In February 2018, the Federal Reserve imposed a cap on Wells Fargo, preventing the scandal-ridden bank from exceeding its 2017 total asset size ($ 1.9 trillion). The restriction was imposed due to the bank’s systemic failures to end a host of consumer abuse and compliance failures across its banking, credit and auto insurance divisions, which included the opening of millions fake accounts on behalf of clients and overcharging clients in its mortgages and auto loans. loan companies.
Powell made the comment days after Senator Elizabeth Warren (D-Mass.) Urged the Fed to dismantle Wells Fargo, arguing that “every new report of scandal and non-compliance going on” proves the bank is ” ungovernable ”. A $ 250 million fine on Wells Fargo by the Office of the Comptroller of the Currency earlier this month for continued risk management failures served as a catalyst for Warren’s advocacy.
“We are watching Wells Fargo’s efforts to address its widespread and pervasive problems very closely,” Powell said Wednesday. “They are serious business for us, and the cabinet has an obligation to fix them. We will take appropriate monitoring action if the business does not meet our expectations. “
Powell continued, “We continue to hold the company accountable for its shortcomings with an unprecedented asset cap that will remain in place until the company has addressed its issues comprehensively. We are not going to remove this asset cap until it is done. “