The Federal Reserve's decision to cap Wells Fargo growth until it sufficiently improves corporate oversight in the wake of a fake accounts scandal will curb the lender's profit by as much as $400 million this year, CEO Tim Sloan said.

The directive, announced after the close of New York trading on Friday, requires the San Francisco-based lender to keep its assets at or below the roughly $2 trillion held at the end of December 2017. At that time, it was the nation's third-largest bank, behind New York-based JPMorgan Chase and Charlotte, N.C.-based Bank of America.

"We understand the urgency to comply with the consent order so that our risk management program can be best in class and the limit on our asset growth can be removed," Sloan told investors late Friday. The Fed's move, coming at the end of Chairwoman Janet Yellen's tenure, is the latest blow from the fake accounts, which were made public when the bank reached a $180 million settlement with federal and local regulators in September 2016.

Ultimately, the lender conceded that more than 3 million unauthorized accounts were created over a five-year period by low-level workers under pressure to sell as many as eight different products to each household or risk losing their jobs. The resulting fallout led to contentious congressional hearings, the abrupt retirement of then-Chairman and CEO John Stumpf and the loss of lucrative government bond deals.

The bank has made significant changes since, overhauling the pay structure in its large community banking division, splitting the roles of chair and chief executive officer, and cutting incentive pay for the former CEO.

The Federal Reserve, however, says the lender needs to further improve its governance and risk management systems and ensure more effective oversight by its board.

"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.

To comply with the order, Sloan is considering limiting certain trading assets, short-term investments, and less-liquid deposits by as much as $75 billion so that lending and other deposits can continue to grow.

"I want to assure our customers, our team members, our communities, and our shareholders that Wells Fargo is open for business," Sloan said. "We take the consent order very seriously, and we will work diligently to fix the issues identified."

Each of the current directors was required to sign the order, the Fed said, and received a letter stating that the board had not meet the regulator's expectations. In tandem with the Fed's action, Wells Fargo will replace three current directors by April and a fourth by the end of the year, the central bank said.

Along with the bogus accounts, Wells Fargo has acknowledged a regulatory probe of its mortgage business and conceded that some car-loan customers were charged for insurance they didn't need.

Friday's announcement came less than a month after Wells Fargo missed analysts' earnings estimates despite a $3.25 billion benefit from last year's GOP-led tax overhaul.

The bank's shares dropped 6.2 percent to $60.09 after the close of regular trading on Friday.