I phoned my Wells Fargo Branch Manager today about HELOC, and he said Wells Fargo is in "bank jail". He said they're prohibited from growing total assets except Paycheck Protection Program. They'll be penalized if their total assets grow before the Federal Reserve says they are out of bank jail. They're trapped at 2018 asset levels.

What does he mean? What's the official term for "bank jail"? Any official websites?

I'm Canadian, my primary residence is in Ontario, and I have property in U.S. I don't closely follow US banking law. r/wallstreetbets has a post on this.

  • I don't know much about it so I don't feel qualified to answer, but a web search for "Wells Fargo Federal Reserve" yields many April 2020 news stories such as cnbc.com/2020/04/08/…
    – user662852
    Commented May 1, 2020 at 5:25

1 Answer 1


Wells Fargo in the United States has been embroiled in a series of scandals and missteps for at least half a decade. See the Wells Fargo Account Fraud Scandal for some details.

It got to such a point where the Federal Reserve in Feb 2018 froze Wells Fargo's asset level.

Assets for a bank are loans and other obligations where the bank makes money. Savings & checking accounts for a bank are actually debts, as the customer owns the money.

While banking is a regulated industry, the number of inquiries, violations and settlements meant that the Board of Governors of the Federal Reserve has to state in: https://www.federalreserve.gov/newsevents/pressreleases/files/enf20180202a1.pdf

Limits on Growth

As of the last day of the first full calendar quarter following the date of this Order and the last day of each quarter thereafter, WFC shall not, without the prior written approval of the Reserve Bank, with the concurrence of the Director of the Division of Supervision and Regulation, take any action that would cause the average of WFC’s total consolidated assets reported in line 5 of Schedule HC-K to the form FR Y-9C (Consolidated Financial Statements for Holding Companies) for the current calendar quarter and the immediate preceding calendar quarter to exceed the total consolidated assets reported as of December 31, 2017, in line 12 of Schedule HC to the form FR Y-9C (Consolidated Financial Statements for Holding Companies).

As you have found out, Wells Fargo in the United States is still operating under these conditions.

And you have noted that the Fed temporarily and narrowly modified the growth restriction on Wells Fargo for Paycheck Protection Program while keeping the rest of the restrictions in place.

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