The Federal Reserve Board issued a cease and desist order against Wells Fargo & Co., in response to "widespread consumer abuses and other compliance breakdowns."
In a late Feb. 2 press release, the regulator said it would cap the company's asset size to its end-of-2017 levels and require improvement of board oversight. The company said the limit will remain until third-party reviews are completed to the Fed's satisfaction, afterward Wells will conduct a second-party review.
Wells Fargo had $1.952 trillion in assets as of Dec. 31, 2017.
Wells Fargo will also replace four of its board members — three by April and another by the end of the year. The Fed sent each board member, along with former CEO John Stumpf and former lead independent director Stephen Sanger, letters informing them they had failed to meet the regulator's expectations.
Janet Yellen, whose last day as Fed chair is Feb. 3, said the cease and desist order "will ensure that Wells Fargo will not expand until it is able to do so safely."
Wells Fargo, in its press release, said it was "confident" it would satisfy the order's requirements and noted the enforcement action relates only to "prior issues where [it has] already made significant progress."
