The Comptroller of the Currency this week warned the banking industry to stop selling data on its customers to telemarketing firms in exchange for a commission on sales, among other practices.
In a speech to bank lending officers at a meeting in San Francisco, John D. Hawke Jr. also chided the banking industry for charging customers' accounts automatically when they express an interest in a product or service or request a trial membership.
He warned that legislative intervention might be necessary if banks do not police their own industry.
“While it may be unfair to burden an entire industry with legislation that aimed at curbing the poor conduct of a few institutions, the persistent failure of the industry itself to address abusive conduct creates a fertile seedbed for legislation,” Hawke said.
He said his office has received numerous complaints from state attorney generals around the country, indicating that the practice is widespread.
In addition, he also criticized banks for another practice that he said was becoming more common: not reporting some of their high-interest borrowers to credit bureaus to prevent them from being pitched by other lenders.