Several major financial institutions (including Bank of America, Citygroup, and Well Fargo) are facing new scrutiny of their handling of the mortgage mess. Shareholders at the banks are likely to vote shortly to investigate mortgage and foreclosure practices.
The votes will come despite much eye-rolling from the banks, which have tended to be less than forthcoming on the subject. Bank of America and Citi petitioned regulators to keep shareholders from voting on the proposal, which is sponsored by the New York City pension funds led by city comptroller John C. Liu. But the Securities and Exchange Commission ruled this month that the votes must go on.
"An independent examination of bank foreclosure practices is needed to reassure shareholders and protect pensioners and taxpayers," said Liu, a Democrat who has been pushing since last fall for bank boards to wake up and investigate. "Regrettably, the banks have failed us on this and even went so far as to try and kick us off the ballot, but the shareholders have prevailed."
The New York funds say they own $1.7 billion worth of stock in BofA, Citi, Wells and JPMorgan Chase (JPM). Its shareholders won't vote on the New York proposal but will vote on a similar one. Wells initially opposed the New York proposal as similar to one its shareholders were already voting on, but took up the New York measure after the other one was dropped.