Feds take new action on final Wells Fargo oversight order in fake accounts scandal
The final federal consent order tied to Wells Fargo’s fake sales scandal was terminated Thursday after eight years in place.
The Federal Reserve Board of Governors’ order that ended Thursday was tied to its 2018 enforcement action against Wells Fargo, the board said.
Over a 14-year period from 2012 to 2016, hundreds of thousands of Wells Fargo’s Community Bank employees opened millions of unauthorized or fraudulent accounts and other financial products to meet excessive sales goals. Community Bank was Wells Fargo’s largest business line of retail branches.
The enforcement action required the bank to demonstrate improvements to its governance and risk management program were effective, and complete two third-party reviews of these improvements, according to the Fed.
The original enforcement action also included a $1.95 trillion asset cap on the bank, the Fed’s harshest punishment that kept Wells Fargo from growing. Last June, federal regulators lifted the cap.
Wells Fargo confirmed Thursday that this was the final public consent order that had remained, and declined further comment.
About Wells Fargo and other sanctions
Wells Fargo’s regulatory sanctions began after the fake accounts scandal was discovered. But regulators identified additional problems with how the bank handled mortgages, auto loans and consumer deposit accounts.
In 2020, the bank agreed to pay a $3 billion fine to federal prosecutors and the SEC over its practices.
Last year, the Office of the Comptroller of the Currency ordered three former Wells Fargo executives to pay $18.5 million for their role in the bank’s widespread fake sales accounts scandal. Eight others previously settled resulting in over $43 million in civil penalties, including former CEO John Stumpf, who was ordered to pay $17.5 million.
Along with the asset cap, Wells Fargo had closed 14 consent orders imposed by regulators since 2019, including eight last year alone.
Charlotte is home to the San Francisco-based bank’s largest employment center, with about 27,000 employees here.
