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Wells Fargo's (WFC) Proposal for Overhaul Wins Approval of Fed
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In a major breakthrough in its efforts to get rid of the past misconducts, Wells Fargo & Company (WFC - Free Report) has been able to satisfy the Federal Reserve with its proposal for overhauling risk management and governance. The news was reported by Bloomberg.
The move is a step forward for the bank to get its asset growth limit removed. Notably, it had submitted the proposal, including the compliance and operational risk management program of improvement, in September 2020.
Among the several other limitations and probes that Wells Fargo is currently facing, the one that has been a priority is the asset growth restrictions placed by the Federal Reserve in early 2018. In December, the company had said that it still has to work on improving its control systems in order to have the cap lifted.
With this approval, Wells Fargo will now be required to appoint independent third parties to conduct the review of its implemented processes. Post satisfaction of this, unanimous consensus of the Fed board will be required to revoke the sanction.
The Wall Street biggie was supposed to have fulfilled all the necessary remediation steps long back in 2018. However, it kept failing the regulator’s expectations. First proposal laid down by the bank as early as April 2018 was rejected by the central bank on demands of a stricter check over management.
Since the breakout of the bogus account openings scandal in late 2016, Wells Fargo has been getting involved in a number of probes, which are likely to keep its cost base elevated. However, the bank has diligently taken remedial measures and initiatives to keep afloat. Also, its cost-control plans might help it deal with the pressure on costs.
Shares of Wells Fargo have gained 52% over the past six months compared with 40.8% growth recorded by the industry it belongs to.
Apart from Wells Fargo, many other banks remain under the scrutiny of regulators. Recently, Deutsche Bank (DB - Free Report) , along with three other foreign lenders, has been punished by Taiwan’s central bank in a currency speculation case. In October 2020, Citigroup (C - Free Report) was slapped with a $400 million penalty by The Office of the Comptroller of the Currency and the Federal Reserve for long-standing deficiencies in its risk management and internal controls processes.
Also, Goldman Sachs (GS - Free Report) admitted to conspiring to violate the Foreign Corrupt Practices Act in connection with a scheme to pay more than $1 billion in bribes to Malaysian and Abu Dhabi officials.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Wells Fargo's (WFC) Proposal for Overhaul Wins Approval of Fed
In a major breakthrough in its efforts to get rid of the past misconducts, Wells Fargo & Company (WFC - Free Report) has been able to satisfy the Federal Reserve with its proposal for overhauling risk management and governance. The news was reported by Bloomberg.
The move is a step forward for the bank to get its asset growth limit removed. Notably, it had submitted the proposal, including the compliance and operational risk management program of improvement, in September 2020.
Among the several other limitations and probes that Wells Fargo is currently facing, the one that has been a priority is the asset growth restrictions placed by the Federal Reserve in early 2018. In December, the company had said that it still has to work on improving its control systems in order to have the cap lifted.
With this approval, Wells Fargo will now be required to appoint independent third parties to conduct the review of its implemented processes. Post satisfaction of this, unanimous consensus of the Fed board will be required to revoke the sanction.
The Wall Street biggie was supposed to have fulfilled all the necessary remediation steps long back in 2018. However, it kept failing the regulator’s expectations. First proposal laid down by the bank as early as April 2018 was rejected by the central bank on demands of a stricter check over management.
Since the breakout of the bogus account openings scandal in late 2016, Wells Fargo has been getting involved in a number of probes, which are likely to keep its cost base elevated. However, the bank has diligently taken remedial measures and initiatives to keep afloat. Also, its cost-control plans might help it deal with the pressure on costs.
Shares of Wells Fargo have gained 52% over the past six months compared with 40.8% growth recorded by the industry it belongs to.
The stock currently carries a Zacks rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from Wells Fargo, many other banks remain under the scrutiny of regulators. Recently, Deutsche Bank (DB - Free Report) , along with three other foreign lenders, has been punished by Taiwan’s central bank in a currency speculation case. In October 2020, Citigroup (C - Free Report) was slapped with a $400 million penalty by The Office of the Comptroller of the Currency and the Federal Reserve for long-standing deficiencies in its risk management and internal controls processes.
Also, Goldman Sachs (GS - Free Report) admitted to conspiring to violate the Foreign Corrupt Practices Act in connection with a scheme to pay more than $1 billion in bribes to Malaysian and Abu Dhabi officials.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>