Wells Fargo Moves Closer to Regulatory Compliance as Consent Order is Terminated
Seattle, WA — In a significant development for Wells Fargo, the U.S. Office of the Comptroller of the Currency (OCC) has terminated a consent order issued in 2021 concerning deficiencies in the bank’s home lending loss mitigation practices. This decision, announced on March 17, 2025, marks another step in Wells Fargo’s extended journey to resolve regulatory challenges that have persisted for nearly a decade.
Closure of Fifth Consent Order
The termination of the 2021 consent order is the fifth such closure since the beginning of 2025, as noted by Wells Fargo’s CEO, Charlie Scharf. "This is another sign that we continue to address the issues we’ve faced, ensuring that our practices meet regulatory expectations," Scharf stated. The OCC had previously levied a $250 million fine against the bank related to its home lending loss mitigation program, stemming from its failure to meet the requirements outlined in a 2018 consent order.
Background of Compliance Issues
Wells Fargo’s struggles with compliance have been under scrutiny since a significant fake accounts scandal emerged in 2016. The issues related to compliance have since become a top priority for the bank, especially under Scharf’s leadership, which began in 2019. During his tenure, the bank has successfully addressed and closed a total of 11 consent orders, although there are still three remaining orders and a $1.95 trillion asset cap imposed by the Federal Reserve.
Recent Regulatory Developments
The OCC’s latest decision adds to a series of recent regulatory actions favorable to Wells Fargo. In January 2025, the Consumer Financial Protection Bureau closed a 2022 order linked to alleged mishandling of auto loans and mortgages. Following this, in February, the Federal Reserve lifted two regulatory penalties imposed on Wells Fargo back in 2011. Last month, the OCC also terminated a 2018 order concerning the bank’s compliance risk management program.
Investor Sentiment and Future Outlook
The closing of these consent orders is seen positively by analysts. Piper Sandler analysts noted that this latest action signals Wells Fargo’s transition from a defensive posture to a more proactive stance. Their assessment suggests that the bank’s progress may reassure investors regarding the potential lifting of the asset cap sooner rather than later.
Scharf remains optimistic about meeting the requirements of the remaining consent orders, reiterating the bank’s commitment to compliance and reform. "We remain confident that we will complete the work required in our remaining consent orders," he said.
As Wells Fargo continues to navigate its regulatory landscape, the recent developments suggest a path toward restoration and stability, marking a potential turnaround for the banking giant that has faced extensive scrutiny in recent years.
This progression is set amidst a backdrop of increased scrutiny and regulatory oversight of banking practices across the United States, emphasizing the importance of compliance in restoring public trust in financial institutions.
Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Vijay Kishore.
Share this article:
