If the Fed order is lifted quickly — a big if — then the impact on Wells should be minimal. But if it lingers past 2018, then the bank could find itself on the losing end of the battle for customers and top talent.
The Federal Reserve on Friday slapped Wells Fargo with one of the harshest orders it has ever handed down, but the message it sent went far beyond a single institution.
Wells has tapped Sarah Dahlgren for a newly created position overseeing regulatory relations as the megabank tries try to remove the cloud of its phony-accounts scandal.
Though business owners are more optimistic about the direction of the economy since the tax law was passed, it's doubtful their borrowing will increase meaningfully until they see more signs of more robust growth, bankers say.
Weak loan growth, a $3.25 billion litigation accrual and other costs tied to the phony-accounts saga all added up to a messy fourth quarter for the San Francisco bank.
The JPMorgan Chase CEO is rejecting arguments that banks are poised to loosen underwriting standards to win more mortgage business. He said what's needed to encourage banks to make more loans to borrowers with spotty credit files are changes to FHA rules and other policy fixes.
The disclosure of a key part of Wells Fargo's exam rating is fueling speculation that further regulatory action may soon be taken against the megabank and raising renewed questions about its regulator's oversight.
Fifth Third said it will give a bonus or raise to about three-quarters of its employees while Wells Fargo raised its minimum hourly pay in the wake of Congress' passing a tax reform bill.
