The unprecedented asset cap on Wells Fargo & Co. will only be lifted by a vote of the Federal Reserve's Board of Governors, Fed Chairman Jerome Powell said in a letter to Sen. Elizabeth Warren, D-Mass.
The Fed restricted Wells Fargo from increasing its asset size beyond its end-of-2017 level — $1.952 trillion — for what the regulator called "widespread consumer abuses and other compliance breakdowns." In the past two years, the company has weathered scandals involving the creation of fake accounts and issues with its mortgage and automobile insurance products.
Previously, the decision was considered to be in the hands of the Federal Reserve Bank of San Francisco, with the approval of the Fed's director of supervision and regulation. "After further consideration, the decision about terminating the asset growth restriction will be made by a vote of the Board of Governors," Powell wrote. The board currently has three members, with three nominees awaiting approval by the Senate.
Powell also wrote that the Fed will seek to determine if any of the third-party review on Wells Fargo's compliance efforts can be publicly disclosed. He wrote that, generally, public material in these kinds of disclosures is difficult to release without also communicating confidential information.