"In light of the nature of the deficiencies and the resolvability risks posed by Wells Fargo's failure to remedy them, the agencies have jointly determined to impose restrictions on the growth of international and non-bank activities of Wells Fargo," stated Tuesday’s release from the FDIC and the Federal Reserve.
According to the release, Wells Fargo won’t be allowed to establish banking entities in other countries or to purchase any non-bank subsidiary.
Wells Fargo has come under fire since early September when it acknowledged media reports that employees secretly created accounts on customers’ behalf in order to boost sales numbers. The company paid a $185 million fine to US regulators in connection with the scandal but still faces numerous federal and state investigations.
The company is expected to file a revised submission addressing the remaining deficiencies by March 2017, the release noted. The resolution plan, sometimes called a “living will” for banks, is required by regulators to specify how a banking company would manage its affairs during bankruptcy without requiring a taxpayer-funded rescue.
