Wells Fargo Commits to Regulator Agreement to Fix Financial-Crime Controls — Update

By Connor Hart

Wells Fargo has agreed to enhance its anti-money-laundering and sanctions-risk-management practices after the Office of the Comptroller of the Currency identified deficiencies with the bank's current programs.

The OCC on Thursday entered an agreement with Wells Fargo, under which the bank must obtain the regulator's approval of its program for assessing anti-money laundering and sanctions risks of new offerings, as well as provide notice before expanding its offerings.

The bank's board must also maintain a three-person compliance committee, the majority of whom wouldn't be employees or officers of the company, to ensure compliance with the agreement.

Wells Fargo's shortfalls included its suspicious-activity and currency-transaction reporting, due diligence of customers, and customer-identification and beneficial-ownership programs, the OCC said.

The bank said it was working to address a significant portion of the requirements included in the agreement. "We are committed to completing the work with the same sense of urgency as our other regulatory commitments," it said.

Wells Fargo, whose shares were recently down 4.8%, to $51.17, has struggled to monitor financial crimes amid its yearslong effort to recover from a series of scandals.

Regulators in November issued formal orders to the bank to improve its broad consumer-watching system after a lawsuit claimed the bank allowed an alleged $490 million Ponzi scheme to operate.

Years earlier, the OCC cited its own failures in catching Wells Fargo's questionable sales practices years before the bank eventually paid a $185 million fine in September 2016 for what authorities at the time called widespread illegal sales practices, including opening of as many as two million phony customer accounts.

In 2018, Wells Fargo was slapped with a $1 billion settlement related to claims of misconduct, including failures to identify and prevent problems and improper charges to consumers, in its auto- and mortgage-lending businesses.

Write to Connor Hart at connor.hart@wsj.com