After years of scandals, the Biden Administration is lowering its limitations on Wells Fargo, a financial behemoth, claiming the bank has sufficiently addressed its poisonous culture.
Market Optimism Boosts Wells Fargo Stock
The news had the effect of lifting Wells Fargo’s stock considerably in afternoon trading as investors pondered that the bank, often choking on the restraints imposed by regulators, might finally be allowed to start growing again, as reported by The Associated Press.
The OCC, the regulatory body for big national banks including Wells Fargo, ended the consent order on Thursday that had been issued in September 2016. Upon issue, the order directed Wells to undertake refinements in the way its financial products were sold to clients and provide consumer protections, including those for whistleblowers
OCC Emphasizes Financial Health
The OCC made a brief declaration on Thursday, stating that the “safety and soundness” and “compliance with the law and regulations” of Wells Fargo do not depend on the “continued existence of the Order.”
Federal Reserve’s Role in Decision Pending
What still remains is the Federal Reserve’s own consent order against Wells, as well as the Fed’s stipulation that Wells cannot expand beyond the current size, known as an asset cap, until it fixed its sales culture. There was no immediate comment from the Fed, but the OCC is expected to eventually drive the Fed to make a decision on whether the restrictions on Wells are suitable, as reported by The Associated Press.