Fed Chair Powell Agrees to Public Vote on Wells Fargo Remediation Plans
Powell also said he’d consider releasing as much as possible of the third-party review on the bank's reforms.
Federal Reserve Board Chairman Jerome Powell told Sen. Elizabeth Warren Thursday that he would hold a public vote by the Federal Reserve Board of Governors on Wells Fargo’s remediation plans.
Warren, D-Mass., called on Powell in early April to formally commit to a Board of Governors vote on whether Wells Fargo has satisfied its “remediation” plans that were set in motion by former Fed Chair Janet Yellen.
In an April 3 letter to Powell, Warren noted the Feb. 2 consent order between the Fed and Wells Fargo prohibiting the bank from growing until it makes certain improvements.
Under the order’s terms, “Wells Fargo must submit a plan to make its board of directors more effective and a plan to improve its risk management policies to the Board by mid-April.”
In his Thursday letter to Warren, Powell also said he’d consider Warren’s request to release as much as possible of the third-party review on how the bank is implementing reforms.
The Feb. 2 consent order between the Fed and Wells Fargo prohibits the bank from growing any larger until it makes certain improvements.
“After further consideration, the decision about terminating the asset growth restriction will be made by a vote of the Board of Governors,” Powell told Warren. When the third-party review of Wells Fargo’s remedial actions is ready, “we will review that report to determine whether and to what extent the report can be publicly disclosed without impairing protected interests.”
Warren said in a statement that she was “glad the Fed’s Board of Governors changed course and will vote on whether to lift the growth restriction, rather than delegating that important question. The Fed must strictly enforce its order to show Wells Fargo that it means business.”
Warren took Powell to task during a March 1 hearing on how steadfast he’d be in following through on the Fed’s sanctioning of the troubled bank.
— Check out Fed Leaves Rates Unchanged, Says Inflation Close to Target on ThinkAdvisor.