The Federal Reserve said Tuesday that Wells Fargo is no longer subject to harsh restraints the Fed placed on the bank in 2018 for having a toxic sales and banking culture.

It’s a win for Wells Fargo, which has spent nearly a decade trying to convince the public and policymakers that it had changed its ways.

“We are a different and far stronger company today because of the work we’ve done,” said Wells Fargo CEO Charlie Scharf in a statement. Scharf also announced that each of the 215,000 employees at Wells Fargo would receive a $2,000 award for turning the bank around.

Wells Fargo is Minnesota’s second-largest bank by deposit market share.

Wells Fargo used to have a corporate culture where it placed unreasonable sales goals on its branch employees, which resulted in employees opening up millions of fake accounts in order to meet those goals. Wells’ top executives called its branches “stores” and employees were expected to cross-sell customers into as many banking products as possible, even if the customer did not want or need them.

After an investigation by The Los Angeles Times in 2016, Wells Fargo shut down its sales culture and fired much of its leadership and board of directors. The fake accounts scandal cost Wells Fargo billions of dollars in fines and lost business, and permanently tarnished its reputation, particularly because the scandal broke only a few years after the Great Recession and financial crisis. It was later revealed that Wells Fargo opened up roughly 3.5 million accounts that were not wanted or needed by customers.

Wells Fargo, once thought to be the best run bank in the country, became the poster child of the worst practices of banking in decades.

In order to push Wells to fix itself, the Federal Reserve took the unusual step of placing Wells Fargo in a program where the bank could grow no larger than it was in 2018. No bank had previously been placed into such a program, known as an asset cap. The Fed required Wells to fix it culture and redo its entire risk and compliance departments in order to address its problems.

Since taking over in 2019, Scharf’s goal has been to convince the Federal Reserve that Wells Fargo had fixed its toxic banking practices. With the asset cap removed, the bank can now pursue more deposits, new accounts and take on additional investment banking businesses by holding additional securities on its balance sheet.

— Associated Press

UNH OKs Hemsley’s $60M stock package

UnitedHealth Group shareholders approved a pay package for Chief Executive Officer Stephen Hemsley that includes a $60 million stock option award.

The advisory vote is a sign of shareholders’ confidence in Hemsley, the chairman and returning CEO who helped shape UnitedHealth for decades. He reclaimed the top job last month as the health giant faces multiple crises that cut its market value by more than half since its November peak. In addition to the $60 million award that vests in three years, Hemsley will get a $1 million annual salary.

In his first public address since taking the job, Hemsley said at the annual shareholder meeting that management is determined to “earn back your trust and your confidence.”

UnitedHealth is parent of the largest U.S. health insurer. It is based in Eden Prairie.

Meta power deal saves Illinois nuclear plant

Meta has cut a 20-year deal to secure nuclear power to help meet surging demand for artificial intelligence and other computing needs at Facebook’s parent company.

The investment with Meta will also expand the output of a Constellation Energy Illinois nuclear plant.

Financial details of the agreement were not disclosed.

Constellation’s Clinton Clean Energy Center was actually slated to close in 2017 after years of financial losses but was saved by legislation in Illinois establishing a zero-emission credit program to support the plant into 2027.

With the arrival of Meta, Clinton’s clean energy output will expand by 30 megawatts, preserve 1,100 local jobs and bring in $13.5 million in annual tax revenue, according to the companies.

— From news services