Wells Fargo isn’t the only bank with fake accounts, regulators say

Wells Fargo isn’t the only bank where heavy sales pressure led employees to open fake accounts.

A federal review triggered by the Wells Fargo scandal found that “weaknesses” at other banks led employees to open accounts without proof of customer consent — just like Wells Fargo did — according to the Office of the Comptroller of the Currency.

The probe of more than 40 large and midsize banks concluded that the cause of those fake accounts included “short-term sales promotions without adequate risk controls,” deficient procedures and other isolated instances of “employee misconduct.”

The OCC, the banking regulator that launched the review in 2016, declined to reveal which banks were found to have opened fake accounts or had other issues. It’s not clear when these problems occurred either.

The agency said in a statement that the review found “some weaknesses” in the “policies, procedures and controls” of banks concerning their sales tactics.

However, the OCC said the review did not uncover “systemic issues with bank employees opening accounts without the customer’s consent.”

Banks that were found to have problems “have already taken — or are in the process of” taking corrective actions such as closing accounts, refunding customers and fixing credit bureau information, the OCC said.

“It’s certainly troubling that this appears to be more widespread than one bank,” said John Sedunov, a finance professor at Villanova.

A PwC consultant briefed on the findings told the American Banker that the review led the OCC to issue 252 alerts to banks about matters that required attention as well as five industry-wide problems to be fixed.

The OCC declined to comment beyond its statement. PwC declined to comment.

Source: http://money.cnn.com/2018/06/06/news/companies/wells-fargo-fake-accounts-banks-occ/index.html?utm_term=link&utm_source=fbmoney&utm_content=2018-06-06T18:46:04&utm_medium=social

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