Shares of U.S. banking giant Wells Fargo & Co (NYSE:WFC) surged by approximately 3.6% in morning trading to $55.52, following reports that the bank has submitted a third-party review to the Federal Reserve in an effort to lift a long-standing regulatory asset cap.
According to reports, which cited sources familiar with the matter, the review details Wells Fargo’s risk and control overhauls as it seeks to address the issues that have kept the asset cap in place.
The $1.95 trillion asset cap, imposed by regulators in 2018 after a series of scandals, prevents Wells Fargo from growing its balance sheet until the bank has successfully reformed its risk management practices.
Wells Fargo currently faces eight regulatory consent orders that it continues to work through as part of its efforts to regain regulatory trust.
The Federal Reserve has not made any recent public statements regarding Wells Fargo's asset cap, with Fed Chair Jerome Powell previously stating in 2021 that the cap would remain until the bank had comprehensively addressed its internal issues.
Despite the regulatory headwinds, Wells Fargo’s share price has climbed approximately 13% year-to-date, bolstered by investor optimism over the bank’s progress on regulatory reforms.
Wells Fargo declined to comment on the latest report regarding the third-party review.