• Matthew Mancini

Big Banks Ask Shareholders to Reject Racial Equity Audits

Updated: Mar 25

Above is the headquarters of Bank of America in Charlette, NC (Source: Headquartersof.com)

March 22nd, 2021

By Matthew Mancini

Big banks, such as Citigroup (NYSE: C), Wells Fargo (NYSE: WFC), and Bank of America (NYSE: BAC), are now asking shareholders to reject proposals for racial equity audits.

These requests are in stark contrast to their opinions last summer after the police killing of George Floyd sparked nationwide protests. These companies were among many to make public statements of support for the Black Lives Matter movement. However, recently they have opposed shareholders’ requests to launch racial equity audits because they claim they’re already identifying and addressing problems.

Citi made a bid back in February to the Securities and Exchange Commission (SEC) about these racial equity audits claiming they were unnecessary and should be ignored. The SEC rejected Citi’s bid because they found no basis for their claims.

The proposals would examine these institutions and their practices to identify ways to “avoid adverse impacts on nonwhite communities and communities of color.” The banking industry has had a checkered past in regards to race, with redlining to lack of credit made available to people of color (POC), which have not adequately been addressed, according to Financial News.

The race-related shareholder resolution was made by CtW Investment Group, an investment management firm in Washington, D.C., and they are working with Service Employees International Union to make these resolutions a reality. Along with the three banks mentioned, the racial audit resolutions have also been made to Goldman Sachs (NYSE: GS), JP Morgan Chase (NYSE: JPM), and Morgan Stanley (NYSE: MS).

All of these banks have vowed to spend millions to make up for their misgivings in the past, (such as affordable housing, investing in small businesses, job training, etc.) but does that solve the problem? Dieter Waizenegger, executive director of CtW Investment, claims “[The audits] would help not just to reassure shareholders but also other stakeholders that they’re going beyond just a photo opportunity.”

Although there is still much more progress to be made, there is more investor support for these resolutions. Soon, there will likely be more company support for them too.