"We can not 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", Chair Janet L. Yellen said.
In an unprecedented punitive action, the US Federal Reserve on Friday ordered troubled banking giant Wells Fargo to halt its expansion until it improves governance, following "persistent misconduct".
"Although many hoped that she'd get a second term as Fed chair, we at Brookings are very pleased to have her join our team", wrote David Wessel, the director of the Hutchins Center on Fiscal and Monetary Policy at Brookings.
Federal Reserve Chair Janet Yellen professed her disappointment over not being tapped for a second term by President Donald Trump, as she also predicted the central bank would keep on its path of gradual interest-rate increases.
Wells Fargo became engulfed in scandal in 2016 after admitting its employees had opened 3.5 million phony deposit accounts and lines of credit without the knowledge of its clients as part of high-pressure retail sales tactics the bank touted to investors but has since repudiated.
Controllers can't permit "inescapable and determined wrongdoing at any bank", Yellen said in an announcement. The company kept coming under fire after revealing that auto-loan clients were forced to pay for unwanted vehicle insurance and that mortgage customers were improperly charged fees.
Maldives President declares 15-day state of emergency
He was also president between 1978 to 2008 when the Maldives, which relies on tourism, became a multi-party democracy. The Yameen government refused to implement the ruling, prompting a wave of protests in Maldives capital, Male .
She follows in the footsteps of Ben Bernanke, her immediate predecessor as chair of the Fed, former vice chair Don Kohn, and Nellie Liang, former director of its division of financial stability.
Once the Fed approves those plans, Wells will hire third-party consultants to review them and monitor its progress until the regulator is satisfied.
While its banking industry rivals grown, the Fed sanctions will hold Well's Fargo's total consolidated assets to the $2 trillion level measured as of December 31, 2017. The Fed didn't identify which board members will have to leave.
In letters sent to Wells Fargo board members, Michael Gibson, the Fed's director of supervision and regulation, said those problems show the bank's board did not properly oversee the bank.
Indeed, even after changes the bank made in the previous 17 months, Fed authorities "accept there is more work to be done, and we concur", Chief Executive Officer Timothy Sloan told experts on a phone call Friday night. Wells Fargo said, based on its preliminary analysis of one set of assumptions for prospective balance sheet optimization activities to manage within the asset cap, the company estimates its 2018 net income would be reduced by approximately $300 to $400 million after tax.