Phony financial institution accounts not a 'systemic' challenge: U.S. regulator

WASHINGTON (P3PWriter) – A U.S. financial institution regulator mentioned on Thursday that an industry-wide evaluation prompted by Wells Fargo & Co’s (WFC.N) gross sales practices scandal had uncovered some cases of phony accounts at different lenders however little proof of a “systemic” drawback.

FILE PHOTO: A Wells Fargo financial institution signal is pictured in downtown Los Angeles, California, U.S. August 10, 2017. P3PWriter/Mike Blake/File Picture

The Workplace of the Comptroller of the Foreign money reviewed greater than 40 massive and midsize banks after Wells Fargo’s phony accounts scandal first erupted in 2016, wrapping up the method on the finish of 2017. The total findings haven’t been made public.

The OCC mentioned in a press release that it had not recognized any “systemic points” on the different banks mirroring these at Wells Fargo, the place financial institution workers had created doubtlessly thousands and thousands of unauthorized accounts in clients’ names to fulfill gross sales objectives.

However the evaluation did uncover “some weaknesses” in inside gross sales practices, the OCC assertion mentioned. Particularly, few banks had a centralized strategy to threat governance over gross sales practices earlier than the regulatory evaluation.

The OCC mentioned it had notified banks earlier in 2018 of any specific points that turned up within the evaluation, and that almost all banks took “well timed actions” to deal with these weaknesses after they had been recognized by the regulator.

    The OCC additionally discovered some cases through which accounts had been opened with out buyer consent. It didn’t specify what number of improper accounts it had discovered at different banks, however mentioned explanation why the accounts had been opened had included gross sales promotions missing in threat controls or “remoted” cases of worker misconduct.

    There was no proof that any of the unauthorized accounts discovered at different banks had been opened by financial institution workers so as to meet to gross sales incentives or quotas, the OCC mentioned.

    These banks have both already addressed any unauthorized accounts or are taking remedial motion, together with closing the accounts and refunding any improper charges, the OCC mentioned.

    A Wells Fargo spokesperson declined to remark.

    Reporting by Pete Schroeder; Modifying by Meredith Mazzilli

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