By Nupur Anand and Manya Saini
NEW YORK (Reuters) – A top Wells Fargo executive said on Tuesday that the bank has five consent orders remaining to resolve issues related to its lending and sales practices, and he added the recent termination of three regulatory punishments shows that the bank has been making progress.
“We’re committed and we’re very confident in our ability to close this out (consent orders),” Chief Financial Officer Mike Santomassimo told the UBS financial services conference in Miami. “We are working with the right sense of urgency around it.”
Earlier this month, the Federal Reserve said it had terminated a pair of enforcement actions imposed on the bank in 2011. These enforcement actions were related to deficient practices in mortgage servicing and foreclosures by the bank, and mortgage lending at a former subsidiary.
In January, the Consumer Financial Protection Bureau closed a 2022 order against the bank over its alleged mishandling of auto loans and mortgages.
The Fed had imposed an unprecedented $1.95 trillion asset cap on the lender in 2018, limiting its growth until its issues are addressed.
Analysts have said the recent developments suggest the bank is on the right path to get its asset cap removed in 2025.
The asset cap is seen as one of the toughest punishments U.S. regulators can put in place, and its removal requires a vote by the Fed’s Board of Governors.
Santomassimo also said that there is still optimism that the new Trump administration will be “pro-growth,” echoing comments made by peer banks, including Goldman Sachs CEO David Solomon earlier on Tuesday.
He added that the bank expects the U.S. Federal Reserve’s stress testing, which impacts the regulatory capital that lenders are required to maintain, to also change in the coming months under the new administration.
Wells Fargo also expects the Basel III Endgame implementation to be more constructive now, he said.
“The industry still thinks we should try to finalize Basel III, I think that puts some certainty around how we should manage the balance sheet and it will be a good thing if we can get that finalized.”
(Reporting by Nupur Anand in New York and Manya Saini in Bengaluru,)
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