Banking

OCC Targets Wells For Loose Pay Controls, Unresolved HR Complaints

Regulators Target Wells Fargo HR Dept. As Needing Overhaul

The Office of the Comptroller of the Currency (OCC) has said the Wells Fargo Human Resources (HR) department has a rash of problems, including a backlog of employee complaints, a poor system for pulling back executive pay in the face of punishments and a lack of ability to deal with the types of issues that led to the bank’s 2016 fabricated account scandal, according to a report by The Wall Street Journal.

The OCC wrote a letter in July outlining a to-do list for the department, saying that it needed to handle thousands of complaints and handle compensation structures.

“We do not comment on specific regulatory matters, however, Wells Fargo is making progress on our regulatory obligations but more work needs to be done,” a bank spokesperson said.

The news complicates an already uphill battle for Chief Executive Charles Scharf to get the bank’s reputation and standing back on track. Scharf started in October and has been tasked with repairing the bank’s image after a huge scandal where employees opened millions of fraudulent accounts.

Arati Randolph, a Wells Fargo spokeswoman, said Scharf was “already making significant changes,” which included the hiring of Santander Holdings CEO Scott Powell as COO, to “focus on regulatory priorities and improve our control and operations functions.”

One executive, who was in charge of the HR department, was put on leave after being accused of failings by the OCC.

The OCC has the power, after a $1 billion settlement it made with the bank last year, to compel the bank to make changes to its senior management, or board of directors. The bank’s former CEO, Timothy Sloan, left his position in March after he was publicly rebuked by the OCC. 

Wells Fargo’s HR department and its practices were put under a microscope after the scandal broke, but the pressure was increased this year. The OCC said that there were new issues cited as “matters requiring attention,” in addition to the ones that already existed. 

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