WASHINGTON -- A lobbying group for retired people has called for a national investigation of claims that banks are using unscrupulous tactics to sell mutual funds.
W. Kent Brunette, legislative representative for the American Association of Retired Persons, said in an interview that he has asked the Office of the Comptroller of the Currency to survey bank-affiliated brokers to see if abuses are widespread.
Mr. Brunette said he believes publicized complaints that NationsBank and Barnett Banks, Inc., are engaging in misleading sales practices are "more than an aberration."
The banks have vigorously denied the charges, outlined in recent suits by a handful of customers and brokers in Florida.
34 Million Members
But Mr. Brunette believes a survey is needed to determine if abuses are widespread at these and other banks.
The American Association of Retired Persons markets mutual funds to its members in competition with funds sold by banks and investment companies.
But, as a lobbying group for 34 million Americans over the age of 50, its concerns carry some weight.
A survey of bank-affiliated brokers isn't the only item on the group's agenda.
The association also is pressing the comptroller's office to hold a series of hearings to inform consumers around the country about mutual funds, Mr. Brunette said.
Proposal Being Drafted
Mr. Brunette also said he is drafting a legislative proposal to be offered to one or more members of Congress to regulate the sales of investment products at banks.
The proposal would give the Securities and Exchange Commission authority to regulate banks' investment sales, he said. It would also prohibit banks from giving proprietary funds names that are similar to the banks' names.
The proposal would also set a minimum standard of proficiency for people selling investment products at banks. Fueling his suspicion of banks, Mr. Brunette said he has been contacted by a broker for a bank other than those named in suits, who complained of improper sales practices. He declined to identify the bank or the broker.
But according to Mr. Brunette, the broker was 62 and had been in the business for 19 years.
The broker reportedly quit the bank because he felt he was in the "untenable position," of promoting proprietary funds that were unsuitable to his elderly customers.
