A group of lawmakers led by U.S. Sen. Elizabeth Warren (D-Massachusetts) has asked the Office of the Comptroller of the Currency to halt TD Bank’s $13.4 billion purchase of Tennesee’s First Horizon.
Their request Wednesday (June 15) came after a report by investigative news service Capitol Forum, which alleged that the Toronto-based TD engaged in practices similar to what Wells Fargo was accused of in its “fake account” scandal.
See also: TD Bank Acquires Bank Holding Company First Horizon for $13.4B
“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,” the lawmakers said in a letter to the Acting Comptroller of the Currency Michael Hsu. Warren was joined in her call by U.S. Representatives Katie Porter (D-California), Al Green (D-Texas) and Jesús Chuy García (D-Illinois).
The letter said that TD used a point system and bonuses to incentivize workers to open customer accounts and opt into overdraft protection, with workers under the threat of being fired if they failed to meet their goals.
The Capitol Forum report alleges TD workers were told to make four new accounts for every customer — checking, savings, online and a debit card — and launched accounts even if a consumer declined one of these options.
In a statement emailed to PYMNTS, a TD Bank spokesman refuted the allegations.
“The allegations in the Capitol Forum article are unfounded. Our business is built on a foundation of ethics, integrity and trust. At TD Bank, we put our customers first and are proud of our culture of delivering legendary experiences to customers. As part of routine and ongoing monitoring, TD Bank has not identified systemic sales practice issues at any time,” the spokesman said. “Our compensation practices — which place a heavy emphasis on customer satisfaction — are carefully and actively managed. We vehemently object to any allegations of systemic sales practice issues, or any other claims alleged in the article.
The bank said the OCC previously examined sales practices at national banks and federal savings associations between 2015 and 2018 and found no issues.
“Finally, we strongly disagree with the article’s characterization of information presented as facts regarding TD Bank’s fraud procedures,” the bank said. “At TD Bank, protecting the security of our customers’ accounts and personal information is a top priority. We follow industry-best practices that are designed to detect and help prevent fraud.”
The bank announced the deal in February as part of a plan to help it expand across the American southeast after a number of unsuccessful attempts to tap into that market. Assuming it goes forward, the acquisition — TD’s biggest-ever deal — would make the company America’s sixth-largest bank.
Last year, Warren called on the Federal Reserve to break up Wells Fargo over what she said were repeated instances of misconduct.
Read more: Sen. Elizabeth Warren Recommends Breaking Up Wells Fargo
The bank has been reprimanded over “inadequate controls, insufficient independent oversight and ineffective governance related to loss mitigation activities” in terms of mortgage foreclosures and how Wells Fargo has responded to past notices, the senator said.
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