Wells Fargo Ends 2021 OCC Consent Order Marking Progress in Regulatory Compliance

Wells Fargo’s Regulatory Breakthrough: A Turning Point or Just Another Step?

Regulatory Progress at Wells Fargo: The End of a Chapter

Wells Fargo has confirmed the termination of its 2021 Office of the Comptroller of the Currency loss mitigation consent order—an important milestone in the bank’s long struggle with regulatory scrutiny. The announcement marks the eleventh closed consent order since 2019 and the fifth since the beginning of 2025, reflecting ongoing efforts to rebuild trust and compliance within the organization.

In a statement, CEO Charlie Scharf emphasized the significance of resolving this order in just three and a half years—much faster than past regulatory actions, such as the 2011 Federal Reserve consent orders, which took over a decade to close. While this development is undoubtedly a positive step, the broader question remains: Is this the turning point investors and stakeholders have been waiting for, or just another incremental improvement in Wells Fargo’s drawn-out compliance overhaul?

Regulatory Reforms: A Path Toward Stability or an Ongoing Battle?

Regulators lifting the 2021 consent order signals that Wells Fargo has addressed key deficiencies in its loss mitigation practices, a core issue that has haunted its Home Lending business for years. While past consent orders have focused on fraudulent account openings and systemic risk management failures, this particular order dealt with how the bank handled struggling mortgage borrowers—a critical area of concern given the bank’s past missteps in loan servicing.

For investors, this signals a stronger compliance culture and a potentially lower risk profile. If similar progress continues, the most significant regulatory hurdle—the asset cap imposed by the Federal Reserve in 2018—could eventually be reconsidered. Removing this cap would enable Wells Fargo to expand its lending operations significantly, unlocking long-stalled growth opportunities.

Not Out of the Woods Yet

Despite this progress, Wells Fargo still has five unresolved consent orders, meaning regulatory risk is far from eliminated. These remaining orders likely involve broader systemic issues, such as risk management, consumer protections, and corporate governance—areas that have historically been slow to reform. Investors should remain cautious until more of these orders are resolved, as any setbacks could prolong existing constraints on the bank’s operations.

Market Sentiment and Investor Outlook: A Game Changer or Just a Small Win?

How the Market Reacted

While the stock showed minimal movement following the announcement—hovering around $70.84—the lack of volatility suggests that investors had already priced in regulatory progress. The termination of this consent order is certainly a step forward, but the broader market is waiting for a more substantial shift, such as the lifting of the asset cap or a significant boost in earnings before reevaluating the bank’s long-term growth potential.

Potential Catalysts for Future Growth

The termination of this order could serve as a catalyst for Wells Fargo’s stock if it signals an accelerating trend in regulatory resolutions. Analysts believe that continued improvements in compliance could eventually lead to:

A higher valuation multiple, reflecting lower regulatory risk.
Greater operational flexibility to expand fee-based services and lending operations.
The potential lifting of the asset cap, which would significantly alter the bank’s competitive positioning.

However, the broader economic climate—characterized by rising deposit costs, subdued loan growth, and interest rate uncertainty—remains a key factor in determining how much Wells Fargo can benefit from these regulatory improvements.

Bigger Picture: Will the Asset Cap Finally Be Lifted?

The Endgame: Regulatory Freedom?

At the heart of Wells Fargo’s transformation is the lingering question: Will regulators finally remove the asset cap? This restriction, imposed after the bank’s fraudulent account scandal, has severely limited growth by capping the bank’s total assets at approximately $1.95 trillion.

With each closed consent order, the possibility of the cap being lifted becomes more tangible. However, regulators have been cautious in granting Wells Fargo full regulatory freedom. The Federal Reserve has maintained that the cap will remain until the bank demonstrates sustained, systemic improvements in its governance and risk management. The closing of a single consent order—while a positive development—is unlikely to be enough on its own to convince regulators to make such a significant policy shift.

What Investors Should Watch

To assess whether Wells Fargo is truly turning a corner, investors should monitor:

The pace at which remaining consent orders are resolved.
Regulatory signals regarding potential changes to the asset cap.
The bank’s ability to improve loan growth and profitability despite macroeconomic headwinds.
Shifts in investor sentiment, particularly among institutional investors who have remained cautious despite recent progress.

Progress, But Not a Breakthrough—Yet

The termination of the 2021 OCC consent order is a meaningful step for Wells Fargo, but it is not the defining moment of its comeback. While it reflects genuine progress in compliance and risk management, the bank’s full transformation remains incomplete. With five consent orders still pending and the asset cap remaining in place, there is still work to be done before Wells Fargo can truly claim regulatory freedom.

For investors, this development should be viewed as an incremental improvement rather than a game-changing event. The real turning point will come when regulators signal a willingness to remove the asset cap or when Wells Fargo demonstrates sustainable earnings growth free from regulatory constraints. Until then, cautious optimism is warranted, but expectations should remain tempered by the realities of ongoing oversight and economic uncertainty.

Bottom Line: Wells Fargo is making strides, but the real test will be how quickly it can close the remaining consent orders and, ultimately, whether it can convince regulators to remove the asset cap. Until then, the bank remains a work in progress—albeit one that is steadily moving in the right direction.