An effort designed to make The City’s pension fund divest its holdings with powerful San Francisco-based bank Wells Fargo fizzled Wednesday.
About $227 million of The City’s pension fund is invested with 14 banks accused by activists of wrongdoing during the subprime mortgage meltdown. The City holds $45.3 million with Wells Fargo, $46.7 million with JP Morgan Chase, $31 million with Citibank and $30.7 million with Bank of America, according to the San Francisco Employees’ Retirement System.
These banks were said to engage in predatory lending practices, including subprime mortgages specifically aimed at borrowers who are black or Latino, according to the Alliance of Californians for Community Empowerment, which works with homeowners facing foreclosure and has been pushing SFERS to divest from Wells Fargo since January.
Activists with ACCE say that 6,000 homes have been foreclosed upon in southern San Francisco.
But Wells Fargo, which says only 530 of their mortgage borrowers lost homes to foreclosure in San Francisco over the past four years, staunchly denies any wrongdoing. The bank did, however, agree in July to pay out $175 million in fines to settle a lawsuit alleging racially biased lending.
“When a company pays a fine, that hurts the value of our investment,” said Herb Meiberger, a retirement board commissioner.
Meiberger, who led past divestment efforts, made a push Wednesday that would have led The City’s pension fund to put pressure on Wells Fargo to change its business practices.
As a company shareholder, the San Francisco retirement fund has voting power at Wells Fargo shareholder meetings. Meiberger’s motion would have used the retirement board’s votes to push to separate the positions of Wells Fargo president and CEO and would have pushed the company to reform its lending practices.
An odd coincidence led to the effort’s failure. Retirement board member Malia Cohen, who represents the Bayview-Hunters Point neighborhood on the Board of Supervisors, had voiced support for the effort but missed the Wednesday meeting due to an illness. Without a second vote, Meiberger’s effort died.
The City’s close ties with Wells Fargo also were on display Wednesday. Board member Brenda Wright — a Wells Fargo senior vice president appointed to the body by Mayor Ed Lee — recused herself as did board President Wendy Paskin-Jordan.
Some 9,000 Wells Fargo employees work in The City, with another 3,100 bank employees residing here, according to John Ohayan, a company senior vice president.