Wells Fargo's (WFC.US) asset cap is expected to be lifted next year.
1min read Wells Fargo's (WFC.US) asset cap requirement may be lifted in 2025, according to reports, which boosted the stock nearly 3% before the US market opened on Tuesday.
The bank is in the final stages of regulatory testing to lift the $1.95 trillion asset cap, as early as the first half of 2025, according to people familiar with the matter.
The Federal Reserve imposed the asset limits on the bank in 2018 as punishment for the bank's 2016 revelation that it had opened millions of unauthorized accounts to meet sales quotas.
The bank was also fined billions of dollars and ordered to strengthen governance and risk management controls for the scandal and other violations of consumer rights.
Wells Fargo, the Federal Reserve and the San Francisco Fed declined to comment.
Charlie Scharf was appointed CEO of Wells Fargo in 2019 with the mandate to satisfy regulators and terminate the bank's consent order.
The Office of the Comptroller of the Currency terminated its consent order related to the 2016 fake account scandal in February. The order required the bank to overhaul the way it provides and sells products and services to consumers and take additional steps to protect its customers and employees.
In September, it was reported that Wells Fargo had submitted a risk and control review to the Federal Reserve, a key step toward lifting the asset cap. However, earlier in the month, the OCC took enforcement action against the bank for deficiencies in its financial crime risk management practices and internal controls for anti-money laundering.
Senator Elizabeth Warren also sent a letter to Federal Reserve Chairman Jerome Powell and Vice Chairman for Supervision Randal Quarles on Monday, saying that the bank's asset cap should not be lifted until it addresses its risk management and compliance issues.