June 15, 2022

Warren, Reps. Porter, Garcia Call on OCC to Scrutinize TD Bank’s Proposed Merger Following Reports of Unchecked Consumer Fraud and Abuse

“As TD Bank seeks approval from your agency…to become the sixth-largest bank in the U.S., the OCC should closely examine any ongoing wrongdoing and block any merger until TD Bank is held responsible for its abusive practices.”

This letter follows reports indicating that TD Bank incentivized employees to open accounts without consumers’ consent and push customers into overdraft protection, threatening employees with lost bonuses or even firings if goals were not met.

Text of Letter (pdf)

Washington, D.C. — United States Senator Elizabeth Warren (D-Mass.) and Representatives Katie Porter (D-Calif.) and Jesús Chuy García (D-Ill.) sent a letter to the Acting Comptroller of the Currency Michael Hsu about a recent Capitol Forum report revealing unchecked fraud and abuse at TD Bank, which is currently seeking approval for a merger with First Horizon. The lawmakers are urging Hsu to release the findings of a 2016-2017 investigation by the Office of the Comptroller of the Currency (OCC) which reportedly detected the bank’s misconduct, to examine any ongoing wrongdoing, and to block any merger until TD Bank is held responsible for its abusive practices.

“As TD Bank seeks approval from your agency to increase their market share and become the sixth-largest bank in the U.S., the OCC should closely examine any ongoing wrongdoing and block any merger until TD Bank is held responsible for its abusive practices,” wrote the lawmakers.

Following the revelations about Wells Fargo’s fake account and overdraft fee abuses in 2016, the OCC launched an industrywide probe that reportedly uncovered similar tactics used by TD Bank. These practices included the use of a “point system” that incentivized employees to open as many accounts and push as many customers into overdraft protection as possible, threatening employees with lost bonuses or even firings if goals were not met. According to former TD Bank employees, the system also led to bank employees opening accounts in consumers’ names even after the consumer declined and reporting “fictitious problems” to consumers to encourage them to open even more accounts.

Under former Comptroller Keith Noreika, these infractions were pushed under the rug as a private “Matter Requiring Attention,” without a fine or public disclosure. According to the report by Capitol Forum, these practices persisted into 2022. “The OCC’s decision under Mr. Noreika to allow TD Bank’s rampant fraud and abuse to go unpunished, even after the agency’s troubling findings in its own investigation of the bank, has the potential to undermine the OCC’s authority and put consumer finances at risk,” continued the lawmakers. 

The Biden Administration has previously stated its intentions to review regulations governing big bank mergers, and Acting Comptroller Hsu has called for further public participation in the process. TD Bank is currently seeking approval from the OCC to acquire First Horizon. If the merger were approved, it would make TD Bank the sixth-largest lender in the U.S., without demanding any accountability for its abusive practices. 

The lawmakers request that the OCC release the results of the 2017 investigation into TD Bank, review the decision to forego penalties and treat TD Bank’s behavior only as a “Matter Requiring Attention,” and that the agency prevent TD Bank from consolidating any new mergers until this pattern of behavior is addressed.  

Senator Warren has fought to hold big banks accountable for cheating and mistreating consumers and is a leader in protecting consumers from predatory practices from huge financial institutions: 

  • In March 2022, Senator Warren and her colleagues requested answers from Wells Fargo about their discriminatory mortgage-refinancing practices against Black homeowners
  • In February 2022, Senator Warren and Representative Katie Porter sent a letter to the Financial Industry Regulatory Authority (FINRA) questioning new reports of misbehavior by Wells Fargo that raise concerns about FINRA’s ability to fairly and effectively police the financial system after allegations arose that Wells Fargo, with the permission of FINRA, rigged the arbitration process by manipulating a list of arbitrators in a case in which the bank was alleged to have mishandled a customer’s investments.
  • In September 2021, Senator Warren called on the Federal Reserve to revoke Wells Fargo’s status as a financial holding company and require the company to separate its traditional banking activities from its nonbanking activities due to its ongoing failure to meet regulatory requirements. 
  • In May 2021, Senator Warren called out the CEOs of four of the nation's largest banks — JPMorgan, Wells Fargo & Co, Citi, and Bank of America — for taking a collective $4 billion in overdraft fees from struggling consumers during the pandemic and called on them to immediately refund these fees. 
  • In September 2020, Senator Warren sent a letter to Federal Reserve Chair Jerome Powell, sharing new and previously unreleased information regarding recent reports that Wells Fargo placed non-delinquent mortgage borrowers into forbearance without their consent, potentially putting them at risk of greater financial hardship during the pandemic. 
  • In August 2019, Senator Warren sent letters to then-Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger, then-Securities and Exchange Commission (SEC) Chairman Jay Clayton, and then-Comptroller of the Currency Joseph Otting, expressing concern that Wells Fargo executives may have once again intentionally misled investors, this time about the strength of their customer base.
  • In April 2019, Senator Warren wrote to Joseph Otting, former Comptroller of the Currency, requesting information about the role that the OCC will play in the selection of a new CEO and President of Wells Fargo.
  • In April 2019, Senator Warren and then-Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) released new letters from the Fed, the OCC, and CFPB in response to inquiries that they sent the regulators in March 2019. The regulators told the senators that Wells Fargo has not satisfied its obligations under existing consent orders, which require the bank to remediate customers harmed by its wrongdoing and impose reforms to end Wells Fargo's unlawful activity.
  • In February 2019, Senator Warren urged Chair Powell not to lift growth cap restrictions on Wells Fargo until Tim Sloan was removed from his role as CEO, citing a report revealing that, beginning in 2016, Wells Fargo employees "routinely falsified clients' signatures and otherwise doctored paperwork" in order to comply with a legal settlement with the OCC related to violations of anti-money laundering laws.
  • On March 22, 2019, Senator Warren called on the OCC and the CFPB to fire Wells Fargo CEO Tim Sloan and renewed her call for action by the Federal Reserve. On March 28, 2019, Tim Sloan announced that he was stepping down as Wells Fargo CEO.
  • In January, 2019, Senator Warren questioned Wells Fargo CEO Sloan on excessively high fees Wells Fargo charged college students. On April 4, 2019, Wells Fargo announced it had eliminated some of these fees associated with campus debit cards.
  • In March and April 2018, Senator Warren urged Federal Reserve Chair Powell to hold a public vote by the Federal Reserve Board on lifting growth restrictions for Wells Fargo instead of delegating it to staff. She also asked for the public release of the third-party review of how Wells Fargo is implementing reforms.
  • In a response to Senator Warren on May 10, 2018, Chair Powell reconsidered and announced he would require a Federal Reserve Board vote on whether to lift Wells Fargo's growth restrictions and said he would consider releasing as much of the third-party review as possible.
  • In September 2016, Senator Warren called on former Wells Fargo CEO and Chairman John Stumpf to resign for his role in the fake accounts scandal. Mr. Stumpf resigned on October 12, 2016.
  • In addition, Senator Warren has opposed unnecessary bank mergers through her Bank Merger Review Modernization Act and pushed for strong overdraft reforms that would prevent these types of abuses through her Stop Overdraft Profiteering Act.