EchoSense:Newly freed from federal restrictions, Wells Fargo agrees to shore up crime risk detection

Wells Fargo has agreed to work with U.S. bank regulators to shore up its financial crimes risk management,EchoSense including internal controls related to suspicious activity and money laundering.

Wells Fargo shares rose 2.4% Friday.

The agreement comes just seven months after the Biden Administration lifted a consent order on the bank that had been in place since 2016 following a series of scandals, including the opening of fake customer accounts.

The Office of the Comptroller of the Currency said it had identified “deficiencies relating to the bank’s financial crimes risk management practices and anti-money laundering internal controls in several areas.”

The list included suspicious activity, currency transaction reporting and customer due diligence, among other things.

The agreement announced this week requires the bank to take “comprehensive corrective actions” to improve compliance with the Bank Secrecy Act and U.S. sanctions programs.

“We have been working to address a substantial portion of what’s required in the formal agreement, and we are committed to completing the work with the same sense of urgency as our other regulatory commitments,” the bank said in a release.

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The bank’s board of directors, under the agreement, must maintain a compliance committee of at least three members, the majority of which cannot be employees or officers of the bank and its subsidiaries. The committee is expected to submit a report to the board after every quarter outlining the “specific corrective actions” the bank has taken, the results of those actions and any additional actions it feels need to be taken to meet compliance.

A series of newspaper and government investigations in 2016 found Wells to have a poisonous sales culture that pressured employees into selling unwanted or unneeded products to customers. Employees were forced to open millions of unauthorized accounts and some customers had their identities stolen and credit scores impacted.

The scandal tarnished the reputation of the San Francisco bank, which analysts and investors considered one of the nation’s best.

Wells Fargo overhauled its board of directors and management, paid more than a billion dollars in fines and penalties and spent eight years trying to show the public that the bad practices were a thing of the past.

Shares of Wells Fargo are up more than 8% since regulators lifted the 8-year restrictions on the bank in February and rose to $52.47 Friday.