Seeking to avoid a repeat of the phony-account scandal at Wells Fargo, U.S. regulators in late 2016 opened examinations of the sales practices at other big banks.
After the reviews were finished, the regulators assured outside observers that the banks had made positive changes and were now selling their products in ways that better aligned with the interests of their customers.
One particular firm that drew the regulators’ attention was Bank of America. Between 2016 and 2018, BofA was among nearly 50 large and midsize banks that underwent a special regulatory exam, which focused on sales practices, by the Office of the Comptroller of the Currency.
BofA was also singled out for close review by the Consumer Financial Protection Bureau, which launched an investigation into whether the Charlotte-based company opened credit card accounts without customers’ authorization, as Wells had done.
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But even as Bank of America’s nationwide sales practices were facing governmental scrutiny, company executives in one state were putting increased pressure on branch-based employees to sell more credit cards, according to interviews with former BofA employees, a wrongful termination lawsuit filed by one of those ex-employees and documents reviewed by American Banker.
The interviews, documents and lawsuit raise questions about how much the sales culture at the nation’s second-largest bank has really changed, notwithstanding broad pronouncements by regulators about industry-wide improvements. They open a window into BofA’s sales practices in the wake of the Wells Fargo scandal — and suggest that the company has found ways to continue its focus on aggressive sales even within the confines of new regulatory expectations.
American Banker found no evidence that BofA or its employees opened accounts without customers’ knowledge or permission. Nonetheless, former BofA employees in Oregon depicted an environment in which credit card sales were paramount, and little regard was paid to the question of whether particular customers wanted or needed a new piece of plastic, though executives did use language that was crafted to satisfy the bank’s regulators.
Workers who failed to meet what they viewed as unrealistic sales goals were often disciplined or denied promotions, according to several former employees.
A former Oregon-based branch manager, who spoke on condition of anonymity, said that meeting sales numbers was literally all that mattered in his experience with Bank of America.
This person had a background in retail sales, but none in banking, when he joined BofA in 2019. He said that he was sold on the job largely on the prospect of substantial bonuses that were tied to meeting sales numbers.
But soon he was installed at a small branch that lagged behind others in revenue generation, and he was instructed to take disciplinary action against a recent hire who was not meeting her sales goals, he said.
“You make your numbers, or you face repercussions,” he said.
“They ride their good people hard and abuse their poor performers,” added the former branch manager, who quit after only a few months. “They want you to push credit cards to everyone.”
Late last year, certain lower-level employees in the Portland area were asked to explain in emails why particular customer interactions had not resulted in the opening of a credit card account, according to documents seen by American Banker.
In one email, a BofA employee wrote that an elderly man who had been retired for 24 years and had never had a credit card declined a sales offer. Bank of America lacks an option for customers who simply do not want a card, the employee stated.
BofA spokesman Bill Halldin declined to comment on specific allegations about aggressive tactics, but he said that the bank has worked with regulators to confirm that it has the right processes and controls in place to govern its sales practices. “These kinds of issues have been thoroughly investigated,” Halldin said.
Halldin added that if any employee has concerns about the bank’s promotion of any product, Bank of America encourages them to raise those concerns with bank management, the human resources department and the bank’s ethics hotline.
“In fact, following industry attention to these issues years ago, we implemented additional controls and avenues for employees to express concerns through multiple channels as well as our Employee Relations group,” Halldin said.
Regulators focus on sales practices
The OCC’s review of sales practices at dozens of U.S. banks was cloaked in secrecy, so much so that even the names of the banks that participated were not publicly revealed. But internal OCC documents that were reviewed by American Banker contain some new revelations, including which banks underwent the exams.
The participants included large banks, such as JPMorgan Chase, BofA and Citibank, as well as smaller regional institutions such as the $36 billion-asset Texas Capital Bank in Dallas and the $21 billion-asset Old National Bank in Evansville, Ind., according to an OCC document from October 2016.
The participating banks were required to assess their processes for handling whistleblower complaints, and to correct any weaknesses they found, an agency document from May 2017 states. Similarly, they were told to evaluate, and to make any necessary corrections to, their processes around employee departures.
The dozens of participating banks were also required to assess and make any needed changes to their processes for opening and closing customer accounts, according to the May 2017 document.
After the OCC finished its review in 2018, the agency said that it did not identify any “systemic” issues involving bank employees opening accounts without customer consent, though it did flag more than 250 specific items that regulators wanted fixed at individual banks.
The agency also determined that credit cards — rather than bank accounts — were the most frequently identified source of accounts across the industry that were opened without customers’ authorization. A summary of the OCC’s findings stated that bad employee behavior can be motivated by compensation plans that link worker pay with sales targets.
In 2017, BofA began requiring individuals who opened accounts in its branches to provide signatures that could serve as clear evidence of the customers’ intent.
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The following year, the OCC told members of Congress that banks were making positive changes with respect to their sales cultures.
“Banks have taken steps to strengthen and reinforce their culture pertaining to sales practices and the expectation for ethical conduct and consistent focus on the best interest of each customer,” then-Comptroller Joseph Otting wrote in a 2018 letter to the chair of the Senate Banking Committee.
Regarding the design and management of incentive compensation plans at banks, Otting wrote: “The OCC has observed a shift to a more customer-centric focus, with the intent to reduce the potential for undue sales pressure, unauthorized account opening or other inappropriate conduct.”
The OCC’s posture was upbeat, but nine months later the CFPB sent a civil investigative demand to Bank of America, asking the bank to produce a tally of specific instances of potentially unauthorized credit card accounts, as well as a manual assessment of card accounts that were never used by the customer.
BofA tried to avoid providing more information to the CFPB, though that effort was unsuccessful. In a petition to the CFPB last year, a lawyer for BofA stated that the bank had already provided the CFPB with information about its customer complaint process, its incentive compensation plans and its internal controls for monitoring sales practices issues. None of that material has been made public.
The BofA lawyer acknowledged that the bank had previously found specific instances of what he called “potentially unauthorized credit card accounts,” but he added that multiple analyses provided to the CFPB had consistently identified a “vanishingly small” number of such accounts.
The bank’s lawyer also argued in the March 2019 petition that the consumer bureau had not uncovered “any evidence” that the bank had a “systemic sales misconduct issue.”
BofA told American Banker in September 2019 that it was working as quickly as it could to get the agency the information it needed, but would not comment this month when asked about the status of the investigation. A CFPB spokesperson also declined to comment.
Amid the increased regulatory scrutiny, credit card sales have remained a focus at BofA.
Bank of America Chairman and CEO Brian Moynihan said in May that the company has been working for a long time to get “deeper penetration” of credit cards into its existing customer base.
During remarks at an investor conference, Moynihan said that “60-odd percent” of existing customers whose credit scores qualify them for a BofA credit card already have one, and a similar percentage of existing customers who have a BofA card use it as their primary credit card.
Nationally, Bank of America added between 4 million and 5 million new credit card accounts every year between 2014 and 2019, according to the bank’s quarterly financial disclosures.
Sales pitches are of course common at branches across the U.S. banking industry. But from a customer experience perspective, aggressive sales tactics appear to be a bigger problem for Bank of America than they are for most other big banks.
In a 2018 survey, the consulting firm cg42 sought the perspective of bank customers who had considered moving their primary banking relationship in the previous 12 months.
The survey found that 49% of such customers at BofA said that the bank occasionally or frequently tried to sell them products they did not want or need. That compared with 37% of customers at the 10 big banks that were part of the study.
A 21-year career comes to an end
Allegations of excessive sales pressure at Bank of America branches in Oregon initially surfaced in a lawsuit filed in February by a former BofA vice president named Heather Bryant. The lawsuit was first reported by the Oregonian.
Bryant was fired by BofA in November 2019. Bank of America says that she was terminated primarily because of “repeated inappropriate behavior and lack of professionalism.” She contends that she always acted professionally, and that she was fired shortly after she made complaints about what she believed to be unlawful employment and banking practices.
Bank of America denies the key allegations in Bryant’s lawsuit, including claims of wrongful termination, sex discrimination and whistleblower retaliation.
Bryant, whose territory included roughly a dozen branches in the Portland area, had a wider vantage point than many low-paid branch workers who have spoken out about sales pressure at banks. After a long stint in Bank of America’s mortgage unit, she was named to a retail sales management position in 2015. Before she was fired, the 41-year-old had spent her entire adult life working for BofA.
Bryant’s problems with her employer began when Robert Disanto took over as her supervisor in June 2018, according to her lawsuit. Disanto was a BofA regional executive whose territory covered Oregon and much of Washington state.
At the time, that region was ranked in the bottom 5% of the nation, based on a BofA scorecard that was used internally to compare overall performance, and Disanto was charged with boosting that low ranking, Bryant said in an interview. An improved ranking would have resulted in higher pay for Disanto and other executives in the region, she added.
The internal scorecard was based partly on customer service and compliance, but sales performance was weighted most heavily, according to Bryant. Credit card sales were the largest component of sales performance, since cards are a particularly lucrative product for BofA, she said.
“Credit card was the primary sales metric,” Bryant said. “That’s what had the greatest influence on their ranking and scorecard.”
Bryant alleges that Disanto used tactics like abusing and firing employees in an effort to elicit better performance metrics, which would have improved the region’s ranking.
By contrast, Bryant took pride in her ability to connect with her colleagues, and to motivate strong sales performances with positive feedback, rather than by instilling fear, she said. “I don’t believe in beating people up.”
Bryant also clashed with Chris Briggs, who held the role of sales performance manager for the region that Disanto headed. She accuses the two men of making threats, bullying employees, intimidating and isolating them, and speaking to and about women in a condescending manner.
Disanto and Briggs, who are named as co-defendants in Bryant’s lawsuit, have denied the suit’s key allegations, including that they subjected Bryant to an abusive work environment and that they applied excessive sales pressure. They both referred questions to the Bank of America spokesman.
In April 2019, Disanto gave Bryant a verbal warning, in part for not responding to an email fast enough, according to her lawsuit. Two months later came a final written warning for drinking with colleagues after a conference, even though co-workers who also consumed alcohol were allegedly not disciplined, her lawsuit states.
BofA made reference to Bryant drinking at work-related events in its explanation of why she was later fired, and said that she continued to engage in inappropriate and unprofessional behavior in spite of receiving a final written warning less than a year before her separation from the company.
‘It became very scary to talk to these people’
While other former BofA employees who spoke to American Banker knew about sales pressure only in Oregon, Bryant said that the aggressive tactics that were used by executives in the Pacific Northwest came from a playbook that was also used elsewhere in the company. She acknowledged that the sales pressure may have been greater in Oregon than it was in many other parts of the country, due to the region’s low ranking.
Inside BofA’s operations in Oregon, the pressure to sell credit cards mounted in 2019, since the region’s ranking had not improved under Disanto’s leadership, according to Bryant.
She recalled weekly phone calls during which branch managers were routinely berated, threatened and belittled for physical traits. “They would talk personally about managers,” she said. “They had a big nose, or they stunk.”
Bryant was also the recipient of emails in late 2019 that included branch-based employees’ answers to questions that focused on why the workers had not made more credit card sales.
Bryant’s responses to the emails often featured smiley-face emojis, she said. But other Bank of America executives demanded a more antagonistic approach, she added. “They wanted us to threaten, humiliate, bully.”
According to emails reviewed by American Banker, BofA workers were asked to explain what kind of credit card specific customers were currently using, what the customers were trying to accomplish with plastic from competing banks, and what benefits the customers used on the competing cards.
Bryant said that the questions had been supplied by Disanto and Briggs, who told her that they had been approved by risk and compliance staff inside of BofA, and that they were written in such a way as to ensure that they seemed client-centric. BofA declined to respond to Bryant’s comments.
Last October, Bryant lodged a verbal complaint with a regional executive who was responsible for ensuring that BofA’s sales practices were legal and ethical, according to her lawsuit. Bryant says that she requested a private meeting with the executive, in which she said, ‘I’m very, very concerned that we’re turning into Wells Fargo.’”
The regional executive, Christine Sanford, referred American Banker’s questions to the BofA spokesman, who said that the company has no record in its human resources database of Bryant ever raising concerns about sales expectations during her employment with the company. “Ms. Bryant had a responsibility as a manager to elevate such concerns if she had them. She never did,” the bank spokesman said.
“The brief mention of sales practices in her lawsuit appears to be an effort to gain media attention and distract from the real facts and reason for her termination,” he added.
Ms. Bryant had a responsibility as a manager to elevate…concerns [about sales practices] if she had them. She never did.
Bank of America spokesman Bill Halldin
A former BofA branch worker named Kaleb Baker has also provided a signed written declaration to Bryant’s attorney stating that Bryant expressed concern about pressure to sell credit cards during a meeting that he attended last fall.
Last November, Bryant was pulled into a meeting and fired, she says. She was given a separation agreement that would have paid her more than $99,000, and says that she was pressured to sign the document quickly, so that when she applied for other jobs, she would be listed as retired in Bank of America’s system.
But she refused to sign the document, which included a non-disparagement clause, and instead sued Bank of America. Bryant is seeking up to $1.7 million in her lawsuit.
Since leaving BofA, she has launched a website where she is soliciting stories from other current and former Bank of America employees. “My goal is to expose what they’re doing,” she said.
Bryant connected American Banker to several former branch-level employees at Bank of America in Oregon, who also offered accounts of intense pressure to sell credit cards. BofA declined to comment on their stories.
Neura Conejo, who worked as a BofA relationship manager in the Portland area from 2009 to 2017, wrote in a signed witness declaration that bank management placed “extreme pressure” on employees to sell cards. She added that the customer’s needs “were never a consideration.”
“I was told that if I did not attempt a credit card sale with every customer, I would be disciplined,” she stated in the declaration, which was provided by Bryant’s attorney.
A former relationship manager at BofA, who spoke on condition of anonymity, said that he worked in an Oregon branch that did not get a lot of walk-in traffic, which made it difficult to meet the company’s sales goals. This employee left the company in late 2016 after starting as a teller eight years earlier.
He recalled role-playing exercises in which bankers were coached on how to respond to customers who rejected their sales pitches. He also remembered being required to make cold calls to customers who had used his branch’s ATM one time, but lived far away.
And he came to dread internal calls that were held three times each day, in an effort to juice sales, with employees who hadn’t met their goals. “Those calls would be very nerve-wracking,” he said. “It became very scary to talk to these people.”
An ex-BofA teller in the Portland suburbs, who spoke on condition of anonymity after leaving the company in late 2019, said that the pressure to sell credit cards increased substantially during his last two years with the company.
He said that tellers did not generally receive incentive pay, but that the company tracked closely the number of referrals that they made to personal bankers. He decided to leave the bank after being denied a promotion on the basis that he had not made enough referrals, he said.
“I thought we were about what’s best for our customers,” the former teller said, “but that wasn’t the case.”