By Rebecca Ungarino

Wells Fargo said Monday that the Consumer Financial Protection Bureau lifted a consent order that the bank had been operating under for seven years, a sign that what had been the nation's most troubled big lender is fixing long-running compliance weaknesses.

The San Francisco-based bank said the agency terminated a consent order issued in April 2018 for improperly charging some mortgage borrowers and for the way it ran an insurance program for auto loans.

The CFPB found at the time that Wells Fargo had violated the Consumer Financial Protection Act, and ordered the bank to improve its framework for risk-management compliance. While the CFPB said Wells Fargo had begun to remedy problems with the way it treated customers, the order became another blemish for the bank as it reeled from the high-profile fake-account scandal that erupted in 2016.

Employees opened thousands of accounts for customers without their permission as they sought to meet the bank's targets for sales.

Nine years since the bank's misconduct burst into public view, and two chief executives later, the third-largest U.S. bank has overhauled its leadership team, cleared a dozen consent orders, and boosted its stock. Earlier this month, Wells Fargo reported a higher first-quarter profit than a year earlier, exceeding Wall Street's expectations. Analysts have broadly turned positive on the bank as it has progressed toward eliminating all of its outstanding consent orders.

Wells Fargo CEO Charlie Scharf, who took over in late 2019, said in a statement on Monday that the bank "is a different and stronger company today as we focus on creating long-term value for our customers, clients, communities and shareholders."

Shares of Wells Fargo fell by 0.7% on Monday, in line with the S&P 500. The stock is down 15% from a record high it reached earlier this year while the market has fallen 9.7%.

The consent order's termination marks the 12th consent order that regulators have closed since 2019. It is the sixth closed this year.

Two remain open. The most significant, and the one most closely watched by shareholders, is a restriction on growth imposed in 2018 by the Federal Reserve. That asset cap limited the bank's expansion until it fixed failures tied to governance and controls that led to the unauthorized-account scandal. The other outstanding consent order was brought by the Office of the Comptroller of the Currency in 2015.

"In view of the six consent orders being lifted this year and Treasury Secretary Bessent's commentary regarding loosening the regulatory 'corset' around the banking system, we believe the Federal Reserve's 2018 order could be lifted in the [the second quarter] and possibly real soon," wrote RBC Capital Markets analyst Gerard Cassidy, in a note to clients. He has an Outperform rating on Wells Fargo's stock.

Wells Fargo's recent consent-order closures show "that we have completed much of our common risk and control infrastructure work, including work that is required by other orders," Scharf said.

The CFPB didn't respond to a request for comment on Monday. In January, when the bank cleared a separate consent order, the agency said in a statement that Wells Fargo "is a repeat offender that continues to have serious issues," and that it continued to scrutinize the lender.

Banks are closely watching how the agency itself evolves. The Trump administration is aiming to shrink the CFPB, a watchdog that has long been a target of Republicans. However, a recent letter from the agency to employees about its 2025 priorities said it is shifting toward supervising large banks and de-emphasizing nonbank financial companies.

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com

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April 28, 2025 13:10 ET (17:10 GMT)

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