OCC Missed ‘Red Flags’ at Wells Fargo, Internal Agency Report Says

An internal report by the Office of the Comptroller of the Currency says the agency failed to investigate more than 700 complaints from bank employees as early as 2010 about sales incentives, American Banker reported. “The report, released Wednesday, paints a scathing portrait of the OCC, acknowledging that it missed red flags, failed to pay proper attention to whistleblowers and did not follow up on problems it detected. … The OCC’s internal investigation, undertaken at the behest of Comptroller Thomas Curry, showed that the agency missed several opportunities to detect and correct problems. Starting in 2005, the bank’s board received regular audit reports indicating that there were high levels of internal complaints and employee terminations related to “sales integrity violations.” The OCC’s examiners didn’t appear to pick up on the issue until 2010, and even then gave it short shrift.” The report is available here. The Los Angeles Times and the New York Times also covered the story.

While the focus of the story is on the OCC, and rightly so, I note the additional indicators that the Board may not have exercising its oversight appropriately. For those of you who aren’t aware, the Board cleared itself of wrongdoing in a report it released several weeks ago.

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