NEW YORK, NEW YORK – MAY 17: President and CEO of Wells Fargo Charlie Scharf attends The Future of Everything presented by the Wall Street Journal at Spring Studios on May 17, 2022 in New York City. (Photo by Steven Ferdman/Getty Images)
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Wells Fargo said Thursday one of its primary regulators has lifted a key penalty tied to its 2016 fake accounts scandal.
The bank said in a release that the Office of the Comptroller of the Currency terminated a consent order that forced it to revamp how it sells its retail products and services.
Shares of the bank jumped more than 5% on the news.
Wells Fargo, one of the country’s largest retail banks, has retired six consent orders since 2019, the year that CEO Charlie Scharf took over. Eight more remain, most notably including one from the Federal Reserve that caps the bank’s asset size, according to a person with knowledge of the matter.
In a memo sent to employees, Scharf called the development a “milestone” for the lender. The 2016 fake accounts scandal and related consent order ignited a wave of scrutiny on the bank that revealed problems related to the servicing of mortgages, auto loans and other consumer accounts.
The attention tarnished the bank’s reputation and forced the abrupt retirement of both ex-CEO John Stumpf in 2016 and successor Tim Sloan in 2019.
“The OCC’s action is confirmation that we have effectively put in place new systems, processes, and controls to serve our customers differently today than we did a decade ago,” Scharf said. “It is our responsibility to ensure we continue to operate with these disciplines.”
— CNBC’s Leslie Picker contributed to this report.
This story is developing. Please check back for updates.
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