U.S. Regulators Lift Restrictions On Wells Fargo

The Biden administration eased some of the restrictions on the banking giant Wells Fargo, stating that the bank has sufficiently addressed its toxic culture after years of scandals, as reported by Ken Sweet for the Associated Press (AP).

The order had mandated the bank to overhaul its sales practices and provide additional consumer and employee protections, including safeguards for whistleblowers. I Photo: raymondclarkeimages Flickr

The news drove Wells Fargo's stock sharply higher as investors speculated that the bank, which has been tightly regulated for years, may now be able to rebuild its reputation and resume growth.

The bank's shares closed up 7.2% at $52.04, its highest level since March 2022, in extremely active trading.

The Office of the Comptroller of the Currency (OCC), the regulator overseeing major national banks like Wells Fargo, terminated a consent order last week that had been in place since September 2016.

The order had mandated the bank to overhaul its sales practices and provide additional consumer and employee protections, including safeguards for whistleblowers.

It was imposed after a series of newspaper and government investigations in 2016 revealed a toxic sales culture at Wells Fargo, where employees were pressured into selling unnecessary financial products to customers.

These employees, who worked at "stores" rather than traditional bank branches, were found to have opened millions of unauthorized accounts. As a result, customers suffered identity theft and damage to their credit scores.

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