Three of the country’s largest banks are asking shareholders to reject racial justice resolutions after expressing solidarity with the Black Lives Matter movement last year.
Citigroup Inc. C,
Wells Fargo & Co. WFC,
and Bank of America Corp. BAC,
were among the many major American companies making public statements of support in response to widespread protests last summer following the George Floyd and Breonna Taylor police killings. In recent days, they have all officially opposed calls from shareholder groups to conduct and publish audits on racial equality and other changes, saying they are already doing enough to address equality issues.
The shareholder proposals urge banks to research their practices and policies and find ways to avoid “ negative impacts on non-white stakeholders and colored communities, ” which the banks believe is unnecessary as they juggle different, related initiatives and / or have allocated money for such issues internally and externally. The proposals are contained in shareholder proxy statements, which enable the companies to support or oppose shareholder resolutions and to explain why prior to a vote at their annual meetings.
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CtW Investment Group wrote in its proposal to Citi shareholders that the bank “has a conflicting history of tackling racial injustice in the communities it serves.” The group cites examples, including Citi fined by the Treasury Department in 2019 for not offering mortgage discounts and loans to all customers; the required minimum maintenance costs and minimum daily balances; and the fact that it only has one Black executive in the C-suite (Chief Financial Officer Mark Mason).
“While we disagree with the general approach in this proposal, we are fully aligned with the stated goal of tackling racial inequality in the financial sector,” Citi said in its delegate Wednesday.
The bank noted its $ 1 billion commitment to provide greater access to banks and mortgages for communities of color, and to invest in black businesses. It also said, “ In September 2020, Citi released a 104-page report on the economic cost of black inequality in the United States entitled ‘Closing Racial Differences,’ ” saying its efforts towards this. issues are available to the public.
Citi also recommends that shareholders vote no on a number of other racial equity-related resolutions, such as adopting a “Rooney Rule” policy to increase board diversity and disclosing its direct and indirect lobbying activities. in a report.
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CtW also mentioned minimum requirements for deposits and fees in its Bank of America resolution, adding that in 2018 the Treasury Department found that the bank was offering comparatively fewer home loans to minorities than white applicants in Philadelphia, and that BofA’s C-suite was only Is 8%. Black.
Bank of America said in its proxy published last week that it has pledged $ 1 billion to support minority-owned businesses, job initiatives in black and Hispanic communities, affordable housing, and donations to historically black colleges and universities, and more. It also praised his work with “consumer advocates in the design and marketing of our financial services and products” and his efforts to diversify its workplace and leadership.
In its proposal at Wells Fargo, the Service Employees International Union Pension Plans Master Trust mentions the bank’s track record of discriminatory credit practices that led to several lawsuits and a settlement with the Department of Justice in 2012, as well as claims settlements on discrimination at work. .
Wells Fargo, who published its proxy on Tuesday, said it is in the process of conducting a “human rights impact assessment” and will release a summary of those results and the actions it intends to take in response. The company also said it is committed to diversity, equality and inclusion in its workplace and in its top positions.
Dieter Waizenegger, Executive Director of CtW, worked with the SEIU on the shareholder proposals. Although he said he “welcomed” the banks’ commitments on racial equality and justice issues, “as investors, we believe that a critical part of this work is an independent assessment of the effectiveness of these promises.”
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Shareholders ‘groups had also pointed out that the banks’ political and charitable donations contradicted their stated commitments to justice and fairness.
Wells Fargo “has donated to Senator Tom Cotton, who called for military airstrikes on Black Lives Matter protests, as well as other members of Congress with racist reports,” the SEIU shareholder resolution said.
CtW said, “Citi donated $ 242,000 during the 2020 election cycle to 74 members of Congress who have been rated ‘F’ by the NAACP,” and that Bank of America has been involved in the issuance of “Bonds of Judgment,” for police-related settlements ”in Los Angeles.
Both Wells Fargo and Bank of America have donated to police departments that “bypass normal procurement processes to purchase equipment for police departments, including surveillance technology used to attack communities of color and nonviolent protesters,” the resolutions said. shareholders.
Goldman Sachs Group Inc. GS,
Morgan Stanley MS,
and JP Morgan Chase & Co. JPM,
are faced with similar shareholder proposals and have yet to release their proxies. This article will be updated when they do.