The Federal Reserve Board will hold a public vote on whether to accept Wells Fargo’s remediation plans and lift growth restrictions.
Under a February consent order, the Fed prohibited Wells Fargo from growing more than its total asset size as of the end of 2017 until the bank sufficiently improves its governance and controls. The Fed said the order responded to the bank’s string of consumer abuses and other compliance breakdowns.
During a Senate Banking Committee hearing in March, Federal Reserve Board Chair Jerome Powell said he intended to delegate the board's decision to accept the bank's remediation plans to staff. Committee member Sen. Elizabeth Warren (D-Mass.) pressed Powell to consider requiring a vote instead.
In April, Warren followed up with a letter to Powell calling on him to commit to a public vote on the remediation plans and urged him to look into releasing the third-party review required by the consent order. In a May 10 letter, Powell agreed to the demand for a public vote as well as assented to the request to consider releasing as much of the third-party review on how the bank is implementing reforms as possible.
"After further consideration, the decision about terminating the asset growth restriction will be made by a vote of the Board of Governors," Powell wrote. He also said that the board will review the third-party review to determine whether and to what extent the report can be publicly disclosed.
"I'm glad the Fed's Board of Governors changed course and will vote on whether to lift the growth restriction, rather than delegating that important question. The Fed must strictly enforce its order to show Wells Fargo that it means business," Warren said.
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Fed restricts Wells Fargo’s growth