Two months after federal regulators imposed a $185 million fine and other sanctions against Wells Fargo for its fake account fiasco, one of those agencies — the Office of the Comptroller of the Currency — has rolled back some of the terms of its deal, signaling it will require more oversight of the company.
The OCC released a notice [PDF] Friday that cancels portions of the September agreement [PDF] with Wells Fargo and essentially places the bank in the same field as other troubled financial institutions.
Specifically, the agency says that it revoked provisions of the deal that allowed the company to sidestep specific requirements and limitations regarding rules, policies, and procedures of the bank’s corporate activities.
Going forward, the company will be required to provide written notification and get OCC approval of changes to its directors and senior executive offices. It is also prohibited from making so-called golden parachute payments, which often consist of large compensation to executives leaving the company.
Additionally, the bank will lose eligibility for expedited regulator review, such as those required when branches are being opened or relocated.
While the OCC did not provide an explanation of the move, a former bank examiner with the agency tells the Los Angeles Times the action signals a regulatory vote of no-confidence in the bank as the restorations are typically reserved for banks that are troubled or insolvent.
“This is the OCC saying, ‘We don’t trust you to run your business,’” Wade Francis, who now serves as president of Long Beach bank consultancy Unicon Financial Services, tells the Times. “They’re questioning the judgment of management.”
A rep for the bank says that the changes “will not inhibit our ability to execute our strategy.”
by Ashlee Kieler via Consumerist