NEW YORK (Reuters) - The U.S. Federal Reserve announced late on Tuesday that Wells Fargo ( WFC ) will no longer have to operate under a $1.95 trillion asset cap the regulator imposed on the bank in 2018 following its long-running sales practices scandal.

Wells Fargo ( WFC ) shares were up 2.1% after the bell at $77.27.

COMMENTS:

MAC SYKES, PORTFOLIO MANAGER, GABELLI FUNDS, NEW YORK

"This shouldn't be a surprise because we knew that it was coming but it removes a major regulatory overhang. It provides them a reputational boost which is helpful, provides more and different capital allocation opportunities and allows them to grow their balance sheet. This also demonstrates the leadership path that Charlie Scharf has taken with this company to make sure it's streamlined, more competitive and regulatory compliant."

ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK

"This is bullish for the stock and for the market because whenever you have a situation where stress is reduced or taken away from the system, especially for one of the largest banks in the country, that bodes well for the market and for the economy. The reason why those measures were in place was the Fed... was worried about too much risk. The fact that they're no longer worried about that tells us that the bank is in strong hands, the bank is operating very well and, most importantly, the bank has earned the right to get those restraints removed. That adds confidence. From an investing standpoint, that bodes well for the stock and for the market. All things being well, a healthier financial system is good for the market and good for the economy."

DAVID WAGNER, HEAD OF EQUITIES, PORTFOLIO MANAGER, APTUS CAPITAL ADVISORS LLC, FAIRHOPE, ALABAMA

"This is pretty big news to me. It will potentially increase the company's overall valuation as it continues to trade at a discount relative to peers. It gives them another lever to equal the playing field from a growth perspective. This is a pretty big win for Charlie Scharf. They finally escaped this Federal Reserve's financial asset cap that restricted the size (of the company) for quite some time."

STEPHEN BIGGAR, BANKING ANALYST, ARGUS RESEARCH, NEW YORK

"This marks the end of a painful period for Wells Fargo ( WFC ), and also serves as a reminder for financial institutions to be sure customer interests are always aligned with growth goals."

(Compiled by the Global Finance & Markets Breaking News team)