When the OCC goes to score the big banks on their community lending operations it just looks at the breadth and width of lending that those banks do, compare it to the loose demands of the Community Reinvestment Act, and say "Yeah, fine, you're probably at least trying to lend to poor people."
For a big four bank to get drastically downgraded on its CRA rating is less akin to a rocket scientist failing an SAT than it is to a brain surgeon failing a third-grade math test. So, you are probably already guessing where this is going and which bank we're talking about here...
A U.S. bank regulator is ready to fail Wells Fargo on a national scorecard for community lending, sources familiar with the decision said on Wednesday, in a move that could limit near-term expansion for the bank.
Wells Fargo is due to be deemed a bank that "needs to improve" under the Community Reinvestment Act (CRA), a law meant to promote lending to poor neighborhoods.
The move is a two-notch downgrade from the "outstanding" tag Wells Fargo has held since 2008 and the change would give regulators a greater say on day-to-day matters like opening new branches.
Oh, Wells Fargo, do the hits just ever stop coming?
As reported in the Reuters story - and corroborated by basic logic and memory - there is literally no precedent for a national bank getting dropped two spots on a CRA exam. The message that such a drop sends is probably the last thing Tim Sloan wanted the first thing this morning. But it's yet another sign that there is almost no way he can fuck this job up worse than the last guy.
Happy Holidays, Tim Sloan.