Wells Fargo Not the Only Bank to Have Created Unauthorized Accounts

via latimes:

A federal bank regulator that has fined Wells Fargo more than $500 million over its creation of unauthorized accounts and other consumer abuses has found evidence of sales practice problems at other large and midsize banks — but is refusing to name those institutions.

The Office of the Comptroller of the Currency, the nation’s main bank regulator, found “bank-specific instances of accounts being opened without proof of customer consent” as part of a review of more than 40 banks spurred by the Wells Fargo scandal, agency spokesman Bryan Hubbard told The Times in an email Friday.

However, the agency will not be naming the banks where it found potentially unauthorized accounts or providing details on banks’ specific conduct, he said.

“We do not comment on specific supervisory matters pertaining to particular banks, and exam findings are not released,” Hubbard said.

American Banker, which first reported the story this week, reported that the agency warned banks about five industry-wide issues and more than 250 institution-specific problems turned up by the review.

Hubbard wouldn’t comment on the number of specific or industry-wide issues banks were warned about, but said the review wrapped up at the end of last year and banks received letters regarding their specific issues early this year.

The review started under previous Comptroller Thomas Curry, an Obama appointee. The OCC is now run by Joseph Otting, a former Los Angeles banker who was appointed last year by President Trump.

Otting, who so far has taken a more industry-friendly tack than his predecessor, could face questions from Congress next week about the OCC’s decision to withhold information related to the review. He is scheduled to testify Wednesday and Thursday before the House and Senate banking committees, respectively.

The OCC’s decision to not publicly release its findings drew the ire of consumer groups. They have said that the aggressive employee sales goals and other problems that led to the creation of millions of unauthorized accounts at Wells Fargo — first documented in a 2013 Los Angeles Times investigation — were not unique to the San Francisco finance giant.

Ed Mierzwinski of the U.S. Public Interest Research Group said that the OCC appears to be sweeping its findings under the rug and that the agency should release the results of the review and publicize its warnings to banks.

“It’s apparent that the toxic culture at Wells Fargo that led to millions of fake accounts was no outlier,” he said. “We know now that Wells Fargo wasn’t the only wrongdoer; only full disclosure by OCC can let us know if Wells was Patient Zero of a growing epidemic of banks behaving badly.”

Still, the OCC’s finding is not surprising. In 2016, executives at a few large banks who spoke to The Times on the condition of anonymity said they were nearly certain that some workers had created unauthorized accounts at their institutions, though they did not believe the practice was widespread….

 

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