Wells Fargo shares soar as key regulatory penalty lifted

Shares of Wells Fargo (WFC) are rising after federal regulators lifted a consent order related to past sales practices and "consumer harm" issues. This consent order had been in place since following scandals over fraudulent account openings.

Yahoo Finance's Julie Hyman and Josh Lipton break down the details.

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Editor's note: This article was written by Angel Smith

Video Transcript

JOSH LIPTON: And take a look at shares of Wells Fargo today. Stock is soaring. This company moves one step away from its fake account scandal. The company saying one of its main regulators lifting a key penalty from that scandal. The Office of the Comptroller of the Currency saying the bank has made sufficient progress revamping its systems that guard against customer harm. So the history here quickly, Julie, this one is Wells Fargo's compliance issues came under scrutiny. There was the scandal, sales practices a few years ago.

Anyway, regulators stepped in. Reuters pointing out the bank actually still has eight open consent orders. It is still operating under this asset cap imposed by the Fed. I thought it was interesting here, though a note from RBC's Gerard Cassidy we know smart long time analysts. And he said, the lifting of this consent order, he told his clients, in his opinion paves the way for the Federal reserve to now lift its consent order, that's his--

JULIE HYMAN: Interesting. I mean, and there are six that under Charlie Scharf's leadership, I believe have been taken off since 2019. So these are just a number of overhangs that have been very persistent for Wells Fargo.

JOSH LIPTON: Yeah. Scharf saying here in the statement, I've repeatedly said that implementing a risk and control framework appropriate for a bank of our size and complexity is our top priority. In closing consent orders is an important sign of our progress and investors clearly like that headline too.