WASHINGTON/NEW YORK (Reuters) – Wells Fargo & Co (WFC.N) must keep a lid on its growth until the bank has hardened its risk management policies to prevent any further abuse of its customers, said Jerome Powell, chairman of the Federal Reserve.
FILE PHOTO: The Wells Fargo name is shown on an office town in downtown Los Angeles, California, U.S. October 2, 2018. REUTERS/Mike Blake/File Photo
In February, the Fed ordered Wells Fargo to freeze its balance sheet, keeping its assets below $1.95 trillion, until it put new checks on senior managers and gave the board new powers to sniff out abuses.
“We do not intend to lift the asset cap until remedies to these issues have been adopted and implemented to our satisfaction,” Powell wrote in a letter to U.S. Senator Elizabeth Warren seen by Reuters.
Wells Fargo has so far failed to satisfy the Fed and the bank is months behind schedule on submitting an acceptable reform plan, Reuters reported last week.
A bank representative did not immediately respond to a request for comment on Powell’s letter. Wells Fargo executives have previously said that they expect the cap to be lifted during the first half of next year.
Warren, a Massachusetts Democrat, has been a vocal critic of Wells Fargo and its Chief Executive Tim Sloan. In October, Warren wrote a letter asking the regulator not to remove the asset cap until Sloan is removed, charging that Sloan was “deeply implicated” in the misdeeds of the past. Wells Fargo has called Sloan’s 30-year tenure at the bank an asset and