By Jen Wieczner
February 3, 2018

Fed chair Janet Yellen will officially leave her post Saturday, but she’s not going quietly. On Friday evening, on Yellen’s last business day at the Federal Reserve, the central bank slapped new sanctions on Wells Fargo to punish it for a recent string of misbehavior, including a fake accounts scandal.

Upbraiding Wells Fargo (wfc) for its chronic bad behavior, the Fed imposed a consent order that prohibits the bank from growing its assets any larger indefinitely, a severe handicap in the competitive financial industry. The Fed’s “cease and desist” order also forces Wells Fargo to replace another four of its board members this year, though it’s not yet clear exactly which directors will depart.

“We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” Yellen said in a statement.

Wells Fargo stock plunged more than 6% in after-hours trading Friday, following a more than 2% decline during the day. The bank predicted that the Fed’s restrictions would shave $300 million to $400 million off its bottom line in 2018. (Wells Fargo made $22.2 billion in net income last year.)

In 2016, Wells Fargo paid a $185 million fine for illegally opening phony accounts for consumers; last summer, the bank raised its estimated tally of sham accounts to 3.5 million. In the meantime, Wells Fargo has been beset with other scandals stemming from its aggressive sales tactics, including damaging revelations that it may have inappropriately charged mortgage and auto insurance fees.

“The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers,” added Yellen, who will be succeeded by new Fed chair Jerome Powell on Monday.

The Fed’s move caps Wells Fargo’s assets at $2 trillion, their total at the end of 2017. By comparison, JPMorgan (jpm) ended last year with $2.5 trillion in assets, while Bank of America (bac) had $2.3 trillion, Citigroup (c) had about $1.8 trillion and Goldman Sachs (gs) had $1.49 trillion.

The penalties could make it harder for Wells Fargo to compete. On a conference call Wells Fargo’s management team held following the Fed’s announcement, Wall Street analysts raised the prospect that the bank could fall behind its peers as it cuts back on certain activities in order to keep its assets under the limit. “I’d think every competitor is looking at this thinking it means [Wells Fargo is] going to be on a back foot for the next year, so let’s go after market share,” said Betsy Graseck of Morgan Stanley.

Because the Fed also recently raised interest rates in 2017, banks like Wells Fargo are also making more money off their lending businesses and from consumer deposits. That presents an additional challenge to Wells Fargo in keeping its assets in check to comply with the Fed order. As a result, the bank said it planned to create a “buffer” by scaling back on trading and short-term investments, and to temporarily stop accepting certain deposits from financial institutions.

But Wells Fargo CEO Tim Sloan sought to convey an air of business as usual: “I want to repeat, we are open for business,” said Sloan, who became chief executive in 2016 after his predecessor John Stumpf resigned under pressure.

The bank plans to complete an independent risk management review by the end of September of this year, after which the Fed will decide whether Wells Fargo has sufficiently addressed its concerns and whether to lift the sanctions. “We’ll want to be very sure that the changes that we’ve made and improvements have been implemented, but we want to have this cap lifted as soon as possible,” Sloan added.

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