In banking news, Keith Noreika, the acting U.S. Comptroller of the Currency, is trying to make it easier for Wells Fargo to pay employees when they leave the embattled financial institution, relaxing a restriction put in place last year when the bank's fake account scandal emerged.
According to a news report in Reuters published Monday (Oct. 30), Noreika's push comes as President Donald Trump is working to loosen some of the Obama-era regulations placed on Wall Street. If the Office of the Comptroller of the Currency (OCC)’s idea is approved, it means the government watchdog can treat Wells Fargo and other big banks with more leniency if they are hit with sanctions down the road. Noreika has been advocating easing the sanctions slapped on Wells Fargo since he took control of the OCC in May, noted Reuters.
Under its agreement with regulators made in the wake of the fake accounts scandal, Wells Fargo executives must have severance payouts vetted and cleared by the OCC and the Federal Deposit Insurance Corporation (FDIC) before they can disburse them. Noreika wants officials to speed up the time to approve the severance pay, and for the OCC to have the ability to waive the check on incoming executives to the bank, according to Reuters.
The Reuters report noted hundreds of Wells Fargo employees have seen their severance pays frozen as regulators try to determine what role the workers may have had in the fake account scandal. Under one of the OCC proposals, existing employees could obtain their severance if regulators can’t finish a review within a certain number of weeks. In another, the OCC would approve the payout to exiting employees without needing additional FDIC approval.
The decision has always been made jointly by the two government departments, noted the Reuters report. Individuals familiar with the discussions told Reuters the FDIC is against rushing the severance reviews.