Wells Fargo & Co. has narrowed by two the number of outstanding consent orders with the Federal Reserve Board, but the $1.9 trillion total asset cap established in February 2018 remains rigidly in place.
The Fed board said in a two-paragraph news release it had terminated two enforcement actions issued in 2011 -- five years before the fraudulent customer account scandal erupted in September 2016.
The Fed prohibits Wells Fargo from increasing its total assets beyond what it had on Dec. 31, 2017. For banks, loans are considered assets.
The first enforcement action concerns "deficient practices in residential mortgage loan servicing and foreclosure processing."
The second enforcement action concerns "deficient mortgage lending practices at a former subsidiary (Wells Fargo Financial)."
The bank was fined $85 million, along with providing customer restitution ranging from $1,000 to $20,000. The Fed estimated the range of affected borrowers was between 3,700 and 10,000.
"The termination of these enforcement actions does not affect the board's 2018 enforcement action, which addressed widespread compliance issues by restricting Wells Fargo's growth, and remains effective," the Fed said.
On Jan. 28, the Consumer Financial Protection Bureau terminated its 2022 consent order related to automobile lending, consumer deposit accounts, and mortgage lending products and services.
Counting the Fed board's actions Tuesday, there have been nine consent order closed by Wells Fargo's regulators since 2019.
However, according to banking analysts, there are at least five more regulatory consent orders remaining.
Wells Fargo chief executive Charles Scharf said in a statement the Fed's decision to "terminate two longstanding consent orders ... is another important sign that we continue to make clear, meaningful progress to resolve our historical matters."
"Wells Fargo is a different company today, and the resolution of these two longstanding Federal Reserve consent orders is another indication that our team is establishing the right processes and controls to meet our regulators' and our own expectations.
"We remain confident in our ability to complete the work required in our remaining consent orders."
In December 2022, the CFPB ordered Wells Fargo to pay $1.7 billion in fines and more than $2 billion in redress and compensation to customers.
The redress was broken down into three categories:
More than $1.3 billion in consumer redress for affected auto lending accounts;More than $500 million in consumer redress for affected deposit accounts, including $205 million for illegal surprise overdraft fees; andNearly $200 million in consumer redress for affected mortgage servicing accounts.
The bank said in December 2022 it had "reached a broad-reaching settlement" with the CFPB resolving multiple matters, the majority of which have been outstanding for several years, related to automobile lending, consumer deposit accounts and mortgage lending."
"The required actions related to many of the matters described in the settlement are already substantially complete."
Fed Chairman Jerome Powell said in 2021 the asset cap would remain until the Fed is confident that Wells Fargo has resolved a series of internal governance and risk-control issues.
In April 2023, Scharf told analysts it could be several more years before the bank resolves enough legal and regulatory issues to be allowed by the Fed to grow its total assets.
According to multiple media reports on Sept. 27, Wells Fargo sent a third-party review of its risk and control operation to the Federal Reserve in hopes of speeding along removal of its asset cap.
Total penalties from a series of regulatory and other federal fines add up to at least $11.14 billion.
"In the CFPB's 11 years of existence, Wells Fargo has consistently been one of the most problematic repeat offenders of the banks and credit unions we supervise," former CFPB director Rohit Chopra said in a statement.
"The list could go on and on, from defrauding the government to labor abuses and more. The Department of Justice, state attorneys general and other federal regulators have obtained billions more in forfeitures, including civil and criminal fines."
Chopra said because of Wells Fargo's national reach, "put simply, Wells Fargo is a corporate recidivist that puts one-third of American households at risk of harm."
"Finding a permanent resolution to this bank's pattern of unlawful behavior is a top priority," Chopra said.
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