Three of the largest banks in the country are asking shareholders to reject decisions on racial equity after expressing solidarity with the Black Lives Matter movement last year.
Citigroup Inc. C,
WFC, Wells Fargo & Co.,
and Bank of America Corp. BAC,
was among the many large U.S. companies that made public statements of support in response to widespread protests last summer following the police killings of George Floyd and Breonna Taylor. In recent days, they have all officially opposed the calls from shareholders that they should make and announce auditors and other changes, saying that they are already doing enough to address stock issues.
The shareholders’ proposals call on the banks to examine their practices and policies and identify ways to ‘avoid adverse consequences for non-white stakeholders and color communities’, something the banks say is unnecessary because they engage in and / or engage with various related initiatives. money committed to it. such issues internally and externally. The proposals are included in proxy statements to shareholders, enabling companies to support or oppose shareholders’ decisions, and explain why they were voted on at their annual general meetings.
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CtW Investment Group writes in its proposal to Citi shareholders that the bank “has a conflicting history when it comes to tackling racial injustice within the communities it serves.” The group gives examples, including Citi being fined by the Treasury division in 2019 for not offering all customers mortgage discounts and credits; the required minimum maintenance fees and minimum daily balances; and the fact that he has only one black executive in the C-suite (Mark Mason, CFO).
“While we do not agree with the overall approach in this proposal, we are fully in line with the stated aim of addressing racial inequality in the financial sector,” Citi said in its mandate on Wednesday.
The bank pointed to its $ 1 billion commitment to provide greater access to banking and mortgage lending for color communities, plus to investing in black businesses. It also says: ‘In September 2020, Citi released a 104-page report on the economic costs of black inequality in the United States, entitled’ Closing the Gaps in Racial Inequality ‘, stating that its efforts until these issues are available to the public.
Citi also recommends that shareholders vote no on some other racial equity decisions, such as adopting a “Rooney Rule” policy to increase the diversity of its board of directors and its direct and indirect lobbying in a report to make known.
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CtW also mentions the minimum requirements for deposits and fees in its Bank of America resolution, adding that in 2018 the Treasury Department found that the bank offers proportionately fewer home loans to minorities than white applicants in Philadelphia, and that BofA’s C- suite only 8% is Black.
Bank of America said in its power of attorney last week that it has committed $ 1 billion to support minority-owned enterprises, work initiatives in black and Spanish communities, affordable housing and donations to historic black colleges and universities, and more. It also highlighted his work with ‘consumer advocates in the design and marketing of our financial services and products’ and his efforts to diversify the workplace and leadership.
In its proposal to Wells Fargo, the Service Employees International Union Pension Plans Master Trust cites the bank’s record of discriminatory lending practices that led to various lawsuits and a settlement with the Department of Justice in 2012, as well as settlements of claims for employment discrimination. .
Wells Fargo, who announced his mandate on Tuesday, said he was conducting an “impact study on human rights” and that he would give a summary of the results and the steps he plans to take. The company also said it was making efforts to achieve diversity, equity and inclusion in its workplace and among its top ranks.
Dieter Waizenegger, executive director of CtW, worked with the SEIU on the proposals for shareholders. Although he said he “welcomed” the promises made by banks on issues of racial equality and justice, we as investors believe a critical part of this work is an independent assessment of the effectiveness of these promises. ”
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The shareholder groups also pointed out that the banks’ political and charitable donations contradicted their declared commitments to justice and fairness.
Wells Fargo ‘gave a donation to Senator Tom Cotton, who called for military airstrikes on Black Lives Matter protests, as well as other members of Congress with racist records,’ ‘the SEIU shareholders’ resolution reads.
CtW said ‘Citi donated $ 242,000 during the 2020 election cycle to 74 members of Congress who are’ F ‘by the NAACP,’ and that the Bank of America was involved in issuing ‘sentencing obligations, part of which is to pay for police-related settlements ”in Los Angeles.
Both Wells Fargo and Bank of America donated to police departments that “bypass normal purchasing processes to buy equipment for police departments, including surveillance technology used to target communities of color and non-violent protesters,” the shareholders’ decision reads.
Goldman Sachs Group Inc. GS,
Morgan Stanley MS,
and JP Morgan Chase & Co. JPM,
are facing similar proposals for shareholders and have not yet announced their proxies. This article will be updated.