Wells Fargo resolves 12th consent decree, leaving 2 outstanding
Wells Fargo Sees Lifting of Asset Cap and Pursues Growth Initiatives
After a significant milestone, the Federal Reserve has lifted the $1.95 trillion asset cap on Wells Fargo, which had been in place since 2018 due to the bank’s risk management and governance failures. This move, announced in June 2025, marks a turning point for the bank, enabling it to expand its balance sheet and operations [2][3][5].
However, it is important to note that other provisions of the 2018 enforcement action remain in effect, meaning that some regulatory restrictions and oversight still continue. The Consumer Financial Protection Bureau’s (CFPB) 2018 consent order, which was not terminated in a way that affects the Fed’s asset cap, remains active following a court ruling [2].
With the lifting of the asset cap, Wells Fargo’s management is now focusing on growth strategies. The bank aims to expand retail and commercial deposits and government banking relationships that had been previously constrained by regulatory limits [3][5]. This removal of the cap is seen as a key turning point away from a primarily regulatory remediation phase towards bank growth and performance expansion.
Meanwhile, the Office of the Comptroller of the Currency (OCC) has settled with two former Wells Fargo auditors, David Julian and Paul McLinko, on Friday. Both were issued civil penalties and personal cease-and-desist orders. The OCC asserted that Julian failed to plan and manage audit activity that would detect and document sales practices misconduct. A similar order was terminated by the OCC in February, and the OCC initially fined Julian $7 million in January for similar reasons [4].
The OCC also handed McLinko a $1.5 million fine in January, citing his failure "to maintain professional independence from the Community Bank." This settlement resolves a 2020 investigation by the OCC that was initiated due to the lender's nearly decade-old sales practice misconduct. This settlement is separate from the ongoing consent orders against Wells Fargo, including the one regarding the bank's compliance risk management program [1].
The Federal Reserve's 2018 cease and desist order, which has the asset cap linked to it, is the biggest consent order investors are expecting to be lifted. Analysts believe the Federal Reserve's 2018 order could be lifted in the 2Q25 and possibly real soon [6]. The terminated order concerns the bank's compliance risk management program.
The lifting of the asset cap and the progress made on governance and risk management have been significant steps for Wells Fargo. As the bank moves forward, it is poised to capitalize on its regained ability to grow assets without the former cap, focusing on growth initiatives and expanding its operations.
References:
- Wells Fargo settles with former auditors over sales practices
- Wells Fargo's asset cap lifted by Federal Reserve
- Wells Fargo's asset cap to be lifted, signaling end of regulatory era
- Wells Fargo's former chief auditor fined $7 million by OCC over sales practices
- Wells Fargo's asset cap to be lifted, ending a decade of regulatory oversight
- Wells Fargo's asset cap to be lifted, ending a decade of regulatory oversight
- The lifting of the asset cap by the Federal Reserve allows Wells Fargo to pursue expansion strategies in various areas of the banking-and-insurance industry, such as retail and commercial deposits, and government banking relationships.
- The improvement in Wells Fargo's risk management and governance, as well as the removal of the asset cap, have drawn the attention of investors and financial analysts, who predict growth and development in the bank's business and finance sectors.
