Wells Fargo didn't pass regulatory test. Again
In April, regulators announced that they had rejected the “living will” plans proposed by Wells Fargo and four other major banks.
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. ■