The Federal Reserve Board has ended its enforcement action against Wells Fargo after the bank met all the conditions required of it.
The Fed said the bank was required under the enforcement action to demonstrate that improvements to its governance and risk management program had made the program effective, and to have completed two third-party reviews of these improvements.
“This remediation work spanned nearly a decade. The original enforcement action also imposed an asset cap which was removed in 2025 when the firm satisfied the conditions for removal,” the central bank said.
Wells Fargo acknowledged but did not comment on the Fed statement.
The asset cap, which represented the first time the Fed had imposed such a penalty, limited the bank’s growth for seven years.
Piper Sandler bank analyst Scott Siefers said the market had largely moved on from these regulatory issues given the cap was lifted last year.
"But the termination still represents an important psychological victory in that it was this order that first installed the asset cap. Thus, even if the stock doesn’t react, this is great to have in the rear view," Siefers wrote in a note quoted by Reuters.
The scandal that came to light in 2016 arose when employees opened millions of unauthorised customer accounts to meet aggressive sales targets which Fed regulators said revealed serious failures in governance and risk management across the bank.
Customers were sometimes charged fees or had their credit affected.
Wells Fargo (NYSE: WFC) closed US$1.81 (2.16%) lower at $82.11 on Thursday (Friday AEDT), capitalising the company at $253.36 billion ($362.85 billion).
