{"id":179458,"date":"2018-02-03T20:02:00","date_gmt":"2018-02-04T01:02:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2018\/02\/03\/a-major-smackdown-out-the-door\/"},"modified":"2018-02-03T20:02:00","modified_gmt":"2018-02-04T01:02:00","slug":"a-major-smackdown-out-the-door","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2018\/02\/03\/a-major-smackdown-out-the-door\/","title":{"rendered":"A Major Smackdown Out the Door"},"content":{"rendered":"
As one her last official acts as Fed Chair, Janet Yellen froze the level of its assets<\/a> in response to repeated wrongdoing:<\/div>\n

After markets closed on her final workday in office, Federal Reserve Chair Janet Yellen delivered a blow to one of the nation\u2019s largest banks: Wells Fargo & Co.<\/a> won\u2019t be allowed to grow until it cleans up.<\/p>\n

Fed officials said the San Francisco-based lender\u2019s pattern of consumer abuses and compliance lapses called for an unprecedented sanction. Until Wells Fargo addresses shortcomings in areas including internal oversight, it can\u2019t take any action that would boost total assets beyond their level at the end of 2017, without the Fed\u2019s 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.<\/p>\n

\u201cThis is akin to the last scene in \u2018The Godfather<\/a>,\u201d\u2019 said Isaac Boltansky, an analyst at Compass Point Research & Trading. \u201cChair Yellen decided to handle unfinished business on her way out the door.\u201d <\/p>\n

Yellen\u2019s act stands out at a time when the Trump administration is looking to dial back some of the financial regulations put in place after the 2008 global financial crisis. Those moves include watering down enforcement actions at the Consumer Financial Protection Bureau and proposing revisions to Dodd-Frank reforms on Wall Street.<\/p>\n

\u2026\u2026\u2026<\/p>\n

Regulators can\u2019t allow \u201cpervasive and persistent misconduct at any bank,\u201d Yellen said in a statement. She also sent a letter on Friday to Senator Elizabeth Warren, a Massachusetts Democrat who\u2019s among the bank\u2019s — and the financial industry in general\u2019s — most prominent critics.<\/p>\n

\u201cThe firm has much to do to earn back the trust of its customers, supervisors, investors and the public,\u201d Yellen told the lawmaker. The growth restriction \u201cis unique and more stringent than the penalties the Board has imposed against other bank holding companies for similar unsafe and unsound practices.\u201d<\/span><\/p><\/blockquote>\n

I expect this to be overturned within the next 12 months, but it is seriously gangsta.<\/p>\n","protected":false},"excerpt":{"rendered":"

As one her last official acts as Fed Chair, Janet Yellen froze the level of its assets in response to repeated wrongdoing: After markets closed on her final workday in office, Federal Reserve Chair Janet Yellen delivered a blow to one of the nation\u2019s largest banks: Wells Fargo & Co. won\u2019t be allowed to grow …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[456,437],"class_list":["post-179458","post","type-post","status-publish","format-standard","hentry","tag-finance","tag-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/179458"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=179458"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/179458\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=179458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=179458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=179458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}