Elizabeth Warren raises concerns about First Horizon merger
Massachusetts Democratic Senator Elizabeth Warren is calling on the Treasury Department to reject a merger involving First Horizon Bank over allegations of abusive practices.
First Horizon — headquartered in Memphis — has a large presence in the Triangle and Triad. In February, Toronto-based TD Bank announced it would buy First Horizon for $13.4 billion. TD Bank has 13 branches in North Carolina, mostly in the western part of the state.
A recent story from the investigative news site Capitol Forum reports TD Bank rewarded employees who signed customers up for new accounts and overdraft protection without permission. Employees told the outlet “the company still expects its branch workers to nudge customers into accounts, cards and loans that they don’t need” and awards “points” to staff based on the number of account sign-ups. The alleged practices are similar to fraud that occurred at Wells Fargo, which resulted in a $3 billion fine and the ouster of the bank’s CEO.
Warren, along with Representatives Katie Porter (D-CA), Jesus “Chuy” Garcia (D-IL), and Al Green (D-TX) wrote a letter to the Office of the Comptroller of the Currency, or OCC, which will decide the fate of the merger. The Capitol Forum report says OCC knew about TD Bank’s practices in 2017 but did not take action to stop them.
“The OCC’s decision... to allow TD Bank’s rampant fraud and abuse to go unpunished, even after the agency’s troubling findings in its own investigation of the bank, has the potential to undermine the OCC’s authority and put consumer finances at risk,” the letter said, which is addressed to Acting Comptroller of the Currency Michael Hsu. “The Biden Administration has previously stated its intentions to review regulations governing big bank mergers, and you have previously called for further public participation in the process.”
Warren and her colleagues want the OCC to release the results of its investigation and prevent TD Bank from “consolidating any new mergers until this pattern of behavior is addressed.”
TD Bank rejected the claims in the Capitol Forum piece. “We vehemently object to any allegations of systemic sales practice issues, or any other claims alleged in the article,” the bank said in a statement. First Horizon has declined media requests for comment.