Wells shed its asset cap — but it isn’t clear why

In 2018, the Federal Reserve Board’s total growth restriction on Wells Fargo established a new tool for dealing with large banks with broken compliance cultures.

Many in and around the banking space viewed the $1.95 trillion asset cap — imposed in response to Wells Fargo’s cross-selling and fake accounts scandals — as a high-water mark for regulatory enforcement, one they believed would inform how regulators administer similar penalties moving forward.

But after seven years, billions spent by the bank on reforms and billions more in lost potential growth, it is unclear to the rest of the banking sector and the broader public just what the San Francisco bank did to get out from under the cap. 

The Fed’s 169-word written statement announcing the removal of the asset cap on Tuesday…