Wells Fargo hit with Fed growth ban

After markets closed onher final workday in office, Federal Reserve Chair Janet Yellen delivered an unusually harsh blow to one of the nation’s largest banks: Wells Fargo &Co. won’t be allowed to grow until it cleans up.

Fed officials Friday said the San Francisco based lender’ s years-long pattern of consumer abuses and compliance laps es called for an unprecedented sanction. Until Wells Fargo addresses short comings in areas including internal oversight, it can’t take any action that would boost total assets beyond their level atthe end of 2017, without the Fed’s permission.

The Fed’s punishment, a forceful intervention by thegovernment into the affairs of a large company, meansthat one of the country’s largest and mostpowerful financial institutions will be unable to keep pace with its fast growing rivals. And the move is all the more extraordinary because it comes ata time when federal banking regulators appointed by President Donald Trump are working vigorously to relax rules thatwere imposed in the years following the financial crisis.

It’s been a long time coming. Wells Fargo began stumbling through a spate of scandals 17 months ago, starting with revelations that branch employees opened millions of accounts without customer permission to meet aggressive sales targets.The company kept coming under fire after revealing that auto-loan clients were forced to pay for unwanted car insurance andthat mortgage customers were improperly charged fees.

On Friday night, Fed officials said they had been workingon their order for awhile, and that the company had just finally agreed to it.