WASHINGTON -- Eugene Ludwig, comptroller of the currency, said examiners have found a bank that has done such a good job of selling investment products that it should be a model for the industry.
The praise was in marked contrast to Mr. Ludwig's statement last November that he was "very unhappy" with some banks' tepid disclosure of the risks of investment products.
"This one bank was off the charts in terms of its customers' understanding of what they were purchasing," Mr. Ludwig said in a luncheon speech at a Bank Securities Association conference.
Midsize Institution
Just as he did with his criticism in November, Mr. Ludwig declined to name the bank he praised, other than to say it is a "medium-sized" institution.
He added, however, that he might disclose the bank's name in the near future if its management approves.
The bank was said to be a participant with six other institutions in a survey of banks believed to do a good job of educating consumers about investment products.
Examiners from the Comp-troller's Office as well as bankers interviewed customers to see how well they understood investment products, and what they thought of their bank's sales efforts.
Mr. Ludwig said that all of the banks were found to do an acceptable job of educating their customers. But one of the banks, "in particular, received glowing reviews."
He said that bank's customers praised its sales agents for "the time and effort spent explaining investment products, and their benefits and risks."
Furthermore, these customers exhibited a high level of understanding of investment products, and a "phenomenal amount" of loyalty to their bank.
Mr. Ludwig said regulators were so impressed that they may "publish some sort of guide" to the bank's employee training practices, which he summarized.
Mr. Ludwig said prospective sales agents spend a month studying financial products, followed by two days of instruction, before taking a Series 6 certification test.
If they pass, the agents watch experienced reps at work, before helping a customer under supervision. All agents take refresher classes each month.
James McLaughlin, a trust and securities specialist with the American Bankers Association here, said he thought it was "very educational" and "very positive" for the comptroller to single out a bank for doing a good job of selling investment products. He added that such praise resembles the comptroller's endorsement last year of a Ghost-Busters-like logo Wells Fargo & Co., of San Francisco, developed to show that mutual funds aren't federally insured.
But Mr. McLaughlin noted that most banks have training programs similar to those out-lined by the comptroller.
This means that the bank praised by Mr. Ludwig must have "inculcated a sales culture and customer understanding" through its training that was unique, he said.
