Wells Fargo CEO Charlie Scharf expressed confidence that the bank is inching closer to the point it will be freed from the $1.95 trillion asset cap it’s operated under for seven years. There’s been plenty of speculation that 2025 will be the year Wells is freed from the growth restriction. Analyst Ken Usdin noted the bank is “closer and closer to emerging from what’s been a very inward-focused period of time for the company,” as it’s overhauled risk management and internal controls to satisfy its various regulatory orders. Wells is spending about $2 billion annually on its risk and control agenda, and has simplified its business, exiting some areas with lower returns or lackluster growth rates. The bank has also brought in a number of fresh faces – 150 of the bank’s top 220 people are new – establishing the “proper risk mindset” at the company, Scharf said. Lifting the asset cap and the ultimate consent order are two different decision points for the Fed, and Scharf said he couldn’t speak for the central bank’s timing. He noted, though, that most of the work completed for other now-closed consent orders is “foundational” to those that remain. With the removal of that limitation on the horizon, the bank is preparing to pounce on growth in its retail deposits business. Given the fake-accounts scandal, sales practices were “front and center” among the bank’s issues, Scharf said, so the bank had to “literally scale back almost everything that we were doing to drive growth in the retail system, and then rebuild it from the bottom up.” During a multiyear period, the bank “didn’t have branch [profits and losses], we didn’t have sales reporting, we weren’t focused on expanding the product set, improving the digital capabilities, because we were so focused on creating the right infrastructure to satisfy the regulators – appropriately so – so that they and we could be comfortable, when we turn these things back on, that we could grow properly,” he said. The closure of the sales practices consent order “was a hugely important point,” revealing regulators’ comfort level, allowing Wells to re-create an environment where the bank can focus on doing more for customers, he said. Wells is particularly focused on primary checking account growth, Scharf said. To do that, the bank has changed compensation plans and introduced reporting; simplified its product set and segmented it to serve more and less affluent customers; is spending “significantly more” on marketing; and is focused on improving its branch experience while bolstering digital capabilities, he said. Each of the bank’s segments – consumer and small-business banking, consumer lending, wealth management, commercial banking and corporate and investment banking – “should be growing faster than they’re growing today and have higher returns,” Scharf said. When the asset cap is eventually lifted, “there’s no light switch” related to the bank’s growth trajectory, he said. But “it does lift a cloud that exists around Wells,” as the cap has limited the bank, both tangibly and in mindset. The bank has been constrained in its ability to take commercial deposits, for example, and its corporate and investment bank growth has been limited.