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Wells Fargo passed another hurdle in rebuilding its reputation in the wake of the 2016 fake accounts scandal, with the Office of the Comptroller of the Currency ending a consent order tied to the controversy, according to news reports.
The 2016 consent order — imposed after revelations that thousands of Wells’ retail bank employees opened millions of customer accounts without authorization to meet tight sales quotas — required the firm to overhaul its sales practices and implement measures to protect its customers as well as staff, Bloomberg writes.
The OCC said this week that it opted to terminate the order in light of Wells’ compliance with regulations, according to the news service.
“I have repeatedly said that implementing a risk and control framework appropriate for a bank of our size and complexity is our top priority, and closing consent orders is an important sign of our progress,” Chief Executive Officer Charlie Scharf said in a statement Thursday, adding that it was the sixth order lifted since 2019, according to Bloomberg.
The bogus account scandal ended up costing Wells around $5 billion in settlements with the U.S. Justice Department and the Securities and Exchange Commission and lawsuits. But it also set off a series of other revelations that had regulators looking into practices and finding a variety of alleged violations across Wells’ entire line of business, including in its wealth management unit.
The OCC’s decision to lift the 2016 consent order is another milestone in Wells recovering its brand name and good standing with authorities.
The termination of the order also gets Wells closer to having the Federal Reserve lifting the asset cap imposed on the firm, but that’s not likely in the short term because “a few other consent orders are still outstanding and scrutiny lingers over the bank’s financial controls,” said Elliott Stein, a senior litigation analyst with Bloomberg Intelligence, according to the news service.