Wells Fargo Asset Cap Is Now One of the Costliest Bank Penalties
- Imposed in 2018, it may have cut roughly $4 billion off profit
- That doesn’t include the expense of overhauling bank’s systems
A person rides a scooter past a Wells Fargo & Co. bank branch in New York.
Photographer: Peter Foley/BloombergThis article is for subscribers only.
Hitting banks with multibillion-dollar fines grabs headlines, but a Federal Reserve cap on Wells Fargo & Co.’s assets is becoming the industry’s true terror.
The wonky sanction devised by the Fed in early 2018 to force Wells Fargo to address a series of scandals is turning into one of the costliest punishments ever levied by a single regulator. By one method of estimating, Wells Fargo has missed out on roughly $4 billion in profits -- and counting -- since the cap was imposed, and it’s unclear when the Fed will lift it.