Fed terminates two 2011 enforcement actions in opposition to Wells Fargo

By Pete Schroeder and Nupur Anand

WASHINGTON (Reuters) – The Federal Reserve introduced on Tuesday it had terminated a pair of enforcement actions imposed on Wells Fargo in 2011, however mentioned the financial institution’s asset cap remained in place.

The enforcement actions had been associated to poor practices in mortgage servicing and foreclosures by the financial institution, and mortgage lending at a former subsidiary. The Fed mentioned the asset cap it imposed shouldn’t be affected by the transfer.

Wells Fargo CEO Charles Scharf mentioned in a press release that the Fed’s strikes present “clear, significant progress.”

“Wells Fargo is a distinct firm right now, and the decision of those two longstanding Federal Reserve consent orders is one other indication that our staff is establishing the correct processes and controls to fulfill our regulators’ and our personal expectations,” he added.

The U.S. central financial institution’s announcement marks the most recent development by Wells Fargo to get out from below quite a few regulatory restrictions following its wide-ranging gross sales practices scandal. These points and others on the financial institution compelled the Fed to impose an unprecedented $1.95 trillion asset cap on the lender in 2018, barring its progress till its points had been addressed.

Reuters reported in November that the financial institution was within the final phases of the method to raise the cap, which could possibly be eliminated as early as the primary half of 2025.

Wells Fargo has seen quite a few regulators transfer to raise enforcement actions in current months. Final month, the Client Monetary Safety Bureau closed a 2022 order in opposition to the financial institution over its alleged mishandling of auto loans and mortgages.

(Reporting by Pete Schroeder; Modifying by Paul Simao)