SEC clears shareholder vote for foreclosure reviews at major banks
The Securities and Exchange Commission upheld a New York City pension funds request that big bank shareholders will get to vote on whether or not those vested financial institutions conduct foreclosure reviews. Shareholders of Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) will vote at annual meetings this spring, because of the ruling. Wells did not contend the proposal at the SEC. In January, The New York City Comptroller John Liu asked the boards of the banks and JPMorgan Chase (JPM) to conduct the reviews to catch potential problems related to robo-signing and other documentation issues. Because a similar group of shareholders requested Chase conduct reviews, the SEC allowed the bank to remove the pension funds request from its annual meeting agenda. After these issues surfaced in the third quarter of 2010, major banks and servicers began internal reviews and began refiling affidavits. But the SEC rejected the banks' arguments that the problems were "technical glitches." "An independent examination of bank foreclosure practices is needed to reassure shareholders and protect pensioners and taxpayers," Comptroller Liu said. "The necessity for this becomes even clearer as the weeks and months tick by and more New Yorkers face losing their homes to foreclosure. 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." Citi declined to comment on the ruling. Neither BofA or Wells immediately responded to requests for comments. Write to Jon Prior. Follow him on Twitter @JonAPrior.