Wells Fargo CEO Timothy Sloan said Monday he expects the Federal Reserve to lift penalties put on his bank by the end of the year.
Sloan said on Fox Business that Fed’s stunning decision to oust four Wells Fargo board members and freeze the bank’s growth “a disappointment,” but not a fatal blow.
“We expect to have this cap lifted because again, all of the activities that the Fed would like us to improve on are the same ones that we would like to improve on,” Sloan said. “And we believe it’s likely that the asset cap could get lifted by the end of the year.”
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The Fed announced Friday that it will ban the bank from doing anything that would increase its total consolidated assets above their December 2017 levels. Wells Fargo will still be able to issue loans and take deposits, but is expected to lose hundreds of millions of dollars in revenue.
Wells Fargo has 60 days to send the Fed thorough action plans on how it would revamp the board’s oversight of the bank and its risk management system. The bank is also required to commission two third-party reviews of its reform efforts. If the Fed approves of the plans, Wells Fargo will be permitted to expand again.
Wells Fargo has been involved in numerous scandals prompting federal and state investigations. The bank opened as many as 3.5 million accounts for customers without their authorization while charging fees for the unwanted services. Wells Fargo also charged thousands of customers for auto insurance products they didn’t need, and paid a $108 million settlement after charging veterans hidden fees to refinance their mortgages.
Sloan, who replaced former CEO John Stumpf in 2015, touted the bank’s progress Monday and said Wells Fargo has already addressed many of the Fed’s criticisms.
“We’ve addressed leadership concerns, we’ve made fundamental changes in terms of how we’re organized, we’ve invested billions of dollars in improving our risk management practices,” Sloan said.
“The issue is that the Fed called out an order,” he said, targeting problems that the bank was “in the midst of correcting anyway.”
Updated at 2:24 p.m.