Wells Fargo nears full regulatory relief as CFPB lifts consent order
Wells Fargo cleared its twelfth consent order since 2019 and moved closer to fixing longstanding regulatory issues that have kept the bank under an asset cap of $1.95 trillion.
The Consumer Financial Protection Bureau, the top U.S. consumer watchdog, has lifted a 2018 consent order related to the lender's compliance risk management, Wells Fargo said on Monday.
A similar consent order that the bank had entered into with the Office of the Comptroller of the Currency, another top regulator, was lifted in February.
'Today's termination, along with the recent closure of other consent orders, demonstrates that we have completed much of our common risk and control infrastructure work,' Wells CEO Charlie Scharf said.
The bank's shares rose nearly 1% to $70.29.
Consent orders are enforcement actions involving a fine or specific directive to address an issue.
Wells Fargo says tech banking team grew by 20% over past year
Wells Fargo's regulatory issues came under the spotlight after a fake accounts scandal that erupted in 2016, leading to intense scrutiny and billions in fines.
Since 2018, the bank has also operated under a U.S. Federal Reserve-imposed asset cap, one of the most severe penalties available to regulators, which bars it from growing its balance sheet beyond $1.95 trillion until its problems are fixed.
The asset cap could be lifted as soon as the second quarter, given the pace of progress this year and the U.S. administration's push for looser banking regulation, RBC Capital Markets analyst Gerard Cassidy said.
Efforts to regain compliance have sparked recent optimism among investors. The bank has resolved six consent orders this year, and two are pending.
'With both the OCC and the CFPB now apparently comfortable with Wells Fargo's compliance risk management, we view the forward progress as a good sign,' Piper Sandler analysts said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
a day ago
- Business Recorder
Dollar slips on Fed credibility concerns, euro close to 4-year high
SYDNEY: The dollar slipped to multi-year lows against the euro and Swiss franc on Thursday as concerns about the future independence of the U.S. Federal Reserve undermined faith in the soundness of the country's monetary policy. According to a Wall Street Journal report, U.S. President Donald Trump had toyed with the idea of selecting and announcing Federal Reserve Chair Jerome Powell's replacement by September or October, aiming to undermine his position. 'Markets are likely to bristle at any early move to name Powell's successor, particularly if the decision appears politically motivated,' said Kieran Williams, head of Asia FX at InTouch Capital Markets. 'The move would raise questions about the potential erosion of Fed independence and potentially weaken credibility,' he added. 'If this was the case it could recalibrate rate expectations, trigger reassessment of dollar positioning.' Trump on Wednesday called Powell 'terrible' for not lowering interest rates sharply, while the Fed Chair was telling the Senate that policy had to be cautious as the President's tariff plans were a risk to inflation. Markets have nudged up the chance of a rate cut at the Fed's next meeting in July to 25%, from just 12% a week ago, and are pricing in 64 basis points of cuts by year-end, up from around 46 basis points last Friday. 'While this stands to be the latest hammer blow to the dollar delivered by the hands of the White House, I do expect it to gain some support in the coming sessions from month-end and quarter-end rebalancing flows,' said Tony Sycamore, an analyst at IG. Dollar mixed as markets consolidate Not so exceptional For now, though, the dollar was under broad pressure as the euro gained 0.4% to $1.1710, its highest since September 2021. The break of resistance at $1.1692 was brief, however, and it was later back at $1.1680. Sterling rose 0.3% to $1.3723, its highest since January 2022, while the dollar was at its lowest in more than a decade on the Swiss franc at 0.80255. The franc also struck a record peak on the yen around 180.55 overnight. The dollar lost 0.4% on the yen to 144.57, while the dollar index sank to its lowest since early 2022 at 97.265. Trump's chaotic tariff policies are also coming back into focus as the clock ticks down to his July 9 deadline for trade deals. JPMorgan on Wednesday warned the hit from tariffs would slow U.S. economic growth and lift inflation, resulting in a 40% chance of a recession. 'The risk of additional negative shocks is elevated, and we expect U.S. tariff rates to move higher,' JPMorgan analysts said in their report. 'The upshot of these developments is that our baseline scenario incorporates the end of a phase of U.S. exceptionalism.' The ending of 'exceptionalism' has been a major theme in the dollar's decline in recent months, as investors question its dominant reserve currency status and as the main safe haven among currencies. The euro has been a big beneficiary, with investors also hoping that massive new investment in European defence and infrastructure will bolster economic growth across the continent.
Business Recorder
2 days ago
- Business Recorder
Indian rupee to hold above 86 as safe haven premium in dollar erodes
MUMBAI: The Indian rupee is expected to open higher on Wednesday, sustaining its rally past the 86 level, supported by a fall in demand for the safe-haven dollar and upbeat risk appetite following the Israel-Iran ceasefire. The 1-month non-deliverable forward indicated an open in the 85.92-85.96 range, versus 85.9750 in the previous session. The rupee rallied 0.9% on Tuesday, logging its best single-day performance in a month. Brent crude declined 13.2% over the last two days following the ceasefire, and the dollar index had declined by 0.9%. Investors pared long dollar positions, unwinding bets built up during the 12-day conflict between the two countries. 'The market is unwinding risk-off trades now that it looks like the conflict won't escalate further,' said a currency trader at a Mumbai-based bank. 'We're seeing better offers (on USD/INR) and light exporter selling. Speculators have been taking to (USD/INR) shorts.' Indian rupee set to rally as crude dives on Israel-Iran de-escalation With the Middle East risk premium deflating, attention has shifted back to the weakening U.S. exceptionalism narrative — a key driver behind the dollar index's nearly 10% slide so far this year. Analysts say the dollar's trajectory from here will hinge on how U.S. tariff negotiations unfold and whether Washington can strike trade deals with key partners. Another major driver will be how the U.S. economy holds up amid policy uncertainty and the timing and scale of U.S. Federal Reserve rate cuts. Fed Chair Jerome Powell stuck to his cautious approach and reiterated that the central bank was in no rush to cut rates at his semi-annual testimony to Congress on Tuesday. Markets continue to price a low probability of rate cut next month. 'Overall, Chair Powell continued to stress the high level of uncertainty and need for additional data.. the testimony did little to change the overall policy trajectory,' Morgan Stanley said in a note.
Business Recorder
3 days ago
- Business Recorder
Gold falls 2% as Iran-Israel ceasefire weighs on safe-haven appeal
Gold fell 2% to hit an over two-week low on Tuesday as the announcement of a ceasefire between Iran and Israel dented safe-haven demand for bullion. Spot gold fell 1.9% to $3,303.93 an ounce, as of 1006 a.m. EDT (1406 GMT), after hitting its lowest level since June 11 earlier in the session. U.S. gold futures slipped 2.2% to $3,318.90. 'The de-escalation of tensions in the Middle East is the primary factor that's weighing on gold. The safe-haven bid has diminished and the market is in more of a risk-on mode,' said Peter Grant, vice president and senior metals strategist at Zanier Metals. 'We've got pretty good support around $3,300 and then even better support probably at $3,250.' Gold at near 2-week low after Trump announces Israel-Iran ceasefire Global shares surged and the dollar dropped on Tuesday after news of the ceasefire between Israel and Iran, while markets shrugged off what U.S. President Donald Trump called violations by both sides. Israeli Defence Minister Israel Katz had said earlier in the day that he had ordered the military to mount new strikes on targets in Tehran, in response to what he said were Iranian missiles fired in a 'blatant violation' of the ceasefire. 'There's some questions about whether this ceasefire is going to hold … until it really gets sorted out, I think the downside (for gold) is probably pretty limited,' Grant added. Meanwhile, U.S. Federal Reserve Chair Jerome Powell said in testimony prepared for delivery at a congressional hearing on Tuesday that the central bank needs more time to see if rising tariffs drive inflation higher, before considering interest rate cuts. Markets are anticipating 50 basis point rate cuts by year-end, starting in October with 25 basis points reduction. Gold thrives in a low-rate environment as it is a zero-yielding asset. Spot silver fell 2% to $35.41 per ounce, platinum shed 0.7% to $1,286.27, and palladium dropped 1.1% to $1,064.80.
