Religious investors lose
faith in Wells Fargo after scandal
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[October 10, 2016]
By Ross Kerber
BOSTON(Reuters)
- A group of nuns and other religiously-affiliated investors have lost
faith in embattled Wells Fargo & Co and filed a shareholder resolution
calling on the bank to report on the root causes of a fake accounts
scandal that led to a $190 million settlement struck with regulators
last month.
The faith-based investors say they also want the report to cover
improved controls after revelations bank employees opened as many as 2
million checking, savings and credit card accounts without the
customers' permission in order to meet sales quotas.
The resolution resembles one the Sisters of St Francis of Philadelphia
and others filed for the bank's 2014 annual meeting and then withdrew,
on the understanding the San Francisco-based bank would provide more
specifics on areas like its risk controls.
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But that did not happen, said Sister Nora Nash, a nun who is director of
corporate social responsibility for the Catholic religious order,
despite a series of meetings held in person and by phone with bank
leaders including Wells Fargo lead independent director Stephen Sanger
and a top ethics officer, Christine Meuers.
"They haven't done what we would have," said Nash in a telephone
interview. "Now it is biting them in the face."
Wells Fargo spokesman Oscar Suris declined to comment.
The resolution is one among a series filed recently at Wells Fargo,
including several from other investor groups affiliated with the
Interfaith Center on Corporate Responsibility in New York. Other
resolutions call on Wells Fargo to study a breakup and to split the
roles of chairman and chief executive officer.
All cite the Sept. 8 settlement Wells Fargo struck with bank regulators
over the accusations. Other authorities have since begun probes, while
CEO John Stumpf faces political pressure and calls to resign.
The shareholder resolutions, proposed for the bank's annual meeting to
be held next spring, show how the tables have turned for Wells Fargo.
Coming out of the financial crisis, it initially appeared to take less
criticism than other large lenders including JPMorgan Chase & Co and
Bank of America.
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![](../images/101016PICS/busine22.jpg)
A man passes the entrance to the Wells Fargo & Co corporate campus
in Manhattan, New York City, U.S., October 6, 2016. REUTERS/Brendan
McDermid
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Both agreed under pressure from religious investors to provide reviews
of their business practices in reports that amounted to mea culpas.
"In some cases, our controls fell short, and in others, we simply
weren't meeting the standards we had set for ourselves," JPMorgan said
in a 2014 report. (http://reut.rs/2dBb0kY)
Wells Fargo's board has taken some steps since the settlement to address
concerns, such as starting their own investigation and having Stumpf
forfeit $41 million worth of unvested stock awards and his 2016 bonus.
But the religious shareholders now say they need more changes. For
instance another resolution filed by the Unitarian Universalist
Association calls on Wells Fargo's board to study how to connect
executive pay with ethical conduct.
Tim Brennan, the association's treasurer, said that while Wells Fargo
already has a code of conduct, the scandal shows the code "had nothing
to do with the way the business was conducted."
(Reporting by Ross Kerber; Editing by Alan Crosby)
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