Three of the nation’s largest banks are calling on shareholders to reject racial equity 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 large American companies that made public statements of support in response to widespread protests last summer following the police assassination of George Floyd and Breonna Taylor. In recent days, all have formally opposed shareholder group demands for them to conduct and advertise racial capital audits and other changes, saying they are already doing enough to address equity issues.
Shareholders’ proposals urge banks to examine their practices and policies and identify ways to “avoid negative impact on non-white stakeholders and communities of color”, which banks say is unnecessary because they juggle different initiatives, related and / or committed money for such issues internally and externally. Proposals are included in shareholder empowerment statements, which allow companies to support or oppose shareholder resolutions and explain why before a vote at their annual meetings.
For more information: companies declared “Black Lives Matter” last year, and now they are required to prove it
CtW Investment Group wrote in its proposal to Citi shareholders that the bank “has a conflicting history when it comes to addressing racial injustice in the communities it serves.” The group offers examples, among which Citi was fined by the Treasury Department in 2019 for not offering all customers discounts and mortgages; minimum required maintenance fees and minimum daily balances; and the fact that he has only one black executive in the C-suite (Chief Financial Officer, Mark Mason).
“Although we do not agree with the general approach of this proposal, we are fully in line with the stated aim of addressing racial inequity in the financial sector,” Citi said in its mandate on Wednesday.
The bank has pledged $ 1 billion to provide greater access to banking and mortgage services for communities of color, plus investment in black businesses. He also said: “In September 2020, Citi released a 104-page report on the economic cost of black inequality in the United States, entitled ‘Closing the Gender Inequality Gaps,’ and said its efforts on these issues are available. for the public.
Citi also recommends that shareholders not vote on several other racial equity resolutions, such as adopting a “Rooney Rule” policy to increase diversity on its board of directors and disclose its direct and indirect lobbying activities in a report.
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CtW also mentioned the minimum requirements for deposits and commissions in its Bank of America resolution, adding that the Treasury Department found in 2018 that the bank offered proportionately fewer home loans to minorities than white Philadelphia applicants and that C-suite- BofA is only 8% Black.
Bank of America said in its mandate published last week that it has committed $ 1 billion to support minority-owned businesses, black and Hispanic employment initiatives, affordable housing and donations to black colleges and universities in history and more. It has also supported its work with “consumer advocates in the design and marketing of our financial services and products” and its efforts to diversify its workplace and management.
In its proposal from Wells Fargo, the International Union Pension Employees’ Master Plan Plans mentions the bank’s records of discriminatory lending practices that led to various lawsuits and a settlement with the Ministry of Justice in 2012, as well as the resolution of employment discrimination claims. .
Wells Fargo, which launched its power of attorney on Tuesday, said it was conducting a “human rights impact assessment” and would publish a summary of these results and the actions it intends to take in response. The company also said it is working towards diversity, equity and inclusion in the workplace and among its top positions.
Dieter Waizenegger, CEO of CtW, worked with SEIU on shareholder proposals. Although he said he “welcomed” the promises of banks on racial equality and justice, “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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The shareholder groups also stressed that the banks’ political and charitable donations contradicted the stated commitments to justice and fairness.
Wells Fargo “donated to Senator Tom Cotton, who called for military airstrikes at the Black Lives Matter protests, as well as other members of Congress with racist recordings,” the SEIU shareholders’ resolution reads.
The CtW said that “Citi donated $ 242,000 during the 2020 election cycle to 74 members of Congress who are rated” F “by the NAACP” and that Bank of America was involved in issuing “bonds, part of which it was used to pay for police-related settlements ”in Los Angeles.
Both Wells Fargo and Bank of America have donated to police departments that “bypass the normal procurement process to purchase equipment for police departments, including surveillance technology that has been used to target communities of color and nonviolent protesters,” they say. shareholders’ resolutions.
Goldman Sachs Group Inc. GS,
Morgan Stanley MS,
and JP Morgan Chase & Co. JPM,
face similar proposals from shareholders and have not yet released their powers. This article will be updated when they do.