Wells Fargo has reached a significant regulatory milestone as the Federal Reserve announced on June 3, 2025, that the asset growth restriction imposed on the bank in 2018 has been lifted. This decision marks the end of a seven-year constraint placed on the financial giant due to prior shortcomings in its risk management framework.
The asset growth cap was originally enforced following a 2018 consent order after Wells Fargo failed to maintain an adequate risk management system commensurate with its size and complexity. The Federal Reserve required the bank to improve the effectiveness of its board of directors, enhance its compliance and operational risk management programs, and submit to an independent third-party review to ensure progress.
Since then, Wells Fargo has undergone extensive supervisory scrutiny by the Federal Reserve’s Division of Supervision and Regulation, which conducted multiple assessments to verify the bank’s compliance with the consent order’s terms. The Fed’s announcement that Wells Fargo has met all the necessary conditions came after a thorough evaluation of the bank’s governance and operational risk improvements.
The lifting of the asset cap, effective May 30, 2025, allows Wells Fargo to expand its assets and pursue growth strategies that had been restricted for years. This regulatory relief is seen as a testament to the bank’s substantial efforts to transform its operations and strengthen its risk controls.
Wells Fargo’s stock responded positively to the news, climbing approximately 3% on the day of the announcement, reflecting investor confidence in the bank’s renewed governance and growth prospects. The stock had shown a 1.24% increase earlier in the day before surging further, signaling market approval of the Federal Reserve’s decision.
Wells Fargo CEO Charlie Scharf expressed pride in the company’s transformation journey, stating, "The Federal Reserve’s decision to lift the asset cap marks a pivotal milestone in our journey to transform Wells Fargo. We are a different and far stronger company today because of the work we’ve done." He emphasized that the bank has simplified its business mix and revamped its management team, investing methodically in its future while improving financial results.
In recognition of the efforts of its workforce, Wells Fargo announced a special award for its approximately 215,000 full-time employees. Each will receive a $2,000 stock grant (with some variations for select international locations and employee classifications) as a token of appreciation for their role in reaching this milestone. Scharf highlighted that the employees’ dedication—whether through direct work on risk and control efforts or by embedding a culture of compliance—was instrumental in achieving this outcome.
Steven D. Black, Chair of Wells Fargo’s Board of Directors, also acknowledged the leadership and transformation efforts, particularly crediting Scharf for assembling a top-tier management team and steering the company through complex challenges, including a global pandemic and regulatory hurdles. Black remarked, "Since he arrived in late 2019, Charlie has assembled a top-notch management team, overseen the details and the big picture of a major transformation effort, and made meaningful changes to improve returns." He further expressed gratitude to the board for their role in governance changes and oversight improvements that contributed to the bank’s progress.
Despite the removal of the asset growth cap, the Federal Reserve noted that other provisions of the 2018 enforcement action remain in effect until Wells Fargo satisfies all termination requirements. This indicates ongoing regulatory oversight to ensure the bank continues on its path of robust governance and risk management.
Wells Fargo & Company remains a leading financial services institution with approximately $1.9 trillion in assets. It operates across four major segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. The bank's market capitalization stands at about $243.2 billion, with an average daily trading volume exceeding 18 million shares.
Financial analysts have reacted favorably to Wells Fargo’s progress. The most recent ratings classify the stock as a Buy, with a price target of $70.00. According to TipRanks’ AI Analyst, Spark, Wells Fargo is considered an Outperform stock, supported by solid financial performance, strong earnings growth, and an attractive valuation. Although some challenges remain, such as cash flow efficiency and economic uncertainties, the company’s strategic progress and strengthened balance sheet position it well within the diversified banking sector.
The lifting of the asset growth restriction signals a turning point in Wells Fargo’s regulatory and operational history, underscoring the bank’s commitment to reform and resilience. As the institution moves forward, shareholders and customers alike will be watching closely to see how this newfound flexibility translates into growth and enhanced service offerings.
