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WASHINGTON (AP) — Federal Reserve Chair Janet Yellen is likely to face sharp questions from a House committee today over whether there was a failure in oversight by federal banking regulators involving Wells Fargo.
The nation’s second largest bank engaged in practices that allegedly allowed the bank to open millions of accounts without customers’ permission.
The actions at Wells Fargo have raised questions about the role of regulators — including the Fed — in monitoring banks.
Yellen last week said she was “distressed” to see banks only addressing problems of employee misconduct after they crop up, rather than having solid procedures in place to ensure that employees act “in an ethical and appropriate manner.” She added that Fed examiners will pay close attention to banks’ control procedures to prevent such lapses in the future.
Yellen is scheduled to testify before the House Financial Services Committee on the Fed’s responsibilities to supervise the nation’s largest banks.
Earlier this month, U.S. and California regulators fined Wells Fargo $185 million. They charged that bank employees opened unauthorized accounts and signed up customers for online banking, debit cards and other services without their knowledge in an effort to meet aggressive sales targets.
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