Wells Fargo & Co (NYSE:WFC, ETR:NWT) scored a major regulatory victory on Tuesday after the US Federal Reserve lifted a strict asset cap that had hampered the bank’s growth for more than six years.
The Fed imposed the $1.95 trillion cap in 2018 as punishment for Wells Fargo’s toxic sales practices, which included opening millions of unauthorized customer accounts to meet aggressive sales goals – the first and only time the central bank had taken such a step.
“We are a different and far stronger company today,” CEO Charlie Scharf said in a statement, announcing a $2,000 bonus for each of the bank’s 215,000 employees.
Wells Fargo shares rose nearly 3% in premarket trading following the announcement, which signals the Fed’s confidence in the bank’s sweeping overhaul of its risk, compliance, and governance functions.
With the cap lifted, the bank can now pursue expansion in deposits, securities, and corporate banking — areas it had been forced to limit under regulatory constraints since 2018.