The Hong Kong Shanghai Banking Corporation (HSBC Bank) may be one of the 40 large to midsize banks investigated as part of a follow-up to the 2016 Wells Fargo Scandal by the U.S. Office of the Comptroller of Currency (OCC).

The OCC—which regulates the banking industry domestically—reportedly reviewed the practices of several financial institutions after the problems with Wells Fargo were uncovered, according to the LA Times.

While the identity of the investigated banks have not been disclosed by the OCC, a spokesperson noted that problems were definitely isolated and addressed.

As indicated in a PYMNTS article, the painstaking OCC review of sales practices, account opening and closing documentation, and other items of key interest, led to warnings being issued to several banking institutions.

Systemic issues were found, according to the report, but several hundred problems particular to certain banks were also identified. Five industry-wide issues were pinpointed and 250 items were expected to be immediately addressed and corrected by the institutions where they were found.

According to a spokesperson for the OCC, most of the banks included in the review responded promptly to requests to make institutional corrections. In light of the severe condemnation of Wells Fargo Bank, many organizations wanted to comply and address their functioning weaknesses without a lot of push back.

While the specific identity of involved banks have not been released and there are no plans to do so, private attorneys are now looking into claims that HSBC Bank and others have been involved in questionable sales practices like those investigated by the OCC.

The Wells Fargo Scandal and Consequences

The OCC did say that in specific banks accounts were opened where there was no documentation that supported customer approval of the action. While it was not widespread or systemic, this was the main concern of the investigation.

The OCC investigation was initiated after reports that Wells Fargo employees had opened millions of unauthorized patron accounts including credit cards and registration for fee-based banking services surfaced. Ultimately, incentivized pressure from management to reach sales goals was pinpointed as the motivation for the fake accounts.

News of these inappropriate actions, according to the LA Times, was first reported in 2013 and the full scandal reached a head by 2016. The OCC was reportedly concerned that this behavior was indicative of an epidemic of unethical behavior going unchecked in the banking industry.

In 2016, the OCC in combination with the Consumer Financial Protection Bureau (CFPB) and the City of Los Angeles levied a sizeable fine of $185 million against Wells Fargo, headquartered in California.

In the spring of 2018, more problems were reportedly found and the OCC and CFPB each determined that the assessment of a separate fine in the amount of $500 million was warranted from each of them against Wells Fargo.

The recent OCC review as presented by a spokesperson for the agency says that, for the most part, unauthorized account opening found recently among the 40 banks reviewed were based upon individual employee misconduct or inattention to technological detail needed to properly open and close an account, rather than a linked response to required quotas and financial rewards for doing so.