Wells Fargo is coming under renewed pressure from Sen. Elizabeth Warren, D-Mass., who is pushing the Federal Reserve to revoke its license in a bid to break up the bank.

Warren, a progressive senator who is among Wall Street’s vocal critics, wrote a letter to Federal Reserve Chairman Jerome Powell on Tuesday where she made the case to break up Wells Fargo. In the letter, Warren urged the central bank to use its powers to revoke Wells Fargo’s license as a financial holding company (FHC).

Under the Bank Holding Company Act, FHCs like Wells Fargo are required to be “well-capitalized” and “well managed.” If a company fails to meet these requirements, the central bank provides an opportunity to the FHC to correct any shortcomings in 180 days or it can be ordered to cease activity.

The senator argues that Wells Fargo’s history of falsifying bank account numbers and conflicts with federal regulators over the years justifies its breakup. In 2018, then-Fed Chairwoman Janet Yellen imposed an “asset cap” on the bank for “widespread consumer abuses and other compliance breakdowns.” Since then Warren has warned that Wells Fargo has not learned any lessons from the penalties levied against it over the years.

More recently, Warren pointed to a consent order from the Office of the Comptroller of the Currency (OCC) issued over Wells Fargo’s ongoing problems related to mortgage foreclosures and the bank’s failure to comply with past consent orders issued by the agency. The agency assessed a $250 million penalty against Wells Fargo.

"In the more than three years since then, numerous additional revelations have surfaced about Wells Fargo’s continued unethical and anti-consumer conduct," wrote Warren.

“These new revelations have once again made clear that continuing to allow this giant bank with a broken culture to conduct business in its current form poses substantial risks to consumers and the financial system,” she added.

The same day Warren sent her letter to Powell, Wells Fargo released a statement where it said meeting regulators' expectatons on risk management is a "top priority." In their statement, Wells Fargo shared changes it has implemented since 2019 in response to the scandal five years ago that includes restructuring its business groups to ensure better oversight, strengthened risk management programs, and a new incentive plan that it says is governed by "stronger oversight and controls" while being "focused on customer relationships."

The bank also touted "milestones" reached in the last two years with regulators including an end to a Consumer Finance Protection Board consent order from September 2016 and another consent order from the OCC in 2015 being lifted in January.

Wells Fargo has found in Warren a persistent foe who has repeatedly demanded accountability for its violations of federal regulations. For Warren, Wells Fargo is something of an embodiment of the rampant risktakers on Wall Street who pushed the financial system over the edge during the Great Recession.

In 2016, Warren called on former CEO John Stumpf to resign after news broke that Wells Fargo was opening bank accounts and credit cards on behalf of customers without their consent. A year later, she said to Stumpf’s replacement Timothy Sloan that “You should be fired” over the scandal and in 2018 urged the Federal Reserve to restrict the bank’s growth until Sloan left the company. After current CEO Charles Scharf took the reins in 2019, Warren promised that she would be “watching him carefully.”

In January, Scharf announced plans to expand Wells Fargo's investment banking business in spite of the asset cap placed on it. Warren referred to these intentions as all the more reason that the Fed needed to act to protect consumers because Wells Fargo cannot be trusted to protect them.

“By invoking its full authority to protect consumers and the financial system and requiring Wells Fargo to separate its consumer-facing banking arm from the rest of its financial activities, the Fed can ensure that Wells Fargo faces appropriate consequences for its longstanding, ungovernable behavior,” said Warren.

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