Bank regulator hasn't followed up on its Wells Fargo recommendations

January 18, 2018

Members of the Senate Banking Committee say the Office of the Comptroller of the Currency has not made necessary changes after the unauthorized accounts scandal at Wells Fargo & Co.

 

In a letter sent Wednesday to Joseph Otting, who was sworn in as comptroller of the currency in November, six committee Democrats said the bank regulator does not appear to have made any progress on recommendations made in an internal report in April. That leaves consumers vulnerable to abuses by other big banks, they said.

 

The report, which identified how the office of the comptroller of the currency's bank examiners for years did not spot or correct bad practices at Wells Fargo, made nine recommendations for changes at the agency, including developing a process to more thoroughly analyze customer and employee complaints.

 

It was released just weeks before the previous comptroller Thomas Curry, who was appointed by President Barack Obama –– was replaced by an interim comptroller named by President Donald Trump. Now the agency is led by Otting, a Trump appointee and former Los Angeles bank executive.

"The review was issued nearly nine months ago, and the OCC's continued failure to implement its recommendations leaves vulnerable customers of the nation's largest banks," the senators wrote.

 

OCC spokesman Bryan Hubbard said the agency does not comment on congressional correspondence.

 

The letter is signed by Sens. Robert Menendez, D-N.J., Sherrod Brown, D-Ohio, Catherine Cortez Masto, D-Nev., Elizabeth Warren, D-Mass., Brian Schatz, D-Hawaii, Jack Reed, D-R.I., and Chris Van Hollen, D-Md.

 

They asked Otting to implement the report's recommendations "without additional delay" and to give the committee, by the end of this month, a detailed schedule for putting the recommendations into action.

 

The OCC's report last year was praised by some consumer advocates as a remarkably frank take on the agency's failures, one that painted an unflattering picture of bank examiners who did not follow up on numerous red flags.

 

Regulators began taking a more thorough look at the bank's practices after a 2013 Los Angeles Times investigation, which led to a lawsuit by Los Angeles City Attorney Mike Feuer.

 

Feuer's office, the OCC and the Consumer Financial Protection Bureau reached a $185 million settlement with Wells Fargo in 2016.

 

The report noted that OCC examiners met in 2010 with Carrie Tolstedt, who was then a Wells Fargo executive, and asked about 700 whistleblower complaints regarding workers "gaming" the bank's sales goal system to boost their pay - one of the issues at the heart of the bank's creation of as many as 3.5 million unauthorized accounts.

 

Tolstedt told the examiners that the bank encouraged valid complaints. After that meeting, examiners apparently did not investigate further, the report found.

 

The report also noted that examiners thought Wells Fargo's goal of getting customers to open an average of eight accounts each sounded risky but did not look into how or whether the bank was monitoring account openings.

 

via msn.com

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