Review says regulator lax in overseeing Wells Fargo
LOS ANGELES — The nation’s top bank regulator knew about problems with Wells Fargo & Co.’s sales practices in 2010 but did not do enough to put an end to the bank’s bad practices, an internal agency review has concluded.
The Office of the Comptroller of the Currency said that its oversight of Wells Fargo was lax and that examiners missed numerous opportunities to have the bank address its problems, according to a report released Wednesday. Those problems led to the creation of as many as 2.1 million accounts that customers didn’t authorize.
“The OCC did not take timely and effective supervisory actions after the bank and the OCC together identified significant issues with complaint management and sales practices,” according to the report.
It noted that problems with the bank’s sales practices had been mentioned in OCC reports since at least 2010 and the bank had been warned about its handling of complaints as early as 2009.
OCC bank examiners also didn’t seek to understand the root causes of those or other problems, which allowed them to fester, according to the 15page report.
Comptroller of the Currency Thomas Curry said during a congressional hearing in September, soon after the bank reached a $185 million settlement with the OCC and other regulators over its sales practices, that he had ordered a review of the OCC’s supervision of Wells Fargo. Wednesday’s report is the product of that review.
“In his September testimony, the Comptroller stated unequivocally that the OCC can and must do better, including identifying and acting on issues like these sooner,” Deputy Comptroller Bryan Hubbard said in an email Wednesday. “The report includes lessons learned that address the issues and weaknesses identified in the review.”
Hubbard said the OCC would not provide additional comment on the report. Wells Fargo declined to comment.
The report noted that bank examiners met in early 2010 with Carrie Tolstedt, the former Wells Fargo executive who led the community banking division.
Examiners asked Tolstedt about 700 whistleblower complaints about workers “gaming” the bank’s sales goal system to boost their pay. But after that meeting, examiners apparently did not investigate further, the report found.