Jesse Jackson Wants Banks to Take a Stand on How Fines Are Used

(Bloomberg) -- Large U.S. banks can expect a noteworthy guest at their annual meetings this year: civil rights activist Jesse Jackson.

Jackson, who kicked off his tour at Citigroup Inc.’s shareholder meeting in New York on Tuesday, is pushing a proposal that the billions banks have paid in fines be given to Americans who lost homes or suffered in other ways during the financial crisis. He encouraged Citigroup’s top executives to consider advocating for the creation of a development bank to distribute funds to impacted consumers.

“It was certainly our intention that those reparations went back to injured or affected homeowners, and we’ve certainly worked hard to try and be able to do that,” Citigroup Chief Executive Officer Michael Corbat said, noting that he’d met with Jackson on the issue previously. “We’d love to see that money get into the hands of the people who were harmed.”

Jackson also attended last week’s congressional hearing at which Corbat and other bank CEOs were admonished by lawmakers for past violations that led to the fines. Jackson said he plans to attend other annual meetings with a similar message, including Bank of America Corp.’s in Charlotte, North Carolina, next week. Banks don’t control how fines are used after they’re collected.

Citigroup and other banks should make “a public stand and ask that the monies, the fine money, go to the victims of the subprime lending,” Jackson said. Using the funds “toward bailing out those who were victims of the crisis would make logical sense to me.”

Jackson has attended bank shareholder meetings before, including visits in 2005 to encourage minority hiring, and in 2010 to seek help for homeowners looking for loan modifications.

Here are other key takeaways from Citigroup’s annual meeting on Tuesday:

  • Citigroup’s incoming summer analyst class will be 47 percent female, and more than a quarter will be black or Hispanic. Corbat said the bank’s goal for upcoming classes is for the staff to be 30 percent minority and half women.
  • In a preliminary vote, Citigroup shareholders approved the proposed slate of directors and 2018 pay packages for top executives.
  • Stockholders also approved, with 51 percent of preliminary votes, a shareholder proposal that asks the board to consider amending its bylaws so that those holding 15 percent of outstanding shares can call a special investor meeting.
  • Corbat said if the federal government exits its conservatorship of Fannie Mae and Freddie Mac, officials should protect other elements of housing finance in the U.S., such as the 30-year fixed-rate mortgage and the securitization market for mortgages.

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