Regulator starts probing banks’ sales practices

Bank regulators have started to investigate the sales practices and compensation policies of many of the nation’s large and midsize banks, something they had promised to do in the wake of the unauthorized accounts scandal at Wells Fargo & Co.

The Office of the Comptroller of the Currency, which oversees most of the nation’s big banks, this month started sending letters to banks requesting information about their sales practices, Deputy Comptroller Bryan Hubbard said Tuesday.

The OCC is reviewing sales practices related to consumer, small business and wealth-management accounts and services tied to employee incentive pay, he said. The agency is requesting information from most banks it supervises with at least $10 billion in assets. There are 62 banks that are supervised by the OCC and meet that minimum, according to the Federal Deposit Insurance Corp.

The review had been expected since the head of the OCC promised to take such action at a Sept. 20 hearing that the Senate Banking Committee held on Wells Fargo. Comptroller of the Currency Thomas Curry said his agency would assess whether banks have controls in place that would prevent the kind of practices uncovered at the San Francisco bank.

The OCC, along with the L.A. city attorney’s office and the Consumer Financial Protection Bureau, last month reached a $185-million settlement with Wells Fargo after finding that workers at the bank created as many as 2 million accounts for customers without their authorization, all in the name of meeting unrealistic sales goals and trying to either earn additional pay or simply keep their jobs.

In some cases, customers paid fees on accounts they never asked for. In others, bank workers issued credit cards to customers without their authorization, potentially affecting those customers’ credit scores.