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U.S. Bank Regulator Fails Wells Fargo on Community Lending Test

Reuters
U.S. Bank Regulator Fails Wells Fargo on Community Lending Test

A U.S. bank regulator has flunked Wells Fargo on a national scorecard for community lending, the bank said on Tuesday as it tries to repair its reputation after a phony-accounts scandal.

The Office of the Comptroller of the Currency deemed Wells Fargo a bank that “needs to improve” under the Community Reinvestment Act, a law meant to promote lending to poor neighborhoods, the bank said.

Wells Fargo had previously boasted an “outstanding” score on CRA. The new ranking gives regulators a greater say over day-to-day matters, such as branch openings.

In September, Wells Fargo admitted that employees wrongly created as many as 2 million accounts without customer approval.

The OCC gave Wells Fargo high marks for all-around service, but the past scandal led to the downgrade.

“Violations across multiple lines of business within the bank (resulted) in significant harm to large numbers of customers,” the OCC said in its filing.

Wells Fargo has a track record of serving needy communities on a day-to-day basis but the lender has yet to see its way through scandals, said Tim Sloan, the chief executive officer.

“We are committed to addressing the OCC’s concerns...,” he said in a statement.

This article was originally published on FORTUNE.com