"Just based upon the news accounts, which of course is all I have to go on, the activities of Wells Fargo in this domain are egregious and unacceptable and I was as shocked as anyone to read about it in the newspaper," said economist Richard Clarida, the nominee to be vice chairman of the Fed, at a Senate Banking Committee hearing.
"If I am confirmed and this matter came before me, as it looks like it would, I would certainly individually want to be absolutely convinced that appropriate steps had been taken and could be verified," he said in response to questioning from Sen. Jon Tester, D-Mont.
The other of President Trump's Fed nominees at the confirmation hearing, Kansas banking regulator Michelle Bowman, said she concurred with Clarida's answer.
"The actions of Wells Fargo were absolutely inappropriate and I would certainly want to make sure that any concerns are addressed by the bank prior to any discussion," she said.
Tester had asked them for assurances that they would not support releasing Wells Fargo from the growth cap until "they significantly change the way they do business."
In February, the Fed board voted unanimously to order Wells Fargo to cap its growth at the $1.95 trillion in assets reached at the end of last year and to improve its corporate governance in response to the creation of millions of unauthorized customer accounts and other consumer abuses.
The consent order required Wells Fargo's board of directors to submit written plans to improve its oversight and risk management, which they did last month.
Fed Chairman Jerome Powell said last week in a letter to Sen. Elizabeth Warren, D-Mass., that Wells Fargo would have to receive a formal vote from the Fed board before the growth restriction was lifted.
At a March hearing, Warren had objected when Powell said the decision would be made by Fed staff in consultation with the board. Warren pressed Powell to hold a vote so Congress and the public could hold the Fed accountable when it decides whether to lift the stiff penalty it placed on the San Francisco banking giant.
Wells Fargo Chief Executive Timothy Sloan told investors at a conference last week that he expected the growth cap would probably continue into 2019.
Clarida is a respected economics professor at Columbia University as well as global strategic advisor at Newport Beach-based bond giant Pacific Investment Management Co., known as Pimco.
Bowman has been the Kansas State Bank Commissioner since 2017. She was an executive at Kansas-based Farmers & Drovers Bank, which her great-great grandfather helped charter. She also has worked as a congressional staffer in Washington, as well as at the Federal Emergency Management Agency and the Department of Homeland Security.