Bank of America's chief financial officer on Tuesday downplayed the odds of a Wells-Fargo-style phony-account scandal at B of A, contending that it does not use hard-charging sales tactics.
About six weeks after Wells Fargo disclosed that it fired more than 5,000 workers for opening roughly 2 million fake accounts, bankers at other institutions are being pressed to defend their own sales practices and answer whether similar abuses could happen under their watch.
Nancy Bush, an analyst at NAB Research, asked B of A executives during a Monday morning conference call to explain "how you think your methodology is different from what produced the problems at Wells Fargo."
"To really answer that question you just have to have a better appreciation for how we run Bank of America," CFO Paul Donofrio responded. "It truly really does start with our purpose, which is to help customers better live their financial lives."
Donofrio said that B of A is built on the premise of "responsible growth," meaning that the bank will only sell additional products to customers when they need them.
"It's not about the number of products that we open," Donofrio said. "We've spent years building controls and governance and escalation around this. We are always monitoring them. It's just how we run the company."
B of A officials did not say during the call whether they have conducted, or plan to conduct, a review of their sales practices in light of the Wells Fargo affair. On Friday officials at JPMorgan Chase and Citigroup said reviews had occurred at their banks.
JPMorgan CFO Marianne Lake said that the bank had identified "issues" of concern at its branches, but had found no systemic problems related to cross-selling. Lake declined to provide details about the number of issues the bank had identified, though she indicated that it was a small number. Citigroup officials "haven't identified anything suggestive of the type of problems with sales practices that were experienced at Wells," CFO John Gerspach said.
On the B of A call, Bush also raised the point that Wells Fargo last week split the chairman and CEO roles following the retirement of John Stumpf, who had held both jobs. Bush asked CEO Brian Moynihan if he thinks shareholders might again try to force him to give up the chairman's job. Moynihan successfully won a shareholder vote in September 2015 to let him keep both titles.
"The independence of our board … how they approach their responsibilities, I think is very strong," Moynihan said. "If you look at all the new governance surveys that have come out, all the words about proper governance … we meet or exceed everything anybody says to go to. So I feel comfortable with that."
14-Day Free Trial
Corrected October 27, 2016 at 1:28PM: An earlier version of this story misparaphrased Bank of America's CFO. Paul Donofrio contrasted his company's practices with Wells Fargo's, but he did not go as far as to declare that a similar scandal would not happen at B of A.