11th Hour

Fed Slaps Wells Fargo in Yellen’s Final Hours on the Job

Before incoming Fed Chairman Jerome Powell takes over.

In her final hours on the job, Federal Reserve Chair Janet Yellen announced Friday evening that the Fed is restricting Wells Fargo’s growth “until it sufficiently improves its governance and controls.” The move came in response to the bank opening a series of dummy accounts in customers’ names and subsequently forcing them to take out unnecessary insurance. Wells Fargo is to replace three of its current board members by April, according to the guidance, and send another member packing by the end of this year. “We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” Yellen said. “The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers.”