NEW YORK, NEW YORK – MAY 17: President and CEO of Wells Fargo Charlie Scharf attends The Way forward for The whole lot introduced by the Wall Road Journal at Spring Studios on Could 17, 2022 in New York Metropolis. (Photograph by Steven Ferdman/Getty Photos)
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Wells Fargo mentioned Thursday one in every of its main regulators has lifted a key penalty tied to its 2016 pretend accounts scandal.
The financial institution mentioned in a launch that the Workplace of the Comptroller of the Foreign money terminated a consent order that pressured it to revamp the way it sells its retail services.
Shares of the financial institution jumped greater than 6% on the information.
Wells Fargo, one of many nation’s largest retail banks, has retired six consent orders since 2019, the yr that CEO Charlie Scharf took over. Eight extra stay, most notably one from the Federal Reserve that caps the financial institution’s asset dimension, in line with an individual with information of the matter.
In a memo despatched to staff, Scharf known as the event a “milestone” for the lender. The 2016 pretend accounts scandal — through which the financial institution admitted to placing clients into greater than 3 million unauthorized accounts — unleashed a wave of scrutiny that exposed issues associated to the servicing of mortgages, auto loans and different shopper accounts.
The eye tarnished the financial institution’s popularity and compelled the retirement of each ex-CEO John Stumpf in 2016 and successor Tim Sloan in 2019.
“The OCC’s motion is affirmation that we’ve got successfully put in place new programs, processes, and controls to serve our clients in a different way at present than we did a decade in the past,” Scharf mentioned. “It’s our accountability to make sure we proceed to function with these disciplines.”
The termination of the OCC order “paves the best way” for the Fed asset cap to finally be eliminated, RBC analyst Gerard Cassidy mentioned Thursday in a analysis observe.
— CNBC’s Leslie Picker contributed to this report.
