After reviewing sales practices at more than 40 large and mid-sized banks, the Office of the Comptroller of the Currency (OCC) found multiple systemic issues, along with hundreds of problems at individual banks. With the review, the office found examples of banks opening accounts without proof that consumers gave them permission to do so, American Banker reported.
The review also caused warnings to go out on five industry-wide problems, along with 250 items that regulators wanted specific financial institutions (FIs) to correct. Though the results have not been publicly released, Dan Ryan, who leads the PwC banking practice, was briefed on the results.
“This has hit home for the C-suite and the boards of the major banks,” Ryan told American Banker. “No one buried their head in the sand.”
Following the review, many banks undertook “timely actions” to remedy weaknesses in their institutions.
Bryan Hubbard, a spokesman for the OCC, said, “As a result, systems and controls in these banks are now better integrated and more apt to identify inappropriate sales activities in a timely manner.”
The news comes as Wells Fargo announced in May that it has agreed to pay $480 million to settle a securities fraud class-action suit. In a press release, the bank had said the lawsuit was filed in the U.S. District Court for the Northern District of California, sparked by misstatements and omissions in its discourse related to sales practices. The $480 million fine is subject to a final approval by the court. Wells Fargo had denied the claims and allegations in the action, and entered into the settlement to avoid the costs and disruption of further lawsuits.
CEO Tim Sloan said in the release, “We are pleased to reach this agreement in principle and believe that moving to put this case behind us is in the best interest of our team members, customers, investors and other stakeholders. We are making strong progress in our work to rebuild trust, and this represents another step forward.”