Some unusual snark in a business story as NPR cites Wells Fargo’s assets as a claim, not a fact, and some unusual oversight by the Fed in ordering replacement of directors.
In a rare move, the Federal Reserve announced Friday that it is restricting Wells Fargo’s growth and demanding the replacement of four board members in response to “widespread consumer abuses and compliance breakdowns” at the bank.”Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017,” the Fed said in a statement. This is first time the Fed has placed a cap on the overall growth of a firm.
Wells Fargo says it has $1.9 trillion in assets.
The move to snuff its growth comes after the bank admitted in 2016 to creating potentially millions of fake bank accounts at the expense of unsuspecting customers.
NPR’s Chris Arnold has reported a “toxic high-pressure sales culture at the bank” drove workers to dupe consumers all while helping the bank’s bottom line.The Fed said Friday that Wells Fargo’s business strategy prioritized its own growth at the expense of risk management resulting in compliance breakdowns. It is ordering the bank to “improve its governance and risk management processes, including strengthening the effectiveness of oversight by its board of directors.”