From Yahoo Finance: 2025-06-03 16:26:00

Wells Fargo’s punitive asset cap of $1.95 trillion was lifted by the U.S. Federal Reserve, allowing for unrestricted growth and a 2.7% increase in shares. CEO Charlie Scharf plans to expand into areas like credit cards and wealth management. The bank faced restrictions since 2018 due to numerous scandals, but has made substantial progress in addressing deficiencies.

The Fed voted unanimously to lift the asset cap, marking a significant turning point in Wells Fargo’s efforts to repair its reputation. CEO Scharf called the move a “pivotal milestone,” stating that the bank is now stronger due to its efforts. JPMorgan Chase CEO Jamie Dimon praised Scharf’s team for resolving the bank’s heritage issues.

While the bank still faces some oversight, the removal of the asset cap signifies a major shift. The bank faced regulatory scrutiny after scandals in 2016, leading to penalties and lawsuits. Despite criticism and focus from lawmakers, the bank has cleared numerous consent orders and is moving towards growth opportunities.

Senator Elizabeth Warren criticized the Fed’s decision to lift the asset cap, citing concerns about risk and compliance. Scharf expressed that the cap limited the bank’s ability to expand its business, particularly in corporate deposits and trading. Peers like JPMorgan Chase saw significant asset growth during Wells Fargo’s restrictions.

The Fed’s action to remove the asset cap is seen as positive for the overall market. Stress reduction for a major bank like Wells Fargo is viewed favorably for the economy. Adam Sarhan, CEO of 50 Park Investments in New York, noted that the move bodes well for the market and broader economy.



Read more at Yahoo Finance: Wells Fargo escapes Fed’s asset cap after seven years, able to pursue growth