Wells Fargo stock rises as Feds lift consent order for its fake-account scandal

United States

Wells Fargo & Co.’s stock rose Thursday after the bank confirmed it satisfied requirements by federal regulators to overhaul aspects of its operations related to the fake bank accounts scandal, but the company still faces other pending actions.

Wells Fargo WFC, +7.57% rose 6.9%, outpacing gains in the financial sector.

Wells Fargo said the Office of the Comptroller of the Currency (OCC) has closed a consent order it issued in 2016 that called for the bank to revamp how it offers and sells products and services to consumers.

It’s the sixth consent order that has been terminated against Wells Fargo since 2019, but the bank still has eight more outstanding on other issues, including an asset cap imposed the the U.S. Federal Reserve.

Citi analyst Keith Horowitz said the latest regulatory milestone amounts to “a positive proof point as management has consistently discussed progress on risk and control work.”

Wells Fargo Chief Executive Charles Scharf said “closing consent orders is an important sign of progress.”

Risk and control work remains a “top priority,” he said.

Wells Fargo has paid billions in fines and settlements related to the scandal, which surfaced in 2016.

The bank created up to two million deposit and credit-card accounts without customers’ knowledge, according to regulators.

In 2022, the  Consumer Financial Protection Bureau ordered Wells Fargo to pay $ 3.7 billion as a result of alleged widespread mismanagement.’

Last March, a former Wells Fargo executive accused of overseeing the fake-account scheme pleaded guilty to criminal charges, agreeing to a 16-month prison term and a $ 17 million fine.

Wells Fargo’s stock has risen 5.4% so far in 2024, compared to a 5.3% gain by the S&P 500 SPX.

Mike Murphy contributed to this report.