Wells Fargo’s asset cap is turning 5. How will it end?
By Kyle Campbell and Polo Rocha
At 6:15 p.m. on Friday, Feb. 2, 2018, the Federal Reserve Board of Governors announced an enforcement action against Wells Fargo that imposed a novel condition on the bank — it would be prohibited from growing beyond $1.95 trillion of assets, its size as of Dec. 31, 2017. The unprecedented move was the central bank’s long-awaited response to a litany of scandals that had embroiled the San Francisco-based bank over the prior several years….Despite the precedent-setting nature of the asset cap and the potential future ramifications for other banks, the calls for more information about what is going on behind the supervisory curtain are likely to go unanswered, said Karen Petrou, managing director of the Washington, D.C.-based consulting firm Federal Financial Analytics. “This is one institution,” Petrou said. “It’s not like multiple enforcement access, where you can put facts together and provide a useful policy or guide without providing proprietary information on a single institution. I don’t think that’s possible.”