Wells Fargo (WFC) Soars 3.44% as Fed Lifts Asset Cap

On June 4, 2025, Wells Fargo's stock surged by 3.44% in pre-market trading, marking a significant rise in its share price.

Wells Fargo has finally been freed from the asset cap imposed by the Federal Reserve, which had restricted its asset growth for over seven years. This decision comes after the Federal Reserve completed a thorough review of the bank's remedial actions, third-party assessments, and its governance and risk management plans. The removal of this cap is a major milestone for Wells Fargo, allowing it to resume its growth trajectory after years of regulatory constraints.

Charlie Scharf, the CEO of Wells Fargo, hailed the decision as a key milestone in the bank's transformation journey. He expressed his satisfaction with the progress made and the bank's commitment to further enhancing returns and growth through implemented processes and cultural changes. In celebration of this achievement, Wells Fargo announced a $2,000 reward for all full-time employees, primarily in the form of restricted stock.

This development is a significant turning point for Wells Fargo, which has been grappling with a series of scandals over the past decade. The asset cap was imposed in 2018 following revelations of widespread misconduct, including the creation of millions of fake accounts by employees to meet sales targets. The cap had a profound impact on the bank's operations and financial performance, estimated to have cost it around $390 billion in lost profits.

With the asset cap lifted, Wells Fargo is now poised to regain its competitive edge and pursue new growth opportunities. The bank's management has been working diligently to address regulatory concerns and implement robust governance and risk management practices. The Federal Reserve's decision reflects its confidence in Wells Fargo's progress and its readiness to operate without the previous restrictions.