Wells Fargo Hit With Rare Growth Ban in Yellen's Final Act
- Fed caps bank’s assets after scandals until problems are fixed
- ‘The firm has much to do’ Yellen writes to Elizabeth Warren
Yellen's Final Act Weighs on Wells Fargo
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After markets closed on her final workday in office, Federal Reserve Chair Janet Yellen delivered a blow to one of the nation’s largest banks: Wells Fargo & Co. won’t be allowed to grow until it cleans up.
Fed officials said the San Francisco-based lender’s pattern of consumer abuses and compliance lapses called for an unprecedented sanction. Until Wells Fargo addresses shortcomings in areas including internal oversight, it can’t take any action that would boost total assets beyond their level at the end of 2017, without the Fed’s permission. The bank said after-tax profit in 2018 would be reduced by $300 million to $400 million and its stock slumped in late trading Friday.