* Bank allegedly promotes sales quotas, needless fees

* Congressman says push to sell products can add risk

* Bank rejects accusations by consumer and labor groups

By Jonathan Stempel

NEW YORK, June 30 (Reuters) – Consumer and labor groups demanded Bank of America Corp (BAC.N) and other lenders reform their sales practices so that workers under pressure to meet sales quotas do not saddle customers with costly and unnecessary products.

The whistleblowing campaign was announced Tuesday as the U.S. Treasury Department unveiled legislation to create a Consumer Financial Protection Agency, as part of the Obama administration financial regulation overhaul. [ID:nN30437901]

People, who said they were former Bank of America employees, alleged that their supervisors drove them to burden consumers with needless debt and fees, to fatten the bank’s earnings and the paychecks of senior executives, and threatened to retaliate if they complained. Some complained their salaries had been too low and that they had to hit quotas to earn needed bonuses.

“This is the kind of information that really needs to get out,” said Representative Keith Ellison, a Minnesota Democrat who sits on the House Financial Services Committee. “Without a strong whistleblower law, we simply are not doing the things we need to do in order to manage risk properly.”

He suggested that lending standards could be compromised by “the urgency to sell, sell, sell, sell, sell.”

Groups conducting the campaign include the Service Employees International Union, which is trying to organize Bank of America workers; the National Association of Consumer Advocates, and the U.S. Public Interest Research Group.

Bank of America spokeswoman Anne Pace rejected the allegations, saying the SEIU misrepresented the largest U.S. bank’s relationship with its customers and associates.

She said the Charlotte, North Carolina-based bank is “pro-associate and believes that managers are well-equipped to respond to associates’ needs,” and is committed to ensuring that customer fees are “transparent and predictable.”

Christopher Feener, who said he used to work in the bank’s credit card unit, was among the former workers who spoke out.

He complained that the bank regularly violated the Fair Debt Collection Practices Act, and sometimes pushed workers to falsely threaten legal action against customers. He said his team was sometimes pushed to call customers’ neighbors about delinquent accounts, “to embarrass the customer and actually encourage the neighbor to bring over a message.”

Shares of Bank of America rose 5 cents to $13.24 in early afternoon trading on the New York Stock Exchange. (Reporting by Jonathan Stempel; Editing by Tim Dobbyn)