March 21, 2020 / 3:02 PM / 11 days ago

UPDATE 1-Wells Fargo asks Fed to lift asset cap amid coronavirus fallout -source

(Changes sourcing, adds background)

By Pete Schroeder

March 21 (Reuters) - Wells Fargo & Co has urged the U.S. Federal Reserve to lift an asset cap on the bank to help it support businesses and customers hit by economic fallout from the coronavirus outbreak, a source familiar with the matter said on Saturday.

The Federal Reserve in early 2018 ordered Wells Fargo to keep its assets below $1.95 trillion, until it had improved its governance and risk controls following a wave of sales practice scandals.

Wells Fargo spokeswoman Arati Randolph on Saturday said the bank could not comment on regulatory matters, adding that it was focused on satisfying the requirements of the consent order.

"During these challenging times, we are very focused on doing all we can for our clients while operating under the constraints of the asset cap," Randolph said in an email.

The Federal Reserve declined to comment.

The central bank imposed the unprecedented cap as a penalty for sales practices and abuses at Wells Fargo, including the opening millions of phony accounts and overcharging customers on products ranging from mortgages to auto loans.

The cap has been a drag on Wells Fargo's reputation and earnings. Chief Executive Charles Scharf, who took over in October, has made it a priority to resolve outstanding regulatory matters.

Wells Fargo said on Friday it was suspending residential property foreclosure sales, evictions and involuntary automobile repossessions due to the coronavirus outbreak.

The bank also said it was temporarily closing some branches, adjusting the operating hours of others, relocating employees and increasing charitable donations. (Reporting by Pete Schroeder in Washington, Rama Venkat and Rishika Chatterjee in Bengaluru; Editing by Alexander Smith and Tom Brown)

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