Wells Fargo exits another consent order. Is asset cap next?

Bing Guan/Bloomberg

Wells Fargo took its latest step out of regulatory purgatory on Monday, when the bank said that a 2018 consent order with the Consumer Financial Protection Bureau has been terminated.

So far in 2025, the megabank has ironed out six regulatory issues, leaving only three such matters still unresolved. The largest of those remaining speed bumps is Wells Fargo's 2018 asset cap, a Federal Reserve Board restriction that limits the bank to $1.95 trillion of assets.

Amid Wells' substantial regulatory progress over the first four months of this year, analysts who cover the $1.9 trillion-asset bank are optimistic that the Fed will remove the asset cap in the coming months.

"Bottom line: the news will likely reinforce investors' belief that the asset cap could be lifted sooner rather than later," Scott Siefers, an analyst at Piper Sandler, wrote Monday in a research note.

The 2018 CFPB consent order stemmed from the bank's alleged violations of consumer-lending rules in connection with a mandatory insurance program for auto loans, as well as in its processes for charging certain borrowers for mortgage interest rate-lock extensions.

At the time, Wells agreed to pay a $1 billion penalty, split between the CFPB and the Office of the Comptroller of the Currency. The OCC's related enforcement action was terminated in February 2025.

Siefers wrote that both the CFPB and OCC orders dealt with compliance risk management, which is also a consideration for the Fed as it determines when to lift the asset cap.

"With the OCC and CFPB now apparently comfortable" with the bank's compliance risk management, "we view the forward progress as a good sign," Siefers stated.

The latest consent order to be terminated was the company's last remaining public enforcement action with the CFPB, and the 12th compliance matter to be resolved since 2019, when CEO Charlie Scharf joined the bank.

In a press release Monday, Scharf expressed confidence that Wells will complete the work necessary to close its other open enforcement actions. "Today's termination, along with the recent closure of other consent orders, demonstrates that we have completed much of our common risk and control infrastructure work, including work that is required by other orders," he said.

Gerard Cassidy, an analyst at RBC Capital Markets, wrote in a research note that he believes the asset cap could be lifted in the second quarter of 2025 "and possibly real[ly] soon."

He pointed not only to the bank's brisk progress with regulators so far this year, but also to recent comments by Treasury Secretary Scott Bessent. Bessent said on a podcast last month that he wants to loosen what he called the "regulatory corset."

Meanwhile, Wells Fargo's critics are urging caution about lifting the asset cap, arguing that the scandal-tarred bank hasn't demonstrated enough progress.

Late last year, Sen. Elizabeth Warren, D-Mass., wrote in a letter to Fed Chairman Jerome Powell that the seven-year-old cap should remain in place until the bank "can show that it can properly manage the risks associated with running a large bank."

And in a report earlier this month, the Committee for Better Banks, which is working to unionize Wells Fargo employees, argued that the Fed should evaluate the bank's consumer complaint trends before lifting the asset cap.

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In addition to the asset cap, Wells Fargo is operating under a 2015 agreement with the OCC, which states that the bank violated part of the Gramm-Leach-Bliley Act that deals with the consolidation and management of bank subsidiaries.

Also still in place is a 2024 formal agreement with the OCC involving what the regulator called "deficiencies" in the bank's anti-money-laundering controls.