Wells Fargo Moves Closer to Lifting Asset Cap After Regulator Closes Consent Order
By Manya Saini and Nupur Anand
May 29, 2025
In a significant development for Wells Fargo & Co., the U.S. Office of the Comptroller of the Currency (OCC) has lifted a consent order placed on the bank in 2015. This decision marks a critical step forward for Wells Fargo as it works towards having a restrictive asset cap removed. With this latest closure, Wells Fargo is left with just one major regulatory hurdle to overcome.
Closure of Consent Order Signals Progress
The recent action by the OCC represents the thirteenth enforcement measure concluded by Wells Fargo’s regulators since 2019 and the seventh so far this year. According to Wells Fargo, the remaining consent order pertains to a $1.95 trillion asset cap imposed by the Federal Reserve in 2018. This cap was instituted as part of a broader requirement for the bank to enhance its governance and controls in light of widespread consumer abuses.
CEO Charles Scharf, who took the helm in 2019, spearheaded a comprehensive reform effort aimed at addressing the bank’s historical issues. Following the news of the consent order’s closure, Wells Fargo’s shares initially experienced a 1% rise in late-afternoon trading; however, these gains were later tempered by a decline in broader market performance.
Stephen Biggar, a banking analyst at Argus Research, commented, "This shows that the bank and the new management have made tremendous progress. These consent orders getting terminated demonstrate that the issues have been resolved to regulators’ satisfaction."
A Long Road of Regulatory Challenges
The regulatory scrutiny surrounding Wells Fargo intensified following a scandal in 2016, when it was revealed that the bank had created millions of unauthorized accounts, leading to substantial fines and reputational damage. The Federal Reserve subsequently imposed the asset cap, a severe penalty that restricted the bank’s ability to expand its balance sheet until it demonstrated that the underlying problems had been adequately addressed.
Chris Marinac, director of research at Janney Montgomery Scott, noted the significance of this development: “The environment is right to finally put the nail in the coffin for all of Wells Fargo’s past sins. It has been a long time and the company has taken efforts to fix its issues.”
Future Prospects and Regulatory Compliance
Under the current asset cap, Wells Fargo has been carefully managing its wholesale deposits and market segments. Scharf expressed optimism during an analyst call in October, stating that the bank anticipates growth in these areas once restrictions are lifted.
In a report last year, Reuters indicated that Wells Fargo was nearing the final phases of regulatory tests necessary to remove the asset cap in 2025, following extensive remediation from its previous scandals. As regulatory oversight continues, the bank is focused on compliance and fostering a positive relationship with regulators to ensure that a recurrence of past issues remains unlikely.
The lifting of the OCC consent order, alongside the continued efforts to improve governance, may position Wells Fargo for new opportunities in the competitive banking landscape, allowing it to regain traction and grow in a manner comparable to its peers.
As Wells Fargo looks to move beyond its troubled history, the final removal of the asset cap would not only symbolize a significant regulatory victory but also mark a pivotal turn toward renewed operational freedom and growth potential.
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