NEW YORK, NY – MAY 17: Wells Fargo President and CEO Charlie Scharf speaks at an interview hosted by The Wall Street Journal at Spring Studios on May 17, 2022 in New York City. Attend “The Future of Everything”. (Photo by Steven Feldman/Getty Images)
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wells fargo On Thursday, one of the major regulators announced it had lifted significant fines related to the 2016 fake account scandal.
The bank said in a release that the Office of the Comptroller of the Currency has lifted a consent order forcing it to review how it sells retail goods and services.
The bank’s stock price rose more than 6% on the news.
Wells Fargo, one of the nation’s largest retail banks, has withdrawn six consent orders since CEO Charlie Scharf took over in 2019. Eight more remain, the most notable being the Federal Reserve, which limits the size of the bank’s assets, the people said.
In a memo sent to employees, Schaaf called the development a “milestone” for the financial institution. The 2016 fake account scandal (in which the bank admitted to placing customers in more than 3 million fraudulent accounts) led to a wave of increased scrutiny related to repayments on mortgages, auto loans, and other consumer accounts. The problem was revealed.
The attention damaged the bank’s reputation and forced the departure of former CEO John Stumpf in 2016 and his successor Tim Sloan in 2019.
“OCC’s actions confirm that we have effectively implemented new systems, processes and controls to serve our customers differently than we did 10 years ago,” Scharf said. “It is our responsibility to continue to operate in accordance with these disciplines.”
RBC analyst Gerald Cassidy said in a research note Thursday that ending the OCC order “paves the way” for the Fed’s asset cap to eventually be lifted.
— CNBC leslie picker contributed to this report.
