Wells Fargo didn't pass regulatory test. AgainStaff Writer |
Banking Only Wells Fargo did not pass
For the second time this year, Wells Fargo didn't pass a key regulatory test that was created after the 2008 financial crisis.
Each bank had been required to submit a plan to unwind itself in a way that would safeguard the economy in case of the bank’s failure.
Since then, all five banks have resubmitted their disaster-preparedness plans; only Wells Fargo’s plan did not pass muster.
The Federal Reserve and the Federal Deposit Insurance Corporation will prohibit Wells Fargo from establishing new international units or acquiring a subsidiary that is not a bank.
Those penalties can be lifted if Wells Fargo fixes its plan by March 31. The bank has until then to submit its plan a third time; if the problems linger too long, regulators could place additional limits on the company. ■
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