Bank regulator disputes Democrats’ criticism that agency didn’t reform after Wells Fargo scandal
Joseph Otting, one of the nation’s top bank regulators, slapped back Thursday at Democratic senators who accused his agency of inaction following 2016’s Wells Fargo accounts scandal.
Otting’s agency, the Office of the Comptroller of the Currency, issued a report last April detailing how its bank examiners failed to catch or correct bad practices at the San Francisco institution and recommended numerous changes to the agency’s procedures.
In a letter last week, Sen. Robert Menendez (D-N.J.) and other Democrats on the Senate Banking Committee said it appeared the OCC had not made any of the recommended changes, putting bank customers at risk of further abuse.
Otting, a former bank executive who took over as comptroller in November, months after the report was released, replied in his own letter Thursday that the senators had “errors and misperceptions” and that their concerns were unfounded.
“Your letter is wrong to suggest that the OCC has not taken steps to implement the recommendations from its internal review,” Otting wrote.
The OCC’s review found that the agency ignored or failed to follow up on information that could have helped it uncover Wells Fargo’s practice of opening accounts for customers without authorization, a practice first brought to light by a 2013 Los Angeles Times investigation, that in 2016 resulted in the bank paying $185 million to the OCC and other regulators.
The review made nine recommendations, including developing processes to more thoroughly analyze employee and customer complaints. In his letter, Otting said the agency had finished work on eight of those changes and should complete work on the ninth by June.
On some items, Otting’s letter says the agency finished work on May 3 of last year — just two weeks after the OCC’s report was released. Bryan Hubbard, a spokesman for the agency said work on some of the report’s recommendations started well before the report was made public.
Otting also said that an OCC review of practices at other banks — one that aimed to assess whether Wells Fargo was alone in creating unauthorized accounts — is almost complete and has so far not found that such practices were widespread at other institutions.
A spokesman for Menendez, the author of last week’s letter, did not immediately respond to a request for comment.
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