by Nupur Anand

NEW YORK (Reuters) – Wells Fargo is in the final stages of a process to convince the U.S. regulator to lift its $1.95 trillion asset cap after resolving problems linked to the “ghost accounts” scandal, reports said. three sources close to the matter told Reuters.

The sanction could be lifted as early as the first half of 2025, one of the sources said.

The US Federal Reserve (Fed) imposed an asset cap on Wells Fargo in 2018 and ordered the bank to correct failings in its governance and risk management after years of malfeasance at the expense of its customers.

The Fed ruled that the bank had given priority to growth at the expense of risk management, with employees having opened several million false accounts in the names of customers without warning them in order to achieve objectives assigned to them. .

The asset cap is one of the toughest sanctions U.S. regulators can put in place, with its removal requiring a vote by the Fed’s board of governors.

While the sources said Wells Fargo has done the work necessary to lift this measure, governors can still keep the sanction in place if they have concerns or are not completely satisfied with the corrective measures.

Lifting restrictions would be a major step forward in the bank’s consolidation efforts. Since the scandal broke in 2016, it has been fined billions of dollars and faced a series of regulatory sanctions, some of which are still in effect.

Wells Fargo, the Fed and the Federal Reserve Bank of San Francisco, where the bank is headquartered, had no comment.

In pre-market trading, Wells Fargo shares gained 3% on Tuesday after this information.

(Reporting by Nupur Anand in New York with Pete Schroeder and Ann Saphir, Bertrand De Meyer, editing by Blandine Hénault)

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