Wells Fargo escapes Fed's asset cap after seven years

In early 2018, the Federal Reserve hit Wells Fargo with an unprecedented penalty for a years-long record of misconduct: an asset cap that prevented the bank from growing.

- STACY COWLEY

On Tuesday, the Fed lifted that restriction. Wells Fargo has improved its internal governance and risk management enough to be released from its fetters, the regulator said.

The end of the asset cap reflects the bank's “focused management leadership, strong board oversight and strict supervision,” said Michael S. Barr, a Fed governor who recently ended his service as the board’s vice chair for supervision. He said the three improvements “will need to continue for the firm to have a sustainable approach.”

Wells Fargo, based in San Francisco, hailed the end of a sanction that has shadowed the bank for more than seven years. Charles W. Scharf, the bank’s CEO, called it “a pivotal milestone” in the company’s transformation.

“We are a different and far stronger company today because of the work we've done,” he said.