Wells Fargo’s regulatory woes continue.
According to a report in The Wall Street Journal on Wednesday (Nov. 7), the bank in “recent weeks” has been sent a “regulatory warning” from the U.S. Office of the Comptroller of the Currency (OCC) regarding the financial institution’s “ technology operations.” Such a notice, the paper noted, citing unnamed sources, “often precedes an enforcement action.”
The bank’s problems reportedly are related to cybersecurity, software vulnerabilities and risk management. The bank offered no direct response to the news of the OCC warning, with a spokeswoman saying that Wells Fargo is in “constant dialogue with our regulators,” according to the report. The OCC also declined to comment.
In October, Wells Fargo said that its Chief Administrative Officer Hope Hardison and Chief Auditor David Julian have begun leaves of absence from the bank and will no longer be members of the company’s operating committee. Wells Fargo said the leaves are related to ongoing reviews by regulatory agencies in connection with the historical retail banking sales practices. The bank noted the leaves of absence have nothing to do with its reported financial results or internal financial controls at the bank.
In August, the U.S. Department of Justice said the financial institution would pay $2.09 billion in penalties to settle claims related to mortgage loans that the lender processed before the last recession. The United States alleged that, in 2005, Wells Fargo began an initiative to double its production of sub-prime and Alt-A loans. As a result, the firm loosened its requirements for originating stated income loans, which is when a borrower states their income without providing any supporting documentation.