SAN FRANCISCO–A tough year for Wells Fargo Bank isn’t getting any better.
After a widespread sham account-opening scandal, the resignation of two senior officials, and more than $200 million in fines, the Office of the Comptroller of the Currency has issued a “needs to improve” tag under the Community Reinvestment Act to the bank. That change gives regulators greater say on day-to-day matters like opening new branches. According to Reuters, the ruling is expected to come in January.
If the OCC so acts, it would mark a two-notch downgrade from the “outstanding” rating Wells Fargo has held since 2008 for its performance under CRA. The Community Reinvestment Act was passed in 1977 law with a goal of stopping banks from “redlining,” or denying home loans to neighborhoods based on their racial, ethnic or income makeup.
The Reuters report did not provide a reason for the downgrade.
The California Reinvestment Coalition, which advocates for fair and equal access to banking for low-income communities and communities of color, called the downgrade “appropriate.”
“Given the long and growing list of enforcement actions against Wells Fargo for harmful and illegal practices, we expected at least a double downgrade,” Paulina Gonzalez, coalition executive director, said in a statement.
The coalition also said it was “deeply troubled” by the OCC’s nearly four-year delay in giving Wells Fargo a new CRA rating following its 2012 exam.