Wells Fargo gets hit with new AML consent order

Wells Fargo is facing new regulatory troubles over anti-money-laundering prevention, with its main federal regulator imposing another penalty for shortcomings on Thursday.

The Office of the Comptroller of the Currency flagged “deficiencies” at the megabank in an enforcement action released Thursday. The order is a major setback for Wells, which was freed from a separate anti-money-laundering order with the OCC in 2021.

The bank’s stock plunged by about 4% on Thursday afternoon immediately after the news, though it soon clawed back a portion of the loss. Investors have hoped that Wells CEO Charlie Scharf, who joined the bank in late 2019, will finally be able to rid the San Francisco company of its numerous regulatory troubles.

In a statement, the bank said Thursday that it has been “working to address a substantial portion of what’s required in the formal agreement.”

“We are committed to completing the work with the same sense of urgency as our other regulatory commitments,” the bank said.

The OCC said it’s requiring the bank to take “comprehensive corrective actions” to ensure that it’s reporting suspicious activity, doing adequate customer due diligence and customer identification.

Wells Fargo said it will have to obtain the OCC’s acceptance on how it gauges money laundering and sanctions risks as it launches new products. It will also have to notify the OCC before it expands some of those new products.

The bank continues to operate under an asset cap that the Federal Reserve imposed in 2018, a response to an earlier scandal over retail sales practices.