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Feb 19, 2015

Wells Fargo and Citi face shareholder pressure

Faith-based shareholder group ICCR calls for review of practices

A religious shareholder group has targeted Wells Fargo and Citigroup in a bid to force the US banks to publish reviews of their business standards, the Wall Street Journal reports.

The Interfaith Center on Corporate Responsibility (ICCR) has already conducted a teleconference with Wells Fargo’s executives to discuss how the institution monitors its internal activities. ICCR is also concerned with how the bank discloses details of this process to external stakeholders.

Seamus Finn, ICCR’s chairman, says that a lack of communication from both banks is worrying. ‘It would be helpful for us as investors and the general public to have one place to go to see what changes [the banks] have put in place since the 2008 financial meltdown,’ he comments in the WSJ.

Efforts by ICCR and its member firms have yielded results at US banks recently. Last December, JP Morgan published a large report on its business standards following pressure from The Sisters of Charity of Saint Elizabeth, one of ICCR’s members. The document set out the steps JPMorgan would be taking to improve its corporate culture and reduce risk-taking.

JPMorgan also attracted ICCR’s attention last February, after a number of institutions, including the faith-based group, filed proposals against the dual role of CEO and chairman held by Jamie Dimon, and called for a comprehensive report on the bank’s ‘credibility problem’.

The organization currently represents a number of religious and CSR-minded investors that manage more than $100 bn of assets between them.

The ICCR has previously named Wells Fargo as one of the worst performing US banks in terms of transparency and disclosure practices. In a report published in October 2013, the group said Wells Fargo demonstrates ‘some weaknesses in regard to its risk management, overall business practices, and responsible lending and investment practices.’

In response to Finn’s comments, a Wells Fargo spokesperson told the WSJ: ‘We have appreciated the engagement we’ve had with them in the past and we meet with them from time to time.’

A spokesperson for Citi, meanwhile, said: ‘Citi has long enjoyed a productive dialogue with the members of the ICCR.’