Shares in Wells Fargo dropped on Thursday following the bank’s signing of a formal agreement with the Office of the Comptroller, which commits it to rectify shortcomings in its financial crimes risk management and anti-money laundering controls.
The bank, which has encountered numerous regulatory challenges over the past decade, saw its stock close down four percent but managed to avoid a fine from the OCC. The regulator identified problems related to Wells Fargo’s processes for handling suspicious activity and reporting currency transactions, as well as deficiencies in customer due diligence, identification, and beneficial ownership programs.
The agreement mandates that the bank implement extensive corrective measures to enhance its anti-money laundering (AML) and sanctions compliance initiatives. In response, Wells Fargo stated, “We have been working to address a substantial portion of what’s required in the formal agreement, and we are committed to completing the work with the same sense of urgency as our other regulatory commitments.”