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Warren calls on Fed to keep restrictions on Wells Fargo until it replaces CEO

Sen. Elizabeth Warren is calling on the Federal Reserve to hold off on removing a cap on asset growth for Wells Fargo & Co. until its board replaces CEO Tim Sloan.

The Fed in February restricted Wells Fargo from growing beyond the asset levels it reported at the end of 2017, an unprecedented penalty as the regulator responded to the bank's opening of millions of unauthorized accounts.

The scandal led to Wells parting ways with several top executives and board members and replacing its former CEO with Sloan, who has been at Wells Fargo for more than three decades. Sloan's previous roles at the bank include chief operating officer and chief financial officer.

Warren, D-Mass., sent a letter to Fed Chairman Jerome Powell saying the company needs a CEO "who has not contributed to the very problems the Federal Reserve is seeking to fix." She cited developments that occurred while Sloan has worked at Wells Fargo, such as the company charging customers for auto insurance they did not need.

"There are only two possibilities: either he was aware of this misconduct and did nothing to stop it, or he was not aware of it despite his obligations as a senior manager of the company," she wrote.

Wells Fargo spokeswoman Erika Reynoso said the company "continues to have constructive dialogue with the Federal Reserve to ensure that we fully satisfy our consent order requirements."

"We are also confident that the transformation of the company over the last two years, including our efforts to make things right with our customers, will contribute to resolution of the issues cited within the consent order, especially in our operational and compliance risk management structure," Reynoso said.

A Fed spokesperson said the regulator has received the letter and plans to respond.