The Office of Comptroller of Currency (OCC) found Wells Fargo in violation of a previous agreement. Now the bank can expect even more regulatory scrutiny from the government.
WASHINGTON, November 22, 2016 — The image of an embattled Well Fargo bank came under attack yet again last Friday. On that date, the U.S. Office of the Comptroller of Currency (OCC) announced that Wells had violated an earlier agreement with the government that was meant to remediate the bank’s mistreatment of certain military customers who had taken out loans with Wells.
On November 18, the OCC put out a press release announcing it had revoked provisions of an enforcement action taken on September 29, when the regulator and the bank reached an agreement to a $20 million settlement and certain provisions after accusing the bank of violating the Service members Civil Relief Act (SCRA). Specifically, Wells failed to:
- Provide the 6-percent interest rate limit to service member obligations or liabilities incurred before military service between approximately 2007 and 2014.
- Accurately disclose service members’ active duty status to the court via affidavits prior to evicting those service members between approximately 2006 and 2011; and
- Obtain court orders prior to repossessing service members’ automobiles between approximately 2007 and 2016.
According to its website. the OCC, an independent bureau of the U.S. Department of the Treasury, “charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks.”
Wells Fargo media relations didn’t immediately reply to emails from Industry Spread for comment.
In practical terms, the OCC’s actions mean more oversight and embarrassment is on the way for a bank already reeling from the added regulatory scrutiny and embarrassment that resulted from its now well-known consumer abuse scandal, in which bank employees, under pressure, opened unauthorized accounts for customers in order to meet increasingly aggressive sales goals.
During hearings in the aftermath of that scandal, several lawmakers had raised concerns concerning the bank’s corporate structure, specifically noting that Wells’ then-CEO John Stumpf was also Chairman of the Board. Other lawmakers complained that the exit package given to Carrie Tolsted, the outgoing head of community banking—the bank division where consumer scandal had occurred—amounted to a golden parachute award for that behavior.
The bank is now under orders to provide OCC with prior written notice of a change in directors and senior executive officers and will also face new restrictions governing the issuance of so-called golden parachutes currently subject to Federal Deposit Insurance Corporation (FDIC) rule 12 C.F.R. Part 359.
As a result of these continuing scandals, Stumpf was forced to step down from both posts with Wells in October.Click here for reuse options!
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