Wells Fargo Faces Limits After Second Living Will Failure

The rejection marks another setback for the lender still reeling from a scandal over phony customer accounts and means it's now banned from buying non-bank companies or setting up international units. While deeming Wells Fargo's so-called living will inadequate, the Federal Reserve and Federal Deposit Insurance Corp. also said Tuesday that JPMorgan Chase & Co., Bank of America Corp., Bank of New York Mellon Corp. and State Street Corp. had fixed deficiencies with their plans. The agencies had rejected all those banks' documents in April.

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When its living will was first rejected earlier this year, Wells Fargo was hammered for "material errors." In a plan re-filed on Oct. 1, the bank detailed what it had done to fix its deficiencies. The publicly available section of the revised plan said it sold some non-core businesses to make the bank easier to handle in a failure. The lender also said it increased capital and liquid assets to be better able to absorb losses.

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In Tuesday's second failure, the bank didn't remedy problems with how it has organized its various "legal entities" and how it shares its services among units, according to the Fed and FDIC.