Wells Fargo won’t be allowed to grow until it hardens its risk management policies to make sure there are no more abuses of customers, according to a report by Reuters.
Jerome Powell, chairman of the Federal Reserve, wrote a letter to U.S. Senator Elizabeth Warren on Nov. 28 and outlined his views and decisions on the bank.
“We do not intend to lift the asset cap until remedies to these issues have been adopted and implemented to our satisfaction,” Powell wrote.
Wells Fargo was ordered to freeze assets in February and keep them below $1.95 trillion, until it put new limits on the powers of senior managers. It was also ordered to broaden the board’s power when looking for abuses.
So far, the bank has not satisfied those needs, and it’s months behind schedule on a reform plan. Previously, Wells Fargo said it expects the assets cap lifted by the first half of 2019.
Senator Warren is one of Wells Fargo’s loudest critics. She has repeatedly spoken out against the bank and its Chief Executive Tim Sloan. She wrote a letter to the regulator in October asking for the Fed not to get rid of the cap until Sloan was removed, saying he was heavily involved in the bank’s past misdeeds. For its part, Wells Fargo responded that Sloan was an asset and had the board’s full support.
On Monday, Warren reiterated her position and said Sloan has to go.
“Wells Fargo is already months behind,” Warren said in a statement. “If the Fed is serious about changing the practices at Wells Fargo that have cost customers their homes or cars or credit scores, it must insist on new leadership at the bank.”
Powell wrote that once Wells Fargo satisfies the terms of the settlement the Fed board will decide the next step for the bank.
“The decision about terminating the asset growth restriction imposed on Wells Fargo will be made by a vote of the Board,” Powell wrote.