The Federal Reserve Board and the FDIC today announced that four out of five systemically important domestic banking institutions have successfully remedied deficiencies in their 2015 resolution plans. Revisions submitted in October by Bank of America, Bank of New York Mellon, J.P. Morgan Chase and State Street were approved unanimously, after the agencies earlier this year determined that the original plans would not facilitate orderly resolution under the U.S. Bankruptcy Code in the event of failure.
The fifth bank, Wells Fargo, failed to adequately remedy its deficiencies with its revised plan, the agencies said, citing outstanding issues with “legal entity rationalization” and “shared services.” Regulators did note, however, that the bank’s revised plan did address the deficiency in the “governance” category. As a result, the agencies will impose restrictions on the growth of Wells Fargo’s international and nonbank activities. The company will have until the end of March to address the remaining deficiencies to avoid further regulatory actions, including divestiture of certain assets or operations.
