Latest news with #CharlesScharf
New York Times
9 hours ago
- Business
- New York Times
Fed Removes Shackle Imposed on Wells Fargo After Series of Scandals
In early 2018, the Federal Reserve hit Wells Fargo with an unprecedented penalty for a yearslong record of misconduct: an asset cap that prevented the bank from growing. On Tuesday, the Fed lifted that restriction. Wells Fargo has improved its internal governance and risk management enough to be released from its fetters, the regulator said. The end of the asset cap reflects the bank's 'focused management leadership, strong board oversight and strict supervision,' said Michael S. Barr, a Fed governor who recently ended his service as the board's vice chair for supervision. He said the three improvements 'will need to continue for the firm to have a sustainable approach.' Wells Fargo, based in San Francisco, hailed the end of a sanction that has shadowed the bank for more than seven years. Charles W. Scharf, the bank's chief executive, called it 'a pivotal milestone' in the company's transformation. 'We are a different and far stronger company today because of the work we've done,' he said. Wells Fargo said it would grant nearly all of its 215,000 full-time workers an award valued at $2,000. For most, the prize will come in the form of a restricted stock grant, which the company described as a way to give its workers 'an opportunity to own a part of Wells Fargo and hopefully benefit from our future success.' Mr. Scharf took on the top job at Wells Fargo in 2019, after the bank's series of scandals toppled two chief executives. In 2016, federal regulators and local officials in California revealed that the bank's employees had for years created bank accounts for unwitting customers, without their consent, to meet aggressive sales goals. That discovery was followed by others, including mistakes that led to improper home foreclosures and auto repossessions. The bank paid billions of dollars in fines and billions more in refunds to customers it had harmed. One former top executive — Carrie L. Tolstedt, who served for years as Wells Fargo's head of retail banking — faced criminal charges from the Justice Department. Through a plea deal, she avoided a prison sentence. The asset cap prevented Wells Fargo from keeping up with rivals. Over the course of the sanction, its ranking among the largest U.S. banks fell from third to fourth, with assets of around $1.9 billion. The bank will now be able to expand its lending, increase its deposits and potentially acquire other financial providers. Its stock price rose about 3.7 percent in after-hours trading after the Fed announcement. Wells Fargo was the first bank to face such a stiff penalty from federal bank regulators, but it's no longer the only one. Last year, the Office of the Comptroller of the Currency imposed an asset cap on TD Bank for violating anti-money-laundering laws. 'No one thought it would last this long,' Ian Katz, an analyst at Capital Alpha Partners, said of the Wells Fargo asset cap. Its removal 'signals both the bank's progress and the Fed's increasingly bank-friendly mood.'
Yahoo
10 hours ago
- Business
- Yahoo
Fed loosens the shackles on Wells Fargo nearly a decade after fake accounts scandal
The Federal Reserve is loosening a major restriction on Wells Fargo (WFC) that was put in place following a fake accounts scandal nearly a decade ago, as the fourth-largest US bank will no longer have to operate under a $1.95 trillion asset cap. The move was a victory for CEO Charles Scharf, who said when he took over the top job in 2019 that his "first priority" was to clean up the messes left by his predecessors. 'The Federal Reserve's decision to lift the asset cap marks a pivotal milestone in our journey to transform Wells Fargo," he said in a release. Wells Fargo's stock climbed as much as 4% in after hours trading. Its stock has climbed more than 50% during Scharf's tenure as CEO. The lifting of the cap will help Scharf go on the offensive as he tries to make Wells Fargo into a major investment banking player, edging deeper into a hyper-competitive business where it lags behind Wall Street giants like Goldman Sachs (GS), JPMorgan Chase (JPM), and Morgan Stanley (MS). The Fed imposed the broad restriction as part of a wider consent order in 2018, citing "widespread consumer abuses" at Wells Fargo after federal investigations revealed a wide ranging sales practice scandal in 2016. It couldn't go past the $1.95 trillion in assets it had at the end of 2017 unless regulators said so. "The removal of the growth restriction reflects the substantial progress the bank has made in addressing its deficiencies and that the bank has fulfilled the conditions required for removal of the growth restriction," the Federal Reserve said in a press release. The other provisions in the 2018 enforcement action still remain in place until the bank satisfies the requirements for their termination. Scharf has now ticked off 13 consent orders that regulators had in place when he became boss, seven of which have been lifted this year. "We are a different and far stronger company today because of the work we've done," he added in a release. "We are excited to continue to move forward with plans to further increase returns and growth in a deliberate manner supported by the processes and cultural changes we have made.' In more recent months Scharf and the rest of Wells Fargo's current management team have tried to play down any expectation for an immediate earnings boost once the asset cap is removed. "I would just caution that when it does happen, it's not this kind of light switch moment,' CFO Mike Santomassimo said while speaking at a UBS conference as far back as March 2024. Even with its biggest disciplinary penalty lifted, Wells Fargo still faces other disciplinary actions from regulators. Along with the remaining 2018 Fed consent order, Wells Fargo has a agreement with the OCC that states the bank violated part of the Gramm-Leach-Bliley Act. It also still has a formal agreement with the OCC from last year where its regulator identified "deficiencies" in the bank's anti-money-laundering controls. Fed governor Michael Barr, who recently departed as the Fed's top banking cop, made it clear in a statement that regulators will continue to keep a close eye on the bank. "Removal of the asset cap represents successful remediation to the required standard based on focused management leadership, strong board oversight, and strict supervision holding the firm accountable," he said. "All three will need to continue for the firm to have a sustainable approach." David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Wells Fargo Approaches End of Asset Cap as OCC Lifts 2015 Consent Order
A significant 2015 consent order was lifted by the U.S. Office of the Comptroller of the Currency (OCC), which moved Wells Fargo & Company (NYSE:WFC) closer to removing its $1.95 trillion asset cap. A team of bankers in suits, discussing the success of the company's banking products. Significant regulatory progress has been made under CEO Charles Scharf, as evidenced by the closing of the seventh regulatory enforcement order in 2025 and the thirteenth since 2019. The Federal Reserve's 2018 consent order, which is linked to changes in governance and controls, is the last obstacle. Wells Fargo & Company (NYSE:WFC) has experienced regulatory attention since its 2016 fake accounts scandal, which resulted in billions of dollars in fines and an unprecedented asset cap imposed by the Federal Reserve in 2018. This week witnessed the lifting of the OCC order about its former financial subsidiaries. Scharf, who took office in 2019, has implemented measures that experts such as Stephen Biggar of Argus and Chris Marinac of Janney Montgomery Scott believe are significant. After limitations are lifted, the bank plans to expand its market operations and wholesale deposit base. While we acknowledge the potential of WFC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WFC and that has 100x upside potential, check out our report about this READ NEXT: and . Disclosure. None.
Yahoo
5 days ago
- Business
- Yahoo
Wells Fargo Approaches End of Asset Cap as OCC Lifts 2015 Consent Order
A significant 2015 consent order was lifted by the U.S. Office of the Comptroller of the Currency (OCC), which moved Wells Fargo & Company (NYSE:WFC) closer to removing its $1.95 trillion asset cap. A team of bankers in suits, discussing the success of the company's banking products. Significant regulatory progress has been made under CEO Charles Scharf, as evidenced by the closing of the seventh regulatory enforcement order in 2025 and the thirteenth since 2019. The Federal Reserve's 2018 consent order, which is linked to changes in governance and controls, is the last obstacle. Wells Fargo & Company (NYSE:WFC) has experienced regulatory attention since its 2016 fake accounts scandal, which resulted in billions of dollars in fines and an unprecedented asset cap imposed by the Federal Reserve in 2018. This week witnessed the lifting of the OCC order about its former financial subsidiaries. Scharf, who took office in 2019, has implemented measures that experts such as Stephen Biggar of Argus and Chris Marinac of Janney Montgomery Scott believe are significant. After limitations are lifted, the bank plans to expand its market operations and wholesale deposit base. While we acknowledge the potential of WFC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WFC and that has 100x upside potential, check out our report about this READ NEXT: and . Disclosure. None.
CNBC
05-05-2025
- Business
- CNBC
Watch CNBC's full interview with Wells Fargo CEO Charlie Scharf
Wells Fargo CEO Charles Scharf sits down with David Faber at the 2025 Milken Institute Global Conference to discuss outlooks on trade, what he's seeing from clients, and more.
