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The US central bank has removed a long-standing barrier to Wells Fargo’s growth ambitions by scrapping an asset cap imposed on the lender following its “fake accounts” scandal.
Wells had met all the conditions required by the Federal Reserve’s 2018 enforcement action for the removal of the asset cap, which for several years crimped the group’s ability to extend loans and weighed on its share price.
The Fed in 2018 restricted Wells from growing its total assets beyond $2tn after it emerged two years earlier that it had fraudulently opened millions of customer accounts. The US lender has paid billions in civil and criminal penalties since then.
The decision to remove the growth restriction “reflects the substantial progress the bank has made in addressing its deficiencies”, the Fed said in a statement on Tuesday.
This is a developing story
