The Office of the Comptroller of the Currency (OCC), a key banking regulator in the United States, has issued an enforcement action against Wells Fargo for shortcomings in its risk management practices, CNN reports.
The move sent shares of the bank down 5% in afternoon trading.
The OCC identified deficiencies in Wells Fargo’s financial crimes risk management practices and its anti-money laundering internal controls.
The enforcement action requires Wells Fargo to obtain permission from the OCC before launching new business initiatives in areas with a medium or high risk of money laundering or sanctions violations. Despite the seriousness of the action, the OCC is not seeking any monetary penalty from the bank.
“We have been working to address a substantial portion of what’s required in the formal agreement, and we are committed to completing the work with the same sense of urgency as our other regulatory commitments,” Wells Fargo said in a statement.
This latest action comes as Wells Fargo continues to grapple with the repercussions of a multiyear scheme that involved a range of illegal activities, including misapplying loan payments, wrongfully foreclosing on homes, illegally repossessing vehicles, and improperly assessing fees and interest. The bank has spent billions of dollars settling civil and criminal charges related to these activities.
Last year, the former head of Wells Fargo’s retail operation was sentenced to three years of probation, while the bank’s former CEO was permanently banned from the industry.
