WASHINGTON - A U.S. bank regulator has flunked Wells Fargo on a national scorecard for community lending, the lender said on Tuesday as it tries to repair its reputation after a phony-accounts scandal.
Wells Fargo was deemed a bank that “needs to improve” under the Community Reinvestment Act (CRA), a law meant to promote lending to poor neighborhoods. The law, passed in 1977, prohibits redlining (or restricting credit based on a neighborhoods ethnic makeup) and encourages financial institutions to meet the needs of low- and moderate-income communities.
The Office of the Comptroller of the Currency, the leading regulator for national banks, scores banks on CRA ratings.
Tim Sloan, Wells Fargo’s chief executive officer, said the bank has a track record of serving needy communities but has yet to see its way through scandals.
“We are committed to addressing the OCC’s concerns because restoring trust in Wells Fargo and building a better bank... is our top priority,” Sloan said in a statement.