In a segment of his Mad Money show Friday, a special episode live from Minneapolis, Jim Cramer welcomed colleagues Jon and Pete Najarian to the show to discuss the late-breaking news that outgoing Federal Reserve chairman Janet Yellen has ordered Wells Fargo (WFC) - Get Report  to replace four board members and also capping the bank's assets and limiting its growth.

The timing of this action is curious, Cramer said, as many investors assumed Wells had put their fraudulent account issues behind them. Also curious, why was this decision handed down late on a Friday, in the middle of an already confusing day?

Pete Najarian added that this is not a case of something being taken away from Wells, but rather an action to limit their future growth. It will likely have a huge impact on the banks come Monday. Pete said the smart money will be buying other banks, like JPMorgan Chase (JPM) - Get Report into Monday's weakness, but it will likely take days or weeks for big investors to decide if they still want to stay long Wells Fargo.

Earlier Friday, the Federal Reserve announced it is restricting Wells Fargo's growth "until [the] firm improves governance and controls" and is requiring the company to replace four members of the board of directors -- three by April and another by the end of the year.

The Fed said it was "responding to widespread consumer abuses and compliance breakdowns by Wells Fargo." Wells Fargo will be able to continue current activities, including accepting deposits and making loans, according to the Fed.

"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. "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."

Wells Fargo said in a news release that "it is confident it will satisfy the requirements of the consent order it agreed to today with the Board of Governors of the Federal Reserve System. Under the consent order, the company will provide plans to the Federal Reserve within 60 days that detail what already has been done, and is planned, to further enhance the board's governance oversight, and the company's compliance and operational risk management. The order also provides for third-party reviews of such plans and, until they are approved and implemented, limits on the growth of the company's total consolidated assets to the level as of December 31, 2017."

"We take this order seriously and are focused on addressing all of the Federal Reserve's concerns," Timothy J. Sloan, Wells Fargo's president and chief executive officer, said in the statement. "It is important to note that the consent order is not related to any new matters, but to prior issues where we have already made significant progress. We appreciate the Federal Reserve's acknowledgment of our actions to date. In addition, the order is not related to Wells Fargo's financial condition -- we remain in a strong financial position and stand ready to serve the varied financial needs of our customers."

Cramer and the AAP team say Friday's stock-market action is exactly the kind of volatility they added a blanket of protection for when they raised cash on Tuesday. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.

Over on Real Money, Cramer says isn't the end of the world. But it is time for investors to recognize peril, not just profits. Get more of his insights with a free trial subscription to Real Money.

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

To read a full recap of this episode of "Mad Money," click here.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

More of What's Trending on TheStreet:

At the time of publication, Cramer's Action Alerts PLUS had a position in JPM.