Wells Fargo & Co. (NYSE: WFC) will be operating under a Federal Reserve asset cap through the end of 2019, according to an announcement by the company. Chief Executive Officer Tim Sloan said on an earnings call, “To have enough time to incorporate this feedback in our plans in a thoughtful manner and adopt and implement the final plans as accepted by the Federal Reserve and complete the third-party reviews, we’re now planning to operate under the asset cap through the end of 2019.”
Last year in February, Wells Fargo was barred by the Federal Reserve from growing total assets beyond their level at the end of 2017. The regulator said the asset cap would only be lifted once the bank had corrected its pattern of sales abuses to its satisfaction. Those sale abuses included opening accounts in customers’ names without their permission, overcharging on auto loans and mortgages, and signing customers up for account features they did not request.
Wells Fargo executives initially said the cap would not hinder the bank’s business growth and that it would be able to meet the requirements of the consent order by the end of 2018. In May, a statement was released saying that it planned on operating under the asset cap through the first half of 2019. Now, that time-frame has been extended again to the end of the year.
The bank says that it’s taking longer than anticipated to correct issues in its consumer business. Wayward sales practices at its consumer bank has resulted in regulatory scrutiny, fines and lawsuits since 2016. In addition to its issues with the Federal Reserve, Wells Fargo is also being closely watched by the U.S. Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. The bank is also facing investigations from the U.S. Department of Justice and the Securities and Exchange Commission.