A group of seven public-sector pension fund systems, including Connecticut’s, called on the boards of the four largest U.S. banks, including Bank of America Corp., to review foreclosure practices, saying there’s a “fundamental” flaw in the companies’ methods, Bloomberg News reports.
The lenders, which also include Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc., should report their findings on annual proxy statements to shareholders in coming months, the pension group said.
The Connecticut Retirement Plans and Trusts Funds and six others represent more than $430 billion in pension fund investments, including $5.7 billion invested in the four banks, according to a statement from New York City Comptroller John C. Liu.
“The banks’ boards cannot continue to pretend the foreclosure mess is the result of technical glitches and paperwork errors,” Liu said. “There is a fundamental problem in their procedures that endangers not just homeowners, but shareholders, and local economies.”
The group also includes the New York City Pension Funds, the Illinois State Board of Investments, the Illinois State Universities Retirement System, the New York State Common Retirement Fund, the North Carolina Retirement Systems, and the Oregon Public Employees’ Retirement Fund.
Citigroup has received the letter and will review it with members of its audit committee and respond, said Shannon Bell, a spokeswoman for the New York-based bank. “We have confidence in our internal processes and controls,” she said.
Wells Fargo spokeswoman Mary Eshet said the bank had received the letter and is reviewing it. Joseph Evangelisti, a spokesman for JPMorgan, declined to comment.
Bank of America hired external auditors to review foreclosure processes last year and improved its procedures before resuming seizures, said Rick Simon, a spokesman for the Charlotte, North Carolina-based lender, in an e-mail.
“The letter from the pension funds appears to bring up a concern that the bank is already addressing — the future prevention of compliance failures and restoration of confidence in the foreclosure processes,” he wrote. “The points they make have been brought up time and time again, reviewed and fully considered.”
