US regulator admits to missing Wells Fargo warning signs
The Office of the Comptroller of the Currency, which is responsible for the regulation and oversight of US banks, has admitted it was "untimely and ineffective" in addressing Wells Fargo's fake accounts scandal. In a report published last week, the agency said it failed to spot the warning signs as the bank set up millions of fake bank and credit card accounts. In 2010, the regulator confronted a Wells Fargo executive following 700 whistleblower complaints, but it did not instruct the bank to provide any further analysis, according to the report. 

For years, as Wells Fargo secretly set up millions of fake bank and credit card accounts without customers’ consent, the bank’s federal regulator was learning of hundreds of whistle-blower complaints against the company for its sales tactics.

But that regulator, the Office of the Comptroller of the Currency, did not act.

In a damning, 15-page report published on Wednesday, the Office of the Comptroller of the Currency admitted that its oversight of Wells Fargo was “untimely and ineffective.” The report said the agency failed to spot clues that would have allowed it to connect the dots in one of the most brazen banking scandals of the recent past.

Since 2005, Wells Fargo’s board had received regular notifications indicating that “the highest level” of ethics line complaints and employee firings were related to sales integrity violations, according to the report. It also said that even though the regulating agency started receiving those reports around early 2010, there was no evidence that it adequately followed up on those concerns.

And even after the regulator confronted a Wells Fargo executive in 2010 about 700 cases of whistle-blower complaints, the regulator did not require the bank to provide adequate analysis, according to the report, which was issued by the comptroller’s office of enterprise governance and its ombudsman.