Report: Wells Fargo Submits Third-Party Review to Federal Reserve
Wells Fargo reportedly submitted a third-party review of its risk and control overhauls to the Federal Reserve, seeking to end the Fed’s cap on its assets.
The cap, which limits the bank to its size at the end of 2017, was imposed by the Fed as punishment for consumer abuses and compliance lapses at Wells Fargo at the time, Bloomberg reported Thursday (Sept. 26).
The submission of the third-party review marks a new phase in the bank’s efforts to have the cap removed, the report said, citing unnamed sources.
Reached by PYMNTS, Wells Fargo declined to comment on the report.
In the time since the imposition of the cap, the bank had to submit a plan, get it accepted after several tries, enact it and hire an outside auditor to review its implementation, according to the report.
Wells Fargo executives expect the cap to remain in place at least into next year as the Fed considers the submitted review, the report said, citing unnamed sources.
It was reported in May that Wells Fargo CEO Charlie Sharf told investors that the bank could be doing more corporate lending and trading if regulators lifted the asset cap.
Scharf said at the time that Wells Fargo was fixing its problems but that the regulators would decide when to lift the asset cap, according to the May report.
During an earnings call in July, Scharf said: “Our commitment and the progress we are making to build an appropriate operational and compliance risk management framework is foundational.”
In a separate matter with federal regulators, Wells Fargo and the Office of the Comptroller of the Currency (OCC) signed a formal agreement announced Sept. 12 in which the bank will rectify deficiencies in its anti-money laundering (AML) and financial crimes risk management practices.
The agreement outlined a detailed plan for the bank to address and correct these shortcomings.
Wells Fargo said in a statement issued at the time: “We have been working to address a substantial portion of what’s required in the formal agreement, and we are committed to completing the work with the same sense of urgency as our other regulatory commitments.”
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