Wells Fargo took a step forward in its regulatory and compliance reforms last week as the Office of the Comptroller of the Currency (OCC) terminated a 2015 consent order.
The order related to Wells Fargo’s Bank Secrecy Act and Anti-Money Laundering (BSA/AML) compliance program, and required the company to implement stricter customer due diligence standards and processes to improve its understanding of beneficial ownership information.
In a statement, the bank said it had undertaken “significant work to remedy the deficiencies” over the past five years.
“Building the right risk and control infrastructure and remediating our legacy issues remain our top priority, and the termination of this consent order is evidence of our progress,” said CEO Charlie Scharf. “While we are pleased with this action, we have a significant amount of work ahead of us and are continuing to commit the necessary resources to this effort.”
Wells Fargo is still working on a 2018 OCC consent order emanating from the mis-selling of mortgages and car insurance products. This order has placed several constraints on its operations and has required more changes to its compliance processes.
The bank was fined $3 billion over the fake accounts scandal last year, with several former staff also penalised.
Scharf has overhauled Wells Fargo’s senior leadership over the past 18 months, while Reuters reports that he is preparing for further significant changes to be announced in the bank’s fourth-quarter earnings call on January 15.
The bank this week announced the creation of an “Office of Consumer Practices”, led by chief regulatory and policy affairs executive Michael Lipsitz. The department has been tasked with overseeing consumer products throughout their lifecycle, reviewing complaints, and monitoring how the bank interacts with consumers.
“Keeping customers front and center is at the heart of Wells Fargo’s continued evolution,” said Scharf. “The Office of Consumer Practices will play an important role in ensuring our products, services, and business practices are fair and transparent.”
COO Scott Powell added: “By launching the Office of Consumer Practices, we are taking another step to embed the customer perspective directly into our decision-making processes, which is an important part of strengthening our risk and control infrastructure.”
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