Wells Fargo Chairman and CEO Charlie Scharf attends The Future of Everything presented by The Wall Street Journal at Spring Studios in New York City on May 17, 2022.
Steven Ferdman | Getty Images Entertainment | fake images
Wells Fargo said Thursday that one of its top regulators has lifted a key penalty linked to its 2016 fake accounts scandal.
The bank said in a statement that the Office of the Comptroller of the Currency ended a consent order requiring it to revamp the way it sells its retail products and services.
The bank's shares rose more than 6% on the news.
Wells Fargo, one of the nation's largest retail banks, has withdrawn six consent orders since 2019, the year CEO Charlie Scharf took over. Eight more remain, notably one from the Federal Reserve that limits the size of the bank's assets, according to a person with knowledge of the matter.
In a memo sent to employees, Scharf called the development a “milestone” for the lender. The 2016 fake accounts scandal, in which the bank admitted to placing customers in more than 3 million unauthorized accounts, unleashed a wave of scrutiny that revealed problems related to servicing mortgages, auto loans and other consumer accounts. .
The attention tarnished the bank's reputation and forced the retirement of both former CEO John Stumpf in 2016 and successor Tim Sloan in 2019.
“The OCC's action is confirmation that we have effectively implemented new systems, processes and controls to serve our customers differently today than we did a decade ago,” Scharf said. “It is our responsibility to ensure that we continue to operate with these disciplines.”
The termination of the OCC order “paves the way” for the Fed's asset cap to finally be lifted, RBC analyst Gerard Cassidy said in a research note on Thursday.
-CNBC Leslie Picker contributed to this report.
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