Wells Fargo confirmed that the Office of the Comptroller of the Currency (OCC) had terminated its 2015 consent order relating to add-on products that the company sold to retail banking customers before 2015.
It marks the third consent order termination or expiration by Wells Fargo’s federal banking regulators since January 2021.
According to credit rating agency Moody’s, the consent order termination is a ‘credit positive’ for Wells Fargo but it must work to meet regulatory expectations.
The agency’s news and analysis report said: “Multiple outstanding regulatory consent orders highlight that Wells Fargo has to continue remedial work on its risk and control infrastructure to meet regulatory expectations, given its size and complexity.”
Other consent orders include a Consumer Financial Protection Bureau (CFPB) consent order issued in 2016 regarding the bank’s retail sales practices which expired in September 2021.
Last January, the OCC also terminated a 2015 consent order related to the company’s Bank Secrecy Act/Anti-Money Laundering compliance program.
The most prominent of these is the Federal Reserve’s February 2018 broad consent order which includes an asset cap, preventing the bank from growing which Moody’s said could continue to at least early 2023.
Although, Wells Fargo’s current leadership has sharpened the bank’s focus on its regulatory appointments, particularly after the appointment of CEO Charlie Scharf in 2019, noted the report.
“In short, resolving Wells Fargo’s legacy governance, oversight, compliance and operational risk management deficiencies remains a significant undertaking.”
A Well Fargo’s statement published last week said that bank’s top priority is to build a risk and control infrastructure appropriate for its size and complexity.
Moody’s said the work has been costly and weighed heavily on Well Fargo’s expense base in recent years, however terminating the order indicates the bank has now built the proper infrastructure, resulting in risk management policies and procedures would prevent a recurrence.
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