Wells Fargo (WFC.N) has sent a third-party review of its risk and control overhauls to the Federal Reserve as it looks to remove an asset cap imposed by the regulator, Bloomberg News reported on Thursday, citing people familiar with the matter.
The bank operates under a $1.95 trillion asset cap that prevents it from growing until regulators deem it has fixed problems dating back to the fake accounts scandal uncovered in 2016.
Eliminating the asset cap will hand a major victory for CEO Charlie Scharf, who has been fixing compliance issues since taking the top job in 2019. The bank has paid billions in penalties while being hit with lawsuits from customers and shareholders.
Both, Wells Fargo and the Fed declined to comment on the report.
Shares of the bank jumped 4.4%. Still, Wells Fargo's executives see the asset cap stretching at least into next year, the report said.
It has eight regulatory punishments, called consent orders, that it is working to address.
Fed Chair Jerome Powell said in 2021 that the asset cap would stay in place until the firm comprehensively fixes its problems. He has not spoken publicly on the cap since then.
Earlier this month, the Office of the Comptroller of the Currency, a top banking regulator, ordered Wells Fargo to overhaul its efforts to combat illicit funds.
