Wells Fargo, BofA Push Back Against Race-Audit Proposals

Two of the biggest U.S. banks are pushing back against shareholder requests for sweeping audits of how they handle racial equity as the industry faces mounting public scrutiny of its historic role in economic disparities.

Boards overseeing Wells Fargo & Co. and Bank of America Corp. -- the first two U.S. banking giants to publish invitations to annual stockholder meetings this year -- asked investors to vote against proposed audits, saying they aren’t needed because the firms already are identifying and addressing problems.

A national debate over racial injustice that erupted last year after George Floyd’s killing by Minneapolis police has raised awareness of the industry’s role in economic inequality through decades-old practices such as mortgage redlining. Banking leaders have spent the intervening months pledging to provide more loans and services to neglected communities. They’ve also promised to make more progress in cultivating diversity within their ranks, especially in senior positions.

A pension plan with a stake in Wells Fargo asked for the review to help the firm “identify, prioritize, remedy and avoid adverse impacts on nonwhite stakeholders and communities of color,” according to a proxy filing posted Tuesday. The findings would ultimately be made public on the San Francisco-based lender’s website. The board said the firm already is conducting a “human rights impact assessment,” among other efforts.

Bank of America is facing a similar proposal from a Washington-based investment group, according to a filing earlier this month. “Our actions and focus in making progress on the issue of racial equality, and reporting on our progress regularly, render the proposal’s requested audit unnecessary,” the board of the Charlotte, North Carolina-based lender wrote.

Both Wells Fargo and Bank of America have recently made equity investments in Black-owned banks as part of broader pledges to support minority-focused lenders.

Rivals JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley have yet to file their annual proxies.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.