Reps. García, Porter, Sen. Warren Call on OCC to Scrutinize TD Bank’s Proposed Merger Following Reports of Unchecked Consumer Fraud and Abuse
Reps. García, Porter, Sen. Warren 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.
WASHINGTON, DC — Representatives Jesús “Chuy” García (IL-04), Katie Porter (CA-45), and United States Senator Elizabeth Warren (D-MA) 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.
- Last year Rep. García and Senator Warren introduced the Bank Merger Review Modernization Act to strengthen bank merger review procedures to ensure mergers are in the public interest.
- Rep. García led colleagues in submitting a comment letter to the Department of Justice urging it to strengthen its bank merger review procedures.
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