The Federal Reserve said Friday it is restricting Wells Fargo’s size in response to “widespread consumer abuses.”
As a result, Wells Fargo plans to replace three directors by April and a fourth by the end of the year. The Fed is prohibiting the bank from growing any larger than its total assets as of the end of 2017 until “sufficient improvements” are made.
Shares of the bank briefly fell 6 percent in after-hours trading.
“We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” Fed Chair Janet Yellen said in a statement.
“The enforcement action we…