Otting defends OCC's steps to improve supervision post-Wells scandal
WASHINGTON — Comptroller of the Currency Joseph Otting on Thursday again took issue with Senate Democrats over their concerns about internal supervisory changes following the Wells Fargo cross-selling scandal.
Responding to a Jan. 17 letter from seven senators, criticizing the Office of the Comptroller of the Currency's progress in implementing supervisory changes, Otting wrote in a letter that their concerns were "unfounded" and their letter contained “errors and misperceptions.” He had criticized the lawmakers' claims earlier this month in a conference call with reporters.
Otting said that the OCC had implemented “eight of the nine” recommendations that arose from its internal review of Wells’ cross-selling scandal. That review, which was initiated by former Comptroller Thomas Curry, highlighted many shortcomings in the agency’s supervisory process to detect wrongdoing associated with Wells’ employees opening unauthorized accounts on behalf of their customers.
Otting said the implication in the Jan. 17 letter that he either condoned Wells’ activities or was not acting swiftly to correct the problems highlighted by the review was without merit.
“I do not condone the behavior and practices found at the bank,” Otting said. “As Comptroller, I will not tolerate such unsafe and unsound practices within the federal banking system, nor will I tolerate banks’ mistreatment of their customers or betrayal of customers’ trust. The men and women of the OCC provide world-class bank supervision, and I am 100 percent committed to continuously improving our capabilities so that we operate as effectively and efficiently as possible.”
Otting went on to say that in addition to the eight corrections that the agency has already implemented, he expects the final recommendation to be implemented by June. That final recommendation pertains to revisions to the OCC supervisor’s handbook to include processes for analyzing compliance data.
The OCC has also conducted a “horizontal review" of sales practices at Wells Fargo, Otting said, and that review is “nearing completion.” The results, he said, did not uncover systemic wrongdoing, but rather only isolated incidents that the bank has taken steps to address.
“The horizontal review did not identify systemic issues with bank employees opening accounts without the customers’ consent,” Otting said. “Where isolated instances occurred, banks had already corrected the issue or are in the process of doing so.”