On Feb. 2, Wells Fargo&Co. ("Wells") became subject to a consent order from the Federal Reserve that caps the company's asset growth until it further enhances its governance and compliance and risk management to the standards required by the regulator. This unprecedented asset cap on a large bank underscores the continued elevated regulatory risks for Wells, and the ongoing ramifications of its retail sales practices issues, as well as the complexities of improving compliance and operational risk controls throughout its very large organization. We are lowering our ratings on Wells by one notch to 'A-/A-2', recognizing that the duration and severity of these regulatory, governance, and reputational issues are not commensurate with the previously peer-leading ratings on Wells.
