Wells Fargo's Asset Cap Might Lift by mid-2025, if compliance is maintained

Wells Fargo announced that the CFPB has ended its 2018 consent order on the bank's compliance risk management. This is the twelfth consent order lifted since 2019 and the sixth in 2025, highlighting significant progress in resolving regulatory issues.

The 2018 CFPB consent order was one of several regulatory actions imposed on Wells Fargo following a series of scandals, most notably the 2016 “fake accounts” incident.

The order targeted deficiencies in the bank’s compliance risk management and required Wells Fargo to overhaul its internal controls and risk infrastructure. The Office of the Comptroller of the Currency (OCC) had issued a parallel enforcement action, which was terminated in February 2025. 

Impact and Next Steps

The termination of this consent order is widely viewed as a key milestone in Wells Fargo’s regulatory rehabilitation. Analysts suggest that this progress could accelerate the lifting of the Federal Reserve’s asset cap, which has limited the bank’s balance sheet to $1.95 trillion since 2018. The asset cap remains one of the most significant restrictions, and its removal would signal a return to full regulatory normalcy for the bank.

Currently, Wells Fargo still faces two outstanding consent orders: one from the OCC related to violations of the Gramm-Leach-Bliley Act and a formal agreement regarding anti-money laundering controls. The bank’s leadership has expressed confidence in resolving these remaining issues.

Market and Regulatory Outlook

The lifting of the CFPB’s consent order has bolstered investor optimism, with some analysts predicting that the Federal Reserve could lift the asset cap as early as the second quarter of 2025. 

However, some lawmakers and advocacy groups urge caution, emphasizing the need for continued scrutiny of Wells Fargo’s risk management practices before all restrictions are lifted.

In summary, the CFPB’s termination of the 2018 consent order represents a significant step forward for Wells Fargo as it seeks to move past years of regulatory scrutiny and restore its standing with both regulators and investors.

_{Source: reuters.com, bankingdive.com, businesswire.com}

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