Auditors Settle OCC Charges for "Sales Practice Misconduct"

The OCC settled charges against a bank's former auditors for failing to take action on pervasive "sales practice misconduct."  

The settlements with the Chief Auditor and a former Executive Audit Director resolve outstanding charges for failing to detect or escalate misconduct in the bank's Community Bank division. The OCC found that both executives failed to ensure that the bank's audit function properly identified and reported on the control failures associated with the bank's high-pressure sales practices. According to the OCC's Notice of Charges, the Community Bank Division's culture was rooted in an aggressive business model that forced employees to choose between engaging in unethical practices or risking termination. The OCC determined that the business model incentivized practices, including the opening of millions of unauthorized accounts and products without customer consent. The OCC found that the auditors either ignored or minimized thousands of internal ethics complaints and customer grievances or failed to implement effective controls to detect or prevent the misconduct. 

According to an accompanying OCC release, Consent Orders were issued previously to eight other former senior executives. 

To settle the charges, the former Chief Auditor was ordered to pay a $100,000 civil money penalty; and the former Executive Audit Director was ordered to pay a $50,000 civil money penalty