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Wednesday, September 21, 2016

OCC to Banks: Expect Closer Scrutiny of Cross-Selling

With Wells Fargo’s product sales quotas in regulatory cross-hairs, Comptroller of the Currency Thomas Curry warned that large and midsize banks should expect closer examiner scrutiny of sales practices.

Curry told the Senate Banking Committee:
The actions against Wells Fargo highlight that we must continue our efforts to improve and refine the agency’s supervisory program, to sharpen our early warning processes, and to enhance our supervisory capabilities, particularly with respect to our largest, most complex banks. At the same time, I have directed our examiners to review the sales practices of all the large and midsize banks the OCC supervises and assess the sufficiency of controls with respect to these practices.

During the hearing, senators raised questions about the timeline of when Wells Fargo first reported the problems with unauthorized accounts to regulators. Stumpf said that he first became aware of the problems in late 2013, prior to which they were being handled by the compliance and audit functions within Wells Fargo’s retail banking unit.

Curry noted that the OCC first received consumer and employee complaints in 2012, and Consumer Financial Protection Bureau Director Richard Cordray said that the CFPB learned about the problem through tips in mid-2013. “We had known about these types of problems from our sources, but if any institution feels they can divide and conquer the regulators, they should know that that is a mistake,” Cordray added, urging financial institutions to self-report known issues promptly to all relevant regulatory agencies.

Read Curry’s testimony.

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