Regulator ignored 700 Wells Fargo whistleblower complaints

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History shows that federal agencies are prone to be dismissive of whistleblower complaints. Nevertheless, it’s shocking to read that the Comptroller of the Currency, the federal banking regulator, failed to investigate 700 whistleblower complaints about fraudulent Wells Fargo practices, an internal review disclosed.

The OCC did confront Carrie Tolstedt, then head of Wells Fargo’s community bank, about the stunning number of whistleblower claims. However, there are no records that show that federal inspectors “investigated the root cause,” or force Wells Fargo to probe it. – CNN Money

The report, writes CNN, “painted a damning picture of the OCC’s ability to spot what in retrospect should have been obvious problems at one of the nation’s biggest banks.” But. deficient ability to spot problems isn’t a credible explanation for the diversion of 700 complaints to File 13. Agency officials clearly knew of the complaints, but nevertheless left   defrauded customers and whistleblowers twisting in the wind.

The bank reportedly put heavy pressure on employees to meet sales quotas and accounts were opened without authorization for customers who were charged fees for accounts they “knew nothing about.

Wells Fargo responded to internal ethics complaints from employees by firing them, NPR reports. One of the whistleblowers, identified as “David,” told NPR. “I cannot get a job working at a bank anymore. I had to declare bankruptcy because, you know, currently I’m working for minimum wage. And my career is over thanks to Wells Fargo.”

Senator Elizabeth Warren is said to be investigating the possibility that a system operated by the Financial Industry Regulatory Authority to promote integrity perversely enables whistleblower blacklisting.

The experiences of numerous whistleblowers show that reporting wrongdoing internally is a risky endeavor even when federal laws appear to offer whistleblower protection. Court remedies are frequently out of reach for whistleblowers with no source of income. For this reason, many concerned workers choose to report problems anonymously, although staying anonymous is increasingly difficult as surveillance by industry and government continues to grow.

Wells Fargo and the government agreed to a $190 million settlement–a trivial penalty considering the firm reported $5.73 billion in profits in 2014 alone.  More recently, the bank agreed to a $142 million settlement of a suit filed by customers, but an order released yesterday by U.S. District Judge Vince Chhabria proposed to reject it, citing a provision that bars customers from filing other legal claims and criticizing it for  giving “too much protection to executives and directors.”

 

 

 

 

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