Regulators terminate Wells Fargo consent order, boosting stock

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Federal banking regulators have disclosed they have terminated a 2016 consent order that was placed on Wells Fargo after its fake accounts scandal. The disclosure sent the bank’s stock up more than 7 percent in afternoon trading.

The consent order had required Wells Fargo to revamp how it offers and sells products and services.

In a new order, dated Jan. 30, the Office of the Comptroller of the Currency said it believes “the safety and soundness of [Wells Fargo] and its compliance with laws and regulations” allowed it to scrap the 2016 order.

Wells Fargo chief executive Charles Scharf said the OCC decision reflects the hard work the bank has put into risk management in recent years.

“Implementing a risk and control framework appropriate for a bank of our size and complexity is our top priority, and closing consent orders is an important sign of our progress,” Scharf said in a statement. The company’s risk and control work “remains our top priority,” he added.

The 2016 consent order resulted after the bank admitted it had fired thousands of employees over five years for opening millions of phony accounts to earn bonuses and keep their jobs. Customers were wrongly charged with overdraft fees, and for unneeded automobile insurance and other products.

This is the sixth consent order that regulators have terminated since 2019, Scharf said. The company still faces eight other consent orders, including one that prevents it from growing through mergers and acquisitions, according to CNBC.

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