Elizabeth Warren is putting Wells Fargo (WFC  ) on notice.

The chair of the Senate Banking, Housing and Urban Affairs Subcommittee on Economic Policy sent a detailed letter to Federal Reserve Chair Jerome Powell, in which she argues that recent missteps by the beleaguered bank show that it is unworthy of its status as a financial holding company (FHC).

Should the Fed revoke this crucial status, Wells Fargo would have to divest itself of its Wall Street operations, which would, in essence, split the bank in two. Senator Warren argues that regular customers would not be impacted by this major shift in operations at the nation's fourth-largest bank.

In fact, Warren argues that such steps are necessary to maintain the sanctity of regular customer's accounts and loans.

"The only way these consumers and their bank accounts can be kept safe is through another institution-one whose business model is not dependent on swindling customers for every last penny they can get. The Fed has the power to put consumers first, and it must use it," writes Warren.

Under the Banking Holding Company Act, any institution with FHC status must qualify as both "well-capitalized" and "well managed." Senator Warren's letter cites a 2018 disclosure that proved that Wells Fargo had failed to qualify as "well managed," according to standards set by the Fed.

"It is inconceivable," her letter contends, that Wells Fargo could qualify as "well managed," given the pace and cadence of the bank's recent regulatory blunders.

Powell is unlikely to ascent to Warren's claims, given the risk such a divestiture would pose to Wells Fargo's overall financial health.

"The banking system has evolved considerably since Congress allowed investment banks and commercial banks to get together 25 years ago," Jaret Seiberg, an analyst at Cowen Washington Research Group, told the New York Times. "These operations are now interwoven, and it's not as simple as saying, 'You have to sell half the bank.' Breaking up is hard to do."

Wells Fargo is no stranger to regulatory run-ins. The bank has paid $5 billion in fines in recent years, and the Fed has placed it under a strict asset cap under the condition that it must reform its risk-management practices.

Wells Fargo rose to infamy in 2016 when its practice of opening fraudulent savings and checking accounts on behalf of customers without their knowledge became widely known.

In an email to journalists, a Wells Fargo spokeswoman cited recent overhauls to the institution's management structure, efforts that began in earnest in 2019. The company argues that Wells Fargo has improved oversight, sped up its remediation efforts, and nixed harmful sales practices.

The company's email also points to its efforts in 2015 and 2016 to improve its anti-money laundering efforts and end its harmful sales practices. Said efforts were undertaken largely under the impetus of regulators.

However, the bank's recent $250 million fine from the Office of the Comptroller of Currency (OCC) contradicts this narrative of reform, Warren contends.

In short, Wells Fargo was fined because it failed to comply with a 2018 order from the regulator to fix "unsafe or unsound" practices in its home lending business. In fact, the OCC found that Well's management of customers' mortgage accounts had become so sloppy that some borrowers were subject to unwarranted foreclosures. The OCC gave the bank five months to amend its loan management practices and ordered it to halt some suspect foreclosures, in addition to the aforementioned fine.

"This massive fine represents another astonishing failure in a long chain of lawlessness and incompetence by Wells Fargo and its top executives," writes Senator Warren. "This new incident raises fresh questions about...whether the Board, and Charles Scharf, who was named CEO of Wells Fargo in September 2019, are capable of effectively managing the bank."