Wells Fargo Progresses Towards Resolving Regulatory Issues, Expects Asset Cap Removal in 2025
Wells Fargo's Chief Financial Officer, Mike Santomassimo, disclosed that the bank has five remaining consent orders to address lending and sales practice concerns. However, recent terminations of three regulatory punishments demonstrate significant progress.
"We're confident in our ability to resolve these orders with urgency," stated Santomassimo at the UBS financial services conference in Miami.
Earlier this month, the Federal Reserve lifted a pair of enforcement actions imposed in 2011 regarding mortgage servicing, foreclosures, and lending practices. The Consumer Financial Protection Bureau also closed an order related to auto loan and mortgage mishandling in January 2023.
Wells Fargo had been subject to an unprecedented $1.95 trillion asset cap by the Fed in 2018, limiting its growth until the issues were resolved. However, analysts believe the recent developments indicate the bank is on track to have the cap lifted in 2025.
Santomassimo expressed optimism about the "pro-growth" stance of the Trump administration, mirroring sentiments expressed by other bank executives like Goldman Sachs CEO David Solomon. He anticipates changes in the Federal Reserve's stress testing requirements and a more cooperative implementation of Basel III Endgame under the new administration.
"The industry seeks certainty through the finalization of Basel III, setting a framework for balance sheet management," concluded Santomassimo.