed the move as a key milestone. He took charge in 2019 and prioritized fixing problems left by earlier leadership. The asset cap’s removal will allow Wells Fargo to pursue growth more aggressively.
Following the announcement, Wells Fargo’s stock jumped as much as 4% in after-hours trading. Since Scharf became CEO, the stock has increased more than 50%. This shows investor confidence in the bank’s turnaround.
The asset cap was part of a consent order after investigations revealed Wells Fargo’s widespread consumer abuses. Regulators found the bank had created fake accounts in 2016. This scandal led to strict limits on the bank’s size to protect consumers and markets.
However, the Fed now states that Wells Fargo has met the conditions to lift this particular restriction. The bank has made substantial progress in improving its operations and governance. Yet, other enforcement actions remain until Wells Fargo completes all required changes.
Scharf has tackled 13 regulatory consent orders since becoming CEO. Notably, seven of these were lifted in 2025 alone. He credits these achievements to cultural reforms and stronger oversight.
Despite the lifted cap, Wells Fargo management tempers expectations about immediate earnings gains. CFO Mike Santomassimo said the change won’t produce a sudden boost in profits. The bank plans a steady, deliberate approach to growth moving forward.
Meanwhile, Wells Fargo still faces regulatory scrutiny. The Office of the Comptroller of the Currency (OCC) recently found shortcomings in the bank’s anti-money-laundering systems. The bank also remains under a formal agreement related to the Gramm-Leach-Bliley Act violations.
Former Fed governor Michael Barr emphasized continued oversight. He noted that leadership, board oversight, and strict supervision must persist for lasting success.
In summary, the Fed lifts Wells Fargo asset cap signaling bank’s transformation progress. This development marks a crucial step in Wells Fargo’s recovery journey and future expansion plans.
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