ML-Implode News - Fed Slaps Wells With Rare Asset-Freeze Punishment, in Yellen's Final Act

Fed officials said the San Francisco-based lender's pattern of consumer abuses and compliance lapses called for an unprecedented sanction. Until Wells Fargo addresses shortcomings in areas including internal oversight, it can't take any action that would boost total assets beyond their level at the end of 2017, without the Fed's permission. The bank said after-tax profit in 2018 would be reduced by $300 million to $400 million and its stock slumped in late trading Friday.
"This is akin to the last scene in â€˜The Godfather,"' said Isaac Boltansky, an analyst at Compass Point Research & Trading. "Chair Yellen decided to handle unfinished business on her way out the door."
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[Elizabeth] Warren replied in a statement: "Her decision today demonstrates that we have the tools to rein in Wall Street -- if our regulators have the guts to use them."

Wells Fargo's assets are now capped at $1.95 trillion. Fed officials say the bank is welcome to continue taking deposits and lending to customers, but it must stay below the limit. The firm's compliance will be measured as an average of assets over two quarters, according to the regulator.

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Fed Slaps Wells With Rare Asset-Freeze Punishment, in Yellen's Final Act