Wells Fargo asset cap axed by Fed after ‘substantial progress' from fake accounts scandal

Core Viewpoint - The Federal Reserve has removed a nearly $2 trillion asset cap on Wells Fargo, marking a significant regulatory relief for the bank and allowing it to pursue growth opportunities [1][3]. Group 1: Regulatory Changes - The asset cap of $1.95 trillion was imposed in 2018 due to a sales practices scandal, and its removal reflects the substantial progress made by Wells Fargo in addressing its deficiencies [3][7]. - The decision is seen as a major victory for CEO Charlie Scharf, who was brought in to lead the bank's recovery efforts after the scandal resulted in billions of dollars in fines [3][4]. Group 2: Market Reaction - Following the announcement, Wells Fargo's stock rose over 2% in after-hours trading, with shares closing at $75.65, up from $59.34 a year ago [4]. Group 3: Leadership and Oversight - The Fed emphasized that the removal of the asset cap is a result of focused management leadership, strong board oversight, and strict supervision, which will need to continue for sustainable growth [6]. - Some elements of the enforcement order from the Yellen era will remain, indicating that the bank will still face increased regulatory scrutiny [5].