SFERS Again Delays Action on Discriminatory Lending Motions for City Retirement Funds

IMG_3525_1At the May 8, 2013, meeting of the San Francisco Employee Retirement System (SFERS) Retirement Board, the Commissioners again took no action to implement the SFERS Social Investment Policies which specifically state they should engage at “Level I” to vote on shareholder resolutions at corporate shareholder meetings of corporations engaged in “discriminatory lending”.

Commissioner Brenda Wright, a Senior Vice President of Community Relations at Wells Fargo, currently serving beyond the end of her term, was not present.

Twelve organizers from the Alliance of Californians for Community Empowerment (ACCE) and Occupy Bernal attended the meeting prepared to deliver a statement at the public comment period traditionally held at the opening of the meeting. Instead, they found that SFERS Executive Director Jay Huish had moved the public comment period to nearly the end of the agenda.

IMG_3529_1Then, during his Executive Report, Jay Huish announced that at his “discretion” he had cancelled a May 29 meeting calendared at the request of San Francisco Supervisor Malia Cohen, who is the sole Commissioner on the SFERS Retirement Board appointed by the President of the San Francisco Board of Supervisors. Some Commissioners questioned Executive Director Huish about the reasons for his decision to cancel the May 29 meeting and he said he would calendar the discriminatory lending item for no later than the July 10th meeting agenda. In the public comment for that item, some organizers complained about Executive Director Huish’s seemingly arbitrary decisions and how they made public comment and discussion of the discriminatory lending issue much more difficult.

Representatives of San Francisco Supervisor John Avalos and the movement for fossil fuel divestment also commented that Executive Director Huish’s report failed to mention passage of a resolution by the San Francisco Board of Supervisors urging SFERS to divest from fossil fuel investments.

The organizers, who had arrived at 1:00pm in order to make sure they would be able to get seats in the small windowless room where the SFERS Retirement Board holds its meetings (despite promises to shift the venue), found that we had to wait until nearly 5:00pm, that is for four hours, to make our comments. The comments reminded the SFERS Commissioners of their Social Investment Policies regarding investing in corporations engaging in discriminatory lending and documented the extensive proof of discriminatory lending on the part of Bank of America and Wells Fargo in particular, since they are the ones who the U.S. Department of Justice compelled to arrive at the largest settlements by far in U.S. history for their discriminatory lending practices.

The organizers also asked everyone for a minute of silence to mourn Wells Fargo’s eviction of disabled African-American senior Bernetta Adolph, a SFERS plan participant, and to pray that she finds a safe and secure home.

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IMG_2337_1Current and retired city employees, Foreclosure and Eviction Fighters, and supporters from Service Employees International Union (SEIU) 1021, Alliance of Californians for Community Empowerment (ACCE), Occupy Bernal, Occupy Noe, and the Occupy the Auctions and Evictions Campaign provided important testimony about the illegal, predatory, and discriminatory practices of banks like Wells Fargo, JP Morgan Chase, and Bank of America at meeting of the San Francisco Employee Retirement System Retirement Board on January 9, February 13, March 13, and April 10, 2013.

At each meeting, the group asked the Retirement Board to uphold its fiduciary responsibility to investigate the illegal, predatory, and discriminatory practices of the banks, to request that the banks stop these practices, to sponsor shareholder resolutions if they don’t stop, and to divest from the banks’ stocks if the shareholder resolutions do not succeed. Some of the Commissioners responded favorably to the public comment testimony.

A number of organizations have declared their support of the motions including organizations representing most of the members of the SFERS retirement system:

The San Francisco Employee Retirement Systems (SFERS) handles investments for pension funds for current and retired San Francisco city employees. SFERS has policies that include “Social Investment Procedures” adopted at the SFERS Retirement Board meeting of September 27, 1988, which requires the SFERS Retirement Board when making investments in stocks, mutual funds, and so on, to consider:

“Community Relations: the relationship of the corporation to the communities in which it operates shall be maintained as a good corporate citizen through observing proper environmental standards, supporting the local economic, social and cultural climate, conducting acquisitions and reorganizations to minimize adverse effects and not discriminate in making loans or writing insurance.” (emphasis added by Occupy the Auctions)

A record number of San Francisco City and County employees, as well as others residents of San Francisco and beyond, are facing mortgage loan defaults, foreclosures, and evictions (an estimated 12,000 foreclosures in San Francisco between 2008 and 2011). Many have already lost their homes.

Wells Fargo, JP Morgan Chase, and Bank of America are the market leaders in foreclosures and related evictions here in San Francisco and statewide. These banks engaged in illegal, predatory, and discriminatory practices by putting African-American and Latino borrowers into higher-cost, subprime loans than white borrowers. In fact, in July 2012, Wells Fargo agreed to pay what ended up as $234.3 million to settle a United States Department of Justice lawsuit for its discriminatory mortgage lending practices affecting more than 30,000 borrowers, including those banking at the Bayview Wells Fargo branch.

Billions of dollars in mortgage lender settlements with government agencies and other parties have to date not managed to solve the mortgage lending crisis, making mortgage lenders and servicers a potential medium-term and long-term investment risk. Illegal, predatory, and discriminatory foreclosures harm all homeowners, erode the property tax base, and cost local governments, hurting the standard of living of retirees and all working people.

01Wells Fargo is #1 in San Francisco foreclosures. San Francisco’s Mayor and Board of Supervisors have unanimously requested a halt to foreclosures and related evictions, especially since San Francisco Assessor-Recorder’s report showing that 84% of foreclosures have at least one legal violation and due to Wells’ $234.3 million settlement with the United States Department of Justice paid in response to allegations of racial discrimination in providing mortgage loans in San Francisco’s Bayview-Hunters Point and other neighborhoods.

Wells Fargo’s “waterfall” model, along with similar policies from other lenders, ensures that the bank can squeeze the most money possible from homeowners struggling to make payments while finally discarding them like trash if the bank can’t make a profit on every single loan. Running a mortgage loan business means assuming risks, especially after receiving billions in bailout funds from the taxpayers, many of whom are Wells’ mortgage loan borrowers.

Wells Fargo is putting 32 families at risk of losing their homes due to foreclosure and related evictions during this holiday season. Wells Fargo is foreclosing on and evicting veterans and disabled and senior homeowners and families with children, as well as targeting homeowners with life-threatening illnesses. Wells Fargo has engaged in predatory, fraudulent, and racist lending practices and has contributed to a rash of foreclosure deaths.


Statement Read by ACCE/Occupy Organizers at May 8, 2013, SFERS Retirement Board Meeting    Petition Supporting SFERS Motions    SFERS Retirement Board Meeting on April 10, 2013    Agenda for SFERS Retirement Board Meeting on April 10, 2013    Staff Memo for SFERS Retirement Board Meeting on April 10, 2013    SFERS Social Investment Policy    Members of SFERS Retirement Board    SFERS Retirement Board Meeting on March 13, 2013    SFERS Retirement Board Meeting on January 9, 2013    San Francisco Business Times    KCBS (including audio segment)    Wells Pays $234.3 Million to Resolve Allegations of Racial Discrimination in Providing Mortgage Loans    Occupy Our Homes Wells Fargo Bayview Branch Action    Occupy Wells Fargo Noe Branch    Occupy Wells Fargo HQ    Occupy Senior and Veteran Evictions and Foreclosures (Occupy Anniversary)

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