by Jeff Sovern
I have long wondered whether Wells Fargo was alone in opening unauthorized accounts or if it other banks did the same. A student reported to me that his bank–not Wells–opened an unauthorized account in his name, and I have heard isolated reports of similar behavior elsewhere. Now Kevin Wack reports in the American Banker in an article headlined Wells Fargo not alone: OCC finds sales abuses at other banks the following:
Federal regulators have quietly ended a review of large and midsize banks’ sales practices that found several systemic issues — and hundreds of problems at individual institutions — and have no plans to make the results public.
The Office of the Comptroller of the Currency began a broad examination of more than 40 banks after it was revealed that employees at Wells Fargo employees had opened millions of fake accounts in an effort to meet aggressive sales goals.
The review uncovered specific examples of other banks opening accounts without proof of customers’ consent, an OCC spokesman acknowledged Tuesday. * * *
A few comments: first, why won't the OCC release a report? It released a report about its failures to stop Wells Fargo; surely this latest exercise sheds light on whether the OCC is now doing better.
Second, this story refers to hundreds of problems at a variety of banks. The Wells scandal involved millions of unauthorized accounts at one bank. It thus appears that the problem was much more common at Wells–unless the OCC report missed many incidences of the problem. If the OCC issues a public report, it might shed light on that.
Third, House Financial Services Chair Jeb Hensarling and others have criticized the CFPB for not acting sooner on the Wells scandal accusing it of being asleep at the switch. Will Mr. Hensarling accuse the Bureau of being asleep at the switch for not bringing an enforcement action against the other banks on this matter? According to the American Banker article, the OCC presented its conclusions to senior management in December of 2017–which would have been only shortly after Cordray left the CFPB and Mulvaney took over–but Mr. Mulvaney has had plenty of time to begin an enforcement action since then. And yet the Bureau has begun only one case in its half-year under Mulvaney, which was, of course, against Wells Fargo, the target of a Trump tweet.
