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Wells Fargo Growth Restrictions Lifted
According to the Federal Deposit Insurance Corporation
(FDIC) and the Federal Reserve Board, Wells Fargo has remedied
the deficiencies outlined in its 2015 resolution plan. As a result,
San Francisco-based Wells Fargo will no longer be subject to the
growth restrictions which were imposed last year.
e Dodd-Frank Act requires resolution plans, commonly
known as "living wills" which describe the company's strategy
for rapid and orderly resolution under bankruptcy in the event of
material financial distress or failure of the company. e FDIC
and the Federal Reserve Board found that in December 2016,
Wells Fargo had not yet remedied two of the three deficiencies the
agencies had previously identified.
Subsequently, the agencies imposed restrictions on the growth
of Wells Fargo's international and non bank activities. e revised
plan submitted by Wells Fargo in March adequately repaired the
two deficiencies.
"Earlier today, the Federal Reserve and the FDIC announced
that Wells Fargo's Revised Submission adequately remedied the
remaining deficiencies," said Wells Fargo in a statement. "We
are pleased with the agencies' findings and remain committed to
sound resolution planning and preparedness as we finalize our July
2017 submission."
By July 1, Wells Fargo must file a new resolution that will
address vulnerabilities to orderly resolution as noted in guidance
issued by the agencies last year. If the vulnerabilities noted in the
guidance are not satisfactorily addressed, the agencies may jointly
determine that the plan is not credible or would not facilitate an
orderly resolution under the U.S. Bankruptcy Code. e recent
determination by the agencies pertains solely to Wells Fargo's 2015
resolution plan and not to any future resolution plan.
According to the FDIC, "the decision received unanimous sup-
port from the FDIC and Federal Reserve boards."
