REGULATOR REVIEW WOULD IDENTIFY AND PREVENT MORE PROBLEMS THEREBY
SAFEGUARDING ACCOUNT HOLDERS
San Francisco, CA, Sept. 28—Earlier today, a group of consumer advocacy organizations and financial justice
leaders called on federal bank regulators to conduct a thorough review to determine whether or not the practices
disclosed in the recent Wells Fargo enforcement action are occurring at other banks. During an earlier hearing
about the Wells Fargo settlement, the Comptroller of the Currency, Thomas Curry, explained that the OCC
would be engaging in a review to identify if problematic account openings and sales quotas are more
In a letter to the CFPB, FDIC, OCC, and Federal Reserve, organizations from around the nation called on all
bank regulators to match Curry’s commitment and to conduct a review of sales practices to assess the adequacy
of controls to prevent fraudulent, unfair, deceptive, and otherwise abusive practices against bank customers. The
organizations are calling on regulators to share their findings of the review with the public and to include this
type of review in their Community Reinvestment Act exams of banks.
Paulina Gonzalez, executive director of the California Reinvestment Coalition, explains: “Through this
comprehensive review, regulators can determine if the use of sales quotes or incentives at other banks are
leading to customers being treated as targets for identity theft and products and accounts that they may not need
or want. Sharing the findings publicly are an important first step in rebuilding trust, and we also believe that
these reviews should become a routine part of bank CRA examinations.”
“Wells Fargo shows why executives should not be able to keep incentive pay when regulators and shareholders
don’t discover until years later that a company was engaged in widespread misconduct,” explains Brian
Simmonds Marshall, policy counsel at Americans for Financial Reform. “Regulators need to strengthen their
proposed pay rules to ensure that executives who oversaw, enabled, or ignored illegality can’t walk away with
The groups are also suggesting that bank regulators help restore the public trust, by:
1) Regulators should strengthen and promptly finalize a proposed rule regarding incentive-based pay under the
Dodd-Frank Wall Street Reform and Consumer Protection Act. Advocates are urging expanded clawback
provisions, including that executives who oversaw widespread misconduct would be required to return their
bonuses and that the pursuit of clawbacks and reductions in deferred bonuses should be mandatory, not optional.
They’re also advocating for longer deferral periods (for incentive based pay) so that executive compensation is
more closely aligned with the long-term financial health of an institution and treating its customers fairly.
2) Regulators should amend existing guidance to clarify that bank violations of consumer protection laws will
negatively impact a financial institution’s Community Reinvestment Act rating.
The letter was signed by the following organizations and is available here.
Americans for Financial Reform
California Reinvestment Coalition
Center for Responsible Lending
Committee for Better Banks
Main Street Alliance
Maryland Consumer Rights Coalition
National Consumer Law Center (on behalf of its low income clients)
People’s Action Institute
San Francisco City and County Office of the Treasurer
San Francisco Office of Financial Empowerment