After examining recent revelations that Wells Fargo charged hundreds of thousands of borrowers for unneeded guaranteed auto protection or collateral protection insurance for their automobiles, the Fed has imposed the stiffest penalties on record for one of its regulated banks. Marketwatch reports that along with a cap on assets,
Wells Fargo will replace three current board members by April and a fourth board member by the end of the year, the Fed said. […] The Fed didn’t identify which board members will have to leave.
The vote for the sanctions was 3-0, with the incoming chairman, Jerome Powell, joining Yellen and Gov. Lael Brainard. The new vice chairman for regulation, Randal Quarles, abstained.
Wells Fargo has risen nearly 5% this year, and was reportedly a leading performer in financial ETFs.